XCEL FL 240 LITERALLY EVERY REVIEW QUESTION
IN THE COURSE
An insurance applicant MUST be informed of an investigation regarding his/her
reputation and character according to the - Answer -"Fair Credit Reporting Act".
When a policy pays dividends to its policyholders, it is said to be - Answer -
"participating".
What is the name of the law that requires insurers to disclose information gathering
practices and where the information was obtained? - Answer -"1970 Fair Credit
Reporting Act".
The Consideration clause of an insurance contract includes: - Answer -the schedule
and amount of premium payments
What is the consideration given by an insurer in the Consideration clause of a life
policy? - Answer -Promise to pay a death benefit to a named beneficiary
E and F are business partners. Each takes out a $500,000 life insurance policy on the
other, naming himself as primary beneficiary. E and F eventually terminate their
business, and four months later E dies. Although E was married with three children at
the time of death, the primary beneficiary is still F. However, an insurable interest no
longer exists. Where will the proceeds from E's life insurance policy be directed to? -
Answer -F
Insurance policies are offered on a "take it or leave it" basis, which make them: -
Answer -Contracts of Adhesion
A contract where one party either accepts or rejects the terms of a contract written by
another party is called a contract of - Answer -adhesion
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called: - Answer -representations
Which of these is considered a statement that is assured to be true in every respect? -
Answer -Warranty
When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have: - Answer -insurable interest in the proposed
insured
A Business Disability Buyout plan policy is designed: - Answer -to pay benefits to the
Corporation or other shareholders
,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
Accidental Death coverage is provided to commercial airline passengers in which of the
following types of policies? - Answer -Blanket Accident policy
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
A Business Overhead Expense policy would cover which of the following if a business
owner becomes disabled? - Answer -Utilities and office rent
How would a contingent beneficiary receive the policy proceeds in an Accidental Death
and Dismemberment (AD&D) policy? - Answer -If the primary beneficiary dies before
the insured
The provision in a Group Health policy that allows the insurer to postpone coverage for
a covered illness 30 days after the policy's effective date is referred to as the: - Answer
-Waiting Period
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
XYZ Company pays the entire premium for its group health plan. The MINIMUM
percentage of eligible employees that must be covered is: - Answer -100%
On an Accidental Death and Dismemberment (AD&D) insurance policy, who is qualified
to change the beneficiary designation? - Answer -Policyowner
When an employee is required to pay a portion of the premium for an
employer/employee group health plan, the employee is covered under which of the
following plans? - Answer -Contributory
What type of reinsurance contract involves two companies automatically sharing their
risk exposure - Answer -Treaty
Select the appropriate response Which of the following BEST describes a warranty? -
Answer -Statement guaranteed to be true
Who makes the legally enforceable promises in a unilateral insurance policy? - Answer
-Insurance Company
,A life insurance arrangement which circumvents insurable interest statutes is called: -
Answer -Investor-Originated Life Insurance
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of
the following contractual elements? - Answer -Legal Purpose (Insurable Interest)
All of the following are considered to be typical characteristics describing the nature of
an insurance contract, EXCEPT: - Answer -Bilateral
Life and health insurance policies are: - Answer -Unilateral contracts
Which mode of payment is NOT used by health insurance policies? - Answer -Single
premium
The reason for a business having a Business Overhead Expense Disability Plan is to
cover - Answer -fixed business expenses
Which of these types of coverage is best described as a short term medical policy? -
Answer -interim coverage
What is issued to each employee of an employer health plan? - Answer -Certificate
The individual who provides general medical care for a patient as well as the referral for
specialized care is known as a: - Answer -Primary Care Physician
What is the maximum Social Security Disability benefit amount an insured can receive?
- Answer -100% of the insured's Primary Insurance Amount (PIA)
What is Medicare? - Answer -A hospital and medical expense insurance program
J is a subscriber to a plan which contracts with doctors and hospitals to provide medical
benefits at a predetermined price. What type of plan does J belong to? - Answer -HMO
Medicaid was designed to assist individuals who are: - Answer -below a specific
income limit
Medicare Part A and Part B do NOT pay for: - Answer -dental work
Which of the following organizations would make reimbursement payments directly to
the insured individual for covered medical expenditures? - Answer -Commercial insurer
Which of the following BEST describes how a Preferred Provider Organization (PPO) is
less restrictive than a Health Maintenance Organization (HMO)? - Answer -More
physicians to choose from
, Medicare is intended for all of the following groups, EXCEPT: - Answer -Those enrolled
as a full-time student
Which of these statements is INCORRECT regarding a Preferred Provider Organization
(PPO)? - Answer -PPO's are NOT a type of managed care systems
Which of the following medical expenses does Cancer insurance NOT cover? - Answer
-Arthritis
B's policy provides coverage on an in-hospital basis only and contains a limited daily
room and board benefit. Which of these policies does B have? - Answer -Basic Hospital
Under a Basic Medical Expense policy, what does the hospitalization expense portion
cover? - Answer -hospital room and board
S wants to open a tax-exempt Health Savings Account. To qualify for this type of
account, Federal law dictates that S must be enrolled in a: - Answer -High-deductible
health plan
Which of the following is NOT a limited benefit plan? - Answer -Life insurance policy
Which of these options can an individual use their medical flexible spending account to
pay for? - Answer -Prescription drugs
Which of the following policy features allows an insured to defer current health charges
to the following year's deductible instead of the current year's deductible? - Answer -
Carryover provision
Which of the following situations does a Critical Illness plan cover? - Answer -Leukemia
This type of deductible provision states that should more than one family member be
involved in a common accident, or suffer the same illness, only one individual deductible
amount shall be applied. - Answer -Common accident deductible
Q is hospitalized for 3 days and receives a bill for $10,100. Q has a Major Medical
policy with a $100 deductible and 80/20 coinsurance. How much will Q be responsible
for paying on this claim? - Answer -"$2,100". In this situation, $10,000 x 20%
coinsurance + $100 deductible = $2,100.
Which of the following phrases refers to the fees charged by a healthcare professional?
- Answer -Usual, customary, and reasonable expenses
Deductibles are used in health policies to lower: - Answer -overuse of medical services
IN THE COURSE
An insurance applicant MUST be informed of an investigation regarding his/her
reputation and character according to the - Answer -"Fair Credit Reporting Act".
When a policy pays dividends to its policyholders, it is said to be - Answer -
"participating".
What is the name of the law that requires insurers to disclose information gathering
practices and where the information was obtained? - Answer -"1970 Fair Credit
Reporting Act".
The Consideration clause of an insurance contract includes: - Answer -the schedule
and amount of premium payments
What is the consideration given by an insurer in the Consideration clause of a life
policy? - Answer -Promise to pay a death benefit to a named beneficiary
E and F are business partners. Each takes out a $500,000 life insurance policy on the
other, naming himself as primary beneficiary. E and F eventually terminate their
business, and four months later E dies. Although E was married with three children at
the time of death, the primary beneficiary is still F. However, an insurable interest no
longer exists. Where will the proceeds from E's life insurance policy be directed to? -
Answer -F
Insurance policies are offered on a "take it or leave it" basis, which make them: -
Answer -Contracts of Adhesion
A contract where one party either accepts or rejects the terms of a contract written by
another party is called a contract of - Answer -adhesion
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called: - Answer -representations
Which of these is considered a statement that is assured to be true in every respect? -
Answer -Warranty
When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have: - Answer -insurable interest in the proposed
insured
A Business Disability Buyout plan policy is designed: - Answer -to pay benefits to the
Corporation or other shareholders
,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
Accidental Death coverage is provided to commercial airline passengers in which of the
following types of policies? - Answer -Blanket Accident policy
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
A Business Overhead Expense policy would cover which of the following if a business
owner becomes disabled? - Answer -Utilities and office rent
How would a contingent beneficiary receive the policy proceeds in an Accidental Death
and Dismemberment (AD&D) policy? - Answer -If the primary beneficiary dies before
the insured
The provision in a Group Health policy that allows the insurer to postpone coverage for
a covered illness 30 days after the policy's effective date is referred to as the: - Answer
-Waiting Period
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
XYZ Company pays the entire premium for its group health plan. The MINIMUM
percentage of eligible employees that must be covered is: - Answer -100%
On an Accidental Death and Dismemberment (AD&D) insurance policy, who is qualified
to change the beneficiary designation? - Answer -Policyowner
When an employee is required to pay a portion of the premium for an
employer/employee group health plan, the employee is covered under which of the
following plans? - Answer -Contributory
What type of reinsurance contract involves two companies automatically sharing their
risk exposure - Answer -Treaty
Select the appropriate response Which of the following BEST describes a warranty? -
Answer -Statement guaranteed to be true
Who makes the legally enforceable promises in a unilateral insurance policy? - Answer
-Insurance Company
,A life insurance arrangement which circumvents insurable interest statutes is called: -
Answer -Investor-Originated Life Insurance
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of
the following contractual elements? - Answer -Legal Purpose (Insurable Interest)
All of the following are considered to be typical characteristics describing the nature of
an insurance contract, EXCEPT: - Answer -Bilateral
Life and health insurance policies are: - Answer -Unilateral contracts
Which mode of payment is NOT used by health insurance policies? - Answer -Single
premium
The reason for a business having a Business Overhead Expense Disability Plan is to
cover - Answer -fixed business expenses
Which of these types of coverage is best described as a short term medical policy? -
Answer -interim coverage
What is issued to each employee of an employer health plan? - Answer -Certificate
The individual who provides general medical care for a patient as well as the referral for
specialized care is known as a: - Answer -Primary Care Physician
What is the maximum Social Security Disability benefit amount an insured can receive?
- Answer -100% of the insured's Primary Insurance Amount (PIA)
What is Medicare? - Answer -A hospital and medical expense insurance program
J is a subscriber to a plan which contracts with doctors and hospitals to provide medical
benefits at a predetermined price. What type of plan does J belong to? - Answer -HMO
Medicaid was designed to assist individuals who are: - Answer -below a specific
income limit
Medicare Part A and Part B do NOT pay for: - Answer -dental work
Which of the following organizations would make reimbursement payments directly to
the insured individual for covered medical expenditures? - Answer -Commercial insurer
Which of the following BEST describes how a Preferred Provider Organization (PPO) is
less restrictive than a Health Maintenance Organization (HMO)? - Answer -More
physicians to choose from
, Medicare is intended for all of the following groups, EXCEPT: - Answer -Those enrolled
as a full-time student
Which of these statements is INCORRECT regarding a Preferred Provider Organization
(PPO)? - Answer -PPO's are NOT a type of managed care systems
Which of the following medical expenses does Cancer insurance NOT cover? - Answer
-Arthritis
B's policy provides coverage on an in-hospital basis only and contains a limited daily
room and board benefit. Which of these policies does B have? - Answer -Basic Hospital
Under a Basic Medical Expense policy, what does the hospitalization expense portion
cover? - Answer -hospital room and board
S wants to open a tax-exempt Health Savings Account. To qualify for this type of
account, Federal law dictates that S must be enrolled in a: - Answer -High-deductible
health plan
Which of the following is NOT a limited benefit plan? - Answer -Life insurance policy
Which of these options can an individual use their medical flexible spending account to
pay for? - Answer -Prescription drugs
Which of the following policy features allows an insured to defer current health charges
to the following year's deductible instead of the current year's deductible? - Answer -
Carryover provision
Which of the following situations does a Critical Illness plan cover? - Answer -Leukemia
This type of deductible provision states that should more than one family member be
involved in a common accident, or suffer the same illness, only one individual deductible
amount shall be applied. - Answer -Common accident deductible
Q is hospitalized for 3 days and receives a bill for $10,100. Q has a Major Medical
policy with a $100 deductible and 80/20 coinsurance. How much will Q be responsible
for paying on this claim? - Answer -"$2,100". In this situation, $10,000 x 20%
coinsurance + $100 deductible = $2,100.
Which of the following phrases refers to the fees charged by a healthcare professional?
- Answer -Usual, customary, and reasonable expenses
Deductibles are used in health policies to lower: - Answer -overuse of medical services
