WEBCE Practice Exam Questions with 100% Correct Answers

WEBCE Practice Exam Questions with 100% Correct Answers A policyowner can access the cash value of many life insurance policies through withdrawals, loans or policy surrender. Which of the following terms describes the ability to easily convert life insurance into cash? Liquidity. Life insurance policy proceeds are protected from the claims of creditors due to the policy's: Spendthrift clause. Which of the following is an insurable risk? The possibility of becoming disabled and unable to earn an income. When pricing health insurance policies, the morbidity rates indicate: The average number of persons in a large group who are expected to become disables because of accident or sickness. Those eligible for family coverage under a group medical expense plan would typically be which of the following? Primary insured, spouse, their son, and the spouse's children from a previous marriage. Which of the following statements is correct about the HMO claims process? Members do not need to submit claim forms for services provided within the network. Which statement correctly describes the tax treatment of unreimbursed medical expenses? They may be deducted from taxable income if they exceed a certain percentage of AGI. All of the following statements about multiple employer trusts are correct EXCEPT: The individual employers each own separate group life policies. The use of permanent life insurance policy as security for obtaining a bank loan is done through a(n): Collateral assignment. Which of the following statements about variable life insurance is correct? The cash value is not guaranteed with variable life. Which of the federal law group health plans and protects their enrollees? ERISA. Which statement is correct about the tax treatment of distributions from endowment policies? They are subject to federal income taxation. When choosing a health care provider from a PPO and managing out-of-pocket expenses, the insured can: Use a network provider for the lowest cost, or use a non-network provider for more flexibility. Which disability would most likely qualify for a full benefit under the presumption of disability provision? Loss of eyesight. Besides being an admitted insurer, an insurer that wants to offer a small group health insurance in Texas must be certified by the Texas Department of Insurance as an: Small employer carrier. All of the following reasons that a business might buy life insurance represent a valid insurable interest, EXCEPT: To provide insurance coverage for a large-volume customers. Which provision in a health insurance policy imposes a waiting period on every claim before benefits begin? Elimination period. Juan just purchased an individual long-term care insurance policy from Acme Insurers. The first page of the policy states that it is guaranteed renewable, which means that Acme must allow Juan to renew the policy every year, but it may increase premiums under certain conditions. What purpose does a mandatory minimum group size serve in underwriting group health insurance? It spreads the risk and the administrative costs among numerous participants. Which payment arrangement do medical expense indemnity policies typically use? Fee-for-service. A person who refuses to engage in risky activities like rock climbing for fear of injury or death is demonstrating which risk management technique? Risk avoidance. All of the following are standard types of term life insurance EXCEPT: Variable term insurance. An insured is injured and files a claim under his disability income insurance policy. When does the elimination period begin? On the date of injury. What is the main appeal of joint life insurance? Lower cost than two separate policies. Janson Automotive is a small family-owned business with 20 employees. If it offers a small employer health benefit plan, which of the following employees will be eligible for coverage? Dora, who works 35 hours a week as a full-time office manager. Which statement about disability buy-out insurance policies is correct? They may be used with either a cross-purchase buy-sell agreement or an entity purchase buy-sell agreement. What will result if an insured decides to stop paying premiums for his or her insurance policy? The insurance company is released from its promise to pay benefits and the contract expires. Under which nonforfeiture option does permanent life insurance continue in force with no further need for premiums? Reduced paid-up option. When determining eligibility for Medicaid, states do NOT consider: Household size. Martha was covered by a $50,000 group life insurance policy through her employer. After losing her job and deciding to take an early retirement, she talked to her agent about converting the group policy to individual coverage. Her agent informs her that: Martha can be issued a conversion policy with no more than $50,000 in coverage. To convert to an individual policy, Martha must first provide evidence of insurability. She can convert the policy to a term policy. The premium for the individual policy will be the same as the premium paid for group coverage. Martha can be issued a conversion policy with no more than $50,000 in coverage. When does a fixed deferred annuity contract provide a death benefit? Only if the contract owner or annuitant dies during the accumulation period. Reimbursement health insurance policies, in contrast to valued health insurance policies, pay benefits based on: The cost of the medical care received. What is the purpose of the fiduciary in a group health insurance plan? To administer the plan in a financially responsible manner. A basic physician expense policy typically specifies: The maximum benefit amount per visit, and the maximum number of visits per injury or illness. An insured's estate can be a beneficiary. However, what is the main disadvantage of that arrangement? It places the policy benefits into the estate where they are subject to creditors and estate taxes. An insured's health insurance plan pays benefits based on the actual amount of the loss. The insured is repaid for some or all of the medical expenses the policy covers. What type of health insurance plan does the insured have?