XCEL USES OF LIFE INSURANCE
EXAM QUESTIONS AND ANSWERS
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and
their families) whose employment has been terminated the right to: - ANSWER-
continue group health benefits
Which of these circumstances is a Business Disability Buy-Sell policy designed to
help in the sale of a business? - ANSWER-business owner becoming disabled
Common exclusions to continuation of group coverage include: - ANSWER-all of the
above
What kind of Accidental Death and Dismemberment (AD&D) insurance beneficiary
requires his/her consent when a change of beneficiary is made? - ANSWER-
irrevocable beneficiary
Which type of policy would pay an employee's salary if the employer was injured in a
bicycle accident and out of work for six weeks? - ANSWER-business overhead
expense
Which of the following is the reimbursement of benefits for the treatment of a
beneficiary's injuries caused by a third party? - ANSWER-subrogation
T and S are named co-primary beneficiaries on a $500,000 Accidental Death and
Dismemberment policy insuring their father. Their mother was named contingent
beneficiary. Five years later, S dies of natural causes and the father is killed in a
scuba accident shortly afterwards. How much of the death benefit will the mother
receive? - ANSWER-$0
P and Q are married and have three children. P is the primary beneficiary on Q's
Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the
contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are
killed instantly. The Accidental Death benefits will be paid to - ANSWER-P only
A Business Overhead Expense policy: - ANSWER-covers business expenses such
as rent and utilities
M purchased an Accidental Death and Dismemberment (AD&D) policy and named
his son as beneficiary. M has the right to change the beneficiary designation at
anytime. What type of beneficiary is his son? - ANSWER-revocable
The difference between group insurance and blanket health policies is: - ANSWER-
blanket health policies do not issue certificates
The Health Insurance Portability and Accountability Act (HIPAA) gives privacy
protection for: - ANSWER-health information
, A policyowner's rights are limited under which beneficiary designation? - ANSWER-
Irrevocable
A policyowner would like to change the beneficiary on an Accidental Death and
Dismemberment (AD&D) insurance policy and make the change permanent. Which
type of designation would fulfill this need? - ANSWER-irrevocable
The Coordination of Benefits provision: - ANSWER-prevents an insured covered by
two health plans from making a profit on a covered loss
A Business Overhead Expense policy would cover which of the following if a
business owner becomes disabled? - ANSWER-utilities and office rent
Group/voluntary long-term care policy premiums are typically deducted from the
employee's income and, - ANSWER-are less costly as compared to individual long
term care coverage
An accident policy will most likely pay a benefit for a(n): - ANSWER-off-the-job
accident
An insured covered by Accidental Death and Dismemberment (AD&D) insurance has
just died. What will happen if the primary beneficiary had already died before the
insured and contingent beneficiary? - ANSWER-proceeds will go to the contingent
beneficiary
Accidental Death coverage is provided to commercial airline passengers in which of
the following types of policies? - ANSWER-Blanket Accident policy
What is issued to each employee of an employer health plan? - ANSWER-certificate
Which of the following is the reimbursement of benefits for the treatment of a
beneficiary's injuries caused by a third party? - ANSWER-subrogation
P is an employee who quits her job and wants to convert her group health coverage
to an individual policy. After the expiration of COBRA laws, which of the following
statements is TRUE? - ANSWER-she does NOT need to provide evidence of
insurability
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an
irrevocable beneficiary. What action will the insurance company take if T requests a
change of beneficiary? - ANSWER-request of the change will be refused
Which of the following statements does NOT accurately describe the tax treatment of
premiums and benefits of individual Accident and Health insurance? - ANSWER-
disability income policy premiums are tax-deductible
Which of these is NOT relevant when determining the amount of personal life
insurance needed? - ANSWER-local unemployment rate
EXAM QUESTIONS AND ANSWERS
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and
their families) whose employment has been terminated the right to: - ANSWER-
continue group health benefits
Which of these circumstances is a Business Disability Buy-Sell policy designed to
help in the sale of a business? - ANSWER-business owner becoming disabled
Common exclusions to continuation of group coverage include: - ANSWER-all of the
above
What kind of Accidental Death and Dismemberment (AD&D) insurance beneficiary
requires his/her consent when a change of beneficiary is made? - ANSWER-
irrevocable beneficiary
Which type of policy would pay an employee's salary if the employer was injured in a
bicycle accident and out of work for six weeks? - ANSWER-business overhead
expense
Which of the following is the reimbursement of benefits for the treatment of a
beneficiary's injuries caused by a third party? - ANSWER-subrogation
T and S are named co-primary beneficiaries on a $500,000 Accidental Death and
Dismemberment policy insuring their father. Their mother was named contingent
beneficiary. Five years later, S dies of natural causes and the father is killed in a
scuba accident shortly afterwards. How much of the death benefit will the mother
receive? - ANSWER-$0
P and Q are married and have three children. P is the primary beneficiary on Q's
Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the
contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are
killed instantly. The Accidental Death benefits will be paid to - ANSWER-P only
A Business Overhead Expense policy: - ANSWER-covers business expenses such
as rent and utilities
M purchased an Accidental Death and Dismemberment (AD&D) policy and named
his son as beneficiary. M has the right to change the beneficiary designation at
anytime. What type of beneficiary is his son? - ANSWER-revocable
The difference between group insurance and blanket health policies is: - ANSWER-
blanket health policies do not issue certificates
The Health Insurance Portability and Accountability Act (HIPAA) gives privacy
protection for: - ANSWER-health information
, A policyowner's rights are limited under which beneficiary designation? - ANSWER-
Irrevocable
A policyowner would like to change the beneficiary on an Accidental Death and
Dismemberment (AD&D) insurance policy and make the change permanent. Which
type of designation would fulfill this need? - ANSWER-irrevocable
The Coordination of Benefits provision: - ANSWER-prevents an insured covered by
two health plans from making a profit on a covered loss
A Business Overhead Expense policy would cover which of the following if a
business owner becomes disabled? - ANSWER-utilities and office rent
Group/voluntary long-term care policy premiums are typically deducted from the
employee's income and, - ANSWER-are less costly as compared to individual long
term care coverage
An accident policy will most likely pay a benefit for a(n): - ANSWER-off-the-job
accident
An insured covered by Accidental Death and Dismemberment (AD&D) insurance has
just died. What will happen if the primary beneficiary had already died before the
insured and contingent beneficiary? - ANSWER-proceeds will go to the contingent
beneficiary
Accidental Death coverage is provided to commercial airline passengers in which of
the following types of policies? - ANSWER-Blanket Accident policy
What is issued to each employee of an employer health plan? - ANSWER-certificate
Which of the following is the reimbursement of benefits for the treatment of a
beneficiary's injuries caused by a third party? - ANSWER-subrogation
P is an employee who quits her job and wants to convert her group health coverage
to an individual policy. After the expiration of COBRA laws, which of the following
statements is TRUE? - ANSWER-she does NOT need to provide evidence of
insurability
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an
irrevocable beneficiary. What action will the insurance company take if T requests a
change of beneficiary? - ANSWER-request of the change will be refused
Which of the following statements does NOT accurately describe the tax treatment of
premiums and benefits of individual Accident and Health insurance? - ANSWER-
disability income policy premiums are tax-deductible
Which of these is NOT relevant when determining the amount of personal life
insurance needed? - ANSWER-local unemployment rate
