Texas Life and Health Insurance Final Exam Review: Questions and Answers, Exams of Insurance law

Download Texas Life and Health Insurance Final Exam Review: Questions and Answers and more Exams Insurance law in PDF only on Docsity! Texas life and health- FINAL EXAM REVIEW – Questions And Answers A Business Disability Buyout plan policy is designed - The Answer Is To pay benefits to the corporation or other shareholders 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? - The Answer Is disability income A certificate of authority does which of the following? - The Answer Is permits an insurance company to transact business in Texas A creditor who requires a debtor to obtain insurance from a particular company or agent as a condition for a loan is guilty of - The Answer Is coercion A Family Income Policy is a combination of Whole Life and - The Answer Is Decreasing term insurance A life insurance application must be signed by all of these, EXCEPT: - The Answer Is beneficiary Texas life and health- FINAL EXAM REVIEW – Questions And Answers A life insurance illustration is NOT required to include the - The Answer Is Companies mortality table A Limited-Pay Life policy has: - The Answer Is premium payments limited to a specific number of years. A Long-Term Care policy must offer a MINIMUM benefit period of how many months? - The Answer Is 12 A major medical policy typically: - The Answer Is provides benefits for reasonable and necessary medical expenses, subject to policy limits A newly licensed General Lines agent must complete a MINIMUM of how many hours of continuing education within 24 months after initial license? - The Answer Is 24 A policy of adhesion can only be modified by whom? - The Answer Is the insurance company Texas life and health- FINAL EXAM REVIEW – Questions And Answers The Answer Is All of the following provisions must be included in life insurance policies EXCEPT All of the following statements about health coverage for newborns are correct EXCEPT - The Answer Is coverage during the first year is limited to congenital defects All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death, EXCEPT: - The Answer Is interest only An agent may legally share commissions only with - The Answer Is another agent who is licensed in the same line of insurance An agent MUST do which of the following during a sales presentation for a participating life insurance policy? - The Answer Is includes a statement that dividends are not guaranteed An agent MUST give a prospective insured an Outline of Coverage when taking an application for a - The Answer Is Medicare supplement policy Texas life and health- FINAL EXAM REVIEW – Questions And Answers An agent who tells claimants that their rights may be impaired if they fail to complete a release form within a given period of time could be guilty of - The Answer Is coercion An agent whose license has been revoked is required to - The Answer Is wait at least five years before applying for a new license An enrollee of a Health Maintenance Organization (HMO) may be cancelled or nonrenewed for which of the following reasons? - The Answer Is failure to pay for coverage An individual life insurance policy issued in Texas MUST have a grace period for premium payment of how many days? - The Answer Is 31 An insurance company may be judged guilty of false advertising if it - The Answer Is exaggerates its dividends in a newspaper advertisement An insurance company may NOT reject a prospective insured's life application on the basis of which of the Texas life and health- FINAL EXAM REVIEW – Questions And Answers following factors? - The Answer Is Gender An insurance company must do which of the following to terminate an agent's appointment? - send notice of the termination to the Texas Department of insurance - The Answer Is send notice of the termination to the Texas Department of insurance An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period? - The Answer Is Full face amount minus any past due premiums An insured must notify an insurer of a medical claim within how many days after an accident? - The Answer Is 20 An insurer must provide an insured with claim forms within __ days after receiving notice of a loss. - The Answer Is 15 An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may Texas life and health- FINAL EXAM REVIEW – Questions And Answers Health insurance benefits NOT covered due to an act of war are: - The Answer Is excluded by the insurer in the contract provisions 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 - The Answer Is pay the policy proceeds in the amount the premiums would have purchased at the insured's actual age In a qualified retirement plan, the yearly contributions to an employee's account: - The Answer Is as restricted to maximum levels set by the IRS In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments: - The Answer Is after an insured has become totally disabled as defined in the policy In Major Medical Expense policies, what is the intent of a Stop Loss provision? - Texas life and health- FINAL EXAM REVIEW – Questions And Answers The Answer Is limits an insured out-of-pocket medical expenses In regards to representations or warranties, which of these statements is TRUE? - The Answer Is If material to the risk, false representations will void a policy In Texas, a domestic insurance company is defined as a company that - The Answer Is is incorporated and formed in Texas Information obtained from a phone conversation to the proposed insured can be found in which of these reports? - The Answer Is inspection report Information obtained from a phone conversation to the proposed insured can be found in which of these reports? - The Answer Is inspection report Insurance agent licenses normally must be renewed every - The Answer Is two years Texas life and health- FINAL EXAM REVIEW – Questions And Answers Insurance company agent appointments remain in force for which of the following maximum periods of time, if any? - The Answer Is until terminated or withdrawn Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid. - The Answer Is conditional J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this? - The Answer Is nonoccupational coverage J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries sustained in an accident. J's age as stated on the application five years ago was found to be understated by ten years. Which of the following actions will the insurance company take? - The Answer Is the insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age 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 Texas life and health- FINAL EXAM REVIEW – Questions And Answers 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? - The Answer Is claim will be denied 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? - The Answer Is olicy was returned within the free-look period, premium will be fully refunded Quarterly premium payments increase the annual cost of insurance because - The Answer Is Interest to the insurer is decreased while the administrative costs are increased returning a portion of a premium as inducement to purchase insurance - The Answer Is Which of the following is an example of rebating? S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse Texas life and health- FINAL EXAM REVIEW – Questions And Answers and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations? - The Answer Is 36 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? - The Answer Is $0 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? - The Answer Is increase her policy's coverage amount 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? - The Answer Is $50,000 Texas life and health- FINAL EXAM REVIEW – Questions And Answers Taking receipt of premiums and holding them for the insurance company is an example of: - The Answer Is fiduciary responsibility The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n): - The Answer Is insuring agreement The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the: - The Answer Is insuring clause The Commissioner of Insurance has the power and duty to take all of the following actions EXCEPT - The Answer Is active insurance companies financial reserves The Commissioner of Insurance may issue a temporary agent's license for a maximum of how many days? - The Answer Is 90 The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the: - The Answer Is initial deductible Texas life and health- FINAL EXAM REVIEW – Questions And Answers What benefit does the Payor clause on a Juvenile Life policy provide? - The Answer Is premiums are waived if the payor becomes diabled What does the ownership clause in a life insurance policy state? - The Answer Is Who the policyowner is and what rights the policyowner is entitled to What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability? - The Answer Is conversion What is being delivered during a policy delivery? - The Answer Is insurance contract to the proposed insured What is the consideration given by an insurer in the Consideration clause of a life policy? - The Answer Is promise to pay a death benefit to a named beneficiary What is the elimination period of an individual disability policy? - Texas life and health- FINAL EXAM REVIEW – Questions And Answers The Answer Is time period a disabled person must wait before benefits are paid What is the purpose of a Policy Summary? - The Answer Is Highlights the critical parts of the policy issued What is the underlying concept regarding level premiums? - The Answer Is the early years are charged more than what is needed What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability? - The Answer Is convertible term What percentage of continuing education instruction MUST be completed in the classroom or classroom equivalent? - The Answer Is 50% 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 Texas life and health- FINAL EXAM REVIEW – Questions And Answers insured and the insurer is called the: - The Answer Is Entire contract provision When does a Probationary Period provision become effective in a health insurance contract? - The Answer Is at the policies inception Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? - The Answer Is risk classification Which health policy clause specifies the amount of benefits to be paid? - The Answer Is insuring Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract? - The Answer Is entire contract Which of the following actions by an insurance company is considered an unfair claims settlement practice? - The Answer Is Denying an insured's claim without indicating the basis of denial under the policy Texas life and health- FINAL EXAM REVIEW – Questions And Answers Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE? - The Answer Is It is taxed as ordinary income Which of the following statements about Health Reimbursement Arrangements (HRA) is CORRECT? - The Answer Is If the employee paid for qualified medical expenses, the reimbursements may be tax-free Which of the following statements BEST describes what the Legal Actions provision of an Accident and Health policy requires? - The Answer Is An insured must wait at least 60 days after proof of loss has been submitted before a lawsuit can be filed Which of the following types of care is typically not covered in a Long-Term Care policy? - The Answer Is acupuncture Which of the following types of health coverage frequently uses a deductible? - The Answer Is major medical policy Texas life and health- FINAL EXAM REVIEW – Questions And Answers Which of the following will a Long Term Care plan typically provide benefits for? - The Answer Is home health care Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business? - The Answer Is business owner becoming disabled Which of these do NOT constitute policy delivery? - The Answer Is policy issued with a rating Which of these factors does NOT influence an applicant's need for life insurance? - The Answer Is self-maintenance expenses Which of these is NOT a type of agent authority? - The Answer Is Principal Which of these is NOT relevant when determining the amount of personal life insurance needed? - The Answer Is local unemployment rate Texas life and health- FINAL EXAM REVIEW – Questions And Answers Which of these life insurance riders allows the applicant to have excess coverage? - The Answer Is term rider Which of these provisions require proof of insurability after a policy has lapsed? - The Answer Is Reinstatement Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE? - The Answer Is Evidence of insurability is required when the option is exercised Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy? - The Answer Is *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.) Which of these statements describe a Modified Endowment Contract (MEC)? - The Answer Is Exceeds the maximum amount of premium