XCEL Kentucky Life and Health Final Exam Questions and
Answers
S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance
company did not respond to the claim. S can take legal action against the insurer beginning: **
Answ** November 1
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? ** Answ** 50%
The provision in a Group Health policy that allows the insurer to postpone coverage for a
covered illness 30 days after the policy's effective date is referred to as the: ** Answ**
Waiting Period
Which of the following is considered to be the period when the accumulated value in an annuity
is payed out? ** Answ** Annuitization Phase
When a premium payment for a life-insurance policy is missed, what provision will dictate the
actions taken by the insurer? ** Answ** Grace Period Provision
Which of the following statements does NOT accurately Describe the tax treatment of premiums
and benefits of individual Accident and Health Insurance? ** Answ** Disability income
policy premiums are tax-deductible
Which life insurance settlement option pays a stated monthly amount until the proceeds are
gone? ** Answ** Fixed Amount Option
Sexual Orientation, religious preference, and geographical location are not allowed to be used in
the underwriting process. Why is this so? ** Answ** Considered unfair discrimination
,The maximum period which a group health plan may exclude benefits for pre-existing conditions
for a participant who is not a late enrollee is: ** Answ** 12 months
What term is used when agents share the proceeds from the sale of policies? ** Answ**
Commission Splitting
Medicare Part A and Part B do NOT pay for: ** Answ** Dental Work
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? ** Answ** Portion of the
premiums paid for by the employer may be a tax deduction
Replacement notices are required for all of the following, EXCEPT? ** Answ** Group
Conversion
What is the underlying concept regarding level premiums? ** Answ** The early years are
charged more than what is needed
Making any statement, or distributing literature, which is false, or maliciously critical of, or
derogatory to the financial condition of an insurer, and which is intended to injure any person
engaged: ** Answ** Defamation
Misrepresenting an insurance policy, or making incomplete comparisons of policies, for the
purpose of inducing someone to change or replace an existing policy is an illegal practice known
as: ** Answ** Twisting
The insurance company that shares profits or losses with its investors is called a: ** Answ**
Stock Company
If a health insurer fails to issue a premiums rate quote to an individual within 30 days after
receiving a properly completed application requesting a quote, which of the following statements
,is true? ** Answ** The insurer must issue coverage to the individual and may not impose
any pre-existing conditions exclusions
The health insurance premiums paid for by each partner in a partnership is considered to be: **
Answ** 100% tax deductible
Mike applied for life insurance and was issued a conditional receipt. He is later found to be
insurable and is issued a policy. When does his coverage become effective? ** Answ** Date
the conditional receipt was issued
How do benefit payments fluctuate over time in a variable life annuity? ** Answ** Depends
on the market value changes in the separate investment account
An insurable risk requires: ** Answ** That the chance of loss be calculable
In an individual retirement account (IRA), rollover contributions are: ** Answ** Not limited
by dollar amount
A person can receive Medicare Part A Hospital benefits, regardless of age, as long as the person
has received which of the following benefits for at least 24 months? ** Answ** Social
Security Disability
Which type of provider is known for stressing preventative medical care? ** Answ** Health
Maintenance Organizations (HMO's)
Which of these life products is NOT considered interest-sensitive? ** Answ** Modified
Whole Life
All of these settlement options would satisfy the conditions of a spendthrift clause, EXCEPT:
** Answ** Lump-Sum Payment
, Medicare bases it's eligibility requirements on: ** Answ** An individuals age
Kate received a group accident and health termination notice. How many days does she have to
apply for a converted policy? ** Answ** 31
P died five years after purchasing a life policy. While investigating the claim, the insurer
discovered material misrepresentations made by P during the application process. Which of these
actions will the insurer take? ** Answ** Beneficiary will be paid the death benefit
All students attending a large university could be covered by: ** Answ** A blanket policy
A 15-year mortgage is best protected by what kind of life policy? ** Answ** 15-year
decreasing term
How many days does the employee has to convert to an individual policy under the Conversion
Policy? ** Answ** 31 days
P is the insured on a participating life policy. Which statement is true if P's premiums are waived
due to a disability? ** Answ** P will still receive declared dividends
P is looking to purchase a life insurance policy that will pay a stated monthly income to his
beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year
period. What type of policy should P purchase? ** Answ** Family Maintenance Policy
The Legal Action provision states how much time an insured has to: ** Answ** Sue the
insurer
A long-term care policy provides coverage for which of the following? ** Answ**
Alzheimer's disease
Answers
S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance
company did not respond to the claim. S can take legal action against the insurer beginning: **
Answ** November 1
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? ** Answ** 50%
The provision in a Group Health policy that allows the insurer to postpone coverage for a
covered illness 30 days after the policy's effective date is referred to as the: ** Answ**
Waiting Period
Which of the following is considered to be the period when the accumulated value in an annuity
is payed out? ** Answ** Annuitization Phase
When a premium payment for a life-insurance policy is missed, what provision will dictate the
actions taken by the insurer? ** Answ** Grace Period Provision
Which of the following statements does NOT accurately Describe the tax treatment of premiums
and benefits of individual Accident and Health Insurance? ** Answ** Disability income
policy premiums are tax-deductible
Which life insurance settlement option pays a stated monthly amount until the proceeds are
gone? ** Answ** Fixed Amount Option
Sexual Orientation, religious preference, and geographical location are not allowed to be used in
the underwriting process. Why is this so? ** Answ** Considered unfair discrimination
,The maximum period which a group health plan may exclude benefits for pre-existing conditions
for a participant who is not a late enrollee is: ** Answ** 12 months
What term is used when agents share the proceeds from the sale of policies? ** Answ**
Commission Splitting
Medicare Part A and Part B do NOT pay for: ** Answ** Dental Work
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? ** Answ** Portion of the
premiums paid for by the employer may be a tax deduction
Replacement notices are required for all of the following, EXCEPT? ** Answ** Group
Conversion
What is the underlying concept regarding level premiums? ** Answ** The early years are
charged more than what is needed
Making any statement, or distributing literature, which is false, or maliciously critical of, or
derogatory to the financial condition of an insurer, and which is intended to injure any person
engaged: ** Answ** Defamation
Misrepresenting an insurance policy, or making incomplete comparisons of policies, for the
purpose of inducing someone to change or replace an existing policy is an illegal practice known
as: ** Answ** Twisting
The insurance company that shares profits or losses with its investors is called a: ** Answ**
Stock Company
If a health insurer fails to issue a premiums rate quote to an individual within 30 days after
receiving a properly completed application requesting a quote, which of the following statements
,is true? ** Answ** The insurer must issue coverage to the individual and may not impose
any pre-existing conditions exclusions
The health insurance premiums paid for by each partner in a partnership is considered to be: **
Answ** 100% tax deductible
Mike applied for life insurance and was issued a conditional receipt. He is later found to be
insurable and is issued a policy. When does his coverage become effective? ** Answ** Date
the conditional receipt was issued
How do benefit payments fluctuate over time in a variable life annuity? ** Answ** Depends
on the market value changes in the separate investment account
An insurable risk requires: ** Answ** That the chance of loss be calculable
In an individual retirement account (IRA), rollover contributions are: ** Answ** Not limited
by dollar amount
A person can receive Medicare Part A Hospital benefits, regardless of age, as long as the person
has received which of the following benefits for at least 24 months? ** Answ** Social
Security Disability
Which type of provider is known for stressing preventative medical care? ** Answ** Health
Maintenance Organizations (HMO's)
Which of these life products is NOT considered interest-sensitive? ** Answ** Modified
Whole Life
All of these settlement options would satisfy the conditions of a spendthrift clause, EXCEPT:
** Answ** Lump-Sum Payment
, Medicare bases it's eligibility requirements on: ** Answ** An individuals age
Kate received a group accident and health termination notice. How many days does she have to
apply for a converted policy? ** Answ** 31
P died five years after purchasing a life policy. While investigating the claim, the insurer
discovered material misrepresentations made by P during the application process. Which of these
actions will the insurer take? ** Answ** Beneficiary will be paid the death benefit
All students attending a large university could be covered by: ** Answ** A blanket policy
A 15-year mortgage is best protected by what kind of life policy? ** Answ** 15-year
decreasing term
How many days does the employee has to convert to an individual policy under the Conversion
Policy? ** Answ** 31 days
P is the insured on a participating life policy. Which statement is true if P's premiums are waived
due to a disability? ** Answ** P will still receive declared dividends
P is looking to purchase a life insurance policy that will pay a stated monthly income to his
beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year
period. What type of policy should P purchase? ** Answ** Family Maintenance Policy
The Legal Action provision states how much time an insured has to: ** Answ** Sue the
insurer
A long-term care policy provides coverage for which of the following? ** Answ**
Alzheimer's disease
