Insurance and Life Insurance Policies: Key Concepts and Definitions, Exams of Nursing

Download Insurance and Life Insurance Policies: Key Concepts and Definitions and more Exams Nursing in PDF only on Docsity! Texas Life and Health Insurance policy Exam and answers 2024 What type of reinsurance contract involves two companies automatically sharing their risk exposure?\ CORRECT ANSWER IS Treaty The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called\ CORRECT ANSWER IS reserves When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have\ CORRECT ANSWER IS insurable interest Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called\ CORRECT ANSWER IS representations The part of a life insurance policy guaranteed to be true is called a(n)\ CORRECT ANSWER IS warranty Which of these is NOT a type of agent authority? Express Implied Principal Apparent\ CORRECT ANSWER IS Principal The Consideration clause of an insurance contract includes\ CORRECT ANSWER IS the schedule and amount of premium payments E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to?\ CORRECT ANSWER IS In this situation, the proceeds from E's life insurance policy will go to F. Which term defines the legally enforceable promise in an insurance contract by the insurer?\ CORRECT ANSWER IS Unilateral Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid.\ CORRECT ANSWER IS conditional Which of these require an offer, acceptance, and consideration?\ CORRECT ANSWER IS Contract Which of these is NOT considered to be an element of an insurance contract? the offer acceptance negotiating consideration\ CORRECT ANSWER IS negotiating An agent is an individual that represents whom?\ CORRECT ANSWER IS Insurer Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling?\ CORRECT ANSWER IS Variable Life Which of the following actions require a policy owner to provide proof of insurability in an Adjustable Life policy?\ CORRECT ANSWER IS increase face amount When a policy owner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply?\ CORRECT ANSWER IS Conversion provision What type of life insurance are credit policies issued as?\ CORRECT ANSWER IS Term How long does the coverage normally remain on a limited-pay life policy?\ CORRECT ANSWER IS age 100 All of these statements about Equity Indexed Life Insurance are correct EXCEPT - Cash value has a minimum rate of accumulation - If the gain on the index goes beyond the policy's minimum rate of return, the cash value will mirror that of the index -The premiums can be lowered or raised, based on investment performance -Tied to an equity index such as the S&P 500\ CORRECT ANSWER IS The premiums can be lowered or raised, based on investment performance What type of life insurance incorporates flexible premiums and an adjustable death benefit?\ CORRECT ANSWER IS Universal Life What type of life policy covers 2 lives and pays the face amount after the first one dies?\ CORRECT ANSWER IS Joint Life Policy Life insurance that covers an insured's whole life with level premiums paid over a limited time is called\ CORRECT ANSWER IS Limited-Pay Life What kind of life insurance product covers children under their parent's policy?\ CORRECT ANSWER IS Term rider P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 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?\ CORRECT ANSWER IS revocable K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, where will the money go?\ CORRECT ANSWER IS To P's estate A policyowner's rights are limited under which beneficiary designation?\ CORRECT ANSWER IS Irrevocable A level premium indicates\ CORRECT ANSWER IS the premium is fixed for the entire duration of the contract On a life insurance policy, who is qualified to change the beneficiary designation?\ CORRECT ANSWER IS Policyowner J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct? -The gross premium is higher on a monthly payment mode as compared to being paid annually -The gross premium is lower on a monthly payment mode as compared to being paid annually -The cash value from a life policy paid on a monthly basis builds quicker than one paid on an annual basis -The face amount of a life policy paid on a monthly basis is higher than one paid on an annual basis\ CORRECT ANSWER IS The gross premium is higher on a monthly payment mode as compared to being paid annually Any changes made on an insurance application requires the initials of whom?\ CORRECT ANSWER IS Applicant In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and\ CORRECT ANSWER IS the initial premium Which of these factors do NOT play a role in the underwriting of a life insurance policy? -Avocations -Credit status -Marital status - Occupation\ CORRECT ANSWER IS marital status An insurance company may NOT reject a prospective insured's life application on the basis of which of the following factors? -Height - Weight -Gender -Medical history\ CORRECT ANSWER IS gender What type of group plan involves employees sharing the cost?\ CORRECT ANSWER IS contributory plan A noncontributory group term life plan is characterized by\ CORRECT ANSWER IS the entire cost of the plan is paid for by the employer W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n) -Flexible Premium Deferred annuity -Variable annuity -Immediate annuity -Straight Life annuity\ CORRECT ANSWER IS Immediate annuity T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?\ CORRECT ANSWER IS Life Annuity with Period Certain The annuity that represents the largest possible monthly payment to an individual annuitant is a(n)\ CORRECT ANSWER IS Straight Life annuity Which of these statements concerning an Individual Straight Life annuity is accurate?\ CORRECT ANSWER IS Payments are made to an annuitant for life Which type of contract liquidates an estate through recurrent payments?\ CORRECT ANSWER IS Annuity P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase?\ CORRECT ANSWER IS Deferred One becomes eligible for Social Security disability benefits after having been disabled for\ CORRECT ANSWER IS 5 months What is Old Age and Survivors Health Insurance (OASDHI) also known as?\ CORRECT ANSWER IS Social Security Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits?\ CORRECT ANSWER IS 5 Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company?\ CORRECT ANSWER IS Annuity An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age?\ CORRECT ANSWER IS 59 1/2 A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed?\ CORRECT ANSWER IS Company X All students attending a large university could be covered by\ CORRECT ANSWER IS a blanket policy The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for\ CORRECT ANSWER IS health information Which type of provider is known for stressing preventative medical care?\ CORRECT ANSWER IS Health Maintenance Organizations (HMO's) The individual who provides general medical care for a patient as well as the referral for specialized care is known as a\ CORRECT ANSWER IS Primary Care Physician The health insurance program which is administered by each state and funded by both the federal and state governments is called\ CORRECT ANSWER IS Medicaid Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures?\ CORRECT ANSWER IS Commercial insurer What does Medicare Parts A and B cover?\ CORRECT ANSWER IS Part A covers hospitalization; Part B covers doctor's services Medicare\ CORRECT ANSWER IS is a hospital and medical expense insurance program Medicaid was designed to assist individuals who are\ CORRECT ANSWER IS below a specific income limit Which of the following does Social Security NOT provide benefits for? -Survivorship -Dismemberment -Disability -Retirement\ CORRECT ANSWER IS Dismemberment In order to establish a Health Reimbursement Arrangement (HRA), it MUST\ CORRECT ANSWER IS be established by the employer A foreign insurance company is one that is incorporated\ CORRECT ANSWER IS under the laws of another state Under an individual life insurance policy, an insured may assign a MAXIMUM of what percentage of policy ownership?\ CORRECT ANSWER IS 100% Who can purchase a plan through the Marketplace?\ CORRECT ANSWER IS Any legal resident except those incarcerated An enrollee of a Health Maintenance Organization (HMO) may be cancelled or nonrenewed for which of the following reasons?\ CORRECT ANSWER IS Failure to pay for coverage Under Texas insurance law, the term "transacting business" includes\ CORRECT ANSWER IS collecting premiums A creditor who requires a debtor to obtain insurance from a particular company or agent as a condition for a loan is guilty of\ CORRECT ANSWER IS coercion 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\ CORRECT ANSWER IS coercion Which of the following is an example of rebating?\ CORRECT ANSWER IS returning a portion of a premium as inducement to purchase insurance A stock insurance company is owned by it's\ CORRECT ANSWER IS stockholders An agent who tells a client that dividends are guaranteed may be guilty of\ CORRECT ANSWER IS misrepresentation An individual life insurance policy issued in Texas MUST have a grace period for premium payment of how many days?\ CORRECT ANSWER IS 31 An agent may legally share commissions only with\ CORRECT ANSWER IS another agent who is licensed in the same line of insurance An agent whose license has been revoked is required to\ CORRECT ANSWER IS wait at least five years before applying for a new license The Commissioner of Insurance may issue a temporary agent's license for a maximum of how many days?\ CORRECT ANSWER IS 90 Insurance company agent appointments remain in force for which of the following maximum periods of time, if any?\ CORRECT ANSWER IS Until terminated or withdrawn If an insured sustains a loss on a policy sold by an agent through an insurance company that is not authorized to do business in Texas, which of the following would be liable?\ CORRECT ANSWER IS The agent and the company