Life and Health Insurance Exam Questions and Answers, Exams of Nursing

Download Life and Health Insurance Exam Questions and Answers and more Exams Nursing in PDF only on Docsity! XCEL TESTING SOLUTIONS LIFE AND HEALTH INSURANCE WEIGHTED EXAM 2024-2025 ACTUAL EXAM LATEST VERSION COMPLETE 240 WRITTEN QUESTIONS AND CORRECT ANSWER S Typically, Long-Term Disability benefits are coordinated with which benefit plan? - correct answer Social Security The focus of major medical insurance is providing coverage for - correct answer medical and hospitalization expenses An insured under a Major Medical expense plan with a zero deductible and 80/20 coinsurance provision files a $1,000 claim. How much of this claim is the insured responsible for? - correct answer $200 because this policy has a zero deductible, the insures is only responsible for the 20% coinsurance on this claim, or $200 An insured has a stop-loss limit of $5,000 and an 80/20 coinsurance. The insured incurs $25,000 of covered losses. How much will the insured pay? - correct answer $5,000 Which type of plan would be the most appropriate for an individual on Medicare and concerned that Medicare will NOT pay for charges exceeding the approved amount? - correct answer Medicare supplement Plan F When can a group health policy renewal be denied according to the Health Insurance Portability and Accountability Act (HIPAA)? - correct answer when contribution or participation rules have been violated What does the word "level: in Level Term describe? - correct answer the face amount A non-contributory health insurance plan helps the insurer avoid - correct answer adverse selection because all eligible employees are usually covered, non-contributory plans are desirable from an underwriting standpoint because adverse selection is minimized. To qualify for a resident producer license in the state of Michigan, an individual - correct answer must complete the required pre-licensing education within 12 months of license application Under an expense-incurred individual health policy, what is the MAXIMUM length of time after issuance of the policy that an insurer can exclude coverage for a pre-existing condition? - correct answer 12 months pre-existing conditions may be excluded for a maximum of 12 months from the date of enrollment. XCEL TESTING SOLUTIONS LIFE AND HEALTH INSURANCE WEIGHTED EXAM 2024-2025 ACTUAL EXAM LATEST VERSION COMPLETE 240 WRITTEN QUESTIONS AND CORRECT ANSWER S 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 - correct answer benefit schedule benefits schedule set predetermined limits or maximums on how much money and insured can be reimbursed for a covered loss. Who is the individual paid on a fee-for-service basis? - correct answer Provider Which of the following is NOT an illegal inducement? - correct answer Giving the insured an article of merchandise printed with the producer's name costing $5 $5 or less of tokens or merchandise to applicants is allowed. Making a statement that is false or maliciously critical of the financial condition of an insurer is known as - correct answer defamation Which of the following is NOT a required provision in an accident and health insurance policy? - correct answer change of occupation the change of occupation provision is considered an OPTIONAL provision Which of these statements about Medicaid is CORRECT? - correct answer Funded by federal, sate, and local taxes Medicaid is funded by federal, state, and local taxes but is administered by each state. All of these are considered key factors in underwriting life insurance EXCEPT - correct answer Marital Status Correct: tobacco use, health history, age The time limit for filing claim disputes is addressed in which provision of an accident and health policy? - correct answer legal actions All of the following plans allow for employee contributions to be taken on a pre-tax basis EXCEPT - correct answer Health reimbursement Arrangement plan employers contribute to health reimbursement Arrangement planz (HRA's), not employees. XCEL TESTING SOLUTIONS LIFE AND HEALTH INSURANCE WEIGHTED EXAM 2024-2025 ACTUAL EXAM LATEST VERSION COMPLETE 240 WRITTEN QUESTIONS AND CORRECT ANSWER S Coordination of Benefits regulation applies to all of the following plans EXCEPT - correct answer preferred provider organization plan CORRECT: group vision plan, self-funded group health plan, group health plan A spouse and child can be added to the primary insured's coverage as what kind of rider? - correct answer Family term Amy has a group medical policy through her employer with a $500 deductible and a 90% coinsurance provision. She incurs $1,500 in covered health care services. How much will her group insurance carrier pay? - correct answer $900 In this situation, the group insurance carrier will pay 90% of the covered loss after the deductible has been applied. In order to save on premiums, a Life Insurance policy can legally be backdated up to - correct answer 6 months Statements made by an insurance applicant on an application are considered to be - correct answer representations To receive proceeds from a death benefit, a minor - correct answer must have an appointed guardian In the interest of protecting the assets of a minor, state law requires that a guardian be appointed to administer the proceeds payable to the minor child. Which of the following services MUST be provided by HMO plans? - correct answer Home health care Home health services is an HMO mandatory benefit in Michigan. The unfair trade practice of replacing an insurance policy from one insurer to another based on misrepresentation is called - correct answer twisting In determining whether a pre-existing condition applies, the enrollee CANNOT have more than how many days' gap in health insurance? - correct answer 63 A business will typically use which type of life insurance to cover their employees? - correct answer Group policy XCEL TESTING SOLUTIONS LIFE AND HEALTH INSURANCE WEIGHTED EXAM 2024-2025 ACTUAL EXAM LATEST VERSION COMPLETE 240 WRITTEN QUESTIONS AND CORRECT ANSWER S Within how many days must a Traditional IRA be rolled over to another IRA in order to avoid tax consequences? - correct answer 60 Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? - correct answer $4,000 In this situation, Ron may increase the face value of his policy by $4,000. $100,000 X .04 = $4,000. When an accident and health policy requires payment of an additional premium to provide coverage for a newborn, how many days after the birth is the first payment due? - correct answer 31 Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. What kind of policy is this? - correct answer Equity index whole life A life insurance policy that contains a guaranteed interest rate with the chance to earn a rate that is higher than the guaranteed rate is called - correct answer universal life What is issued to each employee of an employer health plan? - correct answer Certificate Ted has a health insurance plan that requires him to pay a specific sum out of pocket before any benefits are paid in a calendar year. Which of these does his health plan have? - correct answer Calendar-year deductible A calendar-year deductible is paid before any benefits are paid in a calendar year. An insurer would be committing Unfair Discrimination if coverage was denied based upon - correct answer marital status A licensee who is required to take continuing education MUST include how many ethics coursework hours? - correct answer 3 A licensee is required to take 24 hours of continuing education every two years. Of the 24 hours, 3 must be in ethics Barbara's policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. This rider is called a(n) - correct answer Guaranteed insurability rider XCEL TESTING SOLUTIONS LIFE AND HEALTH INSURANCE WEIGHTED EXAM 2024-2025 ACTUAL EXAM LATEST VERSION COMPLETE 240 WRITTEN QUESTIONS AND CORRECT ANSWER S When calculating the amount of life insurance needed for an income earner, what has to be determined when using the Needs Approach? - correct answer the family's Financial objectives if the income earner were to die or become disabled Dorian exercised a nonforfeiture option by using his life policy's cash value to purchase an extended term insurance option. When the term insurance expires, - correct answer the protection ends When the insured gives birth, coverage for eligible newly born children consists of coverage of injury or sickness including - correct answer birth abnormalities Which of these is NOT considered to be a purpose of an annuity? - correct answer Annuities are intended to create an estate CORRECT: annuities are indented to liquidate an estate, annuities are intended for the tax-free growth of principal, and annuities are intended to distribute accumulate principal What is the purpose for having an accelerated death benefit on a life insurance policy? - correct answer it allows for cash advances to be paid against the death benefit if the insured becomes terminally ill Donald is the primary insured of a life insurance policy and adds a children's term rider. What is the advantage of adding this rider? - correct answer can be converted to permanent coverage without evidence of insurability Life insurance policies will normally pay for losses arising from - correct answer commercial aviation Medical Expense Insurance would cover - correct answer an injury occurring at the insured's residence A clause that allows an insurer the right to terminate coverage at any anniversary date is called a(n) - correct answer optional renewability clause An optional renewability clause allows an insurer the unrestricted right to terminate coverage at any anniversary or at any premium due date. Which of these is NOT considered to be a risk factor in life insurance underwriting? - correct answer Number of children CORRECT: health history, hobbies, occupation XCEL TESTING SOLUTIONS LIFE AND HEALTH INSURANCE WEIGHTED EXAM 2024-2025 ACTUAL EXAM LATEST VERSION COMPLETE 240 WRITTEN QUESTIONS AND CORRECT ANSWER S CORRECT: member in an affinity program that was identified to the consumer upon entering the program, service provider marketing on behalf of licensee, consumer reporting agency. What is the tax liability for employer contributions in Health Savings Accounts (HSA's)? - correct answer No tax payment needed Employer-paid contributions to Health Savings Accounts are tax-free to the employee. A licensee who informs an insured of inaccurate terms, benefits, or advantages of any policy is committing which of the following violations? - correct answer Misrepresention what is the primary reason for buying an annuity? - correct answer Provide future economic security A common exclusion with Vision plans is - correct answer lasik surgery INCLUDED: eyeglass frames, the examination, contact lenses In the Michigan Insurance Code, Chapter 45, insurance fraud defines financial loss as all of the following EXCEPT - correct answer additional premiums CORRECT: loss of earnings, out-of-pocket expenses, repair and replacement costs All of these are considered a financial loss under Chapter 45 of the Michigan Insurance Code EXCEPT for "additional premiums". Which policy feature makes a universal life policy different from a whole life policy? - correct answer A flexible premium schedule An insurer must furnish to a claimant forms for filing proof of loss within ___ days upon receiving a notice of claim. - correct answer 15 A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n) - correct answer guaranteed insurability rider In which of the following processes will the insurer oversee the insured's hospital stay to confirm everything is going according to schedule and that the insured will be released as planned? - correct answer Concurrent review XCEL TESTING SOLUTIONS LIFE AND HEALTH INSURANCE WEIGHTED EXAM 2024-2025 ACTUAL EXAM LATEST VERSION COMPLETE 240 WRITTEN QUESTIONS AND CORRECT ANSWER S In an employer-sponsored contributory group Disability Income plan, the employer pays 60% of the premium and each employee pays 40% of the premium. Any income benefits paid are taxed to the employee at - correct answer 60% of the benefit 60% of an income benefit is taxed to the employee because 60% of the premiums paid come from the employer. Under the Health Insurance Portability and Accountability Act (HIPAA), the employee's new Group Health Plan will verify Creditable Coverage so that the - correct answer employees waiting period for coverage of a pre-existing condition can be reduced under the new employers Health Plan The election of COBRA for continuation of health coverage will - correct answer maintain the same coverage and increase premium Continuation of coverage under COBRA results in the same coverage with increased premiums up to 102% of prior premium. What activity does NOT require an insurance producer's license? - correct answer Underwriting CORRECT: soliciting, negotiating, selling Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30. His insurance agent told him the policy would be paid up if he reached age 100. The present cash value of the policy equals $250,000. Rob recently died at age 60. The death benefit would be - correct answer $500,000 In this situation, the death benefit would be the $500,000 face amount. A rehabilitation benefit is intended to - correct answer prepare the insured to return to employment what amount will be paid under a policy where the insured misstated his/her age? - correct answer An amount the premium would have purchased at the correct age An example of naming a beneficiary by class would be - correct answer to the children born of my union with the Ned Jackson In group health care, what is the purpose of the coordination of benefits provision? - correct answer determines what is paid by the primary and secondary insurers in the event of the claim XCEL TESTING SOLUTIONS LIFE AND HEALTH INSURANCE WEIGHTED EXAM 2024-2025 ACTUAL EXAM LATEST VERSION COMPLETE 240 WRITTEN QUESTIONS AND CORRECT ANSWER S Which of the following statements is NOT true regarding a Critical Illness Plan? - correct answer coverage is limited to a single devastating disease CORRECT: pays a lump sum to the insured upon the diagnosis of a critical illness, the insurer may have a list of critical illnesses they will cover, also known as Specified Disease Plans Dana is an employee who deposits a percentage of her income into her individual annuity. Her company also contributes a percentage into a separate Company pension plan. What kind of annuity is this considered? - correct answer qualified retirement annuity Which of these is considered to be a Lving Benefit option in a life insurance policy? - correct answer accelerated death benefit a tax-free section 1035 exchange of a life insurance policy to a different policy is permitted if it occurs - correct answer from insurer to insurer and no cash is received by the policyowner the Internal Revenue Code (IRC) enables a tax-free section 1035 exchange of a life insurance policy to a different policy if it occurs from insurer ensure and the policyowner does not receive any cash. which of the following is required to be licensed as an insurance producer? - correct answer a business entity soliciting insurance ABC Insurance Agency is entering each applicant who purchases insurance through their agency into a drawing to win a free trip. This is an unlawful Insurance practice known as - correct answer illegal inducement let and then an employer-sponsored group accident and health plan, a master contract is issued to the - correct answer employer if the annuitants dies before the annuity start date, - correct answer the premiums paid plus interest earned will be given to the beneficiary With a scheduled Dental policy, how are covered expenses paid? - correct answer benefits are limited to a specific maximum dollar amount per procedure how long must an individual be unable to engage in any gainful activity due to physical or mental disability in order to qualify for Social Security total disability? - correct answer 12 months which of the following protects the policyowner from a misrepresentation caused by an innocent mistake? - correct answer incontestable clause XCEL TESTING SOLUTIONS LIFE AND HEALTH INSURANCE WEIGHTED EXAM 2024-2025 ACTUAL EXAM LATEST VERSION COMPLETE 240 WRITTEN QUESTIONS AND CORRECT ANSWER S people with higher loss exposure have the tendency to purchase insurance more often than those at average risk. This is called - correct answer adverse selection when can a life policy no longer be canceled for non-fraudulent Miss statements after its date of issue? - correct answer 2 years the contestable period for a life policy in Michigan is 2 years. variable life insurance and universal life insurance are very similar. Which of these features are held exclusively by variable universal life insurance? - correct answer policyowner has the right to select the investment which will produce the greatest return 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 retired and dissolved the business. Bob dies 12 months later. The policies continue in force with no change. Both partners are still a married at the time of Bob's death. in this situation, who receive Bob's policy proceeds? - correct answer Tom insurable interest only has to exist at the time of the application, not at the time of the claim. Being there was no change in beneficiary prior to Bob's death, Tom was still receive the policy proceeds. upon receiving a producer complaint, the Commissioner may immediately - correct answer issue a cease-and-desist order a producer's fiduciary responsibility includes which of the following activities? - correct answer recording the receipt and distribution of premiums due to an insurer an agent show use reasonable accounting methods to record funds received in his or her fiduciary capacity including the receipt and distribution of all premiums do each of his or her insurers. all of the following occurrences may result in license revocation EXCEPT - correct answer producing in an adequate amount of new premium CORRECT: having been convicted of a felony, forging another's name to an application for insurance, failing to meet court-ordered child support obligations XCEL TESTING SOLUTIONS LIFE AND HEALTH INSURANCE WEIGHTED EXAM 2024-2025 ACTUAL EXAM LATEST VERSION COMPLETE 240 WRITTEN QUESTIONS AND CORRECT ANSWER S 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 - correct answer indicates a pre-existing condition for what purpose is a life insurance application backdated? - correct answer to reduce the premium what is the name of the provision which states that a copy of the application must be attached to the policy when issued? - correct answer entire contract a renewable term life insurance policy can be renewed - correct answer at a predetermined date or age, regardless of the insurance health 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? - correct answer net death benefit will be reduced if the loan is not repaid a life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT - correct answer fare-paying passenger CORRECT: pilot of personal airplane, suicide, War the above may not be covered or have restrictions. which of the following signatures is not required on an individual insurance application? - correct answer insurer Which of the following decisions would a Health Savings Account (HSA) owner NOT to be able to make? - correct answer the amount contributed by the employer CORRECT: the amount contributed by the owner, the underlying account Investments used, the medical expenses paid for by the HSA an individual with a Health Savings a Account (HAS) can make all of these decisions except how much the employer will contribute. which of the following is NOT included under health benefit plan? - correct answer Hospital Indemnity plan XCEL TESTING SOLUTIONS LIFE AND HEALTH INSURANCE WEIGHTED EXAM 2024-2025 ACTUAL EXAM LATEST VERSION COMPLETE 240 WRITTEN QUESTIONS AND CORRECT ANSWER S INCLUDED: major medical policy, basic Hospital policy, surgical expense policy A Modified Endowment Contract (MEC) is best described as - correct answer a life insurance contract which accumulates cash value is higher than the IRS will allow a guaranteed issue life insurance policy has no - correct answer medical underwriting which type of business insurance is meant to cover the cost of continuing to do business while the owner is disabled? - correct answer business overhead expense policy which of the following is an annuity that is linked to a market-related index? - correct answer equity-indexed annuity producer commissions may NOT be paid to - correct answer licensed producers not appointed by an insurer CORRECT: licensed and appointed producers, licensed and appointed producers who are sharing commissions, non-resident producers Elizabeth is the beneficiary of a life insurance policy. She's receiving the death benefit and payments of $10,000 per month until the principal and interest has been paid out. Which option was chosen? - correct answer fixed amount which of the following is an example of the insured's consideration? - correct answer a paid premium in the state of Michigan, a licensed producer - correct answer represents the insurer which of these would NOT considered a presumptive disability? - correct answer loss of a leg or arm CORRECT: loss of vision and speech, loss of hearing, loss of leg and arm in Michigan, a small employer is comprised of - correct answer 2 to 50 employees which of the following would be considered a possible application and contract policy holder for group health benefits? - correct answer employer an employer would be a possible application and contract policyholder of a single Master contract or Master policy for group health benefits. XCEL TESTING SOLUTIONS LIFE AND HEALTH INSURANCE WEIGHTED EXAM 2024-2025 ACTUAL EXAM LATEST VERSION COMPLETE 240 WRITTEN QUESTIONS AND CORRECT ANSWER S CORRECT: Dressing, transferring, feeding oneself a producer who knowingly submits a FALSE statement in support of a claim.may be found guilty of - correct answer fraud who were Keogh plans designed to provide pension benefits for? - correct answer the self- employed A policyholder's unmarried child is incapable of self support due to physical disability. the child is provided medical care coverage under the parent's policy - correct answer until policy term with proof of incapacity written proof of disability and dependcy is required to prove a mental or physical handicap for a dependent child. All of the following are characteristics of a Group Life Insurance Plan EXCEPT - correct answer individual underwriting CORRECT: group underwriting, master contract, probationary period All of the following statements correctly describe the purpose of Social Security EXCEPT - correct answer it provides a source of income for a meaningful standard of living during retirement CORRECT: It provides havoc protection against financial problems accompanying death, disability and retirement, it augments a sound personal insurance plan, it provides a time in survivor benefits to a worker and the workers family the authority granted to a licensed producer is provided via the - correct answer law of agency according to the law of agency, the producer/agent represents the principal/insurer and is guaranteed actual, implied and apparent authority to act on behalf of the insurer. the law of agency makes the principal responsible for these acts of the agent. All of the following riders can increase the death benefit amount EXCEPT - correct answer waiver of premium CORRECT: Cost of living, accidental deathrider, guaranteed insurability XCEL TESTING SOLUTIONS LIFE AND HEALTH INSURANCE WEIGHTED EXAM 2024-2025 ACTUAL EXAM LATEST VERSION COMPLETE 240 WRITTEN QUESTIONS AND CORRECT ANSWER S an insurer must furnished to a claimant forms for filing proof of loss within _____ days upon receiving a notice of claim. - correct answer 15 which of these is not subject to income taxation under a modified endowment contract (MEC)? - correct answer death benefit CORRECT: loan against the cash value, policy withdrawal, policy dividend which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive? - correct answer endowment policy an example of a tax qualified retirement plan would be a - correct answer defined contribution plan which of these is NOT considered to be a nonforfeiture option in a whole life insurance policy? - correct answer interest-only CORRECT: reduced paid up insurance, extended term insurance, cash surrender limited payment whole life policy provides - correct answer lifetime protection premiums on limited payment whole life insurance or paid for a limited number of years, but the benefits last a lifetime. under and I'm qualified annuity, interest this text after the - correct answer exclusion ratio has been calculated the taxable and non-taxable portions of annuity payments are determined by the exclusion ratio. how are annuities given favorable tax treatment? - correct answer gains are taxed at distribution all the following are considered appropriate uses of life insurance for business purposes EXCEPT - correct answer protecting the business by covering entry-level employees with life insurance CORRECT: attracting quality employees by offering a group Life Plan, funding and entity buy-sell agreement, protecting the business by covering team plays with life insurance XCEL TESTING SOLUTIONS LIFE AND HEALTH INSURANCE WEIGHTED EXAM 2024-2025 ACTUAL EXAM LATEST VERSION COMPLETE 240 WRITTEN QUESTIONS AND CORRECT ANSWER S Shirley has a Medigap policy, which is designed to pay costs associated with - correct answer Medicare Parts A & B what is the purpose of the medical information Bureau (MIB)? - correct answer to help Underwriters evaluate risk the IRS allows a taxpayer to deduct medical expenses that exceed 7.5% of their adjusted gross income. Which of the following is considered a tax deductible medical expense under this rule? - correct answer long-term care insurance premiums which of these annuities require premium payments that vary from year to year? - correct answer flexible premium deferred annuity which of the following is considered to be an alternative to a life settlement? - correct answer accelerated death benefit Rider 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 the $50,000 and the face amount becomes $350,000. What kind of policy is this? - correct answer universal life policy which annuity payout option allows the policyowner to choose a predetermined number of benefit payments? - correct answer period certain the double indemnity provision in a life insurance policy pertains to an insurance death caused by an - correct answer accident call the following are examples of a business continuation plan EXCEPT - correct answer deferred compensation CORRECT: key person Insurance, cross purchase agreement, stock Redemption plan in addition to the actual policy, an entire contract includes which of the following? - correct answer application which type of policy combines the flexibility of a universal policy with investment choices? - correct answer variable universal life policy without a section 125 plan in place, what would happen to an employee's payroll contribution to an HSA? - correct answer it would be considered taxable income to the employee and insurer, in general business practice, fails to promptly provide a reasonable explanation for the denial of a claim. This is considered to be - correct answer an unfair claim Settlement practice in Michigan, legal action can be taken against insurer for failure to pay LIFE insurance claims for a period not to exceed - correct answer 6 years