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Texas Life and Health Final Examination
A. ____ of continuing education MUST be completed in the classroom or classroom equivalent. - ✔✔50% B. A 42-year-old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his/her needs change. Which of the following policies will best meet this need? - ✔✔Universal Life C. A 55 year old recently received $30,000 distribution from a previous employers 401k plan, minus the $6,000 withholding. Which federal taxes apply if none if none of the funds were rolled over? - ✔✔Income taxes plus a 10% penalty tax on $30, D. A certificate of _____ permits an insurance company to transact business in Texas. - ✔✔Authority E. A characteristic of Preferred Provider Organizations (PPO's) would be: - ✔✔Discounted fees for the patient F. A disability elimination period is best described as a: - ✔✔time deductible
G. A foreign insurance company conducting insurance business in Texas - ✔✔was formed under the laws of another state H. A license may be denied, suspended, or revoked of the licensee - ✔✔is found guilty of misrepresentation in obtaining the license I. A Limited-Pay Life policy has: - ✔✔premium payments limited to a specified number of years J. A medical care provider which typically delivers health services at its own local medical facility is known as a : - ✔✔Health Maintenance Organization (HMO) K. A medicare supplement policy may be cancelled for which of the following reasons? - ✔✔The premium has not been paid by the insured L. A Medicare Supplement policy may be cancelled for which of the following reasons? - ✔✔The premium has not been paid by the insured M.A plan through the Marketplace may be purchased by - ✔✔Any legal resident (except those imprisoned)
S. A Whole Life Insurance Policy endows when the: - ✔✔Cash value equals the death benefit T. A whole life insurance policyowner does not wish to continue making a premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value? - ✔✔Life settlement contract U. ABC Insurance Company is actively engaging in boycott, coercion, and intimidation that results in the unreasonable restraint of trade. ABC is committing a prohibited act under Texas insurance laws covering - ✔✔unfair methods of competition V. After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? - ✔✔File written proof of loss W. All are true statements regarding the underwriting process, EXCEPT: - ✔✔AIDS and HIV virus exams can be conducted in a discriminatory fashion X. All of the following statements are true regarding a policy's Grace period, EXCEPT: - ✔✔Past due premiums are waived Y. All of these are characteristics of an Adjustable Life policy EXCEPT
- ✔✔face amount can be adjusted using policy dividends
Z. An applicant MUST receive an Outline of Coverage when an application is taken for a(n) - ✔✔Medicare Supplement Policy AA. An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be - ✔✔Converted to an individual permanent policy at an individual rate BB. An engineering firm that would suffer financially from the death of a project manager should purchase a: - ✔✔Key Person Life Policy CC. An example of an unfair claims settlement practice is - ✔✔turning down a claim without providing the basis of denial DD. An individual who purchases a Life annuity is given protection against - ✔✔the risk living longer than expected EE. An insurance agent has a fiduciary responsibility to all of the following EXCEPT - ✔✔Other Agents FF. An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the: - ✔✔Insurer dates the policy
MM. Basic Medical Expense Insurance - ✔✔has lower benefit limits than Major Medical insurance NN. 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 OO. 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? - ✔✔Each partner must own a policy on the other partners PP. Credit Life insurance is - ✔✔Insurance on a debtor to cover outstanding loan balances. in favor of a lender, intended to pay off a loan or the balance due if the insured dies or is disabled. QQ. D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive? - ✔✔The full face amount RR. Dental care coverage is designed to cover the costs of all of the following EXCEPT: - ✔✔Loss of income
SS. During a sales presentation for a participating life insurance policy, an agent MUST - ✔✔make a prospect understand that dividends are NOT guaranteed TT. Every 12-months after an initial enrollment period, an HMO must hold an open enrollment period of - ✔✔31 days UU. Group life insurance policies are generally written as: - ✔✔Annually Renewable term VV. 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 WW. How long can a cash surrender value payment be deferred by the insurance company under the Nonforfeiture Law? - ✔✔ 6 months XX. How long does an insurance company appointment remain in force? - ✔✔Until terminated YY. How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy? - ✔✔If the primary beneficiary dies before the insured
FFF. In Texas, which of these statements regarding the Suicide clause is TRUE? - ✔✔An insurer may not use suicide as a defense against payment after the second year GGG. Information obtained from a phone conversation to the proposed insured can be found in which of these reports? - ✔✔Inspection Report HHH. Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid. - ✔✔Conditional III. Insurance policies are considered aleatory contracts because - ✔✔performance is conditioned upon a future occurrence JJJ. Insurers may request a hearing within ____ if their policy is rejected. - ✔✔20 days KKK. K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? - ✔✔Daughter
LLL. 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 MMM. L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will - ✔✔adjust the death benefit to a reduced amount NNN. M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT - ✔✔free-look period has expired OOO. M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son? - ✔✔Revocable PPP. Major Medical policies typically - ✔✔contain a deductible and coinsurance QQQ. Medicaid was designed to assist individuals who are - ✔✔Below a specific income limit
WWW. P completes an application for a $10,000 life policy, but does not give the producer the initial premium. P's coverage becomes effective when - ✔✔P receives the policy and pays the premium XXX. P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim? - ✔✔Claim will be denied. (If a person is injured while committing an illegal act, health insurance will not cover the expense of the injury) YYY. P is a producer who notices 5 questions on a life application were not answered. What actions should P take? - ✔✔Set up a meeting with the applicant to answer the remaining questions ZZZ. Pre-hospitalization authorization is considered an example of - ✔✔managed care AAAA. Q purchases a $500,000 life insurance policy and pays $ 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 BBBB. S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance company did not respond to the claim. S can take legal action against the insurer beginning -
✔✔November 1 (the insured must wait 60 days after written proof of loss before legal action can be brought against the company) CCCC. S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT - ✔✔Beneficiary's Age DDDD. T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called - ✔✔Time Limit on Certain Defenses EEEE. T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?
- ✔✔Less than $5,000 per month benefit regardless of the cause FFFF. The annuity that represents the largest possible monthly payment to an individual annuitant is a(n): - ✔✔Straight Life Annuity
MMMM. The individual who provides general medical care for a patient as well as the referral for specialized care is known as: - ✔✔Primary Care Physician NNNN. The Notice of Claims provision requires a policy owner to: - ✔✔Notify an insurer of a claim within a specified time OOOO. The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs? - ✔✔Social Security Disability Income PPPP. The phrase "transacting business" includes - ✔✔collecting premiums QQQQ. To terminate an agents appointment, an insurance company must - ✔✔send termination notice to the Texas Department of Insurance RRRR. To terminate an agents appointment, the insurance company must - ✔✔send termination notice to the Texas Department of Insurance SSSS. Under a Long Term Care policy, which benefit would be typically excluded or limited? - ✔✔Alcohol Rehabilitation
TTTT. Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees? - ✔✔Portion of the premiums paid for by the EMPLOYER may be a tax deduction. UUUU. Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured? - ✔✔PPO (Preferred Provider Organization) VVVV. Upon delivery of a rated life insurance policy, the Producer must obtain each of the following EXCEPT - ✔✔Signed HIPPA disclosures WWWW. What does the insuring agreement in a Life insurance contract establish? - ✔✔An insurer's basic promise XXXX. What is an organization that solicits insurance only to its members? - ✔✔Fraternal Benefit Society YYYY. What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy? - ✔✔Premiums may increase at time of renewal
GGGGG. 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 HHHHH.When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply? - ✔✔Conversion Provision IIIII. When advertising, an insurance company MUST use its - ✔✔Legal Corporate name JJJJJ. When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the - ✔✔Entire Contract Provision KKKKK. When can a policyowner change a revocable beneficiary? - ✔✔Anytime LLLLL. When does a life insurance contract become effective if the initial premium is not collected during the application process? - ✔✔When producer delivers policy and collects the initial premium
MMMMM. When is the face amount of a Whole Life policy paid? - ✔✔When the insured dies or at the policy's maturity date, whichever happens first NNNNN. When must insurable interest be present in order for a life insurance policy to be valid? - ✔✔When the application is made OOOOO. Which Accident and Health policy provision addresses preexisting conditions? - ✔✔Time Limit on Certain Defenses PPPPP. Which health policy clause specifies the amount of benefits to be paid? - ✔✔Insuring QQQQQ. Which life insurance rider typically appears on a Juvenile life insurance policy? - ✔✔Payor Benefit rider RRRRR. Which Long Term Care insurance statement is true? - ✔✔Pre-existing conditions must be covered after the coverage has been in force for six months SSSSS. Which mode of payment is NOT used by health insurance policies? - ✔✔Single Premium
