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Insurance Policy Types and Provisions, Exams of Personal Health

Tarrant County CollegePersonal Health

A comprehensive overview of various insurance policy types and their key provisions. It covers topics such as disability income insurance, life insurance policies (including whole life, term life, and limited-pay life), health insurance policies (including major medical and medicare supplement), group insurance, and annuities. The document also discusses important insurance concepts like coercion, rebating, fiduciary responsibility, and policy exclusions. By studying this document, readers can gain a deeper understanding of the different insurance products available, their features, and the regulations governing the insurance industry. This information can be valuable for insurance professionals, students studying insurance-related subjects, and individuals seeking to make informed decisions about their insurance coverage.

Typology: Exams

2024/2025

Available from 09/29/2024

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Texas Life and Health FINAL EXAM
2024/2025 REVIEW
1. A Business Disability Buyout plan policy is designed - ✔✔To pay
benefits to the corporation or other shareholders
2. A CEO's personal assistant suffered injuries at home and as a result,
was unable to work for four months. Which type of policy will pay a
monthly benefit to the personal assistant? - ✔✔disability income
3. A certificate of authority does which of the following? - ✔✔permits
an insurance company to transact business in Texas
4. A creditor who requires a debtor to obtain insurance from a
particular company or agent as a condition for a loan is guilty of -
✔✔coercion
5. A Family Income Policy is a combination of Whole Life and -
✔✔Decreasing term insurance
6. A life insurance application must be signed by all of these, EXCEPT: -
✔✔beneficiary
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Download Insurance Policy Types and Provisions and more Exams Personal Health in PDF only on Docsity!

Texas Life and Health FINAL EXAM

2024/2025 REVIEW

  1. A Business Disability Buyout plan policy is designed - ✔✔To pay benefits to the corporation or other shareholders
  2. A CEO's personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant? - ✔✔disability income
  3. A certificate of authority does which of the following? - ✔✔permits an insurance company to transact business in Texas
  4. A creditor who requires a debtor to obtain insurance from a particular company or agent as a condition for a loan is guilty of - ✔✔coercion
  5. A Family Income Policy is a combination of Whole Life and - ✔✔Decreasing term insurance
  6. A life insurance application must be signed by all of these, EXCEPT: - ✔✔beneficiary
  1. A life insurance illustration is NOT required to include the - ✔✔Companies mortality table
  2. A Limited-Pay Life policy has: - ✔✔premium payments limited to a specific number of years.
  3. A Long-Term Care policy must offer a MINIMUM benefit period of how many months? - ✔✔ 12
  4. A major medical policy typically: - ✔✔provides benefits for reasonable and necessary medical expenses, subject to policy limits
  5. A newly licensed General Lines agent must complete a MINIMUM of how many hours of continuing education within 24 months after initial license? - ✔✔ 24
  6. A policy of adhesion can only be modified by whom? - ✔✔the insurance company
  7. A policyowner's rights are limited under which beneficiary designation? - ✔✔irrevocable
  8. A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the

become incontestable: - ✔✔two years from the date of the policy was issued

  1. Additional coverage can be added to a Whole Life policy by adding a(n): - ✔✔decreasing term rider
  2. After the initial enrollment period, an HMO must hold an open enrollment period of how many days at LEAST once in every 12- month period? - ✔✔ 31
  3. All of the following provisions must be included in life insurance policies EXCEPT - ✔✔All of the following provisions must be included in life insurance policies EXCEPT
  4. All of the following statements about health coverage for newborns are correct EXCEPT - ✔✔coverage during the first year is limited to congenital defects
  5. All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death, EXCEPT: - ✔✔interest only
  6. An agent may legally share commissions only with - ✔✔another agent who is licensed in the same line of insurance
  1. An agent MUST do which of the following during a sales presentation for a participating life insurance policy? - ✔✔includes a statement that dividends are not guaranteed
  2. An agent MUST give a prospective insured an Outline of Coverage when taking an application for a - ✔✔Medicare supplement policy
  3. 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 - ✔✔coercion
  4. An agent whose license has been revoked is required to - ✔✔wait at least five years before applying for a new license
  5. An enrollee of a Health Maintenance Organization (HMO) may be cancelled or nonrenewed for which of the following reasons? - ✔✔failure to pay for coverage
  6. An individual life insurance policy issued in Texas MUST have a grace period for premium payment of how many days? - ✔✔ 31
  7. An insurance company may be judged guilty of false advertising if it - ✔✔exaggerates its dividends in a newspaper advertisement
  1. Benefits for drug and alcohol treatment under a group health policy must include all of the following services EXCEPT - ✔✔transportation to and from an outpatient facility
  2. Boycott, coercion, and intimidation that result in the unreasonable restraint of trade are prohibited under the Texas Insurance Code covering - ✔✔unfair methods of competition
  3. C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most? - ✔✔the cost
  4. 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? - ✔✔F
  5. F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed? - ✔✔Decreasing term policy
  1. From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant? - ✔✔Fair credit reporting act
  2. Group life insurance policies are generally written as: - ✔✔annually renewable term
  3. Group life policies MUST include all of the following provisions EXCEPT - ✔✔right to loan proceeds
  4. Group/voluntary long-term care policy premiums are typically deducted from the employee's income and, - ✔✔are less costly as compared to individual long term care coverage
  5. Health insurance benefits NOT covered due to an act of war are: - ✔✔excluded by the insurer in the contract provisions
  6. If, at the time of an insured's death, the insurance company discovers that the insured's age was misstated on the application for life insurance, the company will most likely - ✔✔pay the policy proceeds in the amount the premiums would have purchased at the insured's actual age
  1. Information obtained from a phone conversation to the proposed insured can be found in which of these reports? - ✔✔inspection report
  2. Insurance agent licenses normally must be renewed every - ✔✔two years
  3. Insurance company agent appointments remain in force for which of the following maximum periods of time, if any? - ✔✔until terminated or withdrawn
  4. Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid. - ✔✔conditional
  5. 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? - ✔✔nonoccupational coverage
  6. 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 insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age
  1. L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They purchase a Family Policy that covers L's spouse to age 65. A death benefit will NOT be paid in which of the following circumstances? - ✔✔L's spouse dies at 66
  2. Life insurance that covers an insured's whole life with level premiums paid over a limited time is called: - ✔✔Limited pay life
  3. M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son? - ✔✔Revocable
  4. M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son? - ✔✔Revocable
  5. Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is: - ✔✔business overhead expense
  6. N purchases an annuity by making payments in an amount no less than $100 quarterly. This describes which of the following annuities?
    • ✔✔Flexible installment Deferred

was returned within the free-look period, premium will be fully refunded

  1. Quarterly premium payments increase the annual cost of insurance because - ✔✔Interest to the insurer is decreased while the administrative costs are increased
  2. returning a portion of a premium as inducement to purchase insurance - ✔✔Which of the following is an example of rebating?
  3. 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 and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations? - ✔✔ 36
  4. T and S are named co-primary beneficiaries on a $500, Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? - ✔✔$
  5. T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions

may her insurance company take? - ✔✔increase her policy's coverage amount

  1. T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay? - ✔✔$50,
  2. Taking receipt of premiums and holding them for the insurance company is an example of: - ✔✔fiduciary responsibility
  3. 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): - ✔✔insuring agreement
  4. The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the: - ✔✔insuring clause
  5. The Commissioner of Insurance has the power and duty to take all of the following actions EXCEPT - ✔✔active insurance companies financial reserves
  6. The Commissioner of Insurance may issue a temporary agent's license for a maximum of how many days? - ✔✔ 90
  1. Under a Renewable Term policy, - ✔✔the renewal premium is calculated on the basis of the insured's attained age.
  2. Under Texas insurance law, the term "transacting business" includes - ✔✔collecting premiums
  3. Under the Texas code, the MAXIMUM for which a spouse may be insured in a company group life program with a $50,000 death benefit is: - ✔✔$25,
  4. Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured? - ✔✔PPO
  5. Under which of the following circumstances will the benefits under COBRA continuation coverage end? - ✔✔all group health plans are terminated by the employer
  6. Variable Whole Life Insurance can be described as: - ✔✔both an insurance and securities product
  7. What benefit does the Payor clause on a Juvenile Life policy provide? - ✔✔premiums are waived if the payor becomes diabled
  1. What does the ownership clause in a life insurance policy state? - ✔✔Who the policyowner is and what rights the policyowner is entitled to
  2. What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability? - ✔✔conversion
  3. What is being delivered during a policy delivery? - ✔✔insurance contract to the proposed insured
  4. What is the consideration given by an insurer in the Consideration clause of a life policy? - ✔✔promise to pay a death benefit to a named beneficiary
  5. What is the elimination period of an individual disability policy? - ✔✔time period a disabled person must wait before benefits are paid
  6. What is the purpose of a Policy Summary? - ✔✔Highlights the critical parts of the policy issued
  7. What is the underlying concept regarding level premiums? - ✔✔the early years are charged more than what is needed
  1. Which of the following actions by an insurance company is considered an unfair claims settlement practice? - ✔✔Denying an insured's claim without indicating the basis of denial under the policy
  2. Which of the following best describes a contingent beneficiary? - ✔✔Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured
  3. Which of the following BEST describes a Hospital Indemnity policy? - ✔✔coverage that pays a stated amount per day of a covered hospitalization
  4. Which of the following BEST describes a short-term medical expense policy? - ✔✔Nonrenewable
  5. Which of the following BEST describes Credit Life insurance? - ✔✔Insurance issued on a debtor to cover outstanding balances on installment loans
  6. Which of the following circumstances would cause a Medicare Supplement policy to be cancelled? - ✔✔the insured fails to pay the premium
  1. Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy? - ✔✔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
  2. Which of the following does Social Security NOT provide benefits for? - ✔✔dismemberment
  3. Which of the following health insurance policy provisions specifies the health care services a policy will provide? - ✔✔Insuring clause
  4. 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 deductible? - ✔✔carryover provision
  5. Which of the following reimburses its insureds for covered medical expenses? - ✔✔commercial insurers
  6. Which of the following services is NOT covered under a hospitalization expense policy? - ✔✔surgeons fees
  7. Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE? - ✔✔It is taxed as ordinary income