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Insurance Policy Fundamentals, Exams of Personal Health

Tarrant County CollegePersonal Health

A wide range of topics related to insurance policies, including the types of coverage, policy features, and regulatory aspects. It provides detailed information on various insurance concepts such as cosmetic surgery coverage, business overhead expense disability plans, life insurance policy types, managed care, probationary periods, beneficiary designations, and more. Likely intended for individuals studying insurance-related subjects, such as those pursuing degrees in risk management, finance, or insurance. It could be useful as study notes, lecture materials, or reference material for students, professionals, or anyone interested in understanding the fundamentals of insurance policies.

Typology: Exams

2024/2025

Available from 09/29/2024

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Texas Life and Health Insurance Exam
1. A 64-year old widow recently received a $100,000 death benefit
from her husband's life policy. If she wants to purchase an annuity
that will provide her an immediate, guaranteed income for life,
which of the following types of annuity BEST suits her needs? -
✔✔Single Premium
2. A Basic Hospital/Surgical policy would most likely cover which of the
following expenses - ✔✔Cosmetic surgery to remove a birthmark
from an insured's face
3. A beneficiary who must consent to a change in the beneficiary
designation in a life insurance policy is referred to as - ✔✔an
irrevocable beneficiary
4. A Business Overhead Expense Disability Plan is BEST described as
having a benefit paid to a business for the purpose of - ✔✔covering
the fixed business costs
5. A certificate of authority does which of the following? - ✔✔Permits
an insurance company to transact business in Texas
6. A church member recently pledged $10,000 to the church to replace
a roof, which will need replacement in 10 years. If the member
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Download Insurance Policy Fundamentals and more Exams Personal Health in PDF only on Docsity!

Texas Life and Health Insurance Exam

  1. A 64-year old widow recently received a $100,000 death benefit from her husband's life policy. If she wants to purchase an annuity that will provide her an immediate, guaranteed income for life, which of the following types of annuity BEST suits her needs? - ✔✔Single Premium
  2. A Basic Hospital/Surgical policy would most likely cover which of the following expenses - ✔✔Cosmetic surgery to remove a birthmark from an insured's face
  3. A beneficiary who must consent to a change in the beneficiary designation in a life insurance policy is referred to as - ✔✔an irrevocable beneficiary
  4. A Business Overhead Expense Disability Plan is BEST described as having a benefit paid to a business for the purpose of - ✔✔covering the fixed business costs
  5. A certificate of authority does which of the following? - ✔✔Permits an insurance company to transact business in Texas
  6. A church member recently pledged $10,000 to the church to replace a roof, which will need replacement in 10 years. If the member

wants to be sure that the $10,000 will be available when needed, the member should purchase which of the following $10,000 policies? - ✔✔Ten-Year Endowment

  1. A Conditionally Renewable Health Insurance Policy can - ✔✔increase premiums at time of renewal
  2. A contract that provides permanent life insurance with premiums payable for life is which type of contract? - ✔✔Whole Life
  3. A Life annuity offers protection against the risk of - ✔✔living longer than anticipated
  4. A Life Insurance Policy that promises to pay the face amount on the death of first of 2 lives covered by the policy is called a - ✔✔Joint Life Policy
  5. A life insurance policy that provides protection for the insured's whole life with level premiums for a limited number of years is - ✔✔Limited Pay Life
  6. A life insurance policy written for a specified period of time with a death benefit that changes regularly according to a schedule is - ✔✔a decreasing term policy

application to the insurance company. A member of the company's underwriting department notices that the application is signed but the check is not. In this situation, if the applicant is approved by the insurance company, coverage will be effective as of which of the following dates? - ✔✔The date the producer delivered the policy collected the initial premium and obtained a statement indicating that there is no change in the insured's health

  1. A producer who discovers that answers to a series of questions on a life insurance application were omitted should take which of the following actions? - ✔✔Schedule another appointment with the applicant to complete the unanswered questions
  2. A retirement plan that may be established by an employee, regardless of any other retirement plan is called a(n) - ✔✔Individual Retirement Account (IRA)
  3. A rider on a life insurance policy that guarantees that the premium will be paid if the insured is disabled for a specified period of time is referred to as - ✔✔Waiver of Premium
  4. A terminated employee who was covered under a group life policy for $15,000 of Term Life insurance may convert to a - ✔✔$15,000 Whole Life policy
  1. All of the following are correct in regards to a Preferred Provider Organization (PPO) EXCEPT - ✔✔PPO's are not considered to be managed health care systems
  2. All of the following are defined as doing insurance business EXCEPT - ✔✔selling mutual funds
  3. All of the following data on an insured may affect the underwriting of a life insurance policy EXCEPT the insured's - ✔✔marital status
  4. All of the following groups of people are eligible for Medicare EXCEPT - ✔✔full-time college students
  5. All of the following individuals must sign a life insurance application EXCEPT an - ✔✔irrevocable beneficiary
  6. All of the following persons must sign an application for life insurance EXCEPT the - ✔✔revocable beneficiary
  7. All of the following provisions are required in a group life policy EXCEPT - ✔✔an Accidental Death and Dismemberment provision

insured dies in an accident three years after policy issuance. If the insurance company discovers the misstatement of age at the time of claim, it will - ✔✔adjust the Death benefit to what the premiums paid would have purchased at the insured's actual age

  1. An application for an individual Disability income policy may require all of the following information about the proposed insured EXCEPT for - ✔✔the spouses' occupation
  2. An immediate annuity can be recognized by which of the following features? - ✔✔Payout begins one payment period after purchase
  3. An injured insured receives Disability income benefits for two months and then returns to work. Three months later, the insured is not able to continue because of the same condition. In this situation, the insurer may regard the second period of disability as a continuation of the first and pay benefits on the basis of which of the following provisions? - ✔✔Recurrent Disability
  4. An insurance agent does NOT have fiduciary responsibilities to - ✔✔other agents
  5. An insurance company must provide information on fraudulent claims at the request of all of the following entities EXCEPT - ✔✔an insured
  1. An insurance company received a prepaid application for an Individual Disability Income policy. One week later, it receives the Medical Information Bureau (MIB) report indicating that the applicant had a heart attack two years ago, although this was not disclosed on the application. In this situation, the company would most likely take all of the following actions EXCEPT - ✔✔notify the MIB that coverage is denied
  2. An insured is unable to work for six weeks because of a sickness contracted while on vacation. Which of the following policies would cover the insured's loss of earnings? - ✔✔Disability income
  3. An insured named his wife beneficiary and his son as contingent beneficiary. If the insured and his wife are killed in the same accident, the Common Disaster clause provides for payment to whom? - ✔✔The insured's son
  4. An insured purchases a family Hospital/Surgical Expense policy on May 1, 2013. The policy is issued with a $250 deductible and a limit of three deductibles per calendar year. The insured and the insured's spouse incur medical expenses in excess of the deductible on July 15 and September 1 of the same year. Their two children incur medical expenses in excess of the deductible on January 15 and April 1 of the following year. The insured's MAXIMUM out-of-pocket expenses for 2013 would be which of the following amounts? - ✔✔$
  1. Coverage for the cost of a regular physical examination for preventative care would most likely be provided by a - ✔✔Health Maintenance Organization
  2. Credit policies MUST be issued in which of the following forms? - ✔✔Term
  3. Dental care indemnity plans - ✔✔reimburse services only after the carrier receives the bill
  4. Dread Disease policies cover - ✔✔a single disease or illness only
  5. Group insurance differs from individual insurance in that group insurance usually - ✔✔provides coverage at a lower cost
  6. If a business owner becomes disabled, a Business Overhead Expense policy would cover - ✔✔office rent and telephone bills
  7. If a forty-five year old individual bought an annuity to provide income for life beginning at age sixty-five, the insured did NOT buy - ✔✔an immediate annuity
  1. If a life policyowner wants to take out a bank loan and the bank insists on collateral, the insured may - ✔✔assign the policy to the bank
  2. If a primary beneficiary dies before the insured and a contingent beneficiary is also named in the policy, which of the following will occur when the insured dies? - ✔✔The contingent beneficiary will receive the proceeds
  3. If an insurance company is organized under the laws of New Jersey and licensed to do business here, it is considered which of the following in Texas? - ✔✔a foreign company
  4. If G want to buy $50,000 worth of permanent protection on his/her spouse and $25,000 worth of 10-year Term coverage on G under the same policy, the applicant should purchase - ✔✔A Whole Life Policy with an Other insured rider
  5. In a life insurance policy, the Consideration clause states that the policyowner's consideration consists of completing the application and - ✔✔paying the initial premium
  6. In a policy with a rear-end loaded provision, surrender charges are deducted - ✔✔when the policy is discontinued
  1. Life insurance written to cover a need for a specified period of time at the lowest premium is called - ✔✔level term insurance
  2. Long Term Care policies require that in order for an insured to be qualified for benefits they must be unable to perform a minimum of how many Activities of Daily Living (ADL)? - ✔✔ 2
  3. M is covered by a group health insurance plan through his employer. M is also covered as a dependent on his spouse's group health plan. Under the Model Group Coordination of Benefits provision, when M files a claim, his employer's plan is considered the
    • ✔✔primary carrier
  4. M, an army lieutenant was killed in a skiing accident while on leave. M's policy contains a result type War Exclusion clause. M's beneficiary will receive - ✔✔the full death benefit stated in the policy
  5. Most group life insurance policies are written as - ✔✔annually renewable term
  6. N takes out a loan against a life insurance policy which is equal to one-half of the cash value. If N decides not to pay the interest when it is due, the insurance company will automatically - ✔✔add to the loan balance the amount of interest due
  1. N was treated for a respiratory problem a month before applying for an individual Major Medical Policy. If N discloses the illness on the application and the policy is issued, the condition would be considered - ✔✔a pre-existing condition and may not be covered for one year
  2. P is both the policyowner and the insured under a $100, Whole Life policy. The beneficiary is P's mother. When P marries, ownership of the policy is transferred to P's spouse. If P dies without making any other changes, the policy proceeds will be payable to P's
    • ✔✔mother only
  3. P purchases a $70,000 Life Insurance Policy with premium payments of $550 per year for the first 5 years. At the beginning of the sixth year, the premium will go up to $800 per year but will remain level thereafter. The face amount will remain at $70, throughout the life of the policy. The type of policy that P has purchased is - ✔✔Modified Premium Life
  4. P, covered for the past 10 years under P's employer's group life contract retires at age 59 1/2 can elect to - ✔✔convert to a permanent policy at the individual rates
  5. Q and H are co-primary beneficiaries on the $100,000 Accidental Death and Dismemberment policy insuring their mother. Their father is the contingent beneficiary. If Q dies of cancer and the mother is
  1. The Commissioner of Insurance may issue a temporary agent's license for a maximum of how many days? - ✔✔ 90
  2. The insurance phrase which considers a particular fee charged by a physician, dentist, or other health professional is - ✔✔usual, customary, and reasonable expenses
  3. The insuring agreement in a Life insurance contract establishes the - ✔✔basic promise of the insurance company
  4. The MOST practical Term Policy to protect a 20 year mortgage is a
    • ✔✔20 year decreasing term
  5. The Old Age and Survivors Disability Health Insurance (OASDHI) system is COMMONLY referred to as - ✔✔Social Security
  6. The person who provides all care for a particular member and controls all referrals for specialized care, and in some cases, hospital care, is known as which of the following? - ✔✔Primary Care Physician
  7. The policy feature that permits the policyowner to select the timing of premium payments is - ✔✔Premium Mode
  1. The policy provision that prevents an insurance company from altering its agreement with a policyowner by referring to documents or other items not contained in the policy is called the - ✔✔Entire Contract provision
  2. The purpose of a Stop Loss provision in Major Medical Expense policies is to - ✔✔limit the amount of an insured's out-of-pocket medical expenses
  3. The statement that an insured MUST give an insurance company to show that a loss actually occurred is a - ✔✔Proof of Loss
  4. The Time Payment of Claims provision requires that an insurance company pay Disability Income benefits no less frequently than - ✔✔monthly
  5. The Z Company takes out a Key Employee policy on its director of operations. Several years later the employee leaves Z company, joins A Company and is killed in an automobile accident while the Key Employee policy is still in force. In this situation, the insurance company will pay the proceeds to which of the following entities? - ✔✔Z Company
  6. Under a group Credit Life policy, the amount of insurance on the life of a debtor is limited to - ✔✔the total amount of the insured's loan
  1. Under the Nonforfeiture Law, a cash surrender value payment may be deferred by the insurance company for NO LONGER than how many months? - ✔✔ 6
  2. W, an architect who has five employees, is concerned about how the business would survive financially if W became ill and was disabled. Which of the following policies would BEST meet W's needs? - ✔✔Business Overhead Expense
  3. What MUST an insurance company use in its advertising? - ✔✔Its true corporate name
  4. When an applicant's statements in an insurance application are accepted as true and accurate to the best of the applicant's belief, the statements are considered - ✔✔representations
  5. When an employer provides noncontributory group term life insurance, which of the following statements is CORRECT? - ✔✔The employer pays the entire cost of the plan
  6. When submitting an application for an individual policy to an insurance company, a producer should take which of the following actions? - ✔✔Advise the company of any other relevant information not contained in the application
  1. Which of the following beneficiary designations may limit a policyowner's rights? - ✔✔Irrevocable
  2. Which of the following BEST describes Credit Life insurance? - ✔✔Insurance issued on a debtor to cover outstanding balances on installment loans
  3. Which of the following clauses of an insurance contract states that a specified amount of money will be paid to a designated person on the death of an insured? - ✔✔Insuring Agreement
  4. Which of the following conditions is typical of a Major Medical policy? - ✔✔It contains a deductible and coinsurance
  5. Which of the following elements of a contract is necessary before a life policy will be issued? - ✔✔A prospect's signature on an application
  6. Which of the following information is included in the Consideration clause of a Life or Health policy? - ✔✔Schedule and amount of premium payments
  7. Which of the following is a mandatory provision? - ✔✔Payment of Claims