XCEL practice exam 1

Which of these actions should a producer take when submitting an insurance application to an insurer?

"Inform insurer of relevant information not included on the application.

In Indiana, what is the maximum percentage of controlled business a producer may write in a twelve month period?

25%

A Medicare Supplement policy may be returned for a 100% premium refund within _______ days of delivery.

30

the amount of monthly disability benefits payable under social security is determined by what

amount of benefits available from other sources

The Consideration clause in a life insurance contract contains what pertinent information?

amount of premium payments and when they are due

A disability elimination period is best described as a

time deductible

Which Accident and Health policy provision addresses preexisting conditions?

time limit on certain defenses

A producer inducing an insured to lapse, forfeit, or surrender insurance through misrepresentation is committing the illegal act of:

twisting

If an insurer offers health coverage to an employee, the insurer MUST inform the employer of all of the following information EXCEPT:

"The terms of the insurer's provider agreements".

At what point does a Whole Life Insurance policy endow?

"When the cash value equals the death benefit".

________ % of life insurance premiums is usually deductible for federal income tax purposes

0

An insured must notify an insurer of a medical claim within days after an accident.

20

If a new life insurance policy is replacing an existing one, the insured is given the right to return for a full refund of at least _______ days after policy delivery.

20

An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?

20%

Which is true concerning a Variable Universal Life policy?

Policyowner controls where the investment will go and selects the amount of the premium payment

Which of the following actions is NOT possible with a Universal Life policy?

Premiums may be applied as a credit against income tax

What action will an insurer take if an interest payment on a policy loan is not made on time?

automatically add the amount of interest due to the loan balance

G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of policy which BEST addresses this concern is:

business overhead expense

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?

business overhead expense

Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?

business owner becoming disabled

Whose life is covered on a life insurance policy that contains a payor benefit clause?

child

How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period?

claim is denied under the suicide clause of the policy

A Universal Life policy is sometimes referred to as an unbundled Life Policy because the owner can see the interest earned, expense charges, and the

cost of insurance

which best describes hospital indemnity policy

coverage that pays a stated amount per day for a covered hospitilization

Additional coverage can be added to a Whole Life policy by adding a(n):

decreasing term rider

In the event of an illness, a(n) -------- policy would reimburse an insured for loss of earnings

disability income

a variable insurance policy

does not guarantee a return on its investment accounts

in a disability income policy, which clause acts as a deductible

elimination period

"A producer does not have the authority to change a policy or waive any of its provisions". The health provision that best describes this statement is called the

entire contract

What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?

family maintenance policy

Taking receipt of premiums and holding them for the insurance company is an example of:

fiduciary responsibility

M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect, EXCEPT:

free look period has expired

T sends proof of loss to her insurer for an acceptable medical expense claim under her individual Health Insurance policy. Upon receipt, the insurer must pay the benefits

immediately

An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the:

insurer dates the policy

what settlement option does not involve the systematic liquidation of the death proceeds

interest only

Quarterly premium payments increase the annual cost of insurance because

interest to the insurer is decreased while the administrative costs are increased

The Accidental Death and Dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured:

is blinded in an accident

which is considered a limited pay life policy

life paid up at age 70

The Accelerated Death Benefit provision in a life insurance policy is also known as a(n):

living benefit

Defamation occurs when an agent makes a false statement intended to

malign another insurer

Which of these factors do NOT play a role in the underwriting of a life insurance policy?

marital status

If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?

medicare supplement policy

T is covered by a group major medical policy with his employer. He leaves his employer and converts the coverage to an individual policy. All of these statements about the new policy are true EXCEPT:

new policy pays the same benefits as the group policy

Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?

policy owner

K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?

proceeds will be paid to Ks estate if P dies within a specified time

An existing life insurance policy is being replaced by a new one. A notice of replacement must be provided by the to be signed by the applicant.

producer

All of these are considered sources of underwriting information about an applicant, EXCEPT:

rating services

K failed to pay a renewal premium within the time granted by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation?

reinstatement

Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called:

representations

R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity?

residual disabiltity

What type of life policy covers two people and pays upon the death of the last insured?

survivorship

t is the policy owner of an irrevocable life insurance policy, if he wants to change it. whos permission must he have

the beneficiary

which statement regarding key employee life policy is NOT true

the beneficiary is named by the employee

if an individual is covered under Accidental death policy and dies, an autopsy cant be preformed if

the state prohibits by law

Which of the following BEST describes how pre-admission certification is used?

used to prevent non essential medical costs

Which of the following policies is characterized by a flexible premium and death benefit and allows the policyowner control of the investment aspect of the plan?

variable universal life

A life insurance policy that provides a policyowner with cash value along with a level face amount is called:

whole life

Which of the following plans is NOT required to meet Minimum Essential Coverage (MEC) standards under the Affordable Care Act (ACA)?

workers compensation

a life insurance policy can be backdated before the application date for how long

6 months

All of these statements concerning Individual Medical Expense policies sold in Indiana EXCEPT:

A provision must be contained that guarantees reinstatement

The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n):

AD&D rider

A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim?

Claim will be paid and coverage will remain in force

Post-tax dollar contributions are found in:

Roth IRA investments

Which of the following statements about the classification of applicants is INCORRECT?

Substandard applicants are never declined by underwriters

All of these statements about Equity Indexed Life Insurance are correct, EXCEPT:

The premiums can be lowered or raised, based on investment performance