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Alabama Life & Health Insurance XCEL Testing Solutions Questions and Answers, Exams of Health psychology

Henderson State University (HSU)Health psychology

Alabama Life & Health Insurance XCEL Testing Solutions Questions and Answers 1. The life and health insurance marketing system utilizing non-employee agents that represent just one insurance company and are often paid an allowance to cover office expense and staffing is known as what? ANS the general agency system. 2. Dividends payable to a policyowner are declared by? ANS the insurance company 3. A nonprofit incorporated society that doesn't have capital stock and operates for the sole benefit of its members is known as what? ANS fraternal benefit society 4. Insurance policies issued by companies which are owned by stock holder sand do not pay policy dividends are known as what? ANS non-participating policies 5. Insurance policies issued by companies which allow their policyowners to participate in the favorable experience of the company through payment of dividends are known as what? ANS participating policies

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2023/2024

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Alabama Life & Health Insurance XCEL Testing Solutions
Questions and Answers
1. The life and health insurance marketing system utilizing non-employee agents that
represent just one insurance company and are often paid an allowance to cover office
expense and staffing is known as what? ANS the generalagency system.
2. Dividends payable to a policyowner are declared by? ANS the insurance company
3. A nonprofit incorporated society that doesn't have capital stock and oper-ates for the
sole benefit of its members is known as what? ANS fraternal benefit society
4. Insurance policies issued by companies which are owned by stockholdersand do not pay
policy dividends are known as what? ANS non-participating policies
5. Insurance policies issued by companies which allow their policyowners toparticipate in
the favorable experience of the company through payment of dividends are known as
what? ANS participating policies
6. A life insurance producer's agency agreement normally authorizes the li-censee to do
what? ANS Solicit and sell insurance, collect premiums
Alabama Life & Health-XCEL Solutions.pdf file:///C:/Users/Admin/Downloads/Alabama%20Life%20&%20Healt...
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Alabama Life & Health Insurance XCEL Testing Solutions

Questions and Answers

  1. The life and health insurance marketing system utilizing non-employee agents that represent just one insurance company and are often paid an allowance to cover office expense and staffing is known as what? ANS the generalagency system.
  2. Dividends payable to a policyowner are declared by? ANS the insurance company
  3. A nonprofit incorporated society that doesn't have capital stock and oper-ates for the sole benefit of its members is known as what? ANS fraternal benefit society
  4. Insurance policies issued by companies which are owned by stockholdersand do not pay policy dividends are known as what? ANS non-participating policies
  5. Insurance policies issued by companies which allow their policyowners toparticipate in the favorable experience of the company through payment of dividends are known as what? ANS participating policies
  6. A life insurance producer's agency agreement normally authorizes the li-censee to do what? ANS Solicit and sell insurance, collect premiums

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  1. Who issues policies? ANS the insurer
  2. People with higher loss exposure have the tendency to purchase insurancemore often than those at average risk. This is called? ANS adverse selection
  3. With respect to an insurance application.... ANS a representation is valid as longas its true.
  4. Pat the producer just sold an insurance policy to a client, explaining that hehas authority to issue the policy. Pat was not specifically granted this powerfrom the insurance company. Pat is exercising what? ANS implied authority
  5. Why are insurance contracts said to be contracts of adhesion? ANS One partywrites the contract, and the other party must accept the contract as written.
  6. The agreement between a producer and the insurance company specifiesthe authority given to a producer to act on behalf of the insurer. What is this called? ANS Expressed authority
  7. How do term life insurance and whole life insurance differ? ANS Term insurancedoes not build cash value.
  8. Who can collect the face amount on an endowment policy? ANS the policyown-er.
  9. A policyowner can collect the face amount on what kind of policy? ANS endow-ment policy

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  1. With an initial face amount of $50,000, and a value of $5,000, the actualdeath benefit would be? ANS $55,
  2. Which option would the beneficiary receive the death benefit plus theaccumulated cash value? ANS increasing death benefit option
  3. At what age does a whole life policy endow? ANS 100
  4. Tim has a Universal Life policy. What is the cash value growth in hispolicy? ANS interest sensitive
  5. In an adjustable life policy, what may be adjusted to meet the policyholder'sneeds? ANS frequency of premium payments, amount of payment, policy's face amount
  6. What can NOT be adjusted in an adjustable life policy? ANS the insured
  7. Which of the following combines insurance protection with a cash accu-mulation? ANS permanent insurance
  8. With term life insurance, what remains the same throughout the policyperiod? ANS a level premium
  9. The premium and the protection remain constant for the term of the policy.What kind of

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policy does this describe? ANS Level term policy

  1. Albert surrenders his Whole Life policy ten years after it was purchased.What can he expect? ANS to pay taxes on the cash value in excess of premium paid.
  2. An insurance policy that has a guaranteed minimum cash value, a guaran- teed death benefit, fixed premiums, and grows at a rate reflected by a selectedfund index is known as what? ANS Equity indexed life policy
  3. With what kind of insurance does the premium increase at renewal? ANS re-newable term insurance
  4. With renewable term insurance, the premium...? ANS increases at renewal
  5. A policyowner with an automatic premium loan provision must do what?- ANS pay back the loan amount to keep the policy's cash value at its maximum.
  6. When can an insurance company cancel a life insurance policy? ANS when the outstanding policy loan exceeds the cash value of the policy.
  7. Which of the following allows a policyowner to assign a portion of thepolicy proceeds to the assignee? ANS a collateral assignment
  8. A collateral assignment allows a policyowner to assign what? ANS a portion ofthe policy proceeds to the asignee.

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  1. The person who pays the premiums, retains all rights, values, and optionsof a policy is? ANS the policyowner
  2. After a policyowner cancels his/her permanent policy, the cash value accumulation must be made available to the policyowner. This is an exampleof what? ANS nonforfeiture value
  3. An accidental death rider claim is usually paid under what condition? ANS ifthe insured dies within 90 days of the accident.
  4. Which option allows a policyowner to use his/her dividends to buy lifeinsurance on a single premium basis? ANS paid-up additions option
  5. What is considered the "automatic" nonforfeiture option that most insur-ers use? ANS Extended term
  6. Which of the following waives the premiums when the policyowner be-comes totally disabled? ANS waiver of premium
  7. A waiver of premium will waive the premium under what condition? ANS the policyowner becomes totally disabled.
  8. The proceeds of a life insurance policy can be paid in a form other thana lump-sum payment. What are these forms of payment called? ANS Settlementoptions
  9. A beneficiary in which the policyowner may change at any time without no-tifying/getting permission from the beneficiary is known as what? ANS RevocableBeneficiary
  10. The policyowner needs permission from the beneficiary to borrow thepolicy's loan value. This is known as what? ANS Irrevocable beneficiary
  11. Jan is named irrevocable beneficiary of Jim's life insurance policy. What will Jim need to borrow the policy's loan value? ANS Jim needs Jan's permission toborrow the policy's loan value.
  12. When an estate is named beneficiary to a life insurance policy, the policyproceeds are? ANS distributed according to state law.

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  1. The premium payment made that results in highest total premium is? ANS - Monthly
  2. What option provides that the principal amount gradually decreases tozero? ANS Fixed period option
  3. What type of risk classification would require a higher premium? ANS Substan-dard Risk classification
  4. When attached to the policy, the application becomes part of the what? ANS - insurance contract
  5. The receipt for the first premium is called what? ANS Conditional receipt
  6. On delivery of a policy, a signed statement of good health is typicallyrequested if? ANS the application was submitted without the initial premium.

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marital status.

  1. Which Federal law allows an insurer to obtain an inspection report on apotential insured? ANS The Fair Credit Reporting Act
  2. In order for coverage on a non-medical insurance application to take effect the same day, the producer must do what? ANS collect a signed application and theinitial premium.
  3. What percent of eligible employees must be covered by non-contributory group insurance plans? ANS 100%
  4. When an employee is terminated, policy proceeds will be paid if the em-ployee dies during what period? ANS Conversion period
  5. Ann is an employee covered by a Group Life plan through her employer.When Ann is terminated, her employer fails to inform her about the plan's

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conversion option. Two weeks later, Ann dies in an automobile accident. Howwill this situation be handled? ANS Full benefits must be paid by the insurer.

  1. All individuals covered under a group contract will receive what? ANS certifi-cate
  2. Group Life Insurance is usually in the form of what? ANS Term life insurance
  3. What provision is NOT required in a group life policy? ANS AD&D/Accidental provision
  4. What is the basic function of an annuity? ANS The systematic liquidation of accumulated funds
  5. The monthly benefit of an Annuity Certain is determined by? ANS The annui-tant's payout period selection.
  6. What is Equity indexed annuities typically invested in? ANS S&P 500
  7. Kris is receiving annuity payments that has not yet paid an amount whichis equal to the purchase price of the annuity. If she were to die, her benefi- ciary would continue receiving annuity payments until this amount has beenreached. What type of annuity is this? ANS Refund Life Annuity
  8. Bert bought an immediate annuity with quarterly payments. When will thisannuity start making payments? ANS 3 months after annuity is bought.
  9. The payment on Q's annuity is no less than $250 quarterly. What kind ofannuity does Q own? ANS Flexible installment deferred annuity.
  10. A hubby and wife are receiving annuity payments. When the husband dies,the wife still receives annuity payments for life. What kind of annuity does thisdescribe? ANS Joint and Survivor life annuity.
  11. If an annuitant with a 20-year life annuity certain dies before the 20-year period has elapsed, what will happen? ANS Any monies left are paid to the beneficiaryfor the rest of the certain period.
  12. Upon surrendering the annuity, an annuitant will pay what? ANS tax on theinterest

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  1. The max number of employees (earning at least $15,000) that an employercan have in order to start a SIMPLE retirement plan is? ANS 100
  2. At what age can an IRA owner start making withdrawals and not besubjected to a tax penalty? ANS 59 1/
  3. A trustee-to-trustee transfer of Rollover funds in a qualified plan allowsa participant to avoid what? ANS mandatory income tax withholding on the transferamount.
  4. The employee's right to the employer's contributions or benefits attribut- able. This is called? ANS Vesting
  5. All students attending a large college would most likely be covered bywhich type of Health policy? ANS Blanket policy
  6. Concerning a key employee life policy, who pays the premium and namesthe beneficiary? ANS the company
  7. A cross-purchase buy and sell agreement is in place for ABC company's4 founding partners. What would this agreement require if the agreement is funded with individual life insurance? ANS Each partner must own a policy on the other partners.
  8. An architecture firm would lose a lot of money in the event of the death ofits project manager. What should the firm purchase on its project manager?- ANS Key person life policy
  9. What is a life insurance policy owned by a 3rd party used for? ANS estate planning and business situations
  10. Name 3 costs that are considered to be associated with an individual'sdeath? ANS Funeral expense, tax liability, probate costs.
  11. ABC Company takes out a Key Employee policy on its CEO. The CEO leaves ABC Company and begins working for XYZ Company five years later.If this person were to die and the policy is still in force and unchanged, wherewould the death proceeds be directed to? ANS ABC company

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  1. 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? ANS Each partner must own a policy on the otherpartner.
  2. Don and Marie are married, and each have a Major Medical plan providedby their employers. Don was born in August of 1969 and Marie was born in March of 1976. For their two dependent children, who's plan is primary? ANS - Marie's plan is primary, Don's plan is secondary.
  3. Regarding health insurance plans, who is the primary? ANS the one that be-longs to the parent whose birthday comes up first in the calendar year.

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The Accidental Death benefits will be paid to? ANS Ponly. P survived the accident and is the primary beneficiary.

  1. Under a Health Maintenance Organization (HMO), service providers arepaid a fixed monthly fee for each member. This concept is called? ANS Capitation
  2. What is Medicare eligibility typically based on? ANS age
  3. A Preferred Provider Organization (PPO) contract typically uses whichpayment arrangement? ANS Negotiated fee-for-service
  4. What is the major purpose of a Health Maintenance Organization (HMO)?- ANS provide full medical services with an emphasis on preventative medicine.
  5. Who may the benefits under a health insurance policy (with the insured's written request) be payable to? ANS hospital, physician, or surgeon.

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  1. What welfare program provides assistance to the needy? ANS Medicaid
  2. Medicare would not be available to? ANS 61-year old Medicaid recipient
  3. What are Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) both considered to be? ANS managed health caresystems
  4. J is a subscriber to a plan which contracts with doctors and hospitals toprovide medical benefits at a preset price. What type of plan does J belong to? ANS Health Maintenance Organization (HMO)
  5. The percentage of an individual's Primary Insurance Amount (PIA) deter-mines the benefits paid in which of the following programs? ANS Social Security Disability Income
  6. What do Major Medical policies typically cover? ANS Usual, customary, and necessary expenses
  7. What do major Medical policies typically contain? ANS deductible and coinsur-ance
  8. What limits an insurance company's total exposure under a major med-ical policy? ANS Max. lifetime benefit and a coinsurance provision
  9. If an insured under a Major Medical insurance policy with a $200 de- ductible and an 80% coinsurance clause incurred the following covered ex-penses Hospital room and board $2,000; Surgeon's fee $1,500. How much would the policy pay? ANS $ (2,000+1500=3500-200=3300 x .80)
  10. What type of deductible provision waives the deductible for all family members after some of them have satisfied individual deductibles within thesame year? ANS family max. deductible
  11. A Health Reimbursement Arrangement MUST be established by? ANS theemployer
  12. AJ has a major medical insurance policy with a $500 deductible and an 80% coinsurance clause. he incurs the following covered expenses under arecent hospitilization 3,500 hospital room and board; 2,000 surgeon's fees. what will AJ's policy pay? ANS 4000 (3,500+2,000=5,500-500=5,000 x .80)

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  1. Paul has a major medical policy that begins with basic first dollar cov-erage that pays up to its limits, then he must pay a certain dollar amount of covered expenses before the major medical portion steps in. The dollar amount Paul must pay is called? ANS corridor deductible
  2. When medical expenses reach a certain dollar amount, the insured is nolonger responsible for sharing the cost of expenses. The insurance companythen pays 100% of the covered expenses. What is this major medical policy provision is called? ANS stop-loss limit
  3. What is NOT covered under Major Medical policies? ANS pain and suffering
  4. Major Medical benefits usually have..? ANS No max limit
  5. B is a teacher who was injured in a car accident and cannot work. She is now receiving monthly benefits as a result of this accident. Which type ofpolicy does B have? ANS Disability income
  6. Total disability can be defined as "the insured's inability to perform the occupation for which they are reasonably qualified by education, training, orexperience." For disability income insurance purposes, what is this definitionknown as? ANS own occupation
  7. What is a disability income policy designed to do? ANS pay benefits to maintainthe insureds current standard of living
  8. Individual disability income policies normally have a premium that? ANS ad-justs annually
  9. Which provision allows a disability income policy to remain in force with-out further payments when the insured has become totally and permanently disabled? ANS Waiver of premium
  10. what can prevent a policy from lapsing for nonpayment of premiums whilethe insured is totally disabled and unable to work? ANS waiver of premium
  11. The max. amount of coverage placed on a disability income policy isbased on the insured's..? ANS earned income from the previous year

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  1. At certain ages or dates, an insured can increase the stated benefit (withinlimits) under their disability income policy, regardless of health. Which policy rider does this describe? ANS Future income option
  2. Who does a disability income policy normally cover? ANS wage earners
  3. How frequently does a disability income policy typically pay benefits? ANS - monthly or bi-monthly
  4. Typically, what will a disability income rider pay? ANS a monthly income for aslong as the insured remains totally and completely disabled
  5. longer elimination periods result in..? ANS lower premiums
  6. Mary and Paul have individual disability income policies that both pay a $5,000/month benefit. Mary's policy has a 30-day elimination period, and Paul's