XCEL EXAM Sim. 2
Pierre is covered by his employer's group major medical plan. His employer pays for 75% of the premium and he pays for 25%. How much would a $10,000 benefit be taxable as income under this plan? $10,000 $7,500 $2,500 $0
$0
The typical long-term care insurance policy is designed to provide a minimum of __ year(s) of coverage. 1 3 5 7
1
if an accident and health (disability) policy is reinstated after is had lapsed for nonpayment, there is a waiting period of _____ days before a claim covering sickness will be covered 5 10 15 20
10
Medicare Part A does not pay for medical benefits provided for treatment in a skilled nursing facility beyond - 30 days - 60 days - 100 days - 120 days
100 days
sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of - costs that exceed 7 1/2 % of AGI - costs that exceed 10% of AGI - 100% of costs - no deduction permitted
100% of costs
an insurer must send a notice of appointment for a producer within _____ days from the date of an executed agency contract or after submitting the first application to the insurer 10 15 20 25
15
after a disability policy has been in force for ______ year(s), it is considered incontestable 1 2 3 4
2
How many employees must an employer have for a terminated employee to be eligible for COBRA? 20 30 40 50
20
Written notice for a health claim must be given to the insurer ___ days after the occurrence of the loss. 10 20 31 60
20
an employer may qualify for health care tax credits through SHOP marketplace if that employer has fewer than how many employees? 10 15 20 25
25
Tim's individual life insurance policy has just recently lapsed. His policy may be reinstated at any time within ___ year(s). 1 2 3 4
3
Washington requires that an insurance producer must complete ____ hour(s) of continuing education on the subject of law and ethics every reporting period 1 2 3 4
3
no legal action can be initiated after ____ years from the initial time written proof of loss has been provided 2 3 4 5
3
If an insurer terminates a producer's appointment, the Commissioner must be notified within how many days? 20 25 30 35
30
the standard grace period for a life insurance policy sold in WA is 15 days 30 days 45 days 60 days
30 days
The Commissioner must examine the financial affairs of each admitted insurer operating in WA at least once every how many years? - year - 3 years - 5 years - 7 years
5 years
A doctor who accepts Medicare Assignment agrees to which of the following? - Doctor may charge up to a maximum of 15% more than Medicare pays for the service - doctor is not bound by Medicare's limitations on charges - Doctor cannot charge more than Medicare's scheduled coverage - doctor bills the Medicare beneficiary directly for service performed
Doctor cannot charge more than Medicare's scheduled coverage
the open enrollment period for Medicare Part B is - Jan 1 - Mar 31 - Jan 1 - Apr 30 - Jan 1 - May 31 - Jan - Jun 30
Jan - Mar 31
Small employers who are sponsored by an insurer to provide group benefits to its employees are called - Fraternal Benefit Society - Surplus lines broker - Lloyd of London - MEWA
MEWA
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 retire and dissolve the business. Bob dies 12 months later. The policies continue in force with no change. Both partners are still married at the time of Bob's death. In this situation, who will receive Bob's policy proceeds? - Tom's spouse - Bob's estate - Bob's spouse - Tom
Tom
A producer has committed an insurance crime that violates US Code 1033 (interstate commerce). who would be responsible for the prosecution of this crime? - US Attorney General - Commissioner - Lieutenant Governor - State Senate
US Attorney General
which of the following BEST describes a conditional insurance contract? - a contract that requires certain conditions or acts by the insured individual - a contract that has the potential for the unequal exchange for consideration for both parties - a contract where only one party "adheres" to the terms of the contract - a contract where only one party makes any kind of enforceable contracts
a contract that requires certain conditions or acts by the insured individual
which of the following employers is required to follow ERISA regulations? - a local government with 150 employees - a church with 30 employees - a local electrical supply company with 12 employees - a Canadian company with 300 employees working in the U.S.
a local electrical supply company with 12 employees
an example of rebating is - a mutual insurance company paying dividend to its policyowners - reducing the premiums across the board for a specific risk class - a producer who shares commissions with a client - using intimidation in order to restrain or monopolize the business of insurance
a producer who shares commissions with a client
A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called - a self-derived plan - a multiple-employer plan - a blanket plan - a self-funded plan
a self-funded plan
which of the following is considered to be an alternative to a life settlement? - accelerated death benefit rider - waiver of premium rider - extended term option - decreasing term insurance
accelerated death benefit rider
A medical provider that accepts Medicare Assignment must - accept payment based upon a defined Medicare schedule and bill the insured for any difference - accept payment based upon a defined Medicare schedule and negotiate any excess fees - accept payment based upon a defined Medicare schedule and bill no more than 15% of the excess charges - accept payment based upon a defined Medicare schedule as payment in full
accept payment based upon a defined Medicare schedule as payment in full
What is the nonforfeiture value of an annuity before annuitization? - all premiums paid - all premiums paid plus interest - all premiums paid minus any withdrawals and surrender charges - all premiums paid, plus interest, minus any withdrawals and surrender charges
all premiums paid, plus interest, minus any withdrawals and surrender charges
an individual most likely will have an insurable interest in insuring a person's life if - an economic interest exists for the continuance of the insured's life - a financial interest exists at the time of insured's death - there is any blood relationship with the insured - a business relationship exists
an economic interest exists for the continuance of the insured's life
Before a producer may sell, solicit, or negotiate insurance for an insurer, the producer must have a(n) - appointment - certificate - bond - binder
appointment
which of these factors would an insurer consider when determining whether to accept a group life plan? - number of dependents - incontestable period - average age - grace period
average age
a domestic insurance company in WA MUST - be formed under the laws of WA - own real estate in WA - write insurance on risks located only in WA - honor the charter of the National Association of Insurance Commissioners (NAIC)
be formed under the laws of WA
a disability policyowner is injured and becomes totally disabled. The benefits pay for 2 years, starting from the date of the injury. What is this time period called? - recurrent period - probationary period - benefit period - elimination period
benefit period
an insured has a health plan that pays established amounts in accordance with a list of injuries, surgical procedures, or other losses. This list is called a - loss chart - benefit summary - benefit schedule - coverage menu
benefit schedule
Which type of clause describes the following statement: "We have issued the policy in consideration of the representations in your applications and payment of the first-term premium". - premium clause - consideration clause - adhesion clause - contestability clause
consideration clause
An employee under a group insurance policy has the right to name a beneficiary and the right to - remain on the group plan in the event of employment termination - cash surrender the existing policy - change the policy provisions - convert to an individual policy in the event of employment termination
convert to an individual policy in the event of employment termination
_____ is NOT an element of a valid contract - legal - consideration - competent parties - countersignature
countersignature
A hospital or medical expense policy will typically cover dental treatment expenses under which circumstance? - after an annual limit of a dental policy's coverage is reached - dental treatment is needed to repair an injury - cosmetic dental treatment is performed - if treatment is performed at a in-network provider
dental treatment is needed to repair an injury
Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt's beneficiary if Matt - is killed while committing a felony - dies of a stroke - dies instantly from a car accident - is injured in a skiing accident and dies 18 months later
dies instantly from a car accident
Lisa has recently bought a fixed annuity. Which of these is considered to be a disadvantage of owning this type of annuity? - Payments cease 5 years after the annuitant's death - during periods of inflation, annuitants will experience an increase in purchasing power of their payments - during periods of inflation, annuitants will experience a decrease in purchasing power of their payments - payment amounts can be unpredictable from month to month
during periods of inflation, annuitants will experience a decrease in purchasing power of their payments
which of these statements concerning Traditional IRAs is CORRECT? - earnings are not taxable when withdrawn - earnings are taxable when withdrawn - contributions are never tax-deductible - contributions are always made by the employer
earnings are taxable when withdrawn
which of the following is NOT a federal requirement of a qualified plan? - must benefit a broad cross-selection of employees - employee must be able to make unlimited contributions - vesting schedule must be defined - employer establishes the plan
employee must be able to make unlimited contributions
what provision states that the policy and the application shall constitute the entire contract between parties? - entire contract - consideration - estoppel - whole contract
entire contract
Purchasing a life insurance policy in order to avoid the forced sale of assets upon death is called - estate funding - capital withholding - capital gains - estate conversion
estate conversion
How often must the Commissioner examine each domestic insurance company? - every year - every 2 years - every 3 years - every 5 years
every 5 years
which of these would limit a company's liability to provide insurance coverage? - waiver - exclusion - rider - provision
exclusion
Fraternal Benefit Society has each of the following characteristics EXCEPT - incorporated - w/o capital stock - exist for profit - exist for the benefit of its members
exist for profit
Which of these riders will pay a death benefit if the insured's spouse dies? - guaranteed insurability rider - family term insurance rider - family whole insurance rider - payor benefit rider
family term insurance rider
a health care provider may be settles using which of the following payment methods? - litigation - unfair claim settlement - fee-for-service - prepaid expense
fee-for-service
Elizabeth is the beneficiary of a life insurance policy. She is receiving the death benefit in payments of $10,000 per month until the principal and interest has been paid out. Which option was chosen? - fixed period - fixed amount - life income - interest only
fixed amount
XYZ Life Insurance company's home office located in Ohio and is incorporated in Ohio. In Washington, they are considered to be - reciprocal - non-admitted - foreign - domestic
foreign
Tom has a home health care benefit and is confined to his home. Which of these benefits is NOT typically covered? - part-time nursing care - full-time nursing care - physical therapy - home health aides
full-time nursing
a group Disability Income plan that pays tax-free benefits to covered employees is considered - non-contributory - partially contributory - group contributory - fully contributory
fully contributory
Under the Affordable Care Act, which of these plans is designed to provide coverage that is actuarially equivalent to 80% of the full actuarial value of the benefits provided under the plan? - Gold - platinum - silver - bronze
gold
which of the following is NOT included under a health benefit plan? - major medical policy - basic hospital policy - hospital indemnity plan - surgical expense policy
hospital indemnity plan
Mike has inherited his father's traditional IRA. As beneficiary, he will pay ____ taxes on any money withdrawn. - estate - probate - no - income
income
Which of the following is NOT taken into consideration when determining eligibility for Medicare benefits? - chronic kidney disease - income - age - social security disability
income
Which type of beneficiary should be named if the insured wants to give explicit directions on how the policy proceeds should be paid? - individual - group - class - estate
individual
all of the following are characteristics of a group life insurance plan EXCEPT - group underwriting - master contract - individual underwriting - probationary period
individual underwriting
a policyowner is prohibited from making any changes to the policy without the beneficiary's written consent under which beneficiary designation? - contingent beneficiary - tertiary beneficiary - revocable beneficiary - irrevocable beneficiary
irrevocable beneficiary
Which type of annuity guarantees a stated number of income payments, whether or not the annuitant is still alive to receive them? - life annuity certain - secure life annuity - irrevocable survivor annuity - guaranteed life annuity
life annuity certain
Which of these is NOT considered to be a common life insurance nonforfeiture option - cash surrender - extended term insurance - reduced paid-up insurance - life income annuity
life income annuity
the IRS states that a taxpayer's medical expenses that exceed 7.5% of their adjusted gross income is tax deductible. Which of the following may be considered a medical expense under this rule? - Long term care insurance premiums - dread disease insurance premiums - travel accidental insurance premiums - individual disability income insurance premiums
long term care insurance premiums
which of the following is considered to be a point of service (POS) plan? - preferred provider organization - managed care plan - protected care provider - restricted provider organization
managed care plan
an insurer would be committing Unfair Discrimination if coverage was denied based on - HIV positive result - marital status - diabetes - a mental disorder
marital status
Tara the producer is delivering a specified disease insurance policy to a new policyowner. Upon delivery, she may be expected to collect all of the following EXCEPT a(n) - initial premium - signed impairment rider acknowledgment - modified application with a new signature - good health statement
modified application with a new signature
what would be an expense factor in an insurance program? - premiums collected - mortality costs - opportunity costs - investment interest
mortality costs
Disability income plans which require that the insurer can NEVER change or alter premium rates are usually considered - guaranteed renewable - optionally renewable - conditionally renewable - noncancellable
noncancellable
a whole life policy option where extended term insurance is selected is called a(n) - dividend option - settlement option - nonforfeiture option - interest-only option
nonforfeiture option
a Medicare supplement policy can be cancelled by the insurer for - excessing filing of claims - poor health - smoking - nonpayment
nonpayment
a beneficiary change can occur - only upon the request of the revocable beneficiary - only on specified dates within the policy - normally at any time during the policy term - at no time
normally at any time during the policy term
Paul is an employee who caught a disease unique to the trade in which he was exposed to. Paul has a(n) - genetic predisposition - worksite malady - contagious disease - occupational disease
occupational disease
Inducement is BEST defined as... - making a false statement intended to malign another insurer - making an unfair comparison of two insurance policies - offer to buy, sell, give or allow the prospective insured employment, stock, or special favors in exchange for insurance transaction - charging a higher rate for insurance based on an insured's race, religion, or national origin
offer to buy, sell, give or allow the prospective insured employment, stock, or special favors in exchange for insurance transaction
in what form do disability income policies typically pay benefits? - lump sum - periodic income - tax credit - annuity
periodic income
XYZ Corp was issued a group health policy for its employees. Under this plan a - certificate must be issued to XYZ, and a policy must be issued to each employee - certificate must be issued to XYZ and each employee - policy must be issued to XYZ, and a certificate must be issued to each employee - policy must be issued to XYZ and each employee
policy must be issued to XYZ, and a certificate must be issued to each employee
a producer who sells an individual life insurance policy in WA MUST deliver to the policyowner a(n) - AM best rating - financial report from the previous year - policy summary and buyer's guide - letter showing NAIC compliance
policy summary and buyer's guide
the Federal Employees Benefit Program consists of two types of health plans for federal civilian employees. The two plans are fee-for-service and - prepaid - ambulatory - facility - blanket
prepaid
When must a claim on a life insurance policy be paid after proof of loss has been received by the insurer? - promptly - within 10 days - within 20 days - within 30 days
promptly
what is considered the purpose of the Guaranty Association - protects insured from insolvent insurers - pays premiums for insolvent insureds - provides coverage for uninsured residents - guarantees policy loans
protects insureds from insolvent insurers
twisting is - sharing commissions with other producers - replacing an insurance policy from one insurer to another based on misrepresentation - offering employment as an incentive to purchase insurance - making malicious public statements regarding an insurer's financial condition
replacing an insurance policy from one insurer to another based on misrepresentation
which of the these individuals would require continuing education? - claims administrator - resident producer - nonresident producer - head underwriter
resident producer
which of these is NOT an Unfair Claims Settlement practice? - refusing to pay a claim w/o conducting a reasonable investigation - compelling an insured to Initiate a lawsuit by offering less on an insurance claim - settling a claim by arbitration - failing to acknowledge and act promptly with respect to an Insurance claim
settling a claim by arbitration
which of the following is NOT a type of Medicare Advantage plan? - health maintenance organization (HMO) - preferred provider organization (PPO) - private fee-for-service (PFFS) - social security disability income (SSDI)
social security disability income (SSDI)
all of the following are exempt from the 10% tax penalty for early qualified plan withdrawals EXCEPT - qualified college expenses - first time home purchase - death of the participant - stock purchase
stock purchase
which of these will have the highest monthly payout upon annuitization - - life w/ period certain - joint and survivor life - straight life - joint life
straight life
An insurer has the right to recover payment made to the insured from the negligent party. These rights are called - contributory - indemnity - estoppel - subrogation
subrogation
what is Medicare Part B also known as? - Medicare supplement - supplementary medical insurance - comprehensive insurance - medicaid
supplementary medical insurance
What types of life insurance are normally used for key employee indemnification? - term, whole, and universal life insurance - increasing term insurance - joint, credit, and group life insurance - adjustable, permanent, and limited-pay life insurance
term, whole, and universal life insurance
A Medicare Supplement basic benefit is - the first 3 pints of blood per year - respite care - disability income - term life insurance
the first 3 pints of blood per year
When a preferred provider organization (PPO) insured goes out-of-network, which of the following actions occur? - the insured will pay a reduced amount - the benefits are taxable - the insured has lower out-of-pocket expenses - the insurer will pay a reduced amount
the insurer will pay a reduced amount
an insurer may pay a commission in which of the following scenarios? - to a licensed non-appointed producer who has sold, solicited, or negotiated a policy of the insurance on behalf of the insurer - to an unlicensed person who has sold, solicited, or negotiated a policy of insurance on behalf of the insurer - to a licensed producer who is appointed with the insurer - when a policy is cancelled back to inception
to a licensed producer who is appointed with the insurer
a field underwriter's main task is - assign a risk classification to the insured - report medical information to the Medical Information Bureau (MIB) - to ensure an applicant's medical information is accurate and complete - to approve or decline an applicant
to ensure an applicant's medical information is accurate and complete
The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to as - twisting - subrogation - a life settlement - coercion
twisting
Craig submits a $500 claim for medical expenses. With a past due premium of $100, the insurer pays $400. Which of the Uniform Optional Provisions covers this situation? - payment of claims - legal actions - unpaid premium - time of payment of claims
unpaid premium
a policyholder's unmarried child is incapable of self support due to a physical disability. The child is provided medical care coverage under the parent's policy - only with proof of attending an accredited University - regardless if payments are made on the policy - for the life of the child - until policy termination with proof of incapacity
until policy termination with proof of incapacity
under a traditional IRA, interest earned is taxed - only if withdrawn prior to age 59 1/2 - according to the capital gains rate - upon distribution - during the accumulation phase
upon distribution
What guaranteed that the statements supplied by an insurance applicant are true? - assurance - promise - representation - warranty
warranty
When are group disability benefits considered to be tax-free to the insured? - when the recipient pays the premiums - when the employer pays the premiums - when both the employer and recipient pay the premiums - when benefits paid are equal to or lower than the recipient's salary
when the recipient pays the premium
Which of these would be the best example of a limited pay life insurance policy? - whole life policy that pays out its cash value over a 20 year period - whole life policy with premiums paid up after 20 years - term life policy that returns cash value after 20 years - term life policy with premiums paid up after 20 years
whole life policy with premiums paid up after 20 years
a renewable Term Life insurance policy allows the policyowner the right to renew the policy - at anytime the policyowner chooses - as many times as the policyowner chooses - paying the same premium as before the renewal - without producing proof of insurability
without producing proof of insurability