Xcell Testing Solutions (Life & Health) Final 150 Question Practice 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
J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy?
$25,000
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
An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision?
31
P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount?
Accidental Death and Dismemberment provision
Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company?
Annuity
When can a policy owner change a revocable beneficiary?
Anytime
Any changes made on an insurance application requires the initials of whom?
Applicant
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 deducitble?
Carryover provision
Which statement about a whole life policy is correct?
Cash value may be borrowed against
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?
Contributory
Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability?
Conversion privilege
Under a trustee group life policy, who would be eligible for a certificate of coverage?
Corporation
M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?
Determined by the terms of the policy
Which contract permits the remaining partners to buy-out the interest of a disabled business partner?
Disability Buy-Sell
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
Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require?
Each partner must own a policy on the other partners
What provision in a life insurance policy states that the application is considered part of the contract?
Entire Contract provision
Which of the following is an important underwriting principle of group life insurance?
Everyone must be covered in the group
Cash value may be borrowed against
Face amount plus the policy's cash value
N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase?
Fixed Deferred
What action should a producer take if the initial premium is NOT submitted with the application?
Forward the application to the insurer without the initial premium
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
Which of these is considered a true statement regarding Medicaid?
Funded by both state and federal governments
With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period?
Gives the policyowner additional time to pay past due premiums
Which requirement must be met for an association to be eligible for a group life plan?
Group was formed for a purpose other than acquiring insurance
J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a preset price. What type of plan does J belong to?
Health Maintenance Organization
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
High-deductible health plan
How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?
If the primary beneficiary dies before the insured
All of these statements about the Waiver of Premium provision are correct EXCEPT
Insured must be eligible for Social Security disability for claim to be accepted
In a Life insurance contract, an insurance company's promise to pay stated benefits is called the
Insuring clause
The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the
Insuring clause
Which of the following health insurance policy provisions specifies the health care services a policy will cover?
Insuring clause
Which statement regarding third-party ownership of a life insurance policy is true?
It is used extensively in estate-planning as well as business circumstances
What type of life policy covers 2 lives and pays the face amount after the first one dies?
Joint Life Policy
Which of these would be considered a Limited-Pay Life policy?
Life Paid-Up at Age 70
An insurance company would MOST likely pay benefits under an Accidental Death and Dismemberment policy for which of the following losses?
Loss of eyesight due to an accidental injury
Which of these is an element of a Single Premium annuity?
Lump-sum payment
Which of the following types of health coverage frequently uses a deductible?
Major Medical Policy
The health insurance program which is administered by each state and funded by both the federal and state governments is called
Medicaid
Which of the following are NOT managed care organizations?
Medical Information Bureau (MIB)
All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for
Modified Whole Life
K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?
Modified Whole Life
Which of the following statements is CORRECT about accelerated death benefits?
Must have a terminal illness to qualify
Which of these is considered a mandatory provision?
Payment of claims
Which of these statements concerning an Individual Straight Life annuity is accurate?
Payments are made to an annuitant for life
Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled?
Payor clause
When an employee is terminated, which statement about a group term life conversion is true?
Policy proceeds will be paid if the employee dies during the conversion period
Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation?
Policy was returned within the free-look period, premium will be fully refunded
S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy?
Return of premium rider
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
S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation?
Single Premium
What is the underlying concept regarding level premiums?
The early years are charged less than what is needed
Which statement is TRUE regarding a group accident & health policy issued to an employer?
The employer is the policyowner and each employee receives a certificate of coverage
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
A policy of adhesion can only be modified by whom?
The insurance company
G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G's policy, who is responsible for paying the medical bills?
The insured
How does a typical Variable Life Policy investment account grow?
Through mutual funds, stocks, bonds
The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is
Time Limit on Certain Defenses
Which Accident and Health policy provision addresses preexisting conditions?
Time Limit on Certain Defenses
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
Universal Life
A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled?
Utilities and office rent
A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as
Variable Life
Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling?
Variable Life
When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?
Void the policy only if it is discovered during the Contestable period and proven to be material
If an individual has an Accidental Death and Dismemberment policy and dies, an autopsy can be performed in all these situations EXCEPT
When the state prohibits this by law
What does the ownership clause in a life insurance policy state?
Who the policyowner is and what rights the policyowner is entitled to
L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will
adjust the death benefit to a reduced amount
When does a Guaranteed Insurability Rider allow the insured to buy additional coverage?
at future dates specified in the contract with no evidence of insurability required
S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT
beneficiary's age
The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n)
closed panel
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
The incontestable clause allows an insurer to
contest a claim during the contestable period
Health insurance benefits NOT covered due to an act of war are
excluded by the insurer in the contract provisions
What kind of special need would a policyowner require with an Adjustable Life insurance policy?
flexible premiums
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
Basic Medical Expense insurance
has lower benefit limits than Major Medical insurance
Which of the following will a Long Term Care plan typically provide benefits for?
home health care
For which of the following expenses does a Basic Hospital policy pay?
hospital room and board
With a Basic Medical Expense policy, what does the hospitalization expense cover?
hospital room and board
When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have
insurable interest in the proposed insured
Credit Life insurance is
issued in an amount not to exceed the amount of the loan
What kind of premium does a Whole Life policy have?
level
According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options?
monthly
If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best desribes this policy is called
noncancellable
M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the
policy proceeds
Who elects the governing body of a mutual insurance company?
policyholders
A Limited-Pay Life policy has
premium payments limited to a specified number of years
What is the Suicide provision designed to do?
safeguard the insurer from an applicant who is contemplating suicide
An immediate annuity consists of a
single premium
Which of the following services is NOT covered under a hospitalization expense policy?
surgeon's fees
What type of life policy covers two people and pays upon the death of the last insured?
survivorship
An individual who purchases a Life annuity is given protection against
the risk of living longer than expected
All of these are considered to be a benefit under Social Security EXCEPT for
unemployment
The part of a life insurance policy guaranteed to be true is called a(n)
warranty
A policy owner is able to choose the frequency of premium payments through what policy feature?
Premium Mode
Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy?
Premiums are waived after the insured has been totally disabled for a specified time period
What benefit does the Payor clause on a Juvenile Life policy provide?
Premiums are waived if payor becomes disabled
T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. When T submits a claim, his employer's plan is considered what type of carrier under the Model Group Coordination of Benefits provision?
Primary carrier
All of these are considered sources of underwriting information about an applicant EXCEPT
Rating Services
