Xcel Simulator Practice Exam VA

Kate received a group accident and health termination notice. How many days does she have to apply for a converted policy?

An applicant has 31 days to convert to another accident and health insurance plan.

The agreement in which hospitals and physician groups in a specific area contract with an insurance company to provide medical care at predetermined costs is:

PPO's is a collection of health care providers who offer their services to certain groups at prearranged prices. (Preferred Provider Organization)

The State Corporation Commission is empowered to perform each of the following acts EXCEPT:

Prosecuting agents who violate state insurance laws.

_________ is the attempt made by an agent to intimidate or use force.

Coercion

The Virginia Life, Accident, and Sickness Insurance Guaranty Association protects an insured in the event of

Insurer’s insolvency

In Virginia, a small employer is comprised of

2-50 employees

A cease and desist order issued against an agent

prohibits a specific practice listed in the order

An agent advertising a life insurance policy MUST disclose the

name of the actual insurer

A domestic insurance company in Virginia MUST

be formed under Virginia insurance laws

In Virginia, how much advance notice must be given before terminating a long-term care policy for nonpayment of premium?

30 days

Long-term care insurance policies may contain exclusions for all of the following EXCEPT

Care for incurable conditions

Long-term care policies sold in Virginia may NOT exclude coverage for

senile dementia

When testing for the Human Immunodeficiency Virus (HIV), Virginia law requires a consent form

that discloses who may receive a copy of the results

Medicare supplement policies in Virginia may contain

neither waiting periods nor preexisting conditions exclusions

An insurer MUST charge the same individual life insurance premium for two individuals who share

the same risk class and have equal life expectancy

Greg had 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

Most Medicare Supplement information used by an insurer must be approved by the State. Which of the following types of information does NOT require State approval?

Government publications

According to the State Corporation Commission, the purpose of licensing prospective agents in the state of Virginia is

qualifying the agent to represent an authorized insurer for soliciting and negotiating their insurance products

Which of the following is considered an unfair claims settlement practice?

Failure to investigate or pay legitimate claims

Administrative actions taken against an agent must be reported to the State Corporation Commission within ___ days of the final disposition.

30

An agent may be personally liable if he or she engages in acts

that are not part of the agency or agent contract

Which of the following would prevent a person from obtaining a Virginia resident agent license?

Residing in a state outside of Virginia

Which of these actions by an agent would NOT likely result in license suspension or revocation?

Sharing commission with another similarly-licensed agent 

An agent MUST notify the Bureau of Insurance for

conducting business under an assumed name

If an agent replaces a client's existing life insurance policy with a new one, which of these actions is advisable?

Wait until the new policy is issued and delivered before surrendering existing policy

Which of these is NOT an Unfair Claims Settlement Practice?

Offering to settle a claim by arbitration

An agent who attempts to intimidate is engaging in

Coercion

An agent who informs an applicant that there are no exclusions in an insurance policy has engaged in

Misrepresentation

In Virginia, a grace period of ___ days is required for a life insurance policy paid on an annual basis.

31

Which of these would likely be considered an Unfair Claims Settlement Practice?

Offering settlements that are less than the fair value to offset insurer expenses

A group health certificate for coverage issued in Virginia MUST contain a(n)

summary of policy features and benefits

The marketing of Medicare Supplements is regulated to prevent all of the following EXCEPT

Replacement of any existing coverage

The pre-existing conditions exclusion under a small employer medical plan

may be partially or fully satisfied by having creditable coverage with a previous employer

Under which circumstance may an insurer discontinue a small employer group medical plan?

Insurer discontinues offering the plan to all employers

Virginia offers an extended COBRA insurance plan for companies with

2-19 employees

Before an individual is permitted to act as an insurance agent, he/she must hold a valid insurance license and be _________ by an authorized insurer.

Appointed

When determining the suitability of an annuity for a consumer, the insurance provider is obligated to

Make reasonable efforts to fit the annuity with the consumer's needs

What must an agent do when replacing a long-term care policy with a new policy?

Notify the applicant of any new waiting periods in the new policy

Which of the following is NOT a valid reason for an insurer to contest a life insurance policy during the policy's first two years of existence?

Misstatement of Age

How often must the Commission examine each domestic insurance company?

Every 5 years

Why does Virginia law require an insurance agent to examine the existing Medicare Supplement policies of a prospective insured?

To determine the suitability of potential changes 

A life insurance agent has the authority to

solicit, receive and forward applications to the insurer

A life insurance agent is required to give a disclosure notice about information practices to an applicant or proposed insured

Prior to or at the time of signing the application

A life insurance applicant is tested for the Human Immunodeficiency Virus (HIV). The applicant MUST be informed that the testing

helps determine the insurability of the applicant

Which of these is NOT considered advertising?

An AM Best company rating

In Virginia, false advertising is an example of

misrepresentation

Group health insurance issued in Virginia must identify any exclusions, limitations or reductions in coverage on which of the following?

The certificate of coverage

If a Medicare Supplement policy is cancelled by the insurer, which of these circumstances does NOT require prior approval by the State Corporation Commission?

Nonpayment of premium

A transaction in which a new annuity is purchased and an old one is terminated is called

replacement

The _______ is required to notify the State Corporation Commission in the event of appointment termination.

insurer

Which statement is INCORRECT concerning a tax-sheltered annuity (TSA)?

Annual investment gains are included in participant's gross income 

Taking a sum of money and decreasing it in size is called

capital liquidation

What determines how much an annuitant is paid for a variable annuity?

The market value variations of the securities backing it

Which of the following is NOT a valid contract exchange?

An annuity exchanged for a life insurance policy

Any employee insured under a group life insurance plan is normally

covered with term life insurance

A business may purchase an annuity for all of the following reasons EXCEPT

Accumulating assets on a tax-deferred basis

Disability income policies provide protection for which of the following?

Economic death

What are premiums for group credit life insurance based on?

Flat rate unrelated to the borrower's age

Which of the following contracts offer deferred taxation, flexible payments, a guaranteed interest rate, and death benefits equal to the cash value?

Flexible premium fixed annuity 

Under the Affordable Care Act, all plans that offer coverage to children under the child's parents plan continue to provide coverage until those children reach what age?

26

A life annuity feature which provides benefit payments for a minimum number of years, no matter when the annuitant dies, is called

period certain

Which of these pays an income to two or more annuitants until the death of the last annuitant?

Joint and survivor annuity

During an annuity's liquidation phase, the annuitant normally

receives benefit payments at regular intervals

How do benefit payments fluctuate over time in a variable life annuity?

Reflects changes in the market value of assets in a separate account

Starting in 2016, businesses with up to ___ employees will be defined by the ACA as a "small business".

100

Tim is covered by Policy A with a $4,000 limit and by Policy B with a $2,000 limit. Policy A is primary. If a $6,000 loss is incurred, what will each policy pay?

Policy A will pay $4,000 and Policy B will pay $2,000

How are benefit payments from individually-owned medical expense policies treated for tax purposes?

Exempt from income taxes

Sarah, age 88, is a life annuitant who has lived beyond her life expectancy. The funds for additional benefit payments will be derived primarily from funds that were

not distributed to life annuitants who died before life expectancy

What action can an insurer take to discourage malingering and false disability claims?

Limit the amount of benefits an insured can receive from two disability policies with the same insurer

An HMO prescription drug plan is generally characterized by

drugs dispensed through participating pharmacies

The maximum prison sentence given under federal law for unfair and deceptive insurance practices is

15 years

What can be expected when a preferred provider organization (PPO) patient decides to use a non-PPO?

Higher out-of-pocket expenses

The annuitant in a single premium deferred annuity (SPDA)

makes only one premium payment

Individuals covered with employer-paid group health plans will normally receive tax-free benefits under all of these plans EXCEPT

Disability income

Laura has an employer-based preventative health care plan that focuses on an enrollee's problems, such as drug abuse or stress. These plans are called

Wellness programs

How is an insured's accident and health claim handled by an insurer if it occurs during the policy's grace period?

The unpaid premium may be subtracted from the reimbursement

An annuitant is paid $495 per month until the contract value is exhausted at some undetermined date in the future. Which type of annuity payout option is this

Fixed amounT

All of these are used to prevent adverse selection in a group dental plan EXCEPT

Decreased employee participation

Which of the following incidents would NOT be covered by an Accidental Death and Dismemberment policy?

Suicide

Beth is a surgeon who has an own-occupation disability income policy. She was injured six months ago and has been unable to return to her practice. Her monthly benefit from the policy is $15,000. During this time, Beth has been working part-time at a local boutique and receives $2,000 monthly. What is her ongoing monthly benefit while she is unable to perform her surgical duties?

$15,000

The contractual rights which allow the owner of a deferred annuity to surrender the cash value several years before the annuity date are called

nonforfeiture options

How can a group dental insurer discourage adverse selection?

Limit the duration of coverage

How would preventative care be encouraged in a dental plan?

No deductible on routine examinations

Which of the following best describes a point-of-service (POS) plan?

A plan which combines indemnity plan features with those of an HMO

The dental specialty which deals with the replacement of missing teeth is called

Prosthodontics

All of these are duties that a producer may be required to perform when delivering an insurance policy EXCEPT

Leave a conditional receipt with client

Which benefit can be found in an equity indexed annuity, but not in a fixed annuity?

Protection against long-term inflation

Which of the following is NOT true of a preferred provider plan?

Hospitals can only initiate preferred provider plans

An insured is covered with a health insurance policy. If the insured would like to cancel the policy, he/she must

notify the insurance company in writing

What is considered interstate travel under the Federal Fraud and False Statements Act?

Puerto Rico

Which of the following is NOT a basic underwriting action for accident and health insurance?

Removing uniform policy provisions

Under which circumstance is the interest rate guaranteed within a market value adjusted annuity?

When the contract has been held for the period specified in the policy

In a staff model HMO, enrollees normally have which of the following pharmacy options available to them?

In-house pharmacy

Which of the following would NOT be appropriate for an immediate annuity?

A parent saving for a child's college

An insured must notify an insurer of a medical claim within how many days after an accident?

20

Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?

Guaranteed insurability rider

If an employer pays for accidental death and dismemberment insurance for its employees, the amount paid by the employer is generally

tax deductible to the business

Death benefits from a life insurance policy are normally considered to be

exempt from federal income tax

Which of the following best describes the presumptive disability provision?

Waives the typical total disability requirements

Omar is covered by a disability income policy. He is hurt while performing an occupation more hazardous than the occupation listed in his policy. The policy's change of occupation provision will have what effect?

Reduce the benefit level