WEBCE PRACTICE EXAM WITH QUESTIONS AND ANSWERS WITH
RATIONALES (VERIFIED ANSWERS) LATEST 2024/2025
A policyowner can access the cash value of many life insurance policies through
withdrawals, loans or policy surrender. Which of the following terms describes the
ability to easily convert life insurance into cash? - CORRECT ANSWER
Liquidity.
Life insurance policy proceeds are protected from the claims of creditors due to the
policy's: - CORRECT ANSWER Spendthrift clause.
Which of the following is an insurable risk? - CORRECT ANSWER The
possibility of becoming disabled and unable to earn an income.
When pricing health insurance policies, the morbidity rates indicate: - CORRECT
ANSWER The average number of persons in a large group who are expected to
become disables because of accident or sickness.
Those eligible for family coverage under a group medical expense plan would
typically be which of the following? - CORRECT ANSWER Primary insured,
spouse, their son, and the spouse's children from a previous marriage.
Which of the following statements is correct about the HMO claims process? -
CORRECT ANSWER Members do not need to submit claim forms for services
provided within the network.
Which statement correctly describes the tax treatment of unreimbursed medical
expenses? - CORRECT ANSWER They may be deducted from taxable income if
they exceed a certain percentage of AGI.
,All of the following statements about multiple employer trusts are correct
EXCEPT: - CORRECT ANSWER The individual employers each own separate
group life policies.
The use of permanent life insurance policy as security for obtaining a bank loan is
done through a(n): - CORRECT ANSWER Collateral assignment.
Which of the following statements about variable life insurance is correct? -
CORRECT ANSWER The cash value is not guaranteed with variable life.
Which of the federal law group health plans and protects their enrollees? -
CORRECT ANSWER ERISA.
Which statement is correct about the tax treatment of distributions from
endowment policies? - CORRECT ANSWER They are subject to federal income
taxation.
When choosing a health care provider from a PPO and managing out-of-pocket
expenses, the insured can: - CORRECT ANSWER Use a network provider for
the lowest cost, or use a non-network provider for more flexibility.
Which disability would most likely qualify for a full benefit under the presumption
of disability provision? - CORRECT ANSWER Loss of eyesight.
Besides being an admitted insurer, an insurer that wants to offer a small group
health insurance in Texas must be certified by the Texas Department of Insurance
as an: - CORRECT ANSWER Small employer carrier.
, All of the following reasons that a business might buy life insurance represent a
valid insurable interest, EXCEPT: - CORRECT ANSWER To provide insurance
coverage for a large-volume customers.
Which provision in a health insurance policy imposes a waiting period on every
claim before benefits begin? - CORRECT ANSWER Elimination period.
Juan just purchased an individual long-term care insurance policy from Acme
Insurers. The first page of the policy states that it is guaranteed renewable, which
means that - CORRECT ANSWER Acme must allow Juan to renew the policy
every year, but it may increase premiums under certain conditions.
What purpose does a mandatory minimum group size serve in underwriting group
health insurance? - CORRECT ANSWER It spreads the risk and the
administrative costs among numerous participants.
Which payment arrangement do medical expense indemnity policies typically use?
- CORRECT ANSWER Fee-for-service.
A person who refuses to engage in risky activities like rock climbing for fear of
injury or death is demonstrating which risk management technique? - CORRECT
ANSWER Risk avoidance.
All of the following are standard types of term life insurance EXCEPT: -
CORRECT ANSWER Variable term insurance.
An insured is injured and files a claim under his disability income insurance policy.
When does the elimination period begin? - CORRECT ANSWER On the date of
injury.
RATIONALES (VERIFIED ANSWERS) LATEST 2024/2025
A policyowner can access the cash value of many life insurance policies through
withdrawals, loans or policy surrender. Which of the following terms describes the
ability to easily convert life insurance into cash? - CORRECT ANSWER
Liquidity.
Life insurance policy proceeds are protected from the claims of creditors due to the
policy's: - CORRECT ANSWER Spendthrift clause.
Which of the following is an insurable risk? - CORRECT ANSWER The
possibility of becoming disabled and unable to earn an income.
When pricing health insurance policies, the morbidity rates indicate: - CORRECT
ANSWER The average number of persons in a large group who are expected to
become disables because of accident or sickness.
Those eligible for family coverage under a group medical expense plan would
typically be which of the following? - CORRECT ANSWER Primary insured,
spouse, their son, and the spouse's children from a previous marriage.
Which of the following statements is correct about the HMO claims process? -
CORRECT ANSWER Members do not need to submit claim forms for services
provided within the network.
Which statement correctly describes the tax treatment of unreimbursed medical
expenses? - CORRECT ANSWER They may be deducted from taxable income if
they exceed a certain percentage of AGI.
,All of the following statements about multiple employer trusts are correct
EXCEPT: - CORRECT ANSWER The individual employers each own separate
group life policies.
The use of permanent life insurance policy as security for obtaining a bank loan is
done through a(n): - CORRECT ANSWER Collateral assignment.
Which of the following statements about variable life insurance is correct? -
CORRECT ANSWER The cash value is not guaranteed with variable life.
Which of the federal law group health plans and protects their enrollees? -
CORRECT ANSWER ERISA.
Which statement is correct about the tax treatment of distributions from
endowment policies? - CORRECT ANSWER They are subject to federal income
taxation.
When choosing a health care provider from a PPO and managing out-of-pocket
expenses, the insured can: - CORRECT ANSWER Use a network provider for
the lowest cost, or use a non-network provider for more flexibility.
Which disability would most likely qualify for a full benefit under the presumption
of disability provision? - CORRECT ANSWER Loss of eyesight.
Besides being an admitted insurer, an insurer that wants to offer a small group
health insurance in Texas must be certified by the Texas Department of Insurance
as an: - CORRECT ANSWER Small employer carrier.
, All of the following reasons that a business might buy life insurance represent a
valid insurable interest, EXCEPT: - CORRECT ANSWER To provide insurance
coverage for a large-volume customers.
Which provision in a health insurance policy imposes a waiting period on every
claim before benefits begin? - CORRECT ANSWER Elimination period.
Juan just purchased an individual long-term care insurance policy from Acme
Insurers. The first page of the policy states that it is guaranteed renewable, which
means that - CORRECT ANSWER Acme must allow Juan to renew the policy
every year, but it may increase premiums under certain conditions.
What purpose does a mandatory minimum group size serve in underwriting group
health insurance? - CORRECT ANSWER It spreads the risk and the
administrative costs among numerous participants.
Which payment arrangement do medical expense indemnity policies typically use?
- CORRECT ANSWER Fee-for-service.
A person who refuses to engage in risky activities like rock climbing for fear of
injury or death is demonstrating which risk management technique? - CORRECT
ANSWER Risk avoidance.
All of the following are standard types of term life insurance EXCEPT: -
CORRECT ANSWER Variable term insurance.
An insured is injured and files a claim under his disability income insurance policy.
When does the elimination period begin? - CORRECT ANSWER On the date of
injury.
