Life Ins. Practice Questions XCEL
(Section 7-8 (17-18)) | Questions and
Verified Solutions 2024/2025
Updated. Graded A+
Agent J takes an application and initial premium from an applicant and
sends the application and premium check to the insurance company.
The insurance company returns the check back to J because the check is
made out to J instead of the insurance company. What action should J
take?
A. Deposit the applicant's check into his account and make a personal
check out to the insurance company from his personal account.
B. Return to the customer, collect a new check made out to the
insurance company, and send the new check out to the insurance
company
C. Cross off his name on the "pay to" portion of the check, write the
name of the insurance company, and send the check back to the
insurance company
D. Deposit the check into his personal account, use the funds to
purchase a cashiers check, and send the new cashiers check back to the
insurance company - Answer - B. Return to the customer, collect a new
,check made out to the insurance company, and send the new check out
to the insurance company (if an agent receives a check made out to
them instead of the insurance company, they should return the check to
the customer and collect a new check properly made out to the
insurance company)
P is self-employed and owns an Individual Disability Income policy. He
becomes totally disabled on June 1 and receives $2,000 a month for the
next 10 months. How much of this income is subject to federal income
tax?
$20,000
$14,000
$6,000
$0 - Answer - $0
(Disability income benefits that derive from an individual policy which
was paid entirely by the policyowner is not subject to federal income
tax.)
A prepaid application for individual Disability Income insurance was
recently submitted to an insurer. When the insurer received the Medical
Information Bureau (MIB) report, the report showed that the applicant
had suffered a stroke 18 months ago, something that was not disclosed
on the application. Which of the following actions would the insurance
company NOT take?
A. Send the initial premium back to the applicant
, B. Send a notice to the MIB that the applicant was declined
C. Send a notice to the applicant that the coverage was declined
D. Send a notice to the agent that the applicant was declined - Answer -
B. Send a notice to the MIB that the applicant was declined
Which type of plan normally includes hospice benefits?
A. Short-term disability plans
B. Group life plans
C. Worker's Compensation
D. Managed care plans - Answer - D. Managed care plans
Information obtained from a phone conversation to the proposed
insured can be found in which of these reports?
A. Agent's report
B. MIB report
C. Inspection report
D. Attending physician's report - Answer - C. Inspection report.
(An inspection report may include information obtained by a telephone
call to the proposed insured.)
Pre-hospitalization authorization is considered an example of
A. managed care
B. PPO care
C. Medicaid
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