XCEL Arizona Life and Health Insurance
State Exam UPDATED Exam Questions
and CORRECT Answers
Under a long-term care inflation rider, the benefit levels - CORRECT ANSWER -
periodically increase without proof of insurability
In order for a health plan to be an "accountable health plan", who has to approve it? - CORRECT
ANSWER - the director
Medicare Part A coinsurance payments are covered by - CORRECT ANSWER - Medicare
Supplement Plan A
Employees generally receive workers compensation benefits for - CORRECT ANSWER -
lost wages and medical expenses due to occupational accidents
What year was the Mental Health Parity and Addiction Equity Act established? - CORRECT
ANSWER - 2008
In what situation would disability income insurance premiums be a deductible expense? -
CORRECT ANSWER - Corporation paying for group disability income coverage for its
employees
John received a one-time distribution of $50,000 from his modified endowment contract (MEC).
Prior to that, the contract's cash value was $150,000, the contract investment amount was
$100,000, and the death benefit was $500,000. What percentage of the $50,000 distribution was
taxable as ordinary income? - CORRECT ANSWER - 100%
A survivorship life insurance policy usually covers how many lives? - CORRECT
ANSWER -2
,Mentally or physically handicapped dependent children MUST be covered under an individual
health insurance policy - CORRECT ANSWER - until they become self-supportive
ERISA requires that a Summary Plan Description must be provided to a new plan member within
how many days following the new member's eligibility date? - CORRECT ANSWER - 90
days
A policyowner suffers an injury that renders him incapable of performing one or more important
job duties. Any decrease in income resulting from this injury would make him eligible for
benefits under which provision? - CORRECT ANSWER - Partial disability
What is the maximum number of employees (earning at least $5,000) that an employer can have
in order to start a SIMPLE retirement plan? - CORRECT ANSWER - 100 employees
Which of the following health plans pay benefits on a pre-paid service basis? - CORRECT
ANSWER - HMO
An individual may receive Medicare Part A Hospital benefits, regardless of age, as long as the
person has received which of the following benefits for at least 24 months? - CORRECT
ANSWER - Social Security Disability
Which of the co-annuitants listed below would receive the largest monthly benefit payments in a
joint and 100% survivor annuity? - CORRECT ANSWER - Ages 71 and 73
Kevin has an existing life insurance policy and assigns it to another insurer for a new contract.
How would this transaction be treated for tax purposes? - CORRECT ANSWER - As a
Section 1035 exchange
Karen is considering replacing her individual accident and health insurance policy with another
individual policy. She has had issues in the past with her gall bladder that would be considered a
pre-existing condition. How will a pre-existing conditions exclusion affect Karen's new
insurance contract? - CORRECT ANSWER - May reduce her benefits
, Greg had recently been terminated from his job that covered him for group life insurance. How
long does he have to convert his coverage to an individual policy? - CORRECT
ANSWER - 31 days
A policyowner with a terminal illness who sells his life insurance policy to a third party is called
a - CORRECT ANSWER - viator
What is a juvenile life insurance policy? - CORRECT ANSWER - A life policy that covers
the life of a minor
ABC Partnership is a business with a limited number of partners. Which disability buy-sell
agreement is best suited for this business? - CORRECT ANSWER - Cross purchase
agreement
Which of the following involves sharing an uncertain risk with another similar group? -
CORRECT ANSWER - Transfer
The time limit an individual has to "rollover" funds from an IRA or qualified plan is -
CORRECT ANSWER - 60 days
A life annuity with period certain is characterized as - CORRECT ANSWER -
guaranteeing benefit payments for a stated minimum number of years
James owns a business and purchased a policy that covers the business expense of finding a
permanent or temporary employee to replace a disabled one. This type of disability coverage is
called - CORRECT ANSWER - Key employee coverage
Kelly purchases a health insurance policy issued on a conditionally renewable basis. The
insurance company has a right to refuse renewal of the policy for - CORRECT ANSWER -
specific reasons stated in the contract
State Exam UPDATED Exam Questions
and CORRECT Answers
Under a long-term care inflation rider, the benefit levels - CORRECT ANSWER -
periodically increase without proof of insurability
In order for a health plan to be an "accountable health plan", who has to approve it? - CORRECT
ANSWER - the director
Medicare Part A coinsurance payments are covered by - CORRECT ANSWER - Medicare
Supplement Plan A
Employees generally receive workers compensation benefits for - CORRECT ANSWER -
lost wages and medical expenses due to occupational accidents
What year was the Mental Health Parity and Addiction Equity Act established? - CORRECT
ANSWER - 2008
In what situation would disability income insurance premiums be a deductible expense? -
CORRECT ANSWER - Corporation paying for group disability income coverage for its
employees
John received a one-time distribution of $50,000 from his modified endowment contract (MEC).
Prior to that, the contract's cash value was $150,000, the contract investment amount was
$100,000, and the death benefit was $500,000. What percentage of the $50,000 distribution was
taxable as ordinary income? - CORRECT ANSWER - 100%
A survivorship life insurance policy usually covers how many lives? - CORRECT
ANSWER -2
,Mentally or physically handicapped dependent children MUST be covered under an individual
health insurance policy - CORRECT ANSWER - until they become self-supportive
ERISA requires that a Summary Plan Description must be provided to a new plan member within
how many days following the new member's eligibility date? - CORRECT ANSWER - 90
days
A policyowner suffers an injury that renders him incapable of performing one or more important
job duties. Any decrease in income resulting from this injury would make him eligible for
benefits under which provision? - CORRECT ANSWER - Partial disability
What is the maximum number of employees (earning at least $5,000) that an employer can have
in order to start a SIMPLE retirement plan? - CORRECT ANSWER - 100 employees
Which of the following health plans pay benefits on a pre-paid service basis? - CORRECT
ANSWER - HMO
An individual may receive Medicare Part A Hospital benefits, regardless of age, as long as the
person has received which of the following benefits for at least 24 months? - CORRECT
ANSWER - Social Security Disability
Which of the co-annuitants listed below would receive the largest monthly benefit payments in a
joint and 100% survivor annuity? - CORRECT ANSWER - Ages 71 and 73
Kevin has an existing life insurance policy and assigns it to another insurer for a new contract.
How would this transaction be treated for tax purposes? - CORRECT ANSWER - As a
Section 1035 exchange
Karen is considering replacing her individual accident and health insurance policy with another
individual policy. She has had issues in the past with her gall bladder that would be considered a
pre-existing condition. How will a pre-existing conditions exclusion affect Karen's new
insurance contract? - CORRECT ANSWER - May reduce her benefits
, Greg had recently been terminated from his job that covered him for group life insurance. How
long does he have to convert his coverage to an individual policy? - CORRECT
ANSWER - 31 days
A policyowner with a terminal illness who sells his life insurance policy to a third party is called
a - CORRECT ANSWER - viator
What is a juvenile life insurance policy? - CORRECT ANSWER - A life policy that covers
the life of a minor
ABC Partnership is a business with a limited number of partners. Which disability buy-sell
agreement is best suited for this business? - CORRECT ANSWER - Cross purchase
agreement
Which of the following involves sharing an uncertain risk with another similar group? -
CORRECT ANSWER - Transfer
The time limit an individual has to "rollover" funds from an IRA or qualified plan is -
CORRECT ANSWER - 60 days
A life annuity with period certain is characterized as - CORRECT ANSWER -
guaranteeing benefit payments for a stated minimum number of years
James owns a business and purchased a policy that covers the business expense of finding a
permanent or temporary employee to replace a disabled one. This type of disability coverage is
called - CORRECT ANSWER - Key employee coverage
Kelly purchases a health insurance policy issued on a conditionally renewable basis. The
insurance company has a right to refuse renewal of the policy for - CORRECT ANSWER -
specific reasons stated in the contract
