Texas Life and Health Insurance Final Exam Review, Exams of Nursing

Download Texas Life and Health Insurance Final Exam Review and more Exams Nursing in PDF only on Docsity! FINAL EXAM REVIEW - Texas life and health Q&A UPDATED 2024 If, at the time of an insured's death, the insurance company discovers that the insured's age was misstated on the application for life insurance, the company will most likely - pay the policy proceeds in the amount the premiums would have purchased at the insured's actual age The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the: - Waiver of Premium P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to: - P only Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy? - *Premiums are waived after the insured has been totally disabled for a specified time period (The Waiver of Premium provision waives the payment of premiums after the insured has been totally disabled for a specified period of time.) All of the following provisions must be included in life insurance policies EXCEPT - All of the following provisions must be included in life insurance policies EXCEPT Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation? - olicy was returned within the free-look period, premium will be fully refunded Who can purchase a plan through the Marketplace? - Any legal resident except those incarcerated A major medical policy typically: - provides benefits for reasonable and necessary medical expenses, subject to policy limits Which of the following BEST describes a short-term medical expense policy? - Nonrenewable A Whole Life Insurance Policy endows when the - Cash value equals the death benefit The insuring clause - States the scope and limits of the coverage An insurer must provide an insured with claim forms within days after receiving notice of a loss. - 15 A Family Income Policy is a combination of Whole Life and - Decreasing term insurance T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? - $0 Which of these statements describe a Modified Endowment Contract (MEC)? - Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability? - conversion An insurance company may be judged guilty of false advertising if it - exaggerates its dividends in a newspaper advertisement A policy of adhesion can only be modified by whom? - the insurance company Variable Whole Life Insurance can be described as: - both an insurance and securities product Which type of contract liquidates an estate through recurrent payments? - annuity Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is: - business overhead expense What is the elimination period of an individual disability policy? - time period a disabled person must wait before benefits are paid In Texas, a domestic insurance company is defined as a company that - is incorporated and formed in Texas Under a Renewable Term policy, - the renewal premium is calculated on the basis of the insured's attained age. Group life policies MUST include all of the following provisions EXCEPT - right to loan proceeds The Commissioner of Insurance may issue a temporary agent's license for a maximum of how many days? - 90 Under which of the following circumstances will the benefits under COBRA continuation coverage end? - all group health plans are terminated by the employer What is the consideration given by an insurer in the Consideration clause of a life policy? - promise to pay a death benefit to a named beneficiary Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies? - long term care Which of the following services is NOT covered under a hospitalization expense policy? - surgeons fees Which of these life insurance riders allows the applicant to have excess coverage? - term rider A CEO's personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant? - disability income The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs? - social security disability income What benefit does the Payor clause on a Juvenile Life policy provide? - premiums are waived if the payor becomes diabled Z owns a Disability Income policy with a 30-day Elimination period. Z contracts pneumonia that leaves him unable to work from January 1 until January 15. Z then becomes disabled from an accident on February 1 and the disability lasts until July 1 the same year. Z will become eligible to receive benefits starting on: - march 1 A Long-Term Care policy must offer a MINIMUM benefit period of how many months? - 12 A Limited-Pay Life policy has: - premium payments limited to a specific number of years. 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 Which premium schedule results in the lowest cost to the policyowner? - Annual Additional coverage can be added to a Whole Life policy by adding a(n): - decreasing term rider Who is normally considered to be the owner of a 403(b) tax-sheltered annuity? - the employee L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They purchase a Family Policy that covers L's spouse to age 65. A death benefit will NOT be paid in which of the following circumstances? - L's spouse dies at 66 An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n): - exclusion for the medial condition 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 What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability? - convertible term Which of these do NOT constitute policy delivery? - policy issued with a rating Taking receipt of premiums and holding them for the insurance company is an example of: - fiduciary responsibility 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 When does a Probationary Period provision become effective in a health insurance contract? - at the policies inception An individual life insurance policy issued in Texas MUST have a grace period for premium payment of how many days? - 31 T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay? - $50,000 Why is an applicant's signature required on a life insurance application? - to attest that the statements on the application are accurate to the best of the applicants knowledge Which of the following types of care is typically not covered in a Long-Term Care policy? - acupuncture A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following? - aviation exclusion With Optionally Renewable Health policies, the insurer may: - review the policy annually and determine whether or not to renew it A newly licensed General Lines agent must complete a MINIMUM of how many hours of continuing education within 24 months after initial license? - 24 Information obtained from a phone conversation to the proposed insured can be found in which of these reports? - inspection report A stock insurance company is owned by it's - stockholders Insurance contracts are known as because certain future conditions or acts must occur before any claims can be paid. - conditional An agent may legally share commissions only with - another agent who is licensed in the same line of insurance From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant? - Fair credit reporting act Which of the following health insurance policy provisions specifies the health care services a policy will provide? - Insuring clause Which of the following circumstances would cause a Medicare Supplement policy to be cancelled? - the insured fails to pay the premium T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take? - increase her policy's coverage amount 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 An agent MUST give a prospective insured an Outline of Coverage when taking an application for a - Medicare supplement policy 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 Insurance agent licenses normally must be renewed every - two years A Return of Premium life insurance policy is - whole life and increasing term Which of the following statements about Health Reimbursement Arrangements (HRA) is CORRECT? - If the employee paid for qualified medical expenses, the reimbursements may be tax-free 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 Which of these is NOT a type of agent authority? - Principal Life insurance that covers an insured's whole life with level premiums paid over a limited time is called: - Limited pay life An insurance company may NOT reject a prospective insured's life application on the basis of which of the following factors? - Gender The type of annuity that can be purchased with one monetary deposit is called a(n): - immediate annuity Benefits for drug and alcohol treatment under a group health policy must include all of the following services EXCEPT - transportation to and from an outpatient facility Boycott, coercion, and intimidation that result in the unreasonable restraint of trade are prohibited under the Texas Insurance Code covering - unfair methods of competition Which type of policy is considered to be overfunded, as stated by IRS guidelines? - modified endowment contract What is the underlying concept regarding level premiums? - the early years are charged more than what is needed An agent MUST do which of the following during a sales presentation for a participating life insurance policy? - includes a statement that dividends are not guaranteed Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? - risk classification C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most? - the cost Which health policy clause specifies the amount of benefits to be paid? - insuring 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