XCEL LIFE, ACCIDENT, HEALTH
LICENSE EXAM QUESTIONS WITH
CORRECT ANSWERS
All of the following are included as part of a contract in the entire contract provision
EXCEPT the
- Riders
- Application
- Policy
- Changes made by the producer - ANSWER-Changes made by the producer
People with higher loss exposure have the tendency to purchase insurance more
often than those at average risk. This is called
- Adverse Selection
- Pre-existing conditions
- Risk retention
- Law of large numbers - ANSWER-Adverse Selection
What is known as the immediate specific event causing loss and giving rise to risk?
- Liability
- Peril
- Hazard
- Loss factor - ANSWER-Peril
Tom is shopping for a policy that covers two people and would pay the face amount
ONLY when the first person dies. The type of life policy he is looking for is called a
- Modified endowment contract
- Joint life policy
- Family income policy
- Survivorship life policy - ANSWER-Joint life policy
How much does Medicare Part B pay for physician fees?
- 60%
- 40%
- 80%
- 100% - ANSWER-80%
An individual covered under a disability income policy may be eligible for a partial
disability benefit if
- The cause of disability was from an accident only
- The insured is enrolled in a rehabilitation program
,- The insured can perform some of their job activities on a part-time basis
- The insured cannot perform any of their job activities - ANSWER-The insured can
perform some of their job activities on a part-time basis
Intentional withholding of material facts that would affect an insurance policy's
validity is call a(n)
- Estoppel
- Misrepresentation
- Adhesion
- Concealment - ANSWER-Concealment
A person who is a nonsmoker, of average weight, an in excellent health would most
likely be in which risk classification?
- Acceptable
- Standard
- Substandard
- Preferred - ANSWER-Preferred
What prevents a life insurance policy from being rescinded by the insurer after being
in force for two years?
- Grace period provision
- Free-look provision
- Subrogation
- Incontestability clause - ANSWER-Incontestability clause
Which of the following types of policies pays a stated amount for each day an
individual is hospitalized?
- Hospital confinement indemnity
- Hospital endowment
- Short-term major medical
- Surgical expense - ANSWER-Hospital confinement indemnity
Which of these statements is NOT true concerning recurrent disabilities?
- The recurrence of a disability must occur within a specified time period after the
prior disability
- A recurrent disability is considered to be a continuation of the prior disability
- The insurer continues coverage after a new elimination period
- The recurrent disability must be caused from the original disability - ANSWER-The
insurer continues coverage after a new elimination period
A dread disease policy is considered to be a type of
- Group health insurance policy
- Hospital expense policy
- Limited health insurance policy
,- Major medical insurance policy - ANSWER-Limited health insurance policy
Which of the following enables a life policy to be replaced with another life policy and
results in the postponement of the tax consequence?
- Section 1040 exchange
- Spendthrift option
- Nonforfeiture option
- Section 1035 exchange - ANSWER-Section 1035 exchange
which of the following actions may an insurance company NOT do in a health policy
that contains a guaranteed renewable premium benefit?
- Cancel policy if premiums are not paid
- Stop renewing policy when the insured reaches a specified age
- Increase the premiums on the basis of an entire classification
- Increase the premiums on an individual basis - ANSWER-Increase the premiums
on an individual basis
Coming from an insurance point of view, which of the following is the main risk
associated with disability?
- Decreased work skills
- Loss of Limbs
- Loss of income
- Decreased Mobility - ANSWER-Loss of income
ESOPs are typically invested in
- Non-qualified plans
- Employer Stock
- Annuities
- IRAs - ANSWER-Employer Stock
Why is a life insurance policy's delivery date important?
- The grace period begins on the policy delivery date
- The free-look period begins on the policy delivery date
- The elimination period begins on the policy delivery date
- The probationary period begins on the policy delivery date - ANSWER-The free-
look period begins on the policy delivery date
Which of the following is NOT considered to bean unfair claims settlement practice?
- Advising a claimant to hire an attorney
- Misrepresenting to insureds pertinent facts or policy provisions relating to coverage
at issue
- Failing to provide a reasonable basis for the denial of a claim upon request
- Failing to adopt and implement reasonable standards for prompt investigation and
processing of insured's claims - ANSWER-Advising a claimant to hire an attorney
, Which of the following statements about aleatory contracts is NOT true?
- Aleatory contracts are conditioned upon the occurrence of an event
- The insured and the insurer contribute equally to the contract
- Insurance contracts are considered aleatory
- The insured and the insurer have the potential for unequal contributions -
ANSWER-The insured and the insurer contribute equally to the contract
Employer-provided group term life insurance is exempt from income taxation up to
- $40,000
- $10,000
- $50,000
- $25,000 - ANSWER-$50,000
The coverage, conditions, and limitations in the master policy of a group contract can
be found in which document?
- Certificate of authority
- Certificate of coverage and benefits
- Consumer Report
- Coverage document - ANSWER-Certificate of coverage and benefits
In order to be considered "currently insured" under social security, an individual must
be credited with:
- 6 quarters of coverage during the last 13-quarter period
- 12 quarters of coverage during the last 24-quarter period
- 30 total quarters of coverage
- 15 total quarters of coverage - ANSWER-6 quarters of coverage during the last 13-
quarter period
What type of license is required for an individual who charges a fee to review an
insured's existing life insurance policy?
- Life agent
- Adjuster
- Life and disability analyst
- Life and disability counselor - ANSWER-Life and disability analyst
Employer contributions to qualified plans are
- Only available for key employees
- Only found in 403(b) plans
- Taxable to the employee
- Tax-deductible by the employer - ANSWER-Tax-deductible by the employer
Ownership of a life insurance policy may be temporarily transferred with a(n)
LICENSE EXAM QUESTIONS WITH
CORRECT ANSWERS
All of the following are included as part of a contract in the entire contract provision
EXCEPT the
- Riders
- Application
- Policy
- Changes made by the producer - ANSWER-Changes made by the producer
People with higher loss exposure have the tendency to purchase insurance more
often than those at average risk. This is called
- Adverse Selection
- Pre-existing conditions
- Risk retention
- Law of large numbers - ANSWER-Adverse Selection
What is known as the immediate specific event causing loss and giving rise to risk?
- Liability
- Peril
- Hazard
- Loss factor - ANSWER-Peril
Tom is shopping for a policy that covers two people and would pay the face amount
ONLY when the first person dies. The type of life policy he is looking for is called a
- Modified endowment contract
- Joint life policy
- Family income policy
- Survivorship life policy - ANSWER-Joint life policy
How much does Medicare Part B pay for physician fees?
- 60%
- 40%
- 80%
- 100% - ANSWER-80%
An individual covered under a disability income policy may be eligible for a partial
disability benefit if
- The cause of disability was from an accident only
- The insured is enrolled in a rehabilitation program
,- The insured can perform some of their job activities on a part-time basis
- The insured cannot perform any of their job activities - ANSWER-The insured can
perform some of their job activities on a part-time basis
Intentional withholding of material facts that would affect an insurance policy's
validity is call a(n)
- Estoppel
- Misrepresentation
- Adhesion
- Concealment - ANSWER-Concealment
A person who is a nonsmoker, of average weight, an in excellent health would most
likely be in which risk classification?
- Acceptable
- Standard
- Substandard
- Preferred - ANSWER-Preferred
What prevents a life insurance policy from being rescinded by the insurer after being
in force for two years?
- Grace period provision
- Free-look provision
- Subrogation
- Incontestability clause - ANSWER-Incontestability clause
Which of the following types of policies pays a stated amount for each day an
individual is hospitalized?
- Hospital confinement indemnity
- Hospital endowment
- Short-term major medical
- Surgical expense - ANSWER-Hospital confinement indemnity
Which of these statements is NOT true concerning recurrent disabilities?
- The recurrence of a disability must occur within a specified time period after the
prior disability
- A recurrent disability is considered to be a continuation of the prior disability
- The insurer continues coverage after a new elimination period
- The recurrent disability must be caused from the original disability - ANSWER-The
insurer continues coverage after a new elimination period
A dread disease policy is considered to be a type of
- Group health insurance policy
- Hospital expense policy
- Limited health insurance policy
,- Major medical insurance policy - ANSWER-Limited health insurance policy
Which of the following enables a life policy to be replaced with another life policy and
results in the postponement of the tax consequence?
- Section 1040 exchange
- Spendthrift option
- Nonforfeiture option
- Section 1035 exchange - ANSWER-Section 1035 exchange
which of the following actions may an insurance company NOT do in a health policy
that contains a guaranteed renewable premium benefit?
- Cancel policy if premiums are not paid
- Stop renewing policy when the insured reaches a specified age
- Increase the premiums on the basis of an entire classification
- Increase the premiums on an individual basis - ANSWER-Increase the premiums
on an individual basis
Coming from an insurance point of view, which of the following is the main risk
associated with disability?
- Decreased work skills
- Loss of Limbs
- Loss of income
- Decreased Mobility - ANSWER-Loss of income
ESOPs are typically invested in
- Non-qualified plans
- Employer Stock
- Annuities
- IRAs - ANSWER-Employer Stock
Why is a life insurance policy's delivery date important?
- The grace period begins on the policy delivery date
- The free-look period begins on the policy delivery date
- The elimination period begins on the policy delivery date
- The probationary period begins on the policy delivery date - ANSWER-The free-
look period begins on the policy delivery date
Which of the following is NOT considered to bean unfair claims settlement practice?
- Advising a claimant to hire an attorney
- Misrepresenting to insureds pertinent facts or policy provisions relating to coverage
at issue
- Failing to provide a reasonable basis for the denial of a claim upon request
- Failing to adopt and implement reasonable standards for prompt investigation and
processing of insured's claims - ANSWER-Advising a claimant to hire an attorney
, Which of the following statements about aleatory contracts is NOT true?
- Aleatory contracts are conditioned upon the occurrence of an event
- The insured and the insurer contribute equally to the contract
- Insurance contracts are considered aleatory
- The insured and the insurer have the potential for unequal contributions -
ANSWER-The insured and the insurer contribute equally to the contract
Employer-provided group term life insurance is exempt from income taxation up to
- $40,000
- $10,000
- $50,000
- $25,000 - ANSWER-$50,000
The coverage, conditions, and limitations in the master policy of a group contract can
be found in which document?
- Certificate of authority
- Certificate of coverage and benefits
- Consumer Report
- Coverage document - ANSWER-Certificate of coverage and benefits
In order to be considered "currently insured" under social security, an individual must
be credited with:
- 6 quarters of coverage during the last 13-quarter period
- 12 quarters of coverage during the last 24-quarter period
- 30 total quarters of coverage
- 15 total quarters of coverage - ANSWER-6 quarters of coverage during the last 13-
quarter period
What type of license is required for an individual who charges a fee to review an
insured's existing life insurance policy?
- Life agent
- Adjuster
- Life and disability analyst
- Life and disability counselor - ANSWER-Life and disability analyst
Employer contributions to qualified plans are
- Only available for key employees
- Only found in 403(b) plans
- Taxable to the employee
- Tax-deductible by the employer - ANSWER-Tax-deductible by the employer
Ownership of a life insurance policy may be temporarily transferred with a(n)
