XCEL SOLUTIONS EXAM 2
QUESTIONS AND ANSWERS
Which of these is NOT considered to be a common life insurance nonforfeiture
option?
Cash surrender
Extended term insurance
Reduced paid-up insurance
Life income annuity - ANSWER-Life income annuity
An insured dies from what appears to be accidental causes. When confirming the
cause of death, which of these actions by the insurer takes precedence?
Autopsy
Eyewitness account
Police report
Physician notes - ANSWER-Autopsy
Under a contract of adhesion,
there is the potential for an unequal exchange of value
the insurer's obligations are dependent upon certain acts of the insured individual
the terms must be accepted or rejected in full
only one party makes any kind of enforceable promise - ANSWER-the terms must be
accepted or rejected in full
A provision in a whole life policy that allows a policyowner to terminate the policy in
return for a reduced paid-up policy of the same type is called a(n)
insuring clause
payor provision
reinstatement provision
nonforfeiture provision - ANSWER-
Who is the individual paid on a fee-for-service basis?
Subscriber
Administrator
Insured
Provider - ANSWER-Provider
An insurer has the right to recover payment made to the insured from the negligent
party. These rights are called
contributory
indemnity
estoppel
,subrogation - ANSWER-subrogation
Which type of life insurance policy pays the face amount at the end of the specified
period if the insured is still alive?
Adjustable life policy
Modified life policy
Endowment policy
Universal life policy - ANSWER-Endowment policy
A Modified Endowment Contract (MEC) is best described as
a life insurance contract which accumulates cash values higher than the IRS will
allow
an annuity contract which was converted from a life insurance contract
a modified life contract which enjoys all the tax advantages of whole life insurance
a life insurance contract where all withdrawals prior to age 65 are subject to a 10%
penalty - ANSWER-a life insurance contract which accumulates cash values higher
than the IRS will allow
Upon receiving a producer complaint, the Commissioner may immediately
issue a cease and desist order
revoke the license
impose a fine
issue a warrant arrest - ANSWER-issue a cease and desist order
A disability elimination period is best described as a
time deductible
dollar deductible
eligibility period
probation period - ANSWER-time deductible
Which type of beneficiary should be named if the insured wants to give explicit
directions on how the policy proceeds should be paid?
individual
group
class
Estate - ANSWER-individual
Major Medical expense plans provide coverage for each of the following EXCEPT
medically necessary surgery
diagnostic tests
blood and urine labs
work-related injuries - ANSWER-work-related injuries
All of the following are core benefits of Medicare Supplement Plan A EXCEPT
, Deductible payments for the first 60 days of hospitalization under Medicare
hospitalization insurance
Medicare Part A hospice coinsurance or copayment
Medicare Part B coinsurance or copayment
The first three pints of blood received - ANSWER-Deductible payments for the first
60 days of hospitalization under Medicare hospitalization insurance
A single premium cash value policy can be described as
a policy that is paid up after only one payment
a policy that only requires an annual payment
a policy that is guaranteed issue
a policy that covers two or more lives - ANSWER-a policy that is paid up after only
one payment
An individual most likely will have an insurable interest in insuring a person's life if
an economic interest exists for the continuance of the insured's life
a financial interest exist at the time of insured's death
there is any blood relationship with the insured
a business relationship exists - ANSWER-an economic interest exists for the
continuance of the insured's life
What is the primary reason for buying an annuity?
provide tax-free income
provide risky, yet high return investment
provide an instant estate
provide future economic security - ANSWER-provide future economic security
A health insurance policy that allows an insurer to change the policyowner's
premiums, but NOT cancel the policy is called a(n)
guaranteed renewable policy
conditionally renewable policy
optionally renewable policy
noncancelable policy - ANSWER-guaranteed renewable policy
Which of the following decisions would a Health Savings Account (HSA) owner NOT
be able to make?
the amount contributed by the employer
the amount contributed by the owner
the underlying account investments used
the medical expenses paid for by the HSA - ANSWER-the amount contributed by the
employer
How many employees must an employer have for a terminated employee to be
eligible for COBRA?
QUESTIONS AND ANSWERS
Which of these is NOT considered to be a common life insurance nonforfeiture
option?
Cash surrender
Extended term insurance
Reduced paid-up insurance
Life income annuity - ANSWER-Life income annuity
An insured dies from what appears to be accidental causes. When confirming the
cause of death, which of these actions by the insurer takes precedence?
Autopsy
Eyewitness account
Police report
Physician notes - ANSWER-Autopsy
Under a contract of adhesion,
there is the potential for an unequal exchange of value
the insurer's obligations are dependent upon certain acts of the insured individual
the terms must be accepted or rejected in full
only one party makes any kind of enforceable promise - ANSWER-the terms must be
accepted or rejected in full
A provision in a whole life policy that allows a policyowner to terminate the policy in
return for a reduced paid-up policy of the same type is called a(n)
insuring clause
payor provision
reinstatement provision
nonforfeiture provision - ANSWER-
Who is the individual paid on a fee-for-service basis?
Subscriber
Administrator
Insured
Provider - ANSWER-Provider
An insurer has the right to recover payment made to the insured from the negligent
party. These rights are called
contributory
indemnity
estoppel
,subrogation - ANSWER-subrogation
Which type of life insurance policy pays the face amount at the end of the specified
period if the insured is still alive?
Adjustable life policy
Modified life policy
Endowment policy
Universal life policy - ANSWER-Endowment policy
A Modified Endowment Contract (MEC) is best described as
a life insurance contract which accumulates cash values higher than the IRS will
allow
an annuity contract which was converted from a life insurance contract
a modified life contract which enjoys all the tax advantages of whole life insurance
a life insurance contract where all withdrawals prior to age 65 are subject to a 10%
penalty - ANSWER-a life insurance contract which accumulates cash values higher
than the IRS will allow
Upon receiving a producer complaint, the Commissioner may immediately
issue a cease and desist order
revoke the license
impose a fine
issue a warrant arrest - ANSWER-issue a cease and desist order
A disability elimination period is best described as a
time deductible
dollar deductible
eligibility period
probation period - ANSWER-time deductible
Which type of beneficiary should be named if the insured wants to give explicit
directions on how the policy proceeds should be paid?
individual
group
class
Estate - ANSWER-individual
Major Medical expense plans provide coverage for each of the following EXCEPT
medically necessary surgery
diagnostic tests
blood and urine labs
work-related injuries - ANSWER-work-related injuries
All of the following are core benefits of Medicare Supplement Plan A EXCEPT
, Deductible payments for the first 60 days of hospitalization under Medicare
hospitalization insurance
Medicare Part A hospice coinsurance or copayment
Medicare Part B coinsurance or copayment
The first three pints of blood received - ANSWER-Deductible payments for the first
60 days of hospitalization under Medicare hospitalization insurance
A single premium cash value policy can be described as
a policy that is paid up after only one payment
a policy that only requires an annual payment
a policy that is guaranteed issue
a policy that covers two or more lives - ANSWER-a policy that is paid up after only
one payment
An individual most likely will have an insurable interest in insuring a person's life if
an economic interest exists for the continuance of the insured's life
a financial interest exist at the time of insured's death
there is any blood relationship with the insured
a business relationship exists - ANSWER-an economic interest exists for the
continuance of the insured's life
What is the primary reason for buying an annuity?
provide tax-free income
provide risky, yet high return investment
provide an instant estate
provide future economic security - ANSWER-provide future economic security
A health insurance policy that allows an insurer to change the policyowner's
premiums, but NOT cancel the policy is called a(n)
guaranteed renewable policy
conditionally renewable policy
optionally renewable policy
noncancelable policy - ANSWER-guaranteed renewable policy
Which of the following decisions would a Health Savings Account (HSA) owner NOT
be able to make?
the amount contributed by the employer
the amount contributed by the owner
the underlying account investments used
the medical expenses paid for by the HSA - ANSWER-the amount contributed by the
employer
How many employees must an employer have for a terminated employee to be
eligible for COBRA?
