Texas Life & Health Insurance Exam: Understanding Policies & Contracts, Exams of Nursing

Download Texas Life & Health Insurance Exam: Understanding Policies & Contracts and more Exams Nursing in PDF only on Docsity! Texas Life and Health Insurance Exam Fx Questions (solved). What law protects consumers from the circulation of inaccurate or obsolete information? - correct answer ✅The Fair Credit Reporting Act What do individuals use to transfer their risk of loss to a larger group? - correct answer ✅Insurance. What term describes the fee a person pays an insurance company to start coverage? - correct answer ✅Premium. When a change needs to be made to the application for insurance, which is the best method for correcting the information? - correct answer ✅complete a new application or ask the applicant to initial the corrections on the original application. How is the information obtained for an investigative consumer report? - correct answer ✅through interviews with the applicants associates, friends, and neighbors. What risk classification would typically qualify for lower premiums? - correct answer ✅Preferred Risk. Texas Life and Health Insurance Exam Fx Questions (solved). What are the three risk classifications in life insurance? - correct answer ✅Standard, Substandard, Preferred What is the main responsibility of a company's underwriting unit? - correct answer ✅Risk Selection. When would a misrepresentation be considered material? - correct answer ✅when it may alter the underwriting decision. What entities make up the Medical Information Bureau? - correct answer ✅Insurers. If an applicant for an insurance policy and the potential insured are two different people, what would be the underwriters main concern? - correct answer ✅the existence of insurable interest between the applicant and the insured. Texas Life and Health Insurance Exam Fx Questions (solved). who must have insurable interest in the insured? - correct answer ✅the policy holder. During what stage in the insurance process do insurers evaluate information that identifies adverse selection risks? - correct answer ✅underwriting Who is a field underwriter? - correct answer ✅Agent/Producer. how can health insurance policies be delivered to the insured? - correct answer ✅Personally delivered by the agent or mailed in forming an insurance contract, when does an acceptance usually occur? - correct answer ✅when the insurer approves a prepaid application what two elements are necessaryfor a life insurance contract to have a legal purpose? - correct answer ✅insurable interest and consent in insurance, when is the offer usually made on a contract? - correct answer ✅when the insurance application is submitted. Texas Life and Health Insurance Exam Fx Questions (solved). when must the policy summary for a life insurance policy be delivered to the policyowner? - correct answer ✅at the time of policy delivery if an insurer needs to obtain information about the applicant from investigators, what is the insurer required to do? - correct answer ✅provide the applicant a disclosure authorization notice health insurance contracts are unilateral. what does that mean? - correct answer ✅Only one party makes a legally enforceable promise what is a warranty in an insurance contract? - correct answer ✅an absolutely true statement upon which the validity of the insurance contract is based what document describes the specific information about a policy? - correct answer ✅policy summary whose responsibility is it to determine that all the questions on an insurance application are answered? - correct answer ✅the agents Texas Life and Health Insurance Exam Fx Questions (solved). what is insurance underwriting? - correct answer ✅the process of risk selection and classification health contracts are prepared by insurers and must be accepted by the insured on an as is basis. this describes what aspect of a health insurance contract? - correct answer ✅contract of adhesion if an applicant does not receive his or her insurance policy, who would be held responsible? - correct answer ✅the agent what law protects consumers from the circulation of in accurate or obsolete information? - correct answer ✅the fair credit reporting act when must insurable interest exist in a life insurance policy? - correct answer ✅at the time of the application what are the four elements of an insurance contract? - correct answer ✅agreement (offer and acceptance), consideration, competent parties, and legal purpose Texas Life and Health Insurance Exam Fx Questions (solved). what type of policy issues certificates of insurance to the insureds? - correct answer ✅Group policy in qualified plans, are employers contributions taxed as income to the employees? - correct answer ✅no, employer contributions are not taxed as income to the employees when planning for survivor protection in life insurance, what needs to be considered? - correct answer ✅the insured current assets, liabilities and survivor's needs what is the general taxation rule for death benefits payable to the beneficiary of a life insurance policy? - correct answer ✅death benefits are generally not subject to income taxes. what is the main purpose of the 7-pay test? - correct answer ✅to determine if a life insurance policy is modified endowment contract Texas Life and Health Insurance Exam Fx Questions (solved). what are the characteristics of the group that underwriters will consider before issuing a group life policy? - correct answer ✅Group's purpose, size, financial strength and turnover group life insurance policies are written as what type of insurance? - correct answer ✅annually renewable term what does liquidity mean in a life insurance policy? - correct answer ✅availability of cash value what are the consequences of withdrawing funds from a traditional IRA prior to the age of 59 1/2? - correct answer ✅10% Penalty if an insured terminates membership in group life insurance, to what type of insurance can the i nsured convert the coverage? - correct answer ✅whole life why are dividends in life insurance policies not taxable? - correct answer ✅dividends are not considered income for tax purposes; they are a return of unused premium. Texas Life and Health Insurance Exam Fx Questions (solved). is the death benefits of a life insurance policy taxed to the beneficiary if its recieved as a lump sum? - correct answer ✅no, lump- sum benefits are received tax free. When would life insurance policy proceeds be included in the insured's taxable estate? - correct answer ✅when there is an incident of ownership at the time of death according to the taxation rules of life insurance policies, how are cash value increases taxed - correct answer ✅cash value growth is tax deferred. what is the penalty for excessive contributions to a traditional IRA? - correct answer ✅6% who qualifies for tax-sheltered annuities, or 403(b) plans? - correct answer ✅Employees of non proit organizations under section 501(c) (3) and employees of public school systems Texas Life and Health Insurance Exam Fx Questions (solved). what is the best way to make a change on an application for insurance? - correct answer ✅Start over with a fresh application if an insurer decides to obtain medical information from different sources in order to determine the insurability of an applicant, who must be notified of the investigation? - correct answer ✅the applicant in health insurance, the policy itself and the insurance application form what? - correct answer ✅the entire contract whose responsibility is it to inform an applicant for health insurance about the insurer's information gathering practices? - correct answer ✅the agent what information are the members of the medical information bureau required to report? - correct answer ✅adverse medical information about the applicants or insured if an agent makes a correction on the application for health insurance, who must initial the correct answer ? - correct answer ✅the applicant Texas Life and Health Insurance Exam Fx Questions (solved). when should an agent obtain a statement of good health from the insured? - correct answer ✅when the premium was paid upon policy delivery and not at the time of application Who must sign a health insurance application? - correct answer ✅The policyowner, the insured (if different), and the agent who is responsible for paying the cost of a medical examination required in the process of underwriting? - correct answer ✅insurer What is the entire contract in health insurance underwriting? - correct answer ✅the application and the policy issued in an annuity, the accumulated money is converted into a stream of income during which phase? - correct answer ✅annuitization period what happens to the cash value when a whole life insurance policy matures? - correct answer ✅Cash value is paid to the policyowner Texas Life and Health Insurance Exam Fx Questions (solved). Regarding annuity payments, what is the difference between the annuitant and the beneficiary of an annuity? - correct answer ✅the annuitant receives payments from the annuity during the annuitization period; the beneficiary recieves benefits after the annuitants death. who recieves income payments from an annuity? - correct answer ✅annuitant the death protection component of a universal life policy is expressed as what type of coverage? - correct answer ✅annually renewable term When would a 20-pay whole life policy endow? - correct answer ✅When the insured reaches age 100 what are the death benefit option in universal life policies? - correct answer ✅option a- level death benefit option b- increasing death benefit Texas Life and Health Insurance Exam Fx Questions (solved). in flexible premium payment annuities, the term flexible refers to what? - correct answer ✅amount of premium what type of insurance would perform the function of cash accumulation? - correct answer ✅whole life insurance What type of whole life insurance policies only requires a payment of premium at its inception, and in addition to providing insurance protection for the life of the insured, endows at the insured's age 100? - correct answer ✅single premium whole life an individual has just borrowed $10,000 on a 5-year note from his bank. the note is due in installments. what type of life insurance policy would be best suite to this situation? - correct answer ✅decreasing term What type of annuity requires an agent to have a securities license? - correct answer ✅variable annuity what are the two phases of an annuity? - correct answer ✅Accumulation and annuitization (or pay-in and pay-out) Texas Life and Health Insurance Exam Fx Questions (solved). what is the purpose of establishing the target premium for a universal life policy? - correct answer ✅to prevent the policy from lapsing What type of premium is charged on a straight life policy? - correct answer ✅a level premium for the life of the insured what is the difference between a single premium and a flexible premium payment options in a deferred annuity? - correct answer ✅the number of payments that purchase the annuity in variable universal life insurance, to what policy component does the term "variable" refer? - correct answer ✅cash value and death benefit what type of life insurance policy offers pure death protection? - correct answer ✅term whole life insurance policies mature when the insured reaches the age of 100. if the owner of a whole life policy(the insured) dies at age 80, and there Texas Life and Health Insurance Exam Fx Questions (solved). is no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary? - correct answer ✅the full death benefit what does the term "level" refer to in level term insurance? - correct answer ✅face amount If the annuitant dies before the annuitization period starts, what will the beneficiary recieve? - correct answer ✅either the amount paid into the annuity or the cash value, whichever is greater Who is entited to the cash values in a life insurance policy? - correct answer ✅the policyowner what type of life insurance offers an applicant a cash value element? - correct answer ✅permanent insurance (usually, whole life) Can a business or a corporation be an annuitant? - correct answer ✅No, an annuitant must always be a natural person Texas Life and Health Insurance Exam Fx Questions (solved). a whole life policy that requires that the policyowner only pays premiums for a specified number of years is known as what kind of policy? - correct answer ✅limited-pay whole life If an annuity provides a set amount of income for two or more persons with the income ceasing upon the first death, what type of annuity is that? - correct answer ✅joint life annuity Whole life policies provide protection until the insured reaches what age? - correct answer ✅Age 100 what happens to the premium in an annually renewable term life policy? - correct answer ✅the premium increases with each renewal what type of annuity can be purchased with a single premium? - correct answer ✅immediate annuity Texas Life and Health Insurance Exam Fx Questions (solved). with a single premium deferred annuity, when will the annuity payments become available? - correct answer ✅no sooner than 1 year after the annuity purchase an individual has a contract that will provide him with a certain amount of income for the rest of his life. however, this is not a life insurance policy. what type of contract does this person have? - correct answer ✅Annuity how long will a life annuity with a 15- year period certain pay? - correct answer ✅for the life of the annuitant unless he/she dies within the first 15 years of the annuitization period; then the payments will last for 15 years. what elements of an adjustable life policy can be charged by the policy owners? - correct answer ✅the amount and payment period of the premium, the face amount, and the period for protection a policy states that it will pay a specified face amount if the insured dies during the 20- year premium-paying period and nothing if death occur after the 20-year period. what type of policy is this? - correct answer ✅20-year level term Texas Life and Health Insurance Exam Fx Questions (solved). if the annuitant dies during the accumulation period, who will receive the annuity benefits? - correct answer ✅beneficiary what are the two classifications of annuities according to the time when annuity payments begin? - correct answer ✅immediate and deferred what type of annuity is suitable for someone who wants to select the benefit option that will pay the largest amount only for as long as he annuitant lives? - correct answer ✅straight life How is the premium determined in a joint life insurance policy? - correct answer ✅the premium is based on the average age of the insureds. An insurer has discovered a representation on a life insurance policy application regarding the insured's age. The insured is 10 years older than he stated on the application. What will the insurer do regarding the death benefit? - correct answer ✅pay a reduced death benefit Texas Life and Health Insurance Exam Fx Questions (solved). what provision in a life insurance policy extends coverage beyond the premium due date? - correct answer ✅grace period to meet the requirement of the entire contract policy provision, an insurance policy must contain what? - correct answer ✅a copy of the original insurance application What dividend option can increase the death benefit of the existing life policy? - correct answer ✅paid-up additions what settlement options are available in life insurance policies? - correct answer ✅lump-sum/cash, fixed period, fixed amount, life income, interest only with the reduction of premium dividend option, how is the dividend used? - correct answer ✅the dividend is applied to next year's premium (it reduces the next year's premium). Texas Life and Health Insurance Exam Fx Questions (solved). what are the dividend options in life insurance policies? - correct answer ✅cash, reduced premium, accumulation at interest, paid-up additions, paid- up option, one-year term, and acceleration of endowment What type of beneficiary can be changed at any point by the policyowner? - correct answer ✅revocable a policy owner borrowed a portion of cash value from his whole life policy. if the loan is not repaid, how will that affect the death benefit to the beneficiary? - correct answer ✅the amount of the loan will be subtracted from the death benefit. what is the name for a life insurance policy rider that provides coverage on the insureds family members? - correct answer ✅other-insured rider What life policy rider allows the company to forgo collecting the premium if the insured becomes disabled? - correct answer ✅waiver of premium what is the purpose of settlement options in life insurance policies? - correct answer ✅to determine how the death benefit will be paid to the beneficiary Texas Life and Health Insurance Exam Fx Questions (solved). an applicant for life insurance misstated her age on the policy application. how will this affect the death benefit? - correct answer ✅the death benefit will be adjusted to the amount that the insured could obtain for her correct age. who has the right to cash value of a life insurance policy? - correct answer ✅policy owner what term is used to describe methods of payment of the death benefit to the benficiary upon the insured's death? - correct answer ✅settlement options what happens to the proceeds of a life insurance policy if there is no named beneficiary? - correct answer ✅the proceeds are paid to the insured's estate. With the interest only settlement option, what happens to the policy's death benefit? - correct answer ✅policy proceeds are retained by the insurance company; only the interest is paid to the beneficiary Texas Life and Health Insurance Exam Fx Questions (solved). what type of assignment is used to secure the payment of a debt with an existing life insurance policy? - correct answer ✅collateral assignment When will a contingent beneficiary receive death benefit from a life insurance policy? - correct answer ✅when the primary beneficiary dies before the insured When can an insurance company use suicide as a defense against paying a death claim? - correct answer ✅when a suicide is committed within a specific period of time after the policy is purchased (usually 2 years) is the fixed-period settlement option, how will the number of installments for the death benefit proceeds determine the amount of the installments? - correct answer ✅the longer the period selected, the smaller each installment will be in what type of health plans are providers paid for services in advance, regardless of the services provided? - correct answer ✅prepaid plans Texas Life and Health Insurance Exam Fx Questions (solved). Who chooses a primary care physician in an HMO plan? - correct answer ✅the individual member in order to be eligible for coverage by an HSA, an individual must also be covered by what type of health plan? - correct answer ✅High Deductible Health Plan (HDHP) can alzheimer's disease be excluded from coverage under a long term care policy? - correct answer ✅no, organic cognitive disorders, such as alzheimer's or parkinson's must be covered Can an insured who belongs to a POS plan use an out-of-network physician? - correct answer ✅yes, but the copays and deductibles may be higher Why do HMOs encourage members to get regular checkups? - correct answer ✅to help catch health problems early when treatment has the greatest chance for success (i.e. preventive care) Texas Life and Health Insurance Exam Fx Questions (solved). what does the amount of disability benefit that an insured can receive depend on? - correct answer ✅the insured's income at the time of policy application who are the parties in a group health contract? - correct answer ✅The employer and the insurer what is the role of the gatekeeper in an HMO plan - correct answer ✅To control costs for the services of specialists How can an HMO member see a specialist? - correct answer ✅Referral by the primary care physician what is the term for a period of time immediately following a disability during which benefits are not payable? - correct answer ✅elimination period what types of groups are eligible for group health insurance? - correct answer ✅employer-sponsored and association-sponsored groups Texas Life and Health Insurance Exam Fx Questions (solved). what are the two types of flexible spending accounts? - correct answer ✅health care accounts and dependent care accounts What type of hospital policy pays a fixed amount each day that the insured is in the hospital? - correct answer ✅hospital indemnity what types of injuries and services will be excluded from major medical coverage? - correct answer ✅injuries caused by war, intentionally self- inflicted injuries, injuries covered by workers compensation, regular dental/sision/hearing care, custodial care, and elective cosmetic surgery what is the capital sum in accidental death and dismemberment (AD&D) coverage? - correct answer ✅a percentage of the principal sum in group insurance, what is the name of the policy? - correct answer ✅master policy what is the primary purpose of disability income insurance? - correct answer ✅to replace income lost due to a disability Texas Life and Health Insurance Exam Fx Questions (solved). What health policy provision defines the insured's duty to provide the insurer with reasonable notice in the event of a loss? - correct answer ✅notice of claim according to the time limit on certain defenses provision in health insurance policies, when can an insurer contest fraudulent misstatements on a health insurance application? - correct answer ✅anytime while the policy is in force what health policy provision prevents the insured from bringing a lawsuit against the insurance company for at least 60 days after proof of loss is provided? - correct answer ✅legal actions Who pays the expense for an autopsy under the physical examination and autopsy provision? - correct answer ✅the insurer According to the Reinstatement provision, once a lapsed policy is reinstated, how soon will coverage be available for accidents? - correct answer ✅immediately Texas Life and Health Insurance Exam Fx Questions (solved). What section of a health insurance policy lists the services for which the insurer will not provide coverage? - correct answer ✅exclusions Which health insurance provision describes the insured's right to cancel coverage? - correct answer ✅renewal provision if a health insurance policy has a 31-day grace period, what does that mean? - correct answer ✅the policy remains in effect for 31 days after the premium is due and not paid Under an individual disability income policy, the benefits must be paid on at least what schedule? - correct answer ✅monthly what will happen to a health insurance policy if the premium has not been paid by the end of the grace period? - correct answer ✅the policy will be cancelled what will determine the length of the grace period in a health insurance policy? - correct answer ✅the mode of the premium payment Texas Life and Health Insurance Exam Fx Questions (solved). If the insured pays a monthly premium for health insurance, how long would the grace period be on the policy? - correct answer ✅10 days what provision provides for the sharing of expenses between the insured and the insurance company? - correct answer ✅coinsurance what does the free-look period allow the insured to do? - correct answer ✅return the policy for a full refund of premium within a specified time period (usually 10 days) what is a probationary period in a group health insurance? - correct answer ✅the period of time that must lapse before an employee is eligible health coverage a waiver of premium provision may be included with what type of health insurance policies? - correct answer ✅disability income what is the purpose of the coinsurance provision in health insurance policies? - correct answer ✅to prevent overutilization of the policy benefits Texas Life and Health Insurance Exam Fx Questions (solved). who decides which optional provisions would be included in a health policy? - correct answer ✅the insurance company what health policy provision states to whom the claim benefits must be paid? - correct answer ✅payments of claims What benefits are provided by Medicare Part C? - correct answer ✅Expanded benefits for a fee through private insurance programs such as HMO's or PPO's. at what age do individuals qualify for medicare? - correct answer ✅age 65 In which Medicare supplemental policies are the core benefits found? - correct answer ✅all plans (A-N) who qualifies for medicare coverage? - correct answer ✅People age 65 or older, or anyone who has been entitled to Social Security disability income benefits for 2 years, or who has chronic kidney disease Texas Life and Health Insurance Exam Fx Questions (solved). an insurance with medicare part D has reached the initial benefit limit and must now pay a portion of prescription drug costs. what is the term for this gap in coverage? - correct answer ✅the donut hole What part of Medicare is known as medical insurance? - correct answer ✅part b how many parts does medicare have? - correct answer ✅Four: Parts A-D When is the initial enrollment period for Medicare Part A? - correct answer ✅when an individual first becomes eligible for medicare, starting 3 months before turning age 65 and ending 3 months after the 65th birthday Who issues Medigap policies? - correct answer ✅Private insurers What Medicare part will cover lab services or diagnostic tests? - correct answer ✅part b Texas Life and Health Insurance Exam Fx Questions (solved). what is the required free-look period for medicare supplement policies? - correct answer ✅30 days what is another name for medicare supplement plans? - correct answer ✅medigap medicare part a will pay for what type of services? - correct answer ✅impatient hospital care, skilled nursing facility care, home health care and hospital care What Medicare part helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care? - correct answer ✅Part A what type of insurance covers an employee who is hurt on the job? - correct answer ✅workers compensation in group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense? - correct answer ✅100% Texas Life and Health Insurance Exam Fx Questions (solved). How are benefits received by the business from a key person disability insurance? - correct answer ✅income tax free what is subrogation in health insurance? - correct answer ✅The legal process that gives the insurer the right to seek recovery from a third party that was responsible for the loss after the insurer has paid the insured for the loss When a business receives benefits from its key person disability insurance, how are those benefits taxed? - correct answer ✅the key person disability insurance benefits are received tax free how are individually-owned disability income benefits taxed once received by the insured? - correct answer ✅disability benefits are not taxed; they are received income tax free What is the tax advantage of the employer paying premiums for its employees for disability income insurance? - correct answer ✅premiums are deductible as a business expense Texas Life and Health Insurance Exam Fx Questions (solved). what type of health insurance covers partners or corporate officers of a closely held business? - correct answer ✅disability buy-sell what is a birthday rule in a coordination of benefits provision? - correct answer ✅the coverage of the parent whose birthday is earlier in the year is considered primary in health insurance, when would an excess plan pay benefits? - correct answer ✅after the primary plan has paid its full promised benefit, the excess plan will pay the balance What type of disabilities will be covered by occupational coverage? - correct answer ✅disabilities that result from accidents or sickness that occur on or off the job Under a fully contributory health plan, how are benefits received by the employee? - correct answer ✅income tax free Texas Life and Health Insurance Exam Fx Questions (solved). Who must be a member of insurance guaranty associations? - correct answer ✅all insurers authorized to write insurance within a state What type of licensee represents the insurance company? - correct answer ✅the agent in the agent/insurer relationship, who is considered the principal? - correct answer ✅insurer What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is? - correct answer ✅misrepresentation What type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another? - correct answer ✅twisting If a producer makes maliciously critical statements about another insurer, what is this illegal practice called? - correct answer ✅defamation Texas Life and Health Insurance Exam Fx Questions (solved). If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer? - correct answer ✅authorized or admitted what is the purpose of a cease and desist order? - correct answer ✅to prevent a producer or insurer from further violating laws for transacting insurance Who owns stock companies? - correct answer ✅stockholders who is considered a non resident agent? - correct answer ✅an agent who resides and is licensed in another state, but who is authorized to transact insurance in this state Who must be notified of a producer's change of address? - correct answer ✅the department of insurance (commissioner/director/superintendent) When is controlled business legal? - correct answer ✅When the commissions from controlled business do not exceed the aggregate commissions on all the other business (specific limits may vary from state to state) Texas Life and Health Insurance Exam Fx Questions (solved). If an insurer holds a Certificate of Authority, it is known as what type of insurer? - correct answer ✅authorized or admitted what document is required for an insurance company to transact insurance? - correct answer ✅certificate of authority who may share in the commission from the sale of a life insurance policy? - correct answer ✅only producers properly licensed for the type of insurance transaction who is responsible for the contents of insurance advertisements? - correct answer ✅the insurance company in general, who can be excluded from producer licensing and examination requirements? - correct answer ✅insurance company officers, directors, or any other employees who do not transact insurance and who do not receive commissions for theirs services (usually, their responsibilities include administrative, executive or clerical).