XCEL EXAM QUESTIONS WITH
COMPLETE SOLUTIONS
Upon finding a producer guilty of forgery, the Commissioner may take all of the
following actions EXCEPT?
a. Impose a civil fine
b. Revoke producer's license
c. Place producer on probation
d. Require the producer to notify his/her clients - ANSWER-d. Require the producer
to notify his/her clients
In an employer-sponsored group accident and health plan, a master contract is
issued to the
a. TPA
b. Employees
c. Administrative Services Organization
d. Employer - ANSWER-d. Employer
A producer has allowed his/her license to lapse by failing to complete the required
continuing education credits. The license may be reinstated by completing the
requirement within __ days of the renewal date.
a. 45
b. 60
c. 90
d. 120 - ANSWER-c. 90
In Michigan, legal action may be taken against an insurer for up to __ years for
failing to pay a life insurance claim after proof of loss was submitted.
a. 4
b. 5
c. 6
d. 7 - ANSWER-c. 6
Under which circumstance do consumer privacy regulations allow an insured's
financial information be released?
a. An insured has missed a premium payment and is beyond the grace period
b. A government agency would like personal information on an insurer's
policyowners
c. An insured has requested a full refund beyond the policy's free-look period
, d. An authorized agency makes a written request to the insurer during an insurance
fraud investigation - ANSWER-d. An authorized agency makes a written request to
the insurer during an insurance fraud investigation
Which of the following is NOT a valid reason for an insurer to refuse renewal of a
small employer group plan?
a. Coverage has been discontinued by the insurer
b. Number of participants does not meet minimum requirements
c. Willful misrepresentation
d. Claims were higher than expected - ANSWER-d. Claims were higher than
expected
An insurer's claim settlement practices are regulated by the
a. Securities and Exchange Commission (SEC)
b. National Association of Claims Adjusters (NACA)
c. National Association of Insurance Commissioners (NAIC)
d. State insurance departments - ANSWER-d. State insurance departments
Which of these would limit a company's liability to provide insurance coverage?
a. Waiver
b. Exclusion
c. Rider
d. Provision - ANSWER-b. Exclusion
A life insurance application may be backdated to
a. Save on premiums
b. Increase the producer's commission
c. Ease the underwriting requirements
d. Reduce the policy's death benefit - ANSWER-a. Save on premiums
In determining whether a pre-existing condition applies, the enrollee CANNOT have
more than how many days' gap in health insurance?
a. 60
b. 63
c. 65
d. 70 - ANSWER-b. 63
Michigan requires that a license complete __ hours of continuing education on the
subject of ethics every reporting period.
a. 1
b. 2
c. 3
d. 4 - ANSWER-c. 3
,Which settlement option involves having the proceeds remain with the insurer and
earnings paid on a monthly basis to the beneficiary?
a. Interest only
b. Dividends only
c. Extended interest
d. Fixed period - ANSWER-a. Interest only
Erica is 35 years old and owns an IRA. At what age can she begin to receive
distributions without a tax penalty?
a. 55
b. 59 1/2
c. 62
d. 70 1/2 - ANSWER-b. 59 1/2
XYZ Corp pays the tax-deductible insurance premiums for a key employee disability
policy. Which of the following would be the appropriate tax consequence?
a. Premiums are paid with tax credits
b. Benefits are partially taxable
c. Benefits are fully taxable
d. Premiums are paid with after-tax dollars - ANSWER-c. Benefits are fully taxable
Julie has a $100,000 30-year mortgage on her new home. What type of life
insurance could she purchase that is designed to pay off the loan balance if she dies
within the 30-year period?
a. Adjustable life insurance
b. Decreasing term insurance
c. Increasing term insurance
d. Modified life insurance - ANSWER-b. Decreasing term insurance
Which of the following does Medicare Part D cover?
a. Intensive care coverage
b. Doctor visits
c. Prescription drugs
d. Hospital coverage - ANSWER-c. Prescription drugs
What happens to interest earned if the annuitant dies before the payout start date?
a. It is taxable
b. It is taxable only if no beneficiary is named
c. It is not taxable
d. It is only taxable if contract has been in force under one year - ANSWER-a. It is
taxable
What is Medicare Part B also known as?
, a. Medicare supplement
b. Supplementary medical insurance
c. Comprehensive insurance
d. Medicaid - ANSWER-b. Supplementary medical insurance
All of these statements concerning whole life insurance are false EXCEPT
a. Policyowner can take out a policy loan up to the face amount
b. When a whole life policy is surrendered, income taxes may be owned
c. Coverage is normally temporary
d. The death benefit is not affected by outstanding loans - ANSWER-b. When a
whole life policy is surrendered, income taxes may be owned
A master contract and certificate of coverage can be found in which type of policy?
a. Long-term
b. Medicaid
c. Group
d. Medicare - ANSWER-c. Group
What is the elimination period of an individual disability policy?
a. Time period an insured must wait before coverage begins
b. Time period a disabled person must wait before the benefits are paid
c. Time period after the policy issue date in which the provisions are still contestable
d. The point in time when benefits are no longer payable - ANSWER-b. Time period
a disabled person must wait before the benefits are paid
A single premium cash value policy can be described as
a. A policy that is paid up after only one payment
b. A policy that only requires an annual payment
c. A policy that is guaranteed issue
d. A policy that covers two or more lives - ANSWER-a. A policy that is paid up after
only one payment
Variable life insurance and Universal life insurance are very similar. Which of these
features are held exclusively by variable universal life insurance?
a. Policyowner may increase or decrease the premium payments
b. Policyowner may increase or decrease the face amount
c. Policyowner can contribute large sums of money
COMPLETE SOLUTIONS
Upon finding a producer guilty of forgery, the Commissioner may take all of the
following actions EXCEPT?
a. Impose a civil fine
b. Revoke producer's license
c. Place producer on probation
d. Require the producer to notify his/her clients - ANSWER-d. Require the producer
to notify his/her clients
In an employer-sponsored group accident and health plan, a master contract is
issued to the
a. TPA
b. Employees
c. Administrative Services Organization
d. Employer - ANSWER-d. Employer
A producer has allowed his/her license to lapse by failing to complete the required
continuing education credits. The license may be reinstated by completing the
requirement within __ days of the renewal date.
a. 45
b. 60
c. 90
d. 120 - ANSWER-c. 90
In Michigan, legal action may be taken against an insurer for up to __ years for
failing to pay a life insurance claim after proof of loss was submitted.
a. 4
b. 5
c. 6
d. 7 - ANSWER-c. 6
Under which circumstance do consumer privacy regulations allow an insured's
financial information be released?
a. An insured has missed a premium payment and is beyond the grace period
b. A government agency would like personal information on an insurer's
policyowners
c. An insured has requested a full refund beyond the policy's free-look period
, d. An authorized agency makes a written request to the insurer during an insurance
fraud investigation - ANSWER-d. An authorized agency makes a written request to
the insurer during an insurance fraud investigation
Which of the following is NOT a valid reason for an insurer to refuse renewal of a
small employer group plan?
a. Coverage has been discontinued by the insurer
b. Number of participants does not meet minimum requirements
c. Willful misrepresentation
d. Claims were higher than expected - ANSWER-d. Claims were higher than
expected
An insurer's claim settlement practices are regulated by the
a. Securities and Exchange Commission (SEC)
b. National Association of Claims Adjusters (NACA)
c. National Association of Insurance Commissioners (NAIC)
d. State insurance departments - ANSWER-d. State insurance departments
Which of these would limit a company's liability to provide insurance coverage?
a. Waiver
b. Exclusion
c. Rider
d. Provision - ANSWER-b. Exclusion
A life insurance application may be backdated to
a. Save on premiums
b. Increase the producer's commission
c. Ease the underwriting requirements
d. Reduce the policy's death benefit - ANSWER-a. Save on premiums
In determining whether a pre-existing condition applies, the enrollee CANNOT have
more than how many days' gap in health insurance?
a. 60
b. 63
c. 65
d. 70 - ANSWER-b. 63
Michigan requires that a license complete __ hours of continuing education on the
subject of ethics every reporting period.
a. 1
b. 2
c. 3
d. 4 - ANSWER-c. 3
,Which settlement option involves having the proceeds remain with the insurer and
earnings paid on a monthly basis to the beneficiary?
a. Interest only
b. Dividends only
c. Extended interest
d. Fixed period - ANSWER-a. Interest only
Erica is 35 years old and owns an IRA. At what age can she begin to receive
distributions without a tax penalty?
a. 55
b. 59 1/2
c. 62
d. 70 1/2 - ANSWER-b. 59 1/2
XYZ Corp pays the tax-deductible insurance premiums for a key employee disability
policy. Which of the following would be the appropriate tax consequence?
a. Premiums are paid with tax credits
b. Benefits are partially taxable
c. Benefits are fully taxable
d. Premiums are paid with after-tax dollars - ANSWER-c. Benefits are fully taxable
Julie has a $100,000 30-year mortgage on her new home. What type of life
insurance could she purchase that is designed to pay off the loan balance if she dies
within the 30-year period?
a. Adjustable life insurance
b. Decreasing term insurance
c. Increasing term insurance
d. Modified life insurance - ANSWER-b. Decreasing term insurance
Which of the following does Medicare Part D cover?
a. Intensive care coverage
b. Doctor visits
c. Prescription drugs
d. Hospital coverage - ANSWER-c. Prescription drugs
What happens to interest earned if the annuitant dies before the payout start date?
a. It is taxable
b. It is taxable only if no beneficiary is named
c. It is not taxable
d. It is only taxable if contract has been in force under one year - ANSWER-a. It is
taxable
What is Medicare Part B also known as?
, a. Medicare supplement
b. Supplementary medical insurance
c. Comprehensive insurance
d. Medicaid - ANSWER-b. Supplementary medical insurance
All of these statements concerning whole life insurance are false EXCEPT
a. Policyowner can take out a policy loan up to the face amount
b. When a whole life policy is surrendered, income taxes may be owned
c. Coverage is normally temporary
d. The death benefit is not affected by outstanding loans - ANSWER-b. When a
whole life policy is surrendered, income taxes may be owned
A master contract and certificate of coverage can be found in which type of policy?
a. Long-term
b. Medicaid
c. Group
d. Medicare - ANSWER-c. Group
What is the elimination period of an individual disability policy?
a. Time period an insured must wait before coverage begins
b. Time period a disabled person must wait before the benefits are paid
c. Time period after the policy issue date in which the provisions are still contestable
d. The point in time when benefits are no longer payable - ANSWER-b. Time period
a disabled person must wait before the benefits are paid
A single premium cash value policy can be described as
a. A policy that is paid up after only one payment
b. A policy that only requires an annual payment
c. A policy that is guaranteed issue
d. A policy that covers two or more lives - ANSWER-a. A policy that is paid up after
only one payment
Variable life insurance and Universal life insurance are very similar. Which of these
features are held exclusively by variable universal life insurance?
a. Policyowner may increase or decrease the premium payments
b. Policyowner may increase or decrease the face amount
c. Policyowner can contribute large sums of money
