XCEL SOLUTIONS NORTH CAROLINA
LIFE AND HEALTH STATE - EXAM
SIMULATOR 1 (PART I) QUESTIONS
AND ANSWERS
Which statement is true regarding a minor beneficiary? - ANSWER-Normally, a
guardian is required to be appointed in the Beneficiary clause of the contract.
In most cases, insurers require that a guardian be appointed in the Beneficiary
clause of the policy or that a guardian be designated in the will.
T circulated false statements that were maliciously critical of an insurer's financial
condition. T may be found guilty of - ANSWER-defamation.
A person who issues false written or oral statements that are maliciously critical of
the financial condition of an insurance company may be found guilty of defamation.
In North Carolina, an agent obtains his/her license from the - ANSWER-
Commissioner of Insurance.
Insurance agents MUST obtain a license from North Carolina's Commissioner of
Insurance.
What is considered a valid reason for small businesses to insure the lives of its major
shareholders? - ANSWER-Fund a buy-sell agreement.
Life insurance is purchased to fund a buy-sell agreement in the event of the death of
a major shareholder in a business.
If a dispute arises over an insurance contract, the agent who sold the policy is
considered to represent the - ANSWER-company.
If a dispute arises over an insurance contract, the agent who sold the policy is
considered to represent the insurance company.
Which of the following is considered an element of a Variable Life Policy? -
ANSWER-Underlying equity investment.
One characteristic of a Variable Life policy is it contains an underlying equity
investment.
Which of the following BEST describes how pre-admission certification is used? -
ANSWER-Used to prevent nonessential medical costs.
Pre-admission certification is used to prevent unnecessary medical costs.
,According to the Time Payment of Claims provision, the insurer must pay Disability
Income benefits no less frequently than which of the following options? - ANSWER-
Monthly.
The time of payment for claims is usually specified in different policies as 60 days,
45 days, or 30 days. However, if the claim involves disability income benefits, the
benefits must be paid not less frequently than monthly.
A catastrophic illness would be best covered by which of the following health
insurance plans? - ANSWER-Major Medical.
Major Medical health insurance coverage is best suited for meeting catastrophic
illness expenses.
The provision that defines to whom the insurer will pay benefits to is called: -
ANSWER-Payment of Claims.
The Payment of Claims provision in a Health Insurance policy states to whom claims
will be paid.
For which of the following expenses does a Basic Hospital policy pay? - ANSWER-
Hospital room and board.
A Basic Hospital policy pays expenses for hospital room and board, as well as other
miscellaneous medical expenses incurred during hospitalization.
A non-contributory plan requires ____ participation of all eligible employees. -
ANSWER-100%.
The percentage of eligible employees participating in a non-contributory plan is
required to be at 100%.
What does a Face Amount Plus Cash Value Policy pay upon the insured's death? -
ANSWER-Face amount plus the policy's cash value.
A Face Amount Plus Cash Value Policy is a contract that promises to pay at the
insured's death the face amount of the policy plus a sum equal to the policy's cash
value.
Which of the following MUST be included with the continuation of coverage of a
group Hospital, Surgical, and Major Medical policy? - ANSWER-Hospital expenses.
Continuation of coverage of a group Hospital, Surgical, and Major Medical Policy
MUST include hospital expenses.
Which of the following statements about noncontributory employee group life
insurance is FALSE? - ANSWER-A minimum number of employees is required to
participate.
, Noncontributory employee group life insurance plans must cover ALL eligible
employees at all times.
True Statements:
1) All eligible employees must be covered.
2) No evidence of insurability required.
3) Must have conversion rights.
Which of the following BEST describes a Hospital Indemnity policy? - ANSWER-
Coverage that pays a stated amount per day of a covered hospitalization.
The policy provision that entitles the insurer to establish conditions the insured must
meet while a claim is pending is: - ANSWER-Time Limit on Certain Defenses.
This provision limits the period during which an insurer can deny a claim based on a
misstatement made by the insured.
A Limited-Pay Life policy has: - ANSWER-premium payments limited to a specified
number of years.
In a Limited-Pay Life policy, premium payments are limited to a specified number of
years.
Which of these provisions require proof of insurability after a policy has lapsed? -
ANSWER-Reinstatement.
Most insurers require evidence of insurability be provided upon reinstatement of a
lapsed policy.
D is an architect receiving Disability Income benefits who is not able to return to work
full time, but can work on a part-time basis. Which of these features would allow D to
continue receiving benefits? - ANSWER-Residual Benefit clause.
A residual amount benefit is based on the proportion of income actually lost due to
the partial disability, taking into account the fact that the insured is able to work and
earn some income.
Which of the following statements is correct regarding an employer/employee group
health plan? - ANSWER-The employer receives a master policy and the employees
receive certificates.
Under an employer/employee group health plan the employer receives a master
policy and the employees receive certificates.
The circulation of written literature that is maliciously critical of an insurer's financial
condition is called - ANSWER-defamation.
Circulation of any oral or written statement or any pamphlet, circular, article, or
literature that is false or maliciously critical of or derogatory to the financial condition
of an insurer is known as defamation.
LIFE AND HEALTH STATE - EXAM
SIMULATOR 1 (PART I) QUESTIONS
AND ANSWERS
Which statement is true regarding a minor beneficiary? - ANSWER-Normally, a
guardian is required to be appointed in the Beneficiary clause of the contract.
In most cases, insurers require that a guardian be appointed in the Beneficiary
clause of the policy or that a guardian be designated in the will.
T circulated false statements that were maliciously critical of an insurer's financial
condition. T may be found guilty of - ANSWER-defamation.
A person who issues false written or oral statements that are maliciously critical of
the financial condition of an insurance company may be found guilty of defamation.
In North Carolina, an agent obtains his/her license from the - ANSWER-
Commissioner of Insurance.
Insurance agents MUST obtain a license from North Carolina's Commissioner of
Insurance.
What is considered a valid reason for small businesses to insure the lives of its major
shareholders? - ANSWER-Fund a buy-sell agreement.
Life insurance is purchased to fund a buy-sell agreement in the event of the death of
a major shareholder in a business.
If a dispute arises over an insurance contract, the agent who sold the policy is
considered to represent the - ANSWER-company.
If a dispute arises over an insurance contract, the agent who sold the policy is
considered to represent the insurance company.
Which of the following is considered an element of a Variable Life Policy? -
ANSWER-Underlying equity investment.
One characteristic of a Variable Life policy is it contains an underlying equity
investment.
Which of the following BEST describes how pre-admission certification is used? -
ANSWER-Used to prevent nonessential medical costs.
Pre-admission certification is used to prevent unnecessary medical costs.
,According to the Time Payment of Claims provision, the insurer must pay Disability
Income benefits no less frequently than which of the following options? - ANSWER-
Monthly.
The time of payment for claims is usually specified in different policies as 60 days,
45 days, or 30 days. However, if the claim involves disability income benefits, the
benefits must be paid not less frequently than monthly.
A catastrophic illness would be best covered by which of the following health
insurance plans? - ANSWER-Major Medical.
Major Medical health insurance coverage is best suited for meeting catastrophic
illness expenses.
The provision that defines to whom the insurer will pay benefits to is called: -
ANSWER-Payment of Claims.
The Payment of Claims provision in a Health Insurance policy states to whom claims
will be paid.
For which of the following expenses does a Basic Hospital policy pay? - ANSWER-
Hospital room and board.
A Basic Hospital policy pays expenses for hospital room and board, as well as other
miscellaneous medical expenses incurred during hospitalization.
A non-contributory plan requires ____ participation of all eligible employees. -
ANSWER-100%.
The percentage of eligible employees participating in a non-contributory plan is
required to be at 100%.
What does a Face Amount Plus Cash Value Policy pay upon the insured's death? -
ANSWER-Face amount plus the policy's cash value.
A Face Amount Plus Cash Value Policy is a contract that promises to pay at the
insured's death the face amount of the policy plus a sum equal to the policy's cash
value.
Which of the following MUST be included with the continuation of coverage of a
group Hospital, Surgical, and Major Medical policy? - ANSWER-Hospital expenses.
Continuation of coverage of a group Hospital, Surgical, and Major Medical Policy
MUST include hospital expenses.
Which of the following statements about noncontributory employee group life
insurance is FALSE? - ANSWER-A minimum number of employees is required to
participate.
, Noncontributory employee group life insurance plans must cover ALL eligible
employees at all times.
True Statements:
1) All eligible employees must be covered.
2) No evidence of insurability required.
3) Must have conversion rights.
Which of the following BEST describes a Hospital Indemnity policy? - ANSWER-
Coverage that pays a stated amount per day of a covered hospitalization.
The policy provision that entitles the insurer to establish conditions the insured must
meet while a claim is pending is: - ANSWER-Time Limit on Certain Defenses.
This provision limits the period during which an insurer can deny a claim based on a
misstatement made by the insured.
A Limited-Pay Life policy has: - ANSWER-premium payments limited to a specified
number of years.
In a Limited-Pay Life policy, premium payments are limited to a specified number of
years.
Which of these provisions require proof of insurability after a policy has lapsed? -
ANSWER-Reinstatement.
Most insurers require evidence of insurability be provided upon reinstatement of a
lapsed policy.
D is an architect receiving Disability Income benefits who is not able to return to work
full time, but can work on a part-time basis. Which of these features would allow D to
continue receiving benefits? - ANSWER-Residual Benefit clause.
A residual amount benefit is based on the proportion of income actually lost due to
the partial disability, taking into account the fact that the insured is able to work and
earn some income.
Which of the following statements is correct regarding an employer/employee group
health plan? - ANSWER-The employer receives a master policy and the employees
receive certificates.
Under an employer/employee group health plan the employer receives a master
policy and the employees receive certificates.
The circulation of written literature that is maliciously critical of an insurer's financial
condition is called - ANSWER-defamation.
Circulation of any oral or written statement or any pamphlet, circular, article, or
literature that is false or maliciously critical of or derogatory to the financial condition
of an insurer is known as defamation.
