XCEL TESTING SOLUTIONS LIFE AND
HEALTH INSURANCE 215 EXAM
QUESTIONS WITH COMPLETE
ANSWERS
the waiting period for disability insurance policy - ANSWER-excludes payments for a
short-term illness or injury
waiting period = elimination period
all of these are valid policy dividend options for life insurance policy owner EXPECT -
ANSWER-accumulate without interest
CORRECT: cash outlay to the policyowner, reduction in policy premium buy
additional insurance coverage
people with higher loss exposure have the tendency to purchase insurance more
often than those at average risk. This is called - ANSWER-adverse selection
when can a life policy no longer be canceled for non-fraudulent Miss statements after
its date of issue? - ANSWER-2 years
the contestable period for a life policy in Michigan is 2 years.
variable life insurance and universal life insurance are very similar. Which of these
features are held exclusively by variable universal life insurance? - ANSWER-
policyowner has the right to select the investment which will produce the greatest
return
Bob and Tom start a business. Since each partner contributes an important element
to the success of the business, they decide to take life insurance policies out on
each other, and name each other as beneficiaries. Eventually, they retired and
dissolved the business. Bob dies 12 months later. The policies continue in force with
no change. Both partners are still a married at the time of Bob's death. in this
situation, who receive Bob's policy proceeds? - ANSWER-Tom
insurable interest only has to exist at the time of the application, not at the time of the
claim. Being there was no change in beneficiary prior to Bob's death, Tom was still
receive the policy proceeds.
upon receiving a producer complaint, the Commissioner may immediately -
ANSWER-issue a cease-and-desist order
a producer's fiduciary responsibility includes which of the following activities? -
ANSWER-recording the receipt and distribution of premiums due to an insurer
,an agent show use reasonable accounting methods to record funds received in his
or her fiduciary capacity including the receipt and distribution of all premiums do
each of his or her insurers.
all of the following occurrences may result in license revocation EXCEPT -
ANSWER-producing in an adequate amount of new premium
CORRECT: having been convicted of a felony, forging another's name to an
application for insurance, failing to meet court-ordered child support obligations
a proposed insured for a health insurance policy was treated for heart disease within
the past year. When applying for health insurance, the heart disease treatment -
ANSWER-indicates a pre-existing condition
for what purpose is a life insurance application backdated? - ANSWER-to reduce the
premium
what is the name of the provision which states that a copy of the application must be
attached to the policy when issued? - ANSWER-entire contract
a renewable term life insurance policy can be renewed - ANSWER-at a
predetermined date or age, regardless of the insurance health
Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value.
She would like to borrow $15,000 against the cash value. Which of the following
statements is TRUE? - ANSWER-net death benefit will be reduced if the loan is not
repaid
a life insurance policy normally contains a provision that restricts coverage in the
event of death under all of the following situations EXCEPT - ANSWER-fare-paying
passenger
CORRECT: pilot of personal airplane, suicide, War
the above may not be covered or have restrictions.
which of the following signatures is not required on an individual insurance
application? - ANSWER-insurer
Which of the following decisions would a Health Savings Account (HSA) owner NOT
to be able to make? - ANSWER-the amount contributed by the employer
CORRECT: the amount contributed by the owner, the underlying account
Investments used, the medical expenses paid for by the HSA
an individual with a Health Savings a
Account (HAS) can make all of these decisions except how much the employer will
contribute.
,which of the following is NOT included under health benefit plan? - ANSWER-
Hospital Indemnity plan
INCLUDED: major medical policy, basic Hospital policy, surgical expense policy
A Modified Endowment Contract (MEC) is best described as - ANSWER-a life
insurance contract which accumulates cash value is higher than the IRS will allow
a guaranteed issue life insurance policy has no - ANSWER-medical underwriting
which type of business insurance is meant to cover the cost of continuing to do
business while the owner is disabled? - ANSWER-business overhead expense
policy
which of the following is an annuity that is linked to a market-related index? -
ANSWER-equity-indexed annuity
producer commissions may NOT be paid to - ANSWER-licensed producers not
appointed by an insurer
CORRECT: licensed and appointed producers, licensed and appointed producers
who are sharing commissions, non-resident producers
Elizabeth is the beneficiary of a life insurance policy. She's receiving the death
benefit and payments of $10,000 per month until the principal and interest has been
paid out. Which option was chosen? - ANSWER-fixed amount
which of the following is an example of the insured's consideration? - ANSWER-a
paid premium
in the state of Michigan, a licensed producer - ANSWER-represents the insurer
which of these would NOT considered a presumptive disability? - ANSWER-loss of a
leg or arm
CORRECT: loss of vision and speech, loss of hearing, loss of leg and arm
in Michigan, a small employer is comprised of - ANSWER-2 to 50 employees
which of the following would be considered a possible application and contract policy
holder for group health benefits? - ANSWER-employer
an employer would be a possible application and contract policyholder of a single
Master contract or Master policy for group health benefits.
Tim has a health insurance with a deductible of $500 and an 80/20 coinsurance.
How much will she pay if she incurs a loss of $1,500? - ANSWER-$700
in this situation, the insured will pay $500 deductible plus $200 coinsurance = $700.
, $1500-$500=$1000
$1000×20%=$200
$500+$200=$700
which of the following is a requirement for ANY change in an insurance application? -
ANSWER-change must be initialed by the applicant
what does the Consolidated Omnibus Budget Reconciliation act COBRA of 1985
allow an employee to do? - ANSWER-in the event of an employment termination,
group health insurance can be kept at the employee pays the
when a decreasing term policies purchased, it contains a decreasing death benefit
and - ANSWER-level premiums
major medical expense Plants provide coverage for each of the following EXCEPT -
ANSWER-work-related injuries
CORRECT: medically necessary surgery, diagnostic tests, blood in urine lab screens
a form of medical health insurance covering the treatment and care of gum disease
is called - ANSWER-Dental expense insurance
in what form do disability income policies typically pay benefits? - ANSWER-periodic
income
which of these techniques will remove the risk of losing money in the stock market by
never purchasing stocks? - ANSWER-risk avoidance
health insurance involves two parents, accident and _______ - ANSWER-sickness
continuous 24-hour care provided by licensed medical professionals under the direct
supervision of a physician is called - ANSWER-skilled nursing care
in what part of an insurance policy are policy benefits found? - ANSWER-
declarations
essentially, the insurance declaration page is like a quick guide to the insurance
policy, providing all the basic information the policyholder needs to know.
what type of policy would only provide coverage for specific types of illnesses
(cancer, stroke, Etc)? - ANSWER-dread disease insurance
Shawn, Mike, and Dave are brothers who have a $100,000 "first to die" joint life
policy covering all three of their lives. If Mike dies first, the policy proceeds -
ANSWER-will no longer provide Insurance protection
which of the following is NOT a common exclusion for medical expense policy? -
ANSWER-physical therapy
HEALTH INSURANCE 215 EXAM
QUESTIONS WITH COMPLETE
ANSWERS
the waiting period for disability insurance policy - ANSWER-excludes payments for a
short-term illness or injury
waiting period = elimination period
all of these are valid policy dividend options for life insurance policy owner EXPECT -
ANSWER-accumulate without interest
CORRECT: cash outlay to the policyowner, reduction in policy premium buy
additional insurance coverage
people with higher loss exposure have the tendency to purchase insurance more
often than those at average risk. This is called - ANSWER-adverse selection
when can a life policy no longer be canceled for non-fraudulent Miss statements after
its date of issue? - ANSWER-2 years
the contestable period for a life policy in Michigan is 2 years.
variable life insurance and universal life insurance are very similar. Which of these
features are held exclusively by variable universal life insurance? - ANSWER-
policyowner has the right to select the investment which will produce the greatest
return
Bob and Tom start a business. Since each partner contributes an important element
to the success of the business, they decide to take life insurance policies out on
each other, and name each other as beneficiaries. Eventually, they retired and
dissolved the business. Bob dies 12 months later. The policies continue in force with
no change. Both partners are still a married at the time of Bob's death. in this
situation, who receive Bob's policy proceeds? - ANSWER-Tom
insurable interest only has to exist at the time of the application, not at the time of the
claim. Being there was no change in beneficiary prior to Bob's death, Tom was still
receive the policy proceeds.
upon receiving a producer complaint, the Commissioner may immediately -
ANSWER-issue a cease-and-desist order
a producer's fiduciary responsibility includes which of the following activities? -
ANSWER-recording the receipt and distribution of premiums due to an insurer
,an agent show use reasonable accounting methods to record funds received in his
or her fiduciary capacity including the receipt and distribution of all premiums do
each of his or her insurers.
all of the following occurrences may result in license revocation EXCEPT -
ANSWER-producing in an adequate amount of new premium
CORRECT: having been convicted of a felony, forging another's name to an
application for insurance, failing to meet court-ordered child support obligations
a proposed insured for a health insurance policy was treated for heart disease within
the past year. When applying for health insurance, the heart disease treatment -
ANSWER-indicates a pre-existing condition
for what purpose is a life insurance application backdated? - ANSWER-to reduce the
premium
what is the name of the provision which states that a copy of the application must be
attached to the policy when issued? - ANSWER-entire contract
a renewable term life insurance policy can be renewed - ANSWER-at a
predetermined date or age, regardless of the insurance health
Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value.
She would like to borrow $15,000 against the cash value. Which of the following
statements is TRUE? - ANSWER-net death benefit will be reduced if the loan is not
repaid
a life insurance policy normally contains a provision that restricts coverage in the
event of death under all of the following situations EXCEPT - ANSWER-fare-paying
passenger
CORRECT: pilot of personal airplane, suicide, War
the above may not be covered or have restrictions.
which of the following signatures is not required on an individual insurance
application? - ANSWER-insurer
Which of the following decisions would a Health Savings Account (HSA) owner NOT
to be able to make? - ANSWER-the amount contributed by the employer
CORRECT: the amount contributed by the owner, the underlying account
Investments used, the medical expenses paid for by the HSA
an individual with a Health Savings a
Account (HAS) can make all of these decisions except how much the employer will
contribute.
,which of the following is NOT included under health benefit plan? - ANSWER-
Hospital Indemnity plan
INCLUDED: major medical policy, basic Hospital policy, surgical expense policy
A Modified Endowment Contract (MEC) is best described as - ANSWER-a life
insurance contract which accumulates cash value is higher than the IRS will allow
a guaranteed issue life insurance policy has no - ANSWER-medical underwriting
which type of business insurance is meant to cover the cost of continuing to do
business while the owner is disabled? - ANSWER-business overhead expense
policy
which of the following is an annuity that is linked to a market-related index? -
ANSWER-equity-indexed annuity
producer commissions may NOT be paid to - ANSWER-licensed producers not
appointed by an insurer
CORRECT: licensed and appointed producers, licensed and appointed producers
who are sharing commissions, non-resident producers
Elizabeth is the beneficiary of a life insurance policy. She's receiving the death
benefit and payments of $10,000 per month until the principal and interest has been
paid out. Which option was chosen? - ANSWER-fixed amount
which of the following is an example of the insured's consideration? - ANSWER-a
paid premium
in the state of Michigan, a licensed producer - ANSWER-represents the insurer
which of these would NOT considered a presumptive disability? - ANSWER-loss of a
leg or arm
CORRECT: loss of vision and speech, loss of hearing, loss of leg and arm
in Michigan, a small employer is comprised of - ANSWER-2 to 50 employees
which of the following would be considered a possible application and contract policy
holder for group health benefits? - ANSWER-employer
an employer would be a possible application and contract policyholder of a single
Master contract or Master policy for group health benefits.
Tim has a health insurance with a deductible of $500 and an 80/20 coinsurance.
How much will she pay if she incurs a loss of $1,500? - ANSWER-$700
in this situation, the insured will pay $500 deductible plus $200 coinsurance = $700.
, $1500-$500=$1000
$1000×20%=$200
$500+$200=$700
which of the following is a requirement for ANY change in an insurance application? -
ANSWER-change must be initialed by the applicant
what does the Consolidated Omnibus Budget Reconciliation act COBRA of 1985
allow an employee to do? - ANSWER-in the event of an employment termination,
group health insurance can be kept at the employee pays the
when a decreasing term policies purchased, it contains a decreasing death benefit
and - ANSWER-level premiums
major medical expense Plants provide coverage for each of the following EXCEPT -
ANSWER-work-related injuries
CORRECT: medically necessary surgery, diagnostic tests, blood in urine lab screens
a form of medical health insurance covering the treatment and care of gum disease
is called - ANSWER-Dental expense insurance
in what form do disability income policies typically pay benefits? - ANSWER-periodic
income
which of these techniques will remove the risk of losing money in the stock market by
never purchasing stocks? - ANSWER-risk avoidance
health insurance involves two parents, accident and _______ - ANSWER-sickness
continuous 24-hour care provided by licensed medical professionals under the direct
supervision of a physician is called - ANSWER-skilled nursing care
in what part of an insurance policy are policy benefits found? - ANSWER-
declarations
essentially, the insurance declaration page is like a quick guide to the insurance
policy, providing all the basic information the policyholder needs to know.
what type of policy would only provide coverage for specific types of illnesses
(cancer, stroke, Etc)? - ANSWER-dread disease insurance
Shawn, Mike, and Dave are brothers who have a $100,000 "first to die" joint life
policy covering all three of their lives. If Mike dies first, the policy proceeds -
ANSWER-will no longer provide Insurance protection
which of the following is NOT a common exclusion for medical expense policy? -
ANSWER-physical therapy
