XCEL NEVADA FINAL EXAM
QUESTIONS AND CORRECT
ANSWERS
Which of the following is NOT an example of a producer's breach of contract under fiducia
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
ry duty?
rr
Misappropriation of premiums rr rr
commingling premiums rr
improper withholding of premiums rr rr rr
allowing premiums to be submitted electronically - ans-
rr rr rr rr rr rr rr
allowing premiums to be submitted electronically
rr rr rr rr rr
Nevada Requires that coverage for newborns begins "from the moment of birth" and a pre
rr rr rr rr rr rr rr rr rr rr rr rr rr rr
mium must be paid within: rr rr rr rr
31 days rr
90 days rr
6 months
rr
12 months - ans-31 days
rr rr rr rr
A foreign insurance company doing business in Nevada:
rr rr rr rr rr rr rr rr
Is not subject to Florida insurance laws
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is a company that was formed under the laws of another state
rr rr rr rr rr rr rr rr rr rr rr
Is a company that was formed under the laws of another country
rr rr rr rr rr rr rr rr rr rr rr
is only authorized to write business outside the United States - ans-
rr rr rr rr rr rr rr rr rr rr rr
Is a company that was formed under the laws of another state
rr rr rr rr rr rr rr rr rr rr rr
All of the following statements about Major Medical benefits are true, EXCEPT:
rr rr rr rr rr rr rr rr rr rr rr
The deductible can be expressed as a fixed dollar amount
rr rr rr rr rr rr rr rr rr
The benefit period begins only after a specified amount of expenses have accrued
rr rr rr rr rr rr rr rr rr rr rr rr
Benefits are generally expressed as a percentage of eligible expenses
rr rr rr rr rr rr rr rr rr
Benefits have no maximum limit - ans-Benefits have no maximum limit
rr rr rr rr rr rr rr rr rr rr
M is insured under a basic Hospital/
rr rr rr rr rr rr
Surgical Expense policy. A physician performs surgery on M. What determines the claim
rr rr rr rr rr rr rr rr rr rr rr rr rr
M is eligible for?
rr rr rr
Claim payment is equal to physician's actual charges
rr rr rr rr rr rr rr
Claim payment is negotiated between physician and patient
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Determined by the schedule of benefits from the hospital rr rr rr rr rr rr rr rr
Determined by the terms of the policy - ans-Determined by the terms of the policy
rr rr rr rr rr rr rr rr rr rr rr rr rr rr
,P received Disability income benefits for 3 months then returns to work. She is able to wor
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
k one month before her condition returns, leaving her disabled once again. What would th
rr rr rr rr rr rr rr rr rr rr rr rr rr rr
e insurance company most likely regard this second period of disability as?
rr rr rr rr rr rr rr rr rr rr rr
A presumptive disability
rr rr
An occupational disability
rr rr
A residual disability
rr rr
A recurrent disability - ans-A recurrent disability
rr rr rr rr rr rr
Which of these arrangements allows one to bypass insurable interest laws?
rr rr rr rr rr rr rr rr rr rr
Concealment
Indemnity contract rr
Contract of adhesion rr rr
Investor-Originated Life Insurance - ans-Investor-Originated Life Insurance rr rr rr rr rr rr
Sometimes called IOLI, stranger-originated life insurance rr rr rr rr rr
What determines the full amount of Social Security retirement benefits a qualified individu
rr rr rr rr rr rr rr rr rr rr rr rr
al is entitled to receive?
rr rr rr rr
Primary Insurance Amount (PIA) rr rr rr
Total taxes paid paid into FICA
rr rr rr rr rr
Number of dependents rr rr
State of residence - ans-Primary Insurance Amount (PIA)
rr rr rr rr rr rr rr
Which statement regarding the Misstatement of Age provision is considered to be true?
rr rr rr rr rr rr rr rr rr rr rr rr
Coverage will be adjusted to reflect the insured's true age if a misstatement of age is disc
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
overed
Requires that a new policy must be applied for if a misstatement of age is found on the cur
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
rent policy rr
Misstatement of Age provision is valid only during the contestable period rr rr rr rr rr rr rr rr rr rr
Insurer may void the policy if a misstatement of age is discovered - ans-
rr rr rr rr rr rr rr rr rr rr rr rr rr
Coverage will be adjusted to reflect the insured's true age if a misstatement of age is disc
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
overed
A written agreement to provide a Life insurance Policy holder immediate cash in exchang
rr rr rr rr rr rr rr rr rr rr rr rr rr
e for the sale and transfer of a Life Insurance Policy is a:
rr rr rr rr rr rr rr rr rr rr rr rr
Variable Life Policy rr rr
Viatical Settlement rr
Equity Index Annuity rr rr
Health Care Savings Account - ans-Viatical Settlement
rr rr rr rr rr rr
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate c
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
ash value at a faster rate in the early years of the policy. Which of these statements made
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
by the producer would be correct?
rr rr rr rr rr
Straight life accumulates faster than Limited-Pay Life
rr rr rr rr rr rr
20-Pay Life accumulates cash value faster than Straight Life
rr rr rr rr rr rr rr rr
Cash value accumulation of both 20-
rr rr rr rr rr
pay Life and Straight Life depend on the surer's financial rating
rr rr rr rr rr rr rr rr rr rr
,20-Pay Life and Straight Life accumulate cash value at the same rate - ans-20-
rr rr rr rr rr rr rr rr rr rr rr rr rr
pay Life accumulates cash value faster than Straight Life
rr rr rr rr rr rr rr rr
Which health policy clause specifies the amount of benefits to be paid?
rr rr rr rr rr rr rr rr rr rr rr
Insuring
Consideration
Free-look
Payment Mode - ans-Insuring rr rr rr
Within how many days after policy delivery can a Medicare Supplement policy be returne
rr rr rr rr rr rr rr rr rr rr rr rr rr
d for a 100% premium refund?
rr rr rr rr rr
15
20
25
30 - ans-30rr rr
All of these Settlement options involve the systematic liquidation of the death proceeds in
rr rr rr rr rr rr rr rr rr rr rr rr rr rr
the event of the insured's death, EXCEPT:
rr rr rr rr rr rr
Fixed Period rr
Interest Only rr
Fixed Amount rr
Life Income - ans-Interest Only
rr rr rr rr
Nevada insurance law specifically allows the Commissioner to issue a temporary license t
rr rr rr rr rr rr rr rr rr rr rr rr
o which of the following individuals?
rr rr rr rr rr
A nonresident producer who has relocated to Tennessee
rr rr rr rr rr rr rr
A resident producer whose license has lapsed
rr rr rr rr rr rr
A new appointed officer of an insurance agent who is actively completing relicensing requ
rr rr rr rr rr rr rr rr rr rr rr rr rr
irements
A surviving spouse of a deceased producer - ans-
rr rr rr rr rr rr rr rr
A surviving spouse of a deceased producer
rr rr rr rr rr rr
Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a c
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
ontributory group Term Life plan to all its eligible employees? rr rr rr rr rr rr rr rr rr
Portion of the premiums paid for by the employer may be a tax deduction
rr rr rr rr rr rr rr rr rr rr rr rr rr
Portion of the premiums paid for by the employee may be a tax deduction
rr rr rr rr rr rr rr rr rr rr rr rr rr
Portion of the death proceeds are taxable to the beneficiary
rr rr rr rr rr rr rr rr rr
Portion of the death proceeds are taxable to the estate - ans-
rr rr rr rr rr rr rr rr rr rr rr
Portion of the premiums paid for by the employer may be a tax deduction
rr rr rr rr rr rr rr rr rr rr rr rr rr
L takes out a life insurance policy and dies 10 years later. During the claim process, the in
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
surer discovers that L had understated her age on the application. Under the Misstateme
rr rr rr rr rr rr rr rr rr rr rr rr rr
nt of Age provision, the insurer will
rr rr rr rr rr rr
pay the death benefit in full
rr rr rr rr rr
adjust the death benefit to an increased amount
rr rr rr rr rr rr rr
adjust the death benefit to a reduced amount
rr rr rr rr rr rr rr
, deny the claim - ans-adjust the death benefit to a reduced amount
rr rr rr rr rr rr rr rr rr rr rr
N has a Major Medical policy that only pays a portion of N's medical expenses. N is respo
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
nsible for paying the remaining balance. This provision is known as
rr rr rr rr rr rr rr rr rr rr
Assignment of Benefits rr rr
Coinsurance
Indemnity
Co-deductible - ans-Coinsurance rr rr
T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr r
disabled, what can he likely expect?
r rr rr rr rr rr
$5,000 per month benefit rr rr rr
$10,000 per month benefit if the cause was accidental
rr rr rr rr rr rr rr rr
More than $5,000 per month benefit if cause was work-related
rr rr rr rr rr rr rr rr rr
Less than $5,000 per month benefit regardless of the cause - ans-
rr rr rr rr rr rr rr rr rr rr rr
Less than $5,000 per month benefit regardless of the cause
rr rr rr rr rr rr rr rr rr
What type of policy would only provide coverage for specific types of illnesses (cancer, str
rr rr rr rr rr rr rr rr rr rr rr rr rr rr
oke, etc)? rr
MEWA
Blanket insurance rr
Dread disease insurance rr rr
Disability Insurance - ans-Dread disease insurance rr rr rr rr rr
M completes an application for life insurance but does not pay the initial premium. All of th
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
ese actions must occur before M's policy goes into effect, EXCEPT:
rr rr rr rr rr rr rr rr rr rr
policy is delivered rr rr
free-look period has expired rr rr rr
insurance company issues policy rr rr rr
initial premium is collected - ans-free-look period has expired
rr rr rr rr rr rr rr rr
To be eligible for Social Security disability benefits, an employee must be unable to perfor
rr rr rr rr rr rr rr rr rr rr rr rr rr rr
m:
any occupation rr
his/her current occupation rr rr
any occupation that reflects the employee's education level
rr rr rr rr rr rr rr
any occupation that the employee is qualified and willing to do - ans-any occupation
rr rr rr rr rr rr rr rr rr rr rr rr rr
Which of the following Dividend options results in taxable income to the policy owner?
rr rr rr rr rr rr rr rr rr rr rr rr rr
Paid-up Additions rr
Cash
Accumulation at Interest rr rr
Reduced Premium - ans-Accumulation at Interest rr rr rr rr rr
Which type of contract liquidates an estate through recurrent payments?
rr rr rr rr rr rr rr rr rr
Universal life insurance rr rr
QUESTIONS AND CORRECT
ANSWERS
Which of the following is NOT an example of a producer's breach of contract under fiducia
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
ry duty?
rr
Misappropriation of premiums rr rr
commingling premiums rr
improper withholding of premiums rr rr rr
allowing premiums to be submitted electronically - ans-
rr rr rr rr rr rr rr
allowing premiums to be submitted electronically
rr rr rr rr rr
Nevada Requires that coverage for newborns begins "from the moment of birth" and a pre
rr rr rr rr rr rr rr rr rr rr rr rr rr rr
mium must be paid within: rr rr rr rr
31 days rr
90 days rr
6 months
rr
12 months - ans-31 days
rr rr rr rr
A foreign insurance company doing business in Nevada:
rr rr rr rr rr rr rr rr
Is not subject to Florida insurance laws
rr rr rr rr rr rr
is a company that was formed under the laws of another state
rr rr rr rr rr rr rr rr rr rr rr
Is a company that was formed under the laws of another country
rr rr rr rr rr rr rr rr rr rr rr
is only authorized to write business outside the United States - ans-
rr rr rr rr rr rr rr rr rr rr rr
Is a company that was formed under the laws of another state
rr rr rr rr rr rr rr rr rr rr rr
All of the following statements about Major Medical benefits are true, EXCEPT:
rr rr rr rr rr rr rr rr rr rr rr
The deductible can be expressed as a fixed dollar amount
rr rr rr rr rr rr rr rr rr
The benefit period begins only after a specified amount of expenses have accrued
rr rr rr rr rr rr rr rr rr rr rr rr
Benefits are generally expressed as a percentage of eligible expenses
rr rr rr rr rr rr rr rr rr
Benefits have no maximum limit - ans-Benefits have no maximum limit
rr rr rr rr rr rr rr rr rr rr
M is insured under a basic Hospital/
rr rr rr rr rr rr
Surgical Expense policy. A physician performs surgery on M. What determines the claim
rr rr rr rr rr rr rr rr rr rr rr rr rr
M is eligible for?
rr rr rr
Claim payment is equal to physician's actual charges
rr rr rr rr rr rr rr
Claim payment is negotiated between physician and patient
rr rr rr rr rr rr rr
Determined by the schedule of benefits from the hospital rr rr rr rr rr rr rr rr
Determined by the terms of the policy - ans-Determined by the terms of the policy
rr rr rr rr rr rr rr rr rr rr rr rr rr rr
,P received Disability income benefits for 3 months then returns to work. She is able to wor
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
k one month before her condition returns, leaving her disabled once again. What would th
rr rr rr rr rr rr rr rr rr rr rr rr rr rr
e insurance company most likely regard this second period of disability as?
rr rr rr rr rr rr rr rr rr rr rr
A presumptive disability
rr rr
An occupational disability
rr rr
A residual disability
rr rr
A recurrent disability - ans-A recurrent disability
rr rr rr rr rr rr
Which of these arrangements allows one to bypass insurable interest laws?
rr rr rr rr rr rr rr rr rr rr
Concealment
Indemnity contract rr
Contract of adhesion rr rr
Investor-Originated Life Insurance - ans-Investor-Originated Life Insurance rr rr rr rr rr rr
Sometimes called IOLI, stranger-originated life insurance rr rr rr rr rr
What determines the full amount of Social Security retirement benefits a qualified individu
rr rr rr rr rr rr rr rr rr rr rr rr
al is entitled to receive?
rr rr rr rr
Primary Insurance Amount (PIA) rr rr rr
Total taxes paid paid into FICA
rr rr rr rr rr
Number of dependents rr rr
State of residence - ans-Primary Insurance Amount (PIA)
rr rr rr rr rr rr rr
Which statement regarding the Misstatement of Age provision is considered to be true?
rr rr rr rr rr rr rr rr rr rr rr rr
Coverage will be adjusted to reflect the insured's true age if a misstatement of age is disc
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
overed
Requires that a new policy must be applied for if a misstatement of age is found on the cur
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
rent policy rr
Misstatement of Age provision is valid only during the contestable period rr rr rr rr rr rr rr rr rr rr
Insurer may void the policy if a misstatement of age is discovered - ans-
rr rr rr rr rr rr rr rr rr rr rr rr rr
Coverage will be adjusted to reflect the insured's true age if a misstatement of age is disc
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
overed
A written agreement to provide a Life insurance Policy holder immediate cash in exchang
rr rr rr rr rr rr rr rr rr rr rr rr rr
e for the sale and transfer of a Life Insurance Policy is a:
rr rr rr rr rr rr rr rr rr rr rr rr
Variable Life Policy rr rr
Viatical Settlement rr
Equity Index Annuity rr rr
Health Care Savings Account - ans-Viatical Settlement
rr rr rr rr rr rr
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate c
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
ash value at a faster rate in the early years of the policy. Which of these statements made
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
by the producer would be correct?
rr rr rr rr rr
Straight life accumulates faster than Limited-Pay Life
rr rr rr rr rr rr
20-Pay Life accumulates cash value faster than Straight Life
rr rr rr rr rr rr rr rr
Cash value accumulation of both 20-
rr rr rr rr rr
pay Life and Straight Life depend on the surer's financial rating
rr rr rr rr rr rr rr rr rr rr
,20-Pay Life and Straight Life accumulate cash value at the same rate - ans-20-
rr rr rr rr rr rr rr rr rr rr rr rr rr
pay Life accumulates cash value faster than Straight Life
rr rr rr rr rr rr rr rr
Which health policy clause specifies the amount of benefits to be paid?
rr rr rr rr rr rr rr rr rr rr rr
Insuring
Consideration
Free-look
Payment Mode - ans-Insuring rr rr rr
Within how many days after policy delivery can a Medicare Supplement policy be returne
rr rr rr rr rr rr rr rr rr rr rr rr rr
d for a 100% premium refund?
rr rr rr rr rr
15
20
25
30 - ans-30rr rr
All of these Settlement options involve the systematic liquidation of the death proceeds in
rr rr rr rr rr rr rr rr rr rr rr rr rr rr
the event of the insured's death, EXCEPT:
rr rr rr rr rr rr
Fixed Period rr
Interest Only rr
Fixed Amount rr
Life Income - ans-Interest Only
rr rr rr rr
Nevada insurance law specifically allows the Commissioner to issue a temporary license t
rr rr rr rr rr rr rr rr rr rr rr rr
o which of the following individuals?
rr rr rr rr rr
A nonresident producer who has relocated to Tennessee
rr rr rr rr rr rr rr
A resident producer whose license has lapsed
rr rr rr rr rr rr
A new appointed officer of an insurance agent who is actively completing relicensing requ
rr rr rr rr rr rr rr rr rr rr rr rr rr
irements
A surviving spouse of a deceased producer - ans-
rr rr rr rr rr rr rr rr
A surviving spouse of a deceased producer
rr rr rr rr rr rr
Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a c
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
ontributory group Term Life plan to all its eligible employees? rr rr rr rr rr rr rr rr rr
Portion of the premiums paid for by the employer may be a tax deduction
rr rr rr rr rr rr rr rr rr rr rr rr rr
Portion of the premiums paid for by the employee may be a tax deduction
rr rr rr rr rr rr rr rr rr rr rr rr rr
Portion of the death proceeds are taxable to the beneficiary
rr rr rr rr rr rr rr rr rr
Portion of the death proceeds are taxable to the estate - ans-
rr rr rr rr rr rr rr rr rr rr rr
Portion of the premiums paid for by the employer may be a tax deduction
rr rr rr rr rr rr rr rr rr rr rr rr rr
L takes out a life insurance policy and dies 10 years later. During the claim process, the in
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
surer discovers that L had understated her age on the application. Under the Misstateme
rr rr rr rr rr rr rr rr rr rr rr rr rr
nt of Age provision, the insurer will
rr rr rr rr rr rr
pay the death benefit in full
rr rr rr rr rr
adjust the death benefit to an increased amount
rr rr rr rr rr rr rr
adjust the death benefit to a reduced amount
rr rr rr rr rr rr rr
, deny the claim - ans-adjust the death benefit to a reduced amount
rr rr rr rr rr rr rr rr rr rr rr
N has a Major Medical policy that only pays a portion of N's medical expenses. N is respo
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
nsible for paying the remaining balance. This provision is known as
rr rr rr rr rr rr rr rr rr rr
Assignment of Benefits rr rr
Coinsurance
Indemnity
Co-deductible - ans-Coinsurance rr rr
T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr r
disabled, what can he likely expect?
r rr rr rr rr rr
$5,000 per month benefit rr rr rr
$10,000 per month benefit if the cause was accidental
rr rr rr rr rr rr rr rr
More than $5,000 per month benefit if cause was work-related
rr rr rr rr rr rr rr rr rr
Less than $5,000 per month benefit regardless of the cause - ans-
rr rr rr rr rr rr rr rr rr rr rr
Less than $5,000 per month benefit regardless of the cause
rr rr rr rr rr rr rr rr rr
What type of policy would only provide coverage for specific types of illnesses (cancer, str
rr rr rr rr rr rr rr rr rr rr rr rr rr rr
oke, etc)? rr
MEWA
Blanket insurance rr
Dread disease insurance rr rr
Disability Insurance - ans-Dread disease insurance rr rr rr rr rr
M completes an application for life insurance but does not pay the initial premium. All of th
rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr rr
ese actions must occur before M's policy goes into effect, EXCEPT:
rr rr rr rr rr rr rr rr rr rr
policy is delivered rr rr
free-look period has expired rr rr rr
insurance company issues policy rr rr rr
initial premium is collected - ans-free-look period has expired
rr rr rr rr rr rr rr rr
To be eligible for Social Security disability benefits, an employee must be unable to perfor
rr rr rr rr rr rr rr rr rr rr rr rr rr rr
m:
any occupation rr
his/her current occupation rr rr
any occupation that reflects the employee's education level
rr rr rr rr rr rr rr
any occupation that the employee is qualified and willing to do - ans-any occupation
rr rr rr rr rr rr rr rr rr rr rr rr rr
Which of the following Dividend options results in taxable income to the policy owner?
rr rr rr rr rr rr rr rr rr rr rr rr rr
Paid-up Additions rr
Cash
Accumulation at Interest rr rr
Reduced Premium - ans-Accumulation at Interest rr rr rr rr rr
Which type of contract liquidates an estate through recurrent payments?
rr rr rr rr rr rr rr rr rr
Universal life insurance rr rr
