Texas State Exam Simulator - Life and Health Insurance, Exams of Nursing

Download Texas State Exam Simulator - Life and Health Insurance and more Exams Nursing in PDF only on Docsity! Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers An annuity promises that, if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to a beneficiary until an amount equal to the contract value has been paid. This type of annuity is called An installment Refund annuity A Straight Life annuity A Cash Refund annuity A Joint Life annuity - Correct Answer ✅An installment Refund annuity One becomes eligible for Social Security disability benefits after having been disabled for 3 months 5 months 6 months 12 months - Correct Answer ✅5 months Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct? Straight life accumulates faster than Limited-pay Life 20-Pay Life accumulates cash value faster than Straight Life Cash value accumulation of both 20-Pay Life and Straight Life depend on the insurer's financial rating 20-Pay Life and Straight Life accumulate cash value at the same rate - Correct Answer ✅20-Pay Life accumulates cash value faster than Straight Life Who makes the legally enforceable promises in a unilateral insurance policy? Beneficiary Insurance company Insured Applicant - Correct Answer ✅Insurance company Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Full benefits are payable under the Master contract Full benefits are payable under the converted policy Benefits less required premium are payable under the converted policy - Correct Answer ✅Full benefits are payable under the Master contract All of the following are limited benefit plans EXCEPT cancer policies life insurance policies dental policies critical illness policies - Correct Answer ✅life insurance policies A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow? Extended Term rider Cost of Living Adjustment rider Guaranteed Insurability Option rider Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Waiver of Premium rider - Correct Answer ✅Guaranteed Insurability Option rider An agent whose license has been revoked is required to wait at least five years before applying for a new license submit all previously written policies to the Commissioner of Insurance's office for servicing of the accounts cancel all policies currently in effect and advise the insureds to place them elsewhere continue to service the existing accounts but not solicit new business - Correct Answer ✅wait at least five years before applying for a new license The benefits under a Disability Buy-Out policy are normally paid in installments taxable to the beneficiary payable to the company or another shareholder Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers normally paid after a short elimination period - Correct Answer ✅payable to the company or another shareholder he Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for insolvency health information financial information overinsurance - Correct Answer ✅health information How are surrender charges deducted in a life policy with a rear-end loaded provision? Deducted from the death benefit Deducted when the policy is discontinued Deducted from policy's cash value Deducted when assigned to another policyowner - Correct Answer ✅Deducted when the policy is discontinued Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Policy mailed to agent Policy delivered to the applicant by the agent Policy issued with a rating - Correct Answer ✅Policy issued with a rating What is the MINIMUM number of Activities of Daily Living (ADL) an insured must be unable to perform to qualify for Long Term Care benefits? 1 2 3 4 - Correct Answer ✅2 An agent who tells a client that dividends are guaranteed may be guilty of fraud rebating misrepresentation slander - Correct Answer ✅misrepresentation Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Which statement regarding a Key Employee Life policy is NOT true? The application must be signed by the key employee Its purpose is to prevent the financial loss that may ensue if a key employee dies The beneficiary is named by the key employee The company purchases, owns, pays the premiums and is the beneficiary - Correct Answer ✅The beneficiary is named by the key employee A policyowner's rights are limited under which beneficiary designation? Revocable Tertiary Contingent Irrevocable - Correct Answer ✅Irrevocable Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take? Deposit the applicant's check into his account and make a personal check out to the insurance company from his personal account Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company Cross off his name on the "pay to" portion of the check, write the name of the insurance company, and send the check back to the insurance company Deposit the check in to his personal account, use the funds to purchase a cashiers check, and send the new cashiers check back to the insurance company - Correct Answer ✅Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company Variable Whole Life Insurance can be described as both an insurance and securities product an insurance product only a securities product only Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers continued coverage after the first 31 days is dependent on notification - Correct Answer ✅coverage during the first year is limited to congenital defects Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself? Policy Exclusion Incontestable Entire Contract Provision Assignment - Correct Answer ✅Entire Contract Provision An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a $125,000 individual whole life policy $25,000 modified whole life policy $25,000 individual term life policy Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers $25,000 individual whole life policy - Correct Answer ✅$25,000 individual whole life policy M purchases a $70,000 Life Insurance Policy with premium payments of $550 a year for the first 5 years. At the beginning of the sixth year, the premium will increase to $800 per year but will remain level thereafter. The face amount will remain at $70,000 throughout the life of the policy. The type of policy that M has purchased is Adjustable Life Indeterminate Premium Life Grader Premium Life Modified Premium Life - Correct Answer ✅Modified Premium Life S would like to use dividends from her life insurance policy to purchase paid- up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT type of life insurance Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers S's attained age dividend amount used toward purchase beneficiary's age - Correct Answer ✅beneficiary's age Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy? Have the customer sign a blank application, then take the application back to his office to complete prior to sending it off to the insurance company Complete the application over the phone with the customer, sign the application for the customer, then send the application off to the insurance company Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company Have the customer fill out the application and send it to his office for him to sign, then send it off to the insurance company - Correct Answer ✅Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers is prohibited by state law is allowed only on policies dates after 1992 transfers rights from the company to the policyholder - Correct Answer ✅transfers payments to someone other than the policyowner What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)? MEWA Blanket insurance Dread disease insurance Disability insurance - Correct Answer ✅Dread disease insurance K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income? Indemnity Major Medical Travel Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Disability Income - Correct Answer ✅Disability Income 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? Tertiary Irrevocable Revocable Contingent - Correct Answer ✅Revocable The Accidental Death and Dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured dies of natural causes becomes critically ill becomes chronically ill is blinded in an accident - Correct Answer ✅is blinded in an accident Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deducitble? Deferral provision Carryover provision Stop Loss provision Corridor provision - Correct Answer ✅Carryover provision 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? Fixed Certain Joint and Full Survivor Life Annuity with Period Certain Installment Refund - Correct Answer ✅Life Annuity with Period Certain Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Waiver of Premium - Correct Answer ✅Reinstatement provision P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA laws, which of the following statements is TRUE? She DOES need to provide evidence of insurability She does NOT need to provide evidence of insurability She will have up to 6 months to convert to an individual policy She will be paying exactly the same premium for the individual plan as she did the group plan - Correct Answer ✅She does NOT need to provide evidence of insurability A whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value? Cash surrender Life settlement contract Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Buy-sell arrangement 1031 Exchange - Correct Answer ✅Life settlement contract Who can purchase a plan through the Marketplace? Anyone Any legal resident except those incarcerated Only those who do not have access to employer-sponsored coverage Only those who might be eligible for tax credits - Correct Answer ✅Any legal resident except those incarcerated What is Old Age and Survivors Health Insurance (OASDHI) also known as? Medicare Social Security Medicaid FICA - Correct Answer ✅Social Security Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Which of these require an offer, acceptance, and consideration? Warranty Estoppel Contract Representation - Correct Answer ✅Contract How does a typical Variable Life Policy investment account grow? Tied to price of gold Through mutual funds, stocks, bonds Based on returns from insurer's general account Tied to Treasury Bills - Correct Answer ✅Through mutual funds, stocks, bonds An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers A Renewable Term Policy is renewable at the option of the Owner Company Insured Assignee - Correct Answer ✅insured Which of these is considered a true statement regarding Medicaid? Funded by both state and federal governments Intended to be used by individuals age 65 and older Provides disability income benefits Automatically covers those receiving Social Security disability benefits - Correct Answer ✅Funded by both state and federal governments Which is true concerning a Variable Universal Life policy? Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Policyowner controls where the investment will go and selects the amount of the premium payment Policyowner has no say where the investment will go but can choose the premium mode The investment vehicle for this type of policy is held in the insurer's general portfolio The death benefit can vary but the policyowner has no say in the premium amount paid - Correct Answer ✅Policyowner controls where the investment will go and selects the amount of the premium payment In life insurance, the needs approach is used mostly to establish which type of life insurance a client should apply for how much life insurance a client should apply for which company a client should use when applying for life insurance what the maximum amount the client can spend on life insurance - Correct Answer ✅how much life insurance a client should apply for A life insurance illustration is NOT required to include the Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers name of the insurer underwriting or rating classification upon which the illustration is based initial death benefit company's mortality table - Correct Answer ✅company's mortality table Which of these characteristics is consistent with a Straight Life policy? Owner can adjust both premium and death benefit Premiums are lower for the first five years, increase the sixth year, then levels off for the remaining length of the contract Owner has the option of converting to term insurance Premiums are payable for as long as there is insurance coverage in force - Correct Answer ✅Premiums are payable for as long as there is insurance coverage in force Under the Texas insurance code, which of the following statements about the Suicide clause is CORRECT? Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers An agent MUST do which of the following during a sales presentation for a participating life insurance policy? Include a statement that dividends are NOT guaranteed Include a statement that dividends ARE guaranteed Explain the applicable Nonforfeiture values Explain the surrender cost indexes for 5 and 10 years - Correct Answer ✅Include a statement that dividends are NOT guaranteed In regards to representations or warranties, which of these statements is TRUE? Warranties are statements considered to be true to the best of the applicant's belief If material to the risk, false representations will void a policy Representations are statements guaranteed to be true in every respect If material to the risk, false representations will NOT void a policy - Correct Answer ✅If material to the risk, false representations will void a policy Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers The Commissioner of Insurance may issue a temporary agent's license for a maximum of how many days? 180 90 60 30 - Correct Answer ✅90 A stock insurance company is owned by it's directors stockholders agents insureds - Correct Answer ✅stockholders J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct? Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers 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 ✅The gross premium is higher on a monthly payment mode as compared to being paid annually What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies? Family Maintenance Policy Family Income Policy Survivor Policy Family Survivor Policy - Correct Answer ✅Family Maintenance Policy Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan? Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Assign policy ownership to the bank Name bank as beneficiary - Correct Answer ✅Assign policy ownership to the bank Which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due? Grace Period Consideration Waiver of Premium Reinstatement - Correct Answer ✅Grace Period The Consideration clause in a life insurance contract contains what pertinent information? Summary of benefits Offer and acceptance Entire Contract Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Amount of premium payments and when they are due - Correct Answer ✅Amount of premium payments and when they are due 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 total premiums paid minus any policy loans Nothing $50,000 $100,000 - Correct Answer ✅$50,000 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? $1,000,000 Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers $500,000 $250,000 $0 - Correct Answer ✅$0 The clause identifying which losses resulting from an accident or sickness are insured by the policy is called the Entire Contract provision Consideration clause Benefit clause Insuring clause - Correct Answer ✅Insuring clause What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100? Term Life Whole Life Credit Life Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers assess the company's value on behalf of a prospective client - Correct Answer ✅determine the solvency of the company What does Medicare Parts A and B cover? Part A covers hospitalization; Part B covers long-term care Part A covers doctor's services; Part B covers hospitalization Part A covers hospitalization; Part B covers doctor's services Part A covers prescription drugs; Part B covers disability - Correct Answer ✅Part A covers hospitalization; Part B covers doctor's services What is issued to each employee of an employer health plan? Provision Receipt Policy Certificate - Correct Answer ✅Certificate Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers A 42-year-old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his/her needs change. Which of the following policies will best meet this need? Endowment at Age 75 Universal Life Graded Benefit Whole Life Modified Whole Life - Correct Answer ✅Universal Life When a life insurance policy exceeds certain IRS table values, the result would create which of the following? 1035 Exchange An investment Modified Endowment Contract (MEC) Endowment - Correct Answer ✅Modified Endowment Contract (MEC) Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges? Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers The maximum premium an insurer can charge for their health insurance based on geography The maximum amount an employer can contribute to a contributory health plan The maximum deductible an insured can be charged The maximum amount considered eligible for reimbursement by an insurance company under a health plan - Correct Answer ✅The maximum amount considered eligible for reimbursement by an insurance company under a health plan K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? Return of premiums paid Cash value plus interest $20,000 death benefit Face amount plus interest - Correct Answer ✅$20,000 death benefit Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers insurer risk exposure is greater interest to the insurer is increased while administrative costs are decreased mortality costs are greater interest to the insurer is decreased while the administrative costs are increased - Correct Answer ✅interest to the insurer is decreased while the administrative costs are increased N purchases an annuity by making payments in an amount no less than $100 quarterly. This describes which of the following annuities? Installment Immediate Fixed Installment Deferred Flexible Installment Deferred Flexible Premium Immediate - Correct Answer ✅Flexible Installment Deferred If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of? Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Insurer Beneficiary Reinsurer Insured - Correct Answer ✅Insured What kind of life insurance product covers children under their parent's policy? Family Maintenance rider Term rider Family Income rider Payor benefit - Correct Answer ✅Term rider When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n) elimination exclusion Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers limitation exception - Correct Answer ✅exclusion What is the purpose of the U.S.A. Patriot Act? detect and deter fraud detect and deter alien insurance companies detect and deter terrorism detect and deter misrepresentations - Correct Answer ✅detect and deter terrorism The health insurance program which is administered by each state and funded by both the federal and state governments is called Long-term care Medicaid Medicare Supplemental Program Medicare - Correct Answer ✅Medicaid Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Legal reserve agents Financial planners Life and Health insurance counselors Managing general agents - Correct Answer ✅Legal reserve agents An agent MUST give a prospective insured an Outline of Coverage when taking an application for a Whole life policy Variable Annuity Medicare Supplement policy Term Life policy - Correct Answer ✅Medicare Supplement policy A creditor who requires a debtor to obtain insurance from a particular company or agent as a condition for a loan is guilty of Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers coercion fraud rebating boycotting - Correct Answer ✅coercion Which of the following circumstances would cause a Medicare Supplement policy to be cancelled? A claim greatly exceeds the benefits payable The insured fails to pay the premium The attending physician dies before the claim is settled The insured is no longer in good health - Correct Answer ✅The insured fails to pay the premium Benefits for drug and alcohol treatment under a group health policy must include all of the following services EXCEPT treatment in a certified facility transportation to and from an outpatient facility Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers outpatient treatment through a public hospital or clinic group therapy prescribed by a physician - Correct Answer ✅transportation to and from an outpatient facility V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefit are payable? 6 months 5 months 4 1/2 months 4 months - Correct Answer ✅4 months A foreign insurance company is one that is incorporated under Texas law under the laws of another state is a territory of the United States Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Payor provision Accelerated Benefits provision Assignment provision Waiver of Premium provision - Correct Answer ✅Payor provision The sections of an insurance contract which limit coverage are called waivers riders exclusions limitations - Correct Answer ✅exclusions Which of the following is NOT a limited benefit plan? cancer policies life insurance policies dental policies Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers critical illness policies - Correct Answer ✅life insurance policies All of the following provisions must be included in life insurance policies EXCEPT Incontestability Entire Contract Extended Term Misstatement of Age - Correct Answer ✅Extended Term In a life insurance policy, which feature states that the policy will not cover certain risks? Exception Exclusion Ejection Expulsion - Correct Answer ✅Exclusion Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers What type of life policy covers two people and pays upon the death of the last insured? Shared Survivorship Adjustable Joint - Correct Answer ✅Survivorship J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a predetermined price. What type of plan does J belong to? Multiple Employer Welfare Arrangement Multiple Employer Trust Health Maintenance Organization Co-op Arrangement - Correct Answer ✅Health Maintenance Organization Which of the following actions is NOT possible with a Universal Life policy? Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Family Maintenance Policy Family Survivor Policy Family Income Policy - Correct Answer ✅Family Maintenance Policy Which of the following statements about the classification of applicants is INCORRECT? Substandard applicants are never declined by underwriters Substandard applicants are occasionally declined by underwriters Preferred risk applicants typically have better premium rates than standard risk applicants An applicant can be classified as substandard risk because of a hazardous job - Correct Answer ✅Substandard applicants are never declined by underwriters A Health Reimbursement Arrangement MUST be established with employee funding with other employer-sponsored benefit plans Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers by the employer only during specific open enrollment periods - Correct Answer ✅by the employer Variable annuities may invest premiums in each of the following EXCEPT Common Stock Money Market securities Insurer's corporate business account Junk bonds - Correct Answer ✅Insurer's corporate business account Under the USA Patriot Act, insurers are required to report receipt of cash payments in excess of $10,000 $7,500 $5,000 $2,500 - Correct Answer ✅$10,000 Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers What percentage of continuing education instruction MUST be completed in the classroom or classroom equivalent? 25% 50% 75% 100% - Correct Answer ✅50% A certificate of authority does which of the following? Gives an agent authority to represent a specific insurance company Permits an agent to solicit insurance in Texas Permits a decreased agent's relative to act as an agent for a limited period of time Permits an insurance company to transact business in Texas - Correct Answer ✅Permits an insurance company to transact business in Texas Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers reduced by a specified percentage of the face amount - Correct Answer ✅an amount that the premiums paid would have purchased at the current age or ages T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary? Request will be accepted only if in writing by the insured Change will be made only if premiums are paid current Change will be made immediately Request of the change will be refused - Correct Answer ✅Request of the change will be refused Which of the following health insurance coverages is BEST suited for meeting the expenses of catastrophic illness? Major Medical Hospital Expense Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Surgical Expense Hospital Income - Correct Answer ✅Major Medical An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n) delayed effective date exclusion for the medical condition extended Contestable period Concealment clause - Correct Answer ✅exclusion for the medical condition What provision in a life insurance policy states that the application is considered part of the contract? Application provision Policy Exclusions provision Entire Contract provision Incontestability provision - Correct Answer ✅Entire Contract provision Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans? Joint Noncontributory Contributory Participating - Correct Answer ✅Contributory In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and a Medical Information Report the initial premium forward it immediately to the insurer Attending Physician Statement - Correct Answer ✅the initial premium Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers marital deduction death benefits Section 1035 exchange capital gains tax rate - Correct Answer ✅marital deduction An organization that solicits insurance only among its members is known as a specific order specialized company limited insurance company fraternal benefit society - Correct Answer ✅fraternal benefit society K purchased a $10,000 Life Policy that will pay the face amount to her if she lives to age 65, or to her beneficiary if she dies before age 65. K purchased which of the following types of policies? Limited-Pay Life Term to Age 65 Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Whole Life Paid-Up at Age 65 Endowment at Age 65 - Correct Answer ✅Endowment at Age 65 T was treated for an ailment 2 months prior to applying for a health insurance policy. This condition was noted on the application and the policy was issued shortly afterwards.How will the insurer likely consider this condition? Insurer will require a higher deductible for any claims resulting from this condition Insurer is required to initially cover this pre-existing condition Insurer will permanently exclude the condition from the policy Insurer will likely treat as a pre-existing condition which may not be covered for one year - Correct Answer ✅Insurer will likely treat as a pre-existing condition which may not be covered for one year What would the Medical Information Bureau (MIB) identify? Testing positive for marijuana use from a previous screening Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Existing life insurance coverage with other carriers Credit scores Primary physician - Correct Answer ✅Testing positive for marijuana use from a previous screening In a Life insurance contract, an insurance company's promise to pay stated benefits is called the Insuring clause Consideration clause Entire Contract Owner's rights - Correct Answer ✅Insuring clause Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? Interest Only Fixed Period Fixed Amount Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Who is normally considered to be the owner of a 403(b) tax-sheltered annuity? The 403(b) custodian The financial institution The employer The employee - Correct Answer ✅The employee Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this? Guaranteed insurability rider Additional coverage rider Paid-up option rider Extended insurability rider - Correct Answer ✅Guaranteed insurability rider Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Which of these statements concerning an individual Disability Income policy is TRUE? Premiums are normally tax-deductible Age of the insured determines the amount of the benefits Normally includes an Elimination period Benefits are normally taxable - Correct Answer ✅Normally includes an Elimination period N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot? Misrepresentation Exclusion Collateral assignment Concealment - Correct Answer ✅Exclusion Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase? 30 Pay Life Term to Age 70 Universal Life Adjustable Life - Correct Answer ✅30 Pay Life Which statement is TRUE in regards to a policy loan? Past-due interest payments not paid after 3 months will void the policy Past-due interest on a policy loan is added to the total debt Insurance companies can send delinquent interest accounts to a collection agency Insurance companies can charge an interest rate based on the policyowner's credit report - Correct Answer ✅Past-due interest on a policy loan is added to the total debt Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Before holding a hearing regarding an agent's unfair or deceptive practice, the Insurance Commissioner MUST give how many days notice? 3 5 10 30 - Correct Answer ✅30 Which of the following is an important underwriting principle of group life insurance? Physical examinations are required Everyone must be covered in the group Employer must pay for the entire premium The group must be formed for the purpose of getting affordable insurance - Correct Answer ✅Everyone must be covered in the group The Consideration clause of an insurance contract includes Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers the buyer's guide a summary of the coverage provided the named beneficiaries the schedule and amount of premium payments - Correct Answer ✅the schedule and amount of premium payments K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? Daughter Husband's estate K's estate Trust fund - Correct Answer ✅Daughter The Commissioner of insurance may suspend, revoke, or refuse to renew the license of an agent who Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers is convicted of a misdemeanor is found guilty of misrepresentation or fraud in obtaining the license files for bankruptcy fails to write any business for six consecutive months - Correct Answer ✅ M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for? Claim payment is equal to physician's actual charges Claim payment is negotiated between physician and patient Determined by the schedule of benefits from the hospital Determined by the terms of the policy - Correct Answer ✅Determined by the terms of the policy If X wants to buy $50,000 worth of permanent protection on his/her spouse and $25,000 worth of 10-year Term coverage on X under the same policy, the applicant should purchase An Estate Builder Policy Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers Why is an applicant's signature required on a life insurance application? To attest that the statements on the application are warranties To attest that the statements on the application are accurate to the best of the applicant's knowledge To give Power of Attorney to the producer if needed To attest that all statements on the application are guaranteed to be true - Correct Answer ✅To attest that the statements on the application are accurate to the best of the applicant's knowledge When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply? Extended term option Conversion provision 1035 Exchange Incontestable period - Correct Answer ✅Conversion provision Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers The premiums paid by an employer for his employee's group life insurance are usually considered to be tax-deductible to the employer partially deductible to the employee tax-deductible to the employee taxable income to the employee - Correct Answer ✅tax-deductible to the employee An individual who purchases a Life annuity is given protection against inflation the risk of dying prematurely the risk of living longer than expected the risk of not having enough retirement income - Correct Answer ✅the risk of living longer than expected How are Roth IRA distributions normally taxed? Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Verified Answers 10% penalty tax is applied Taxed as ordinary income Capital gains tax is applied Distributions are received tax-free - Correct Answer ✅Distributions are received tax-free An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be converted to an individual permanent policy at an individual rate converted to an individual permanent policy at a group rate continued at an individual rate continued at a group rate - Correct Answer ✅converted to an individual permanent policy at an individual rate A Loss-Purchase Buy and Sell agreement among three partners, funded with individual life insurance, would require how many policies? 3