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TEXAS HEALTH AND LIFE INSURANCE EXAM
WITH ANSWERS
Why does an insurer have a 2-year suicide clause? a) because the commissioner of insurance requires it. b) suicide is never paid for in life insurance. c)to prevent payment of an immediate claim for a person contemplating suicide. d) to help an insurer be more profitable. - --Answer: C To prevent payment of an immediate claim for a person contemplating suicide. Which of these could the owner of a life insurance policy do when there is a collateral assignment? a) determine how the dividends are used. b) cash surrender the policy. c) obtain another loan. d) cancel the policy. - --Answer: A Determine how the dividends are used. When only the insurer is allowed to alter an insurance contract, the clause that provides this is called? a) ownership b) entire contract c) consideration d) incontestable - --Answer: B Entire contract
Which of these is required to reinstate a lapsed policy? a) obtain a loan b) fill out a new application c) pay a late fee d) provide evidence of insurability - --Answer: D Provide evidence of insurability The insuring clause in an adjustable life policy has all the following EXCEPT? a) insured b) insurer c) amount of premium d) amount of death benefit - --Answer: C Amount of premium Which of the following cannot request or make a change to alter a life insurance policy? a) the agent who wrote the policy b) the policy owner c) an executive officer of the insurer d) a person who has absolute assignment - --Answer: A The agent who wrote the policy Which of these cannot sign or request a change in an insurance contract? a) policy owner b) insured c) executive officer of insurer d) producer of insurer - --Answer: D
b) the policy is immediately terminated; the insurer retains the premium for the underwriting costs c) a refund of premiums minus the number of days the policy was in effect d) a full refund of all premiums paid is returned - --Answer: D A full refund of all premiums paid is returned. An applicant did not disclose a medial condition on a life insurance application 5 years later that person died due to the non disclosed condition. The insurer will? a) keep all premiums and void the policy b) refund all premiums and void the policy c) pay the whole amount of the policy to the beneficiary d) pay half of the policy to the beneficiary - --Answer: C Pay the whole amount of the policy to the beneficiary An applicant lied about their age for a universal life policy. The insurer found out the truth at the time of death. The insurer will? a) request the beneficiary to pay back the premiums for the correct age before paying the death benefit b) refund all premiums and void the policy c) pay the policy death benefit to reflect the correct age d) pay the policy as it was issued - --Answer: C Pay the policy death benefit to reflect the correct age A policy owner/insured takes a loan of 1/2 the cash value. The owner doesn't pay any interest that accumulates on the loan. which of these would be true? a) dividends are withheld until the loan is paid back b) interest is added to the loan annually
c) interest is deducted from the loan annually d) dividends and interest are both withheld until the loan is paid back - -- Answer: B Interest is added to the loan annually Which of the following is NOT a non forfeiture option? a) reduced paid up b) extended term c) cash surrender d) life income - --Answer: D Life income When an insured die with an outstanding loan on the policy which of the following applies? a) nothing is payable the loan voids the policy's death benefits b) the death benefit is payable minus any outstanding loans plus interest on the loan c) all of the death benefit is paid without reductions d) the loan must be repaid before any death benefits are paid - --Answer: B The death benefit is payable minus any outstanding loans plus interest on the loan G has a life policy with his wife listen as primary beneficiary. They both die in a car accident. They don't know who died first. According to the Uniform Simultaneous Death Act where will the policy proceeds be paid? a) wife's estate b) g's estate c) g's next of kin
When would the tertiary beneficiary receive death benefit in a life insurance policy? a) if the insured dies before the he contingent beneficiary b) if the primary and contingent beneficiary dies before the insured c) if the primary and contingent beneficiary dies after the insured d) if the contingent beneficiary dies after the insured - --Answer: B If the primary and contingent beneficiary dies before the insured Cobra would cover dependents of an employee for how long after the death of the employee? a) no months b) 18 months c) 36 months d) 20 months - --Answer: C 36 months What is the minimum number of employees to be eligible for Cobra coverage? a) 50 b) 100 c) 10 d) 20 - --Answer: D 20 A conversion privilege in a group health plan allows which of the following? a) 31 days to request Cobra coverage under your group health insurance policy without proof of insurability
b) continuation of coverage for a dependent beyond age 26 for physical or mental handicap c) 31 days to convert the group coverage to an individual health insurance policy without proof of insurability d) the right to convert your ex-employers group health to your new employers group health - --Answer: C 31 days to convert the group coverage to an individual health insurance policy without proof of insurability Flexible Spending Accounts FSA's pay for which of these? a) elective cosmetic surgeries b) reimbursed medical expenses c) cancer treatment only d) unreimbursed medical expenses - --Answer: D Unreimbursed medial expenses A certificate would be given to which of these in a group health plan? a) spouses b) employee c) policy owner d) employer - --Answer: B Employee M switched his job and enrolled on his new employers group health plan. 3 months laters M was prescribed a new allergy medication. The health insurer will? a) pay none of the new prescription b) void the policy for preexisting conditions
Every Long-Term Care policy must provide a ______-day free look period from the date the policy is delivered. a) 45 b) 20 c) 10 d) 30 - --Answer: D 30 You are the producer selling Medicare supplements, you must introduce yourself as an employee of ______? a) insurer b) insured c) social security d) federal government - --Answer: A Insurer According to the Affordable Care Act all of these would be eligible for a catastrophic health plan, EXCEPT? a) those with a hardship exemption b) people who can't qualify for medicaid c) people under 30 d) those who can't afford insurance - --Answer: D Those who can't afford insurance Medicare A and B pays for? a) A the doctor, B the hospital b) A the hospital, B prescription drugs
c) A the physical exam, B the hospital d) A the hospital, B physicians service - --Answer: D A the hospital, B physicians service Of the following listed choices, which is true as it pertains to Medicare Part A? a) all recipients pay a monthly premium b) it is prepaid through FICA taxes c) it covers all prescription drugs d) provides coverage for outpatient services - --Answer: B It is prepaid through FICA taxes All of the following are prohibited provisions in a long term care policy, except? a) limits or denies benefits to a policy holder who is diagnosed with any destructive brain tissue disease with will result in loss of brain function b) provides coverage for only skilled nursing care instead of lower levels of care c) canceling a policy due to nonpayment of premium d) cancels, non-renews, or terminates the policy on the grounds of age or deterioration of the mental or physical health of the insured - --Answer: C Canceling a policy due to nonpayment or premium The OASDHI Old Age, Disability, and Health Insurance is also known as? a) medicaid b) medicare c) social security d) worker's compensation - --Answer: C Social security
Medicare A and B Medicare A and B pays for? a) A the hospital, B physicians service b) A the doctor, B the hospital c) A the physical exam, B the hospital d) A the hospital, B prescription drugs - --Answer: A A the hospital, B physicians service Which policy provides the most protection for the least amount of money? a) term life b) universal life c) equity indexed whole life d) adjustable life - --Answer: A Term life Which policy is a 2nd or last to die policy? a) joint life b) variable life c) modified whole life d) joint survivor life - --Answer: D Joint life survivor Where is the Straight Whole Life insurance policy will you find the parties in the contract? a) consideration clause b) common disaster clause
c) incontestable clause d) insuring clause - --Answer: D Insuring clause P wants a life policy with quick cash value accumulation. Which policy should the producer recommend? a) straight whole life b) 20 year level term c) 20 pay limited life d) both the 20 pay limited whole life and the straight whole life have the same accumulation rate - --Answer: C 20 pay limited life Which policy pays the face amount at the end of the payment period? a) life paid up at age 60 b) endowment at age 65 c) 20 pay whole life d) 15 pay whole life - --Answer: B Endowment at age 65 Which of the following would be true if a child rider on a life insurance policy? a) the child will be offered a conversion option to convert a permanent plan without proof of insurability at a specific age such as 21 b) the policy owner must request the new child be added to the policy and pay the additional premium c) if the policy has the rider and a new child is born the new child is covered from the moment of birth
d) the cash value remains unchanged, until the insured is no longer disabled - -- Answer: B Cash value and dividends continue to increase just as if the regular premium payments have been made Which of the following life insurance policies provides protection for a limited period of time? a) single premium whole life policy b) universal life policy c) term policy d) limited pay whole life policy - --Answer: C Term policy This rider guarantees a policy on a minor will continue even though the parent paying premiums became disabled? a) payor benefits b) guaranteed insurability c) return of premium d) waiver of premium - --Answer: A Payor benefit Which of the following policies would be a limited pay whole life? a) premiums and policy expire after a limited period of time b) policy lasts for a limited time then expires c) premiums payable for a limited time then expire but the policy goes on d) premiums are limited for a while then they increase - --Answer: C Premiums payable for a limited time then expire but the policy goes on
The right to change a term policy to a permanent policy without proof of insurability if called? a) changeable b) convertible c) level d) renewable - --Answer: B Convertible In which of the following policies is the cash value in the policy invested in stocks and/or bonds? a) universal life b) limited pay whole life c) single premium whole life d) variable life - --Answer: D Variable life An insurance company incorporated in New York selling polices in Texas would be called? a) domestic b) mutual c) alien d) foreign - --Answer: D Foreign A person is told they won't receive any aid processing a claim unless they sign a release form. This is known as?
When a person or a company voluntarily surrenders a known right, this is known as? a) warranties b) waiver c) fraud d) agreement - --Answer: B Waiver When an insurance policy is know as a "Take it or leave it" contact it is? a) aleatory b) contract of adhesion c) warranties d) unilateral contact - --Answer: B Contract of adhesion If an insurer accepts an incomplete application and issues the policy, what must they do? a) get the application competed within the incontestability period b) void the policy and rewrite it c) honor the policy d) resubmit a new application immediately - --Answer: C Honor the policy Offer, acceptance and consideration are all parts of? a) law of agency b) negotiation
c) apparent authority d) elements of a legal contract - --Answer: D Elements of a legal contract An incorporated insurance company that sells shares would be? a) stock b) fraternal c) mutual d) lloyd's - --Answer: A Stock Statements made on the application that are believed to be true to the best of the applicants knowledge are? a) misrepresentations b) waivers c) representations d) concealments - --Answer: C Representations A statement made in an application for life insurance which is substantially true would be considered? a) warranty b) representation c) waiver d) misrepresentation - --Answer: B Representation
