XCEL Solutions 160 Questions Exam

An employer may qualify for health care tax credits through SHOP Marketplace if that employer has fewer than how many employees?

25

Sonya applied for a health insurance policy on April 1. Her agent submitted the information to the insurance company on April 6. She paid the premium on May 15 with the policy indicating the effective date being May 30. On which date would Sonya have coverage?

30-May

Greg has recently been terminated from his job that covered him for group life insurance. How long does he have to convert his coverage to an individual policy?

31 days

In Pennsylvania, accident and health plans are required to provide mammograms for women starting at age

40

How many months can a life insurance policy normally be backdated from the date of application?

6

A rollover from a Traditional IRA to another IRA MUST be done within ___ days to avoid tax consequences.

60

In Pennsylvania, an employee must request spousal coverage under a group sponsored accident and health plan within ___ days of marriage.

60

If a health insurance claim is not promptly paid, legal action may be taken against the insurer after

60 days from the date proof of loss is furnished

How much does Medicare Part B pay for physician fees?

80%

Upon policy delivery, which of the following must a producer have an applicant sign if no initial premium was collected with the health insurance application?

A good health statement

In Pennsylvania, what's the requirement for a minor to receive proceeds from a death benefit?

A guardian must be appointed

An example of rebating would be

A producer who shares commissions with a client

Which of these is considered to be a Living Benefit option in a life insurance policy?

Accelerated death benefit

Under a disability income policy, which provision would be payable if the cause of an injury is unexpected and accidental?

Accidental bodily injury provision

Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue?

Accumulation at Interest Option

Kathy's annuity is currently experiencing tax-deferred growth until she retires. Which phase is this annuity in?

Accumulation period

The waiver of premium does NOT include which provision?

All future premiums are waived if the insured recovers from the disability

Which of the following is considered to be the period when the accumulated value in an annuity is paid out?

Annuitization phase

The difference between a Long Term Care Partnership Plan and a Non-Partnership Plan is which of the following?

Asset Protection

What is the difference between a Long-Term Care Partnership Plan and a Non-Partnership Plan?

Asset protection

An attending physician's statement would be appropriate for which life insurance purpose?

At the request of the insurer to assist in the underwriting decision

Which situation would qualify an individual for receiving benefits from a qualified long-term care policy?

Becoming cognitively impaired (mentally ill)

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?

Benefit period

With a scheduled dental policy, how are covered expenses paid?

Benefits are limited to a specific maximum dollar amount per procedure

Which of the following is a requirement for ANY change in an insurance application?

Change must be initialed by the applicant

When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates?

Change of occupation provision

Jonas is a whole life insurance policyowner and would like to add coverage for his two children. Which of the following products would allow him to accomplish this?

Child term rider

In Pennsylvania, who is responsible for Continuing Education (CE) course content approval?

Commissioner

Tim is covered under a group plan and would like to change his group coverage to an individual policy with the same insurer because of employment termination. Which of these describes the change that will take place?

Conversion

Which of these is affected by the frequency of an insurance policy's premium payments?

Cost

Which of these is NOT subject to income taxation under a Modified Endowment Contract (MEC)?

Death benefit

In group health care, what is the purpose of the coordination of benefits provision?

Determines what is paid by the primary and secondary insurers in the event of a claim

Acme Corporation recently purchased a group health plan for its employees. Who would receive a certificate of coverage?

Employees

A common exclusion or limitation on a dental policy is

Endodontics

Fraternal Benefit Society has each of the following characteristics EXCEPT

Exist For profit

All of these are settlement options for life insurance policies EXCEPT

Extended term

Which of these riders will pay a death benefit if the insured's spouse dies?

Family term insurance rider

Which of the following is required to maintain a producer's license in Pennsylvania?

Field underwriter, who solicits insurance and earns a commission

A producer is meeting with a client to determine whether an annuity would be suitable for purchase. Which of the following topics needs to be discussed with the client?

Financial objectives

Which of these will typically authorize treatment from a specialist?

Gatekeeper

How is Medicare Part B funded?

General tax revenue and user premiums

All of the following are primary risk factors in underwriting individual health insurance policies EXCEPT

Geographical location

Tom has a rider on his disability income policy that guarantees the right to increase his benefits without a medical exam. What kind of rider is this?

Guaranteed insurability rider

Which of these is a method of determining the level of funds required for ongoing support in the event of the breadwinner's death?

Human life value

The Pennsylvania Department of Insurance may take each of the following actions EXCEPT

Incarceration

How is the cost of a policy affected when a policyowner pays premiums more frequently?

Increases

What happens to the total amount of premium paid for an insurance policy when the payment frequency increases?

Increases

Health insurance will typically cover which of the following perils?

Injury due to accident

Who is responsible for assembling the policy forms for insureds?

Insurance carriers

Which of the following types of deductibles would apply a single deductible to both medical and dental insurance coverage?

Integrated deductible

Violating Pennsylvania insurance law may result in which of the following Insurance Department actions?

Issuance of a cease and desist order after a hearing

Which type of life insurance is normally associated with a Payor Benefit rider?

Juvenile insurance

How do insurers predict the increase of individual risks?

Law of large numbers

The time limit for filing claim disputes is addressed in which provision of an accident and health policy?

Legal actions

Which contract element is insurable interest a component of?

Legal purpose

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

Which of these is NOT considered to be a common life insurance nonforfeiture option?

Life income annuity

Insurance premium is determined by each of the following factors EXCEPT

Liquidity

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

Someone needing custodial care at home would require which type of coverage?

Long-term care

All of these are considered key factors in underwriting health insurance EXCEPT

Marital status

All of these are considered key factors in underwriting life insurance EXCEPT

Marital status

Shirley has a Medigap policy, which is designed to pay costs associated with

Medicare Parts A and B

Which of these gaps in Medicare coverage is addressed with Medicare Supplemental Insurance?

Medicare in-hospital deductible

Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She would like to borrow $15,000 against the cash value. Which of the following statements is TRUE?

Net death benefit will be reduced if the loan is not repaid

When an insured has a major medical plan with first dollar coverage, how does this impact the benefits paid?

No deductible payment is required

What is the required action to be taken by a Pennsylvania licensee before operating under an assumed business name?

Notify Commissioner

What makes an insurance policy a unilateral contract?

Only the insurer is legally bound

A policyowner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision?

Partial disability

What is an insurance policy's grace period?

Period of time after the premium is due but the policy remains in force

Which of the following is NOT a common exclusion for a medical expense policy?

Physical therapy

Variable life insurance and Universal life insurance are very similar. Which of these features are held exclusively by variable universal life insurance?

Policyowner has the right to select the investment which will provide the greatest return

Which of the following is a person who negotiates an insurance contract on behalf of an insurer?

Producer

The branch of dentistry which deals with the replacement of missing parts is called

Prosthodontics

All of the following are considered appropriate uses of life insurance for business purposes EXCEPT

Protecting the business by covering entry level employees with life insurance

Premiums paid that exceed 7 1/2% of an insured's Adjusted Gross Income (AGI) are tax-deductible when paid for which of the following plans?

Qualified Long-Term Care plan

A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due?

Reduction of premium dividend option

A transaction in which a new life insurance policy is purchased and an existing life insurance policy is surrendered is called

Replacement

Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence?

Section 1035 exchange

Which of the following are the premium payments for a Universal life policy NOT used for?

Separate account investments

Generally speaking, which three levels of care are Long-Term Care policies provided with?

Skilled nursing, intermediate, and custodial care

A life insurance producer licensed in the Commonwealth of Pennsylvania is authorized to

Solicit, receive and forward applications to the insurer

Which of these statements regarding the annuitant is CORRECT?

The annuitant's life expectancy determines the annuity payments

Bill the producer is collecting the initial premium on a health policy. Which of the following statements is true?

The contract is not in force without the initial premium being paid.

James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount?

The death benefit paid will be what the premium would have purchased at the correct age

Which of the following statements most aptly describes health insurance benefits?

The greater the benefits, the higher the premium.

Which of the following would be a valid reason why a policy premium would be higher than the standard premium?

The insured does not meet established underwriting requirements

Who assumes the investment risk with a fixed annuity contract?

The insurer

When a preferred provider organization (PPO) insured goes out-of-network, which of the following actions occur?

The insurer will pay a reduced amount

Which of the following statements about the contestability of a life insurance policy is true?

The policy can be contested by the insurer only during the first two years of the contract

What is the elimination period of an individual disability policy?

Time period a disabled person must wait before benefits are paid

An example of naming a beneficiary by class would be

To the children born of my union with Ned Jackson

Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is this?

Universal Life policy

A life insurance policy which contains cash values that vary according to its investment performance of stocks is called

Variable Whole Life

Life insurance may make an immediate benefit payment before the insured dies in which transaction?

Viatical Settlement

A policyowner can receive a percentage payment of the death benefits prior to death by using what kind of contract?

Viatical settlement agreement

When can a group health policy renewal be denied according to the Health Insurance Portability and Accountability Act (HIPAA)?

When contribution or participation rules have been violated

When does a life insurance policy typically become effective?

When initial premium is collected and policy is issued

When are group disability benefits considered to be tax-free to the insured?

When the recipient pays the premiums

A 70-year old insured individual has suffered from kidney failure for the past 24 months. She is covered by her spouse's large-group employer plan. How will Medicare be utilized in this situation?

Will be the secondary insurer and pay for claims not fully covered by the group plan

Continued coverage under COBRA would be provided to all of the following EXCEPT:

a covered employee is terminated for gross misconduct

A long-term care policy typically provides all of the following levels of care EXCEPT

acute care

A non-contributory health insurance plan helps the insurer avoid

adverse selection

Loss of income insurance provides

an individual the means to replace wages

Medical Expense Insurance would cover

an injury occurring at the insured's residence

The entire contract includes the actual policy and the

application

A licensee may only sell, solicit, and negotiate insurance contracts on behalf of the

appointing insurer

The Commissioner has the right and duty to

audit insurer financial reports and conduct market studies

In order to solicit insurance in Pennsylvania, all of the following is required EXCEPT

be at least 21 years of age

A domestic insurance company in Pennsylvania MUST

be formed under Pennsylvania insurance laws

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

benefit schedule

Preferred risk policies with reduced premiums are issued by insurance companies because the insured has

better than average mortality or morbidity experience

Field underwriting performed by the producer involves

completing the application and collecting initial premium

Jennifer is required to pay a specific sum out of pocket before any benefits are paid in a year. Her health policy most likely contains a(n)

deductible

An example of a tax-qualified retirement plan would be a(n)

defined contribution plan

A Medicare Supplement Policy is

designed to fill in the gaps of Part A and Part B Medicare

All of these are standard exclusions found in a life insurance policy EXCEPT

disability

When soliciting insurance, a producer CANNOT

emphasize Guaranty Association benefits

Key Person Disability Insurance pays benefits to the

employer

A producer's license may only be suspended or revoked if the producer

has been afforded a right to a hearing

When an applicant for a producer's license has a principal place of residence or business location in Pennsylvania, for licensing purposes the State of Pennsylvania is known as the

home state

A proposed insured for a health insurance policy was treated for heart disease within the past year. When applying for health insurance, the heart disease treatment

indicates a preexisting condition

An accident and health policy that provides reimbursement benefits makes them payable to the

insured

When a decreasing term policy is purchased, it contains a decreasing death benefit and

level premiums

Commissions may be shared by

licensed and appointed Producers

The Life and Health Guaranty Association provides funds to carry out its powers and duties by assessing

member insurers

A producer who sells insurance in Pennsylvania but resides in another state is called a(n)

nonresident producer

Which of these characteristics of an applicant is NOT taken into consideration when assessing risk for Disability coverage?

number of children

A provision that allows a policyowner to withdraw a policy's cash value interest free is a(n)

partial surrender

Mortality is calculated by using a large risk pool of

people and time

An indemnity plan

provides the insured a specific dollar amount for services

In the state of Pennsylvania, a licensed producer

represents the insurer

An annuity is primarily used to provide

retirement income

An endorsement found in an insurance plan which modifies the provisions of the policy is called a(n)

rider

Term insurance is appropriate for someone who

seeks temporary protection and lower premiums

All of the following actions are considered rebating EXCEPT

sharing commissions with other licensed and appointed producers

Proceeds from a life insurance policy are protected from the beneficiary's creditors by which clause?

spendthrift trust clause

In an insurance contract, the applicant's "consideration" is the

statements made in the application and the premium

A(n) ______ company is owned by its shareholders.

stock

Respite care is able to provide

temporary relief to the patient's primary caregiver

A producer does NOT have a fiduciary responsibility to

the Pennsylvania Guaranty Association

A Medicare Supplement basic benefit is

the first 3 pints of blood per year

When an insurance company consistently fails to provide reasonable explanations for the denial of a claim, this is called a(n)

unfair claim settlement

A life insurance policy that is subject to a contract interest rate is referred to as

universal life

Maximum benefits refers to the

upper limit of the total lifetime benefits the insurance company will pay

A securities license is required for a life insurance producer to sell

variable life insurance

Shawn, Mike, and Dave are brothers who have a $100,000 "first to die" joint life policy covering all three of their lives. If Mike dies first, the policy proceeds

will no longer provide insurance protection

The Fair Credit Reporting Act protects consumers

with guidelines regarding credit reporting and distribution

Karen is a producer who has obtained personal information about a client without having a legitimate reason to do so. Under the McCarran-Ferguson Act, what is the minimum penalty for this?

$10,000

The Pennsylvania Life and Health Guaranty Association protects life insurance death benefit claims up to

$300,000

In Pennsylvania, a Specified disease accident and health plan must provide a minimum benefit in the amount of

$5,000

Ken is a producer who has obtained Consumer Information Reports under false pretenses. Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed on Ken?

$5,000

Kate has a Major Medical Plan with a 75/25 coinsurance and a deductible of $25. How much will she have to pay if she, not having met any of her deductible, visits the doctor and receives a bill for $125?

$50.00

An insured may return their accident and health policy within ___ days of policy delivery.

10

Kathy pays a monthly premium on her health insurance policy. How long is her grace period?

10 days

Frank is shopping for a disability income policy. Which of the following would have the HIGHEST premium?

14 day waiting period / 10 year benefit period

If a Medicare Supplement policy replaces another that had been in effect for at least 6 months, the replacing policy may impose which of the following time exclusions for pre-existing conditions?

0 months

An immediate annuity has been purchased with a single premium. When does the annuitant typically begin receiving benefit payments?

1 month

Tyler purchased a disability policy with a waiver of premium rider on April 1. He is disabled on May 1. On June 1, he receives proof of permanent and total disability, and submits a claim. He begins receiving benefits on June 15. When are his premiums waived?

1-May