XCEL EXAM QUESTIONS WITH
COMPLETE SOLUTIONS
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?
a. Partial disability
b. Nondisabling injury
c. Presumptive disability
d. Flat amount disability - ANSWER-a. Partial disability
A life insurance policy written on one contract for two people in which it is payable
upon the first death is called
a. Split
b. Shared
c. Joint
d. Survivorship - ANSWER-c. Joint
Under the Health Insurance Portability and Accountability Act (HIPAA), the
employee's new Group Health Plan will verify Creditable Coverage so that the
a. Employee's benefits still owed can be claimed
b. Employee cannot be excluded from the new employer's health plan
c. Employee's waiting period for coverage of a preexisting condition can be reduced
under the new employer's health plan
d. New health insurance carrier will have a clear record of any chronic conditions
that exist - ANSWER-c. Employee's waiting period for coverage of a preexisting
condition can be reduced under the new employer's health plan
Lorenzo is self employed with an S corporation. He is unmarried and had a net profit
for the tax year. What are the tax ramifications of his health insurance premiums paid
for the year?
a. 50% of his health insurance costs can be deducted from his gross income
b. 75% of his health insurance costs can be paid with pre-tax income
c. 100% of his health insurance costs can be deducted from his gross income
d. 100% of his health insurance costs can be paid with tax credits - ANSWER-c.
100% of his health insurance costs can be deducted from his gross income
,A producer may give an insurance applicant an article of merchandise having an
invoice value of ___ or less
a. $5
b. $15
c. $25
d. $50 - ANSWER-a. $5
Which of the following is present when an applicant stands to lose value if the
insured dies?
a. Insurability
b. Offer and acceptance
c. Insurable interest
d. Consideration - ANSWER-c. Insurable interest
At what age will a person normally enroll with an insurance carrier under a Part C
Medicare Advantage Plan?
a. Age 59 1/2
b. Age 60
c. Age 62
d. Age 65 - ANSWER-d. Age 65
How is Medicare Part B funded?
a. Employer taxes
b. Payroll taxes
c. User premiums
d. General tax revenue and user premiums - ANSWER-d. General tax revenue and
user premiums
After an insured gives notice of loss, what must he/she do if the insurer does not
furnish forms?
a. File a lawsuit
b. Contact the insurer again requesting forms
c. Nothing
d. File written proof of loss - ANSWER-d. File written proof of loss
An individual can enroll in a Part C Medicare Advantage Plan at what time?
a. When becoming eligible for Medicaid
b. At age of retirement
c. Age 59 1/2
d. When becoming eligible for Medicare - ANSWER-d. When becoming eligible for
Medicare
A pharmacy benefits covers prescription drugs derived from a list called a(n)
,a. Administrative drug list
b. Drug formulary
c. Controlled substance list
d. Generic benefit manager - ANSWER-b. Drug formulary
Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits.
Which of these benefit options would he choose?
a. Accelerated lifetime benefit
b. Guaranteed lifetime withdrawal benefit
c. Right of income rider
d. Guaranteed minimum accumulation benefit - ANSWER-b. Guaranteed lifetime
withdrawal benefit
A nonparticipating company is sometimes called a(n)
a. Alien insurer
b. Mutual insurer
c. Reinsurer
d. Stock insurer - ANSWER-d. Stock insurer
Which of these is the BEST example of misrepresentation?
a. Making a public advertisement that contains false or malicious information about
an insurance company
b. Unfairly discriminating against a person in any way on an insurance-related
matter
c. Publishing a false financial statement regarding an entity
d. Providing incorrect, misleading, incomplete, or materially untrue information in a
license application - ANSWER-d. Providing incorrect, misleading, incomplete, or
materially untrue information in a license application
When a decreasing term policy is purchased, it contains a decreasing death benefit
and
a. Increasing premiums
b. Level premiums
c. Decreasing premiums
d. Variable premiums - ANSWER-b. Level premiums
Without a Section 125 Plan in place, what would happen to an employee's payroll
contribution to an HSA?
a. It would be considered taxable income to the employee
b. The employee would not be allowed to an HSA
c. The employer would pay payroll tax and FICA on the contribution amount
, d. The employer would not be allowed to deduct the contribution form the
employee's pay - ANSWER-a. It would be considered taxable income to the
employee
Which of these is NOT considered to be a nonforfeiture option in a whole life
insurance policy?
a. Interest only
b. Reduced paid-up insurance
c. Extended term insurance
d. Cash surrender - ANSWER-a. Interest only
In what form do disability income policies typically pay benefits?
a. Lump sum
b. Periodic income
c. Tax credit
d. Annuity - ANSWER-b. Periodic income
All of these characteristics of a major medical expense policy EXCEPT
a. Large benefit maximums
b. Deductibles
c. Elimination periods
d. Coinsurance - ANSWER-c. Elimination periods
The elimination period under a hospital indemnity plan is
a. The period in which pre-existing conditions are not taken into consideration
b. The period in which all deductibles are eliminated
c. The specified number of days after an insurance policy's issues date during which
coverage is not afforded for sickness
d. The specified number of days an insured must wait before becoming eligible to
receive benefits for each hospitalization - ANSWER-d. The specified number of days
an insured must wait before becoming eligible to receive benefits for each
hospitalization
Ron has a life insurance policy with a face value of $100,000 and a cost of living
rider. If the consumer price index has gone up 4%, how much may Ron increase the
face value of the policy?
a. $400
b. $800
c. $2,000
d. $4,000 - ANSWER-d. $4,000
COMPLETE SOLUTIONS
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?
a. Partial disability
b. Nondisabling injury
c. Presumptive disability
d. Flat amount disability - ANSWER-a. Partial disability
A life insurance policy written on one contract for two people in which it is payable
upon the first death is called
a. Split
b. Shared
c. Joint
d. Survivorship - ANSWER-c. Joint
Under the Health Insurance Portability and Accountability Act (HIPAA), the
employee's new Group Health Plan will verify Creditable Coverage so that the
a. Employee's benefits still owed can be claimed
b. Employee cannot be excluded from the new employer's health plan
c. Employee's waiting period for coverage of a preexisting condition can be reduced
under the new employer's health plan
d. New health insurance carrier will have a clear record of any chronic conditions
that exist - ANSWER-c. Employee's waiting period for coverage of a preexisting
condition can be reduced under the new employer's health plan
Lorenzo is self employed with an S corporation. He is unmarried and had a net profit
for the tax year. What are the tax ramifications of his health insurance premiums paid
for the year?
a. 50% of his health insurance costs can be deducted from his gross income
b. 75% of his health insurance costs can be paid with pre-tax income
c. 100% of his health insurance costs can be deducted from his gross income
d. 100% of his health insurance costs can be paid with tax credits - ANSWER-c.
100% of his health insurance costs can be deducted from his gross income
,A producer may give an insurance applicant an article of merchandise having an
invoice value of ___ or less
a. $5
b. $15
c. $25
d. $50 - ANSWER-a. $5
Which of the following is present when an applicant stands to lose value if the
insured dies?
a. Insurability
b. Offer and acceptance
c. Insurable interest
d. Consideration - ANSWER-c. Insurable interest
At what age will a person normally enroll with an insurance carrier under a Part C
Medicare Advantage Plan?
a. Age 59 1/2
b. Age 60
c. Age 62
d. Age 65 - ANSWER-d. Age 65
How is Medicare Part B funded?
a. Employer taxes
b. Payroll taxes
c. User premiums
d. General tax revenue and user premiums - ANSWER-d. General tax revenue and
user premiums
After an insured gives notice of loss, what must he/she do if the insurer does not
furnish forms?
a. File a lawsuit
b. Contact the insurer again requesting forms
c. Nothing
d. File written proof of loss - ANSWER-d. File written proof of loss
An individual can enroll in a Part C Medicare Advantage Plan at what time?
a. When becoming eligible for Medicaid
b. At age of retirement
c. Age 59 1/2
d. When becoming eligible for Medicare - ANSWER-d. When becoming eligible for
Medicare
A pharmacy benefits covers prescription drugs derived from a list called a(n)
,a. Administrative drug list
b. Drug formulary
c. Controlled substance list
d. Generic benefit manager - ANSWER-b. Drug formulary
Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits.
Which of these benefit options would he choose?
a. Accelerated lifetime benefit
b. Guaranteed lifetime withdrawal benefit
c. Right of income rider
d. Guaranteed minimum accumulation benefit - ANSWER-b. Guaranteed lifetime
withdrawal benefit
A nonparticipating company is sometimes called a(n)
a. Alien insurer
b. Mutual insurer
c. Reinsurer
d. Stock insurer - ANSWER-d. Stock insurer
Which of these is the BEST example of misrepresentation?
a. Making a public advertisement that contains false or malicious information about
an insurance company
b. Unfairly discriminating against a person in any way on an insurance-related
matter
c. Publishing a false financial statement regarding an entity
d. Providing incorrect, misleading, incomplete, or materially untrue information in a
license application - ANSWER-d. Providing incorrect, misleading, incomplete, or
materially untrue information in a license application
When a decreasing term policy is purchased, it contains a decreasing death benefit
and
a. Increasing premiums
b. Level premiums
c. Decreasing premiums
d. Variable premiums - ANSWER-b. Level premiums
Without a Section 125 Plan in place, what would happen to an employee's payroll
contribution to an HSA?
a. It would be considered taxable income to the employee
b. The employee would not be allowed to an HSA
c. The employer would pay payroll tax and FICA on the contribution amount
, d. The employer would not be allowed to deduct the contribution form the
employee's pay - ANSWER-a. It would be considered taxable income to the
employee
Which of these is NOT considered to be a nonforfeiture option in a whole life
insurance policy?
a. Interest only
b. Reduced paid-up insurance
c. Extended term insurance
d. Cash surrender - ANSWER-a. Interest only
In what form do disability income policies typically pay benefits?
a. Lump sum
b. Periodic income
c. Tax credit
d. Annuity - ANSWER-b. Periodic income
All of these characteristics of a major medical expense policy EXCEPT
a. Large benefit maximums
b. Deductibles
c. Elimination periods
d. Coinsurance - ANSWER-c. Elimination periods
The elimination period under a hospital indemnity plan is
a. The period in which pre-existing conditions are not taken into consideration
b. The period in which all deductibles are eliminated
c. The specified number of days after an insurance policy's issues date during which
coverage is not afforded for sickness
d. The specified number of days an insured must wait before becoming eligible to
receive benefits for each hospitalization - ANSWER-d. The specified number of days
an insured must wait before becoming eligible to receive benefits for each
hospitalization
Ron has a life insurance policy with a face value of $100,000 and a cost of living
rider. If the consumer price index has gone up 4%, how much may Ron increase the
face value of the policy?
a. $400
b. $800
c. $2,000
d. $4,000 - ANSWER-d. $4,000
