XCEL SOLUTIONS - FINAL EXAM

M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim?

$1,600

An employee with $25,000 group life coverage was recently fired. This employee's group coverage may be converted to a:

$25,000 individual whole life policy

An individual has a Major Medical policy with a $5,000 deductible and an 80/20 Coinsurance clause. How much will the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred?

$7,000

A health insurance policyholder has ___ days to return the policy and receive a full refund

10

G purchased a Family Income policy at age 40, The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income?

10 years

XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is

100%

What type of policy would offer a 40-year old the quickest accumulation of cash value?

20-pay life

A Medicare Supplement policyholder has ___ days to return the policy and receive a full premium refund.

30

Any criminal charges taken against a producer must be reported to the Commissioner of Insurance by the producer within how many days of the final disposition?

30

The required free-look period in a Medicare Supplement policy is ___days

30

Within how many days after policy delivery can a Long-term Care policy be returned for a 100% premium refund?

30

M's insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force?

45 days

What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan?

50%

Pre-existing conditions may be excluded on a Medicare Supplement policy for up to

6 months

A non-disabled individual is first eligible for a Medicare Supplement policy at age

65

Which of the following is considered to be misrepresentation?

A producer guaranteeing a policy's dividends

A producer is attempting to replace an existing life insurance policy with a new one. What must this producer submit as part of the application?

A signed statement by the applicant regarding the replacement

Which of the following is NOT included in an annuity contract?

AD&D rider

When is a Group Health policy required to provide coverage for a newborn child?

At the moment of birth

According to Nevada law, when must an agent deliver the Outline of Coverage to a Medicare Supplement applicant?

At the time application

Which of the following is a requirement to attain a nonresident producer license?

Be licensed as a producer in the person's state of domicile

T is receiving $3,000/month from a Disability Income policy in which T's employer has pad the premiums. How are the $3,000 benefit payments taxable?

Benefits are taxable to T.

Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is:

Business Overhead Expense

Which of these is NOT considered to be a cost connected with an individual's death?

Business expenses

S is covered by a whole life policy. Which insurance product can cover his children?

Child Term rider

K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed?

Daughter

Credit life insurance is typically issued with which of the following types of coverage?

Decreasing Term

Which of the following statements does NOT accurately describe the tax treatment of premiums and benefits of individual Accident and Health insurance?

Disability income policy premiums are tax-deductible

M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate?

Earned, but unpaid benefits

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

Family Maintenance Policy

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

Family Maintenance policy

An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period?

Full face amount minus any past due premiums

All of these are a prerequisite for becoming a licensed resident producer in Nevada EXCEPT

Graduate from high school

What is the required renewability status of all Medicare supplement policies?

Guaranteed renewable

Information obtained from a phone conversation to the proposed insured can be found in which of these reports?

Inspection report

Variable annuities may invest premiums in each of the following, EXCEPT:

Insurer's corporate business account

Which health policy clause specifies the amount of benefits to be paid?

Insuring

What type of life policy covers 2 lives and pays the face amount after the first one dies?

Joint Life Policy

T has a Disability Income policy that pays a monthly benefit of $5,000. If T becomes partially disabled, what can he likely expect?

Less than $5,000 per month benefit regardless of the cause

The health insurance program which is administered by each state and funded by both the federal and state governments is called:

Medicaid

Which type of policy is considered to be overfunded, as stated by IRS guidelines?

Modified Endowment Contract

What type of renewability guarantees premium rates and renewability?

Noncancellable

What must be signed by both the producer and applicant when an existing life insurance policy is being reissued with a reduction in cash value?

Notice regarding replacement

Which of thee contracts are affected by replacement regulations?

Ordinary Life insurance

P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to disability?

P will still receive declared dividends

On a life insurance policy, who is qualified to change the beneficiary designation?

Policyowner

Which is true concerning a Variable Universal Life policy?

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

Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees?

Portion of the premiums paid for by the employer may be a tax deduction

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?

Request of the change will be refused

D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits?

Residual Benefit clause

A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the Medical Information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take?

Send a notice to the MIB that the applicant was declined

Which of the following costs would a Basic Hospital/Surgical policy likely cover?

Surgically removing a facial birthmark

A noncontributory group term life plan is characterized by:

The entire cost of the plan is paid for by the employer

Which statement regarding the Change of Beneficiary provision is true?

The policyowner can change the beneficiary

A Medicare Supplement policy may be cancelled for which of the following reasons?

The premiums has not been paid by the insured

W gave W's age as 50 when W purchased a Life policy. At the time of W's death seven years later, the company discovered W's true age at issue had been 59. What would the normal procedure be under the misstatement of age provision in regard to the payment of the death claim?

The proceeds would be reduced based on whatever the premium would have been if purchased at age 59

J is a producer who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty of?

Twisting

What is the primary factor that determines the benefits paid under a disability income policy?

Wages

What type of insurance offers permanent life coverage with premiums that are payable for life

Whole life

According to the Affordable Care Act (ACA), a dependent child's eligibility status is determined by

age

What does a Medicare Supplement policy cover?

allowable amounts under Medicare Part B

Group life insurance policies are generally written as

annually renewable term

A domestic insurance company in Nevada MUST

be incorporated and formed in Nevada

Which of the following is included under newborn child health coverage?

birth abnormalities

A person who is insured within a group contract will be given a

certificate

Which of the following is an example of defamation?

circulating brochures that falsely denounce the financial condition of an insurer

N has a Major Medical policy that only pays a portion of N's medical expenses. N is responsible for paying the remaining balance. This provision is known as

coinsurance

Which of these actions is taken when a policy owner uses a Life Insurance policy as collateral for a bank loan?

collateral assignment

What is the requirement for maintaining an Individual Nevada producer license?

completing 30 hours of continuing education every 3 years

What is the requirement for maintaining an individual Nevada producer license?

completing 30 hours of continuing education every 3 years

Nevada's 10-day free-look period for life insurance policies begins at the

date of delivery

Non-occupational disability coverage is designed for

employees who suffer non-work related disabilities, since work-related disabilities are covered by Worker's Compensation

A group life insurance policy can be converted to an individual whole life policy under which circumstance?

employment termination

Replacement can be defined as

exchanging an existing policy for a new policy

In Nevada, an insurer that is incorporated in Arizona and conducts business in Nevada is called a(n)

foreign insurer

Which of these is considered a true statement regarding Medicaid?

funded by both state and federal governments

A Long-Term Care policy sold in Nevada MUST be

guaranteed renewable

Basic Medical Expense insurance:

has lower benefit limits than Major Medical Insurance

The first portion of a covered Major Medical Insurance expense that the insured is required to pay is called the:

initial deductible

Who issues Medicare Supplement policies?

insurance companies

Pre-hospitalization authorization is considered an example

managed care

An example of an unfair claims practice would be

misrepresenting insurance policy provisions affecting a loss

The Notice of Claims provision requires a policy owner to:

notify an insurer of a claim within a specified time

Which of these is considered a mandatory provision?

payment of claims

Which life insurance rider typically appears on a Juvenile life insurance policy?

payor benefit rider

After selling an individual life insurance policy, a Nevada producer MUST deliver to the policy owner a(n)

policy summary an buyer's guide

The Nevada Insurance Guaranty Association

protects Nevada insurance policy owners in the event an insurance company becomes insolvent

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?

revocable

An insurance producer could be found guilty of rebating by

sharing commissions with a client who purchased insurance

The investment gains from a Universal Life Policy usually go toward:

the cash value

C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most?

the cost

The most important factor to consider when determining whether to convert term insurance at the insured's attained age or to the insured's original age is:

the cost

D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive?

the full face amount

Life insurance replacement regulation protects the interest of

the policyowner

The Consideration clause of an insurance contract includes:

the schedule and amount of premium payments

Group Life policies in Nevada are required to contain a conversion privilege that allows for conversion

to an individual policy for a stated period of time

B the producer sold an insurance contract to a client. B has engaged in

transacting insurance

P is self-employed and owns an Individual Disability Income policy. He becomes totally disabled on June 1 and receives $2,000 a month for the next 10 months. How much of this income is subject to federal income tax?

$0 (Disability income benefits that derive from an individual policy which was paid entirely by the policy owner is not subject to federal income tax.)

Which of the following actions is NOT required when a producer is replacing a Medicare Supplement policy?

Producer must notify the Commissioner of replacement