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XCEL Testing Life & Health Insurance LATEST 2025
Exam North Carolina with Questions and 100%
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Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated: - ✔✔ 1970 - Fair Credit Reporting Act What type of reinsurance contract involves two companies automatically sharing their risk exposure? - ✔✔Treaty What is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained? - ✔✔Fair Credit Reporting Act Who elects the governing body of a mutual insurance company? - ✔✔policyholders The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called: - ✔✔reserves A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a: - ✔✔risk retention group What year was the McCarran-Ferguson Act enacted? - ✔✔ 1945 Which of these describe a participating life insurance policy? - ✔✔Policyowners are entitled to receive dividends
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? - ✔✔Upon completion of the application A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as: - ✔✔a fraternal benefit society An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the: - ✔✔Fair Credit Reporting Act Which of the following consists of an offer, acceptance, and consideration? - ✔✔Contract Which of these is NOT a type of agent authority? - ✔✔Principal E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? - ✔✔F All of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT: - ✔✔Bilateral The part of a life insurance policy guaranteed to be true is called a(n): - ✔✔warranty A life insurance arrangement which circumvents insurable interest statutes is called: - ✔✔Investor-Originated Life Insurance
A life insurance policy would be considered a wagering contract WITHOUT: - ✔✔insurable interest what is a warranty? - ✔✔is a statement guaranteed to be true Which of these is NOT considered to be an element of an insurance contract? - ✔✔negotiating Who makes the legally enforceable promises in a unilateral insurance policy? - ✔✔Insurance company In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this? - ✔✔Unilateral In regards to representations or warranties, which of these statements is TRUE? - ✔✔If material to the risk, false representations will void a policy A policy of adhesion can only be modified by whom? - ✔✔The insurance company Insurance policies are considered aleatory contracts because - ✔✔performance is conditioned upon a future occurrence Insurance policies are offered on a "take it or leave it" basis, which make them: - ✔✔Contracts of Adhesion
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? - ✔✔Legal Purpose (Insurable Interest) Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features? - ✔✔Aleatory What is the consideration given by an insurer in the Consideration clause of a life policy? - ✔✔Promise to pay a death benefit to a named beneficiary The Consideration clause of an insurance contract includes: - ✔✔the schedule and amount of premium payments When must insurable interest be present in order for a life insurance policy to be valid? - ✔✔When the application is made Life and health insurance policies are: - ✔✔Unilateral contracts All of these are characteristics of an Adjustable Life policy, EXCEPT: - ✔✔ace amount can be adjusted using policy dividends No insurer shall refuse to insure an individual because of - ✔✔race Which type of plan normally includes hospice benefits? - ✔✔Managed care plans
All of the following statements are true regarding a policy's Grace period, EXCEPT: - ✔✔Past due premiums are waived All of the following actions are considered rebating EXCEPT - ✔✔sharing commissions with other licensed and appointed agents According to the Affordable Care Act (ACA), a dependent child's eligibility status is determined by: - ✔✔age In life insurance, the needs approach is used mostly to establish: - ✔✔how much life insurance a client should apply for A person is required to be AT LEAST how old before he or she is licensed as an agent in North Carolina? - ✔✔ 18 Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan? - ✔✔Collateral assignment The policyholder has how many days to return an Accident/Health Insurance Policy and receive a full refund on premiums? - ✔✔ 10 The Legal Actions provision of an insurance contract is designed to do all of the following, EXCEPT: - ✔✔protect the producer
A Limited-Pay Life policy has: - ✔✔premium payments limited to a specified number of years An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable? - ✔✔$25, An insurance company MUST clearly specify questions designed to obtain information solely for marketing research - ✔✔in any insurance transaction A vacancy that occurs during the North Carolina Commissioner of Insurance's term of office MUST be filled by the - ✔✔Governor Every Group Health Policy providing benefits for chemical dependency treatments must include, for the life of the contract, a - ✔✔minimum benefit of $16,00 0 An example of rebating would be - ✔✔offering a client something of value not stated in the contract in exchange for their business If after satisfactory proof of loss, an insurer fails or refuses to pay death proceeds, the insurer must pay interest on the proceeds after how many days? - ✔✔ 30 A written agreement to provide a Life Insurance Policy holder immediate cash in exchange for the sale and transfer of a Life Insurance Policy is a - ✔✔Viatical Settlement When L applies for a Health Insurance Policy, L unintentionally fails to list a previous visit to a cardiologist. If the insurance company contests the policy, it MUST do so within 2 years - ✔✔from the date of issue
Which statement regarding the Change of Beneficiary provision is true? - ✔✔The policyowner can change the beneficiary What do Dread Disease policies cover? - ✔✔A specific disease or illness What is the initial requirement for an insured to become eligible for benefits under the Waiver of Premium provision? - ✔✔Insured must be under a physician's care Which of the following types of insurance is exempt from the Rules Governing Life Insurance and Annuity Replacements? - ✔✔Credit Life A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow? - ✔✔Guaranteed Insurability Option rider Which of these is an element of a Single Premium annuity? - ✔✔Lump-sum payment Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy? - ✔✔Issue the policy with an altered Time of Payment of Claims provision What is the purpose of a Policy Summary? - ✔✔It highlights the critical parts of the policy issued Which of the following statements BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition? - ✔✔Less restrictive
Group/voluntary long-term care policy premiums are typically deducted from the employee's income and, - ✔✔are less costly as compared to individual long term care coverage The fund that assures policyholders payment of death benefits on Life Policies, if the company is insolvent at the time of the claim, is called the - ✔✔Life and Health Insurance Guaranty Association AT LEAST how many days before the effective date of a rate increase must an insurer provide written notice to individual accident and health policyowners? - ✔✔ 30 The Rules Governing Life Insurance and Annuity Replacements define replacement as - ✔✔exchanging an existing policy for a new policy K works for XYZ Clothing Store from September through December each year. K works 45 hours a week for this period of time. The employer's Group Policy would consider K - ✔✔not eligible for the insurance because as a seasonal employee K does not meet the definition of "employee" under North Carolina law The Misstatement of Age provision requires that if the age of the insured is misstated, then any amount payable is - ✔✔an amount that the premiums paid would have purchased at the current age or ages Which of the following requires that an applicant for an individual Health Policy be notified of an investigation into his personal character, general reputation, and mode of living? - ✔✔Insurance Information and Privacy Protection Act
One of the stated purposes of the Life and Health Insurance Guaranty Association is to - ✔✔assist in the prevention of insurer insolvencies K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? - ✔✔$20,000 death benefit N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot? - ✔✔Exclusion T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. Under the Model Group Coordination of Benefits provision, when T files a claim, his employer's plan is considered the: - ✔✔Primary carrier Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy? - ✔✔Discourages overutilization of the insurance coverage A policyowner would like to change the beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy and make the change permanent. Which type of designation would fulfill this need? - ✔✔Irrevocable An agent who sells an individual life insurance policy in North Carolina MUST deliver to the policyowner - ✔✔A Policy Summary and Buyer's Guide Periodic health claim payments MUST be made at least: - ✔✔monthly
What type of employee welfare plans are not subject to ERISA regulations? - ✔✔Church plans An example of false advertising would be - ✔✔An insurer exaggerating its dividends in a magazine advertisement M's insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force? - ✔✔45 days Which of the following is NOT a limited benefit plan? - ✔✔life insurance policies Insurers organized under the laws of North Carolina are called - ✔✔domestic companies On an Accidental Death and Dismemberment (AD&D) insurance policy, who is qualified to change the beneficiary designation? - ✔✔Policyowner Which of these life products is NOT considered interest-sensitive? - ✔✔Modified Whole Life When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may be considered a red flag for a(n): - ✔✔Anti-Money Laundering violation What does the insuring agreement in a Life insurance contract establish? - ✔✔An insurer's basic promise
The underwriting process involves all of these, EXCEPT for: - ✔✔Policy loan Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE? - ✔✔Evidence of insurability is required when the option is exercised Which health policy clause specifies the amount of benefits to be paid? - ✔✔Insuring Which of the following BEST describes how pre-admission certifications are used? - ✔✔Used to prevent nonessential medical costs A Return of Premium life insurance policy is: - ✔✔Whole life and Increasing term 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 An assignment of benefits of a Health Policy: - ✔✔transfers payments to someone other than the policyowner 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? - ✔✔50% Which of the following reimburses its insureds for covered medical expenses? - ✔✔Commercial insurers
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to: - ✔✔continue group health benefits
