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Texas Life and Health Insurance Exam
Latest 2023/
Which of these characteristics is consistent with a Straight Life Policy? - ✔️ Premiums are payable for as long as there is insurance coverage in force
Which of the following are Equity Indexed annuities typically invested in? - ✔️ S&P 500
Which of the following does Social Security NOT provide benefits for? - ✔️ Dismemberment
An example of false advertising would be - ✔️ An insurer exaggerating its dividends in a magazine advertisement
A 45 year-old woman won $100,000 in a scratch-off lottery ticket. She purchased an annuity that will pay her $1500 per month beginning at age 60. Which of these annuities did this woman purchase? - ✔️ Deferred Fixed Annuity
Which of the following types of organizations are prepaid group health plans, where members pay in advance for the services of participating physicians and hospitals that have agreements? - ✔️ HMO
Which action will a life insurance company most likely take if an insured dies and it is discovered that the insured's age was misstated on the application? - ✔️ Pay an amount the premiums would have purchased at the insured's actual age
Q is looking to buy a life insurance policy that will provide the greatest amount of protection for a temporary time period. Which of these policies should Q purchase? - ✔️ Term Life
An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age? - ✔️ 59 1/
An applicant MUST receive an Outline of Coverage when an application is taken for a(n) - ✔️ Medicare Supplement policy
Life insurance that covers an insured's whole life with level premiums paid over a limited time is called: - ✔️ Limited Pay Life
An individual has a Major Medical policy with a $5,000 deductible and an 80/ Coinsurance clause. How much will the INSURED have to pay is a total of $15, in covered medical expenses are incurred? - ✔️ $
$5,000 + 20% = $7,
How long can a cash surrender value payment be deferred by the insurance company under the Nonforfeiture Law? - ✔️ 6 months
An Evidence of Coverage form may be issued by a Health Maintenance Organization (HMO) after being approved by the - ✔️ Commissioner
What is an organization that solicits insurance only to its members? - ✔️ Fraternal benefit society
Which of the following is NOT a reason for a business to buy key person life insurance? - ✔️ A pension deficiency is the key employee dies
When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the: - ✔️ Entire Contract Provision
One becomes eligible for Social Security disability benefits after having been disabled for - ✔️ 5 Months
An insured owns an individual Disability Income policy with a 30-day Elimination Period for sickness and accidents and a monthly indemnity benefit of $500. If the insured is disabled for 3 1/2 months, what is the MAXIMUM amount he would receive for an approved claim? - ✔️ $1,
A license may be denied, suspended, or revoked if the licensee - ✔️ is found guilty of misrepresentation in obtaining the license
Which Unfair Trade Practice involves an agent telling a prospective client that a policy's dividends are guaranteed? - ✔️ Misrepresentation
K's whole life insurance policy lapsed two months ago due to nonpayment. She would now like to reinstate the policy. All of these statements are correct about the policy's reinstatement EXCEPT - ✔️ K will forfeit the right to use the automatic loan provision upon reinstatement
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? - ✔️ Life Income
Major Medical policies typically: - ✔️ contain a deductible and coinsurance
A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim? - ✔️ Claim will be paid and coverage will remain in force
Which of these is NOT an example of doing insurance business? - ✔️ Selling shares of stock
How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy? - ✔️ If the primary beneficiary dies before the insured
ABC Insurance Company is actively engaging in boycott, coercion, and intimidation that results in the unreasonable restraint of trade. ABC is committing a prohibited act under Texas insurance laws covering - ✔️ Unfair methods of competition
P is a producer who notices 5 questions on a life application were not answered. What actions should P take? - ✔️ Set up a meeting with the applicant to answer the remaining questions.
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? - ✔️ Exclusion
Under a Long Term Care policy, which benefit would be typically excluded or limited? - ✔️ Alcohol Rehabilitation
At the age of 45, an individual withdraws $50,000 from his Qualified Profit-Sharing Plan and then deposits this amount into a personal savings account. This action would result in: - ✔️ Income tax and 10% penalty assessed upon funds withdrawn from the Qualified Plan
Why would the Insurance Commissioner examine the records of an insurance company? - ✔️ To determine the solvency of the company
Before a life insurance policy is issued, which of these components of the contract is required? - ✔️ Applicant's signature on the application
The reason for backdating a policy is - ✔️ to obtain a premium rate based on an earlier age
Medicare Part B does NOT cover - ✔️ inpatient hospital services
A foreign insurance company conducting insurance business in Texas - ✔️ was formed under the-laws of another state
K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable? - ✔️ Level
All of the following statements about traditional individual retirement accounts are false EXCEPT - ✔️ 10% penalty is applied to withdrawals before age 59 1/
All of these statements about the Waiver of Premium provision are correct EXCEPT - ✔️ Insured must be eligible for Social Security disability for claim to be accepted
P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability? - ✔️ P will still receive declared dividends
Which of the following consists of an offer, acceptance, and consideration? - ✔️ Contract
Which of the following policy provisions prohibits an insurance company from incorporating external documents into an insurance policy? - ✔️ Entire Contract
S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary? - ✔️ $50,
K is the insured and P is the sole beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true? - ✔️ Proceeds will be paid to P's estate
What kind of life insurance product covers children under their parent's policy? - ✔️ A term rider
✔️ send termination notice to the Texas Department of Insurance
Deductibles are used in health policies to lower - ✔️ overuse of medical services
An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period?
✔️ Full face amount minus any past due premiums
In Texas, how long must a policy be enforce before an insurance company must pay death benefits for suicide? - ✔️ 2 years
S, age 40, is looking to buy a Life Insurance policy that will allow for increases or decreases in coverage as his needs change. The policy best suited for S would be - ✔️ Universal Life
Under a Graded Premium Whole Life policy, - ✔️ the premium increases each year during the early years of the contract and remains the same after that time
If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have? - ✔️ Contributory
Which of the following types of care is typically not covered in a Long-Term Care policy? - ✔️ Acupuncture
A pilot applies for Life Insurance. The insurer approves the application with a $ additional monthly premium modification due to the risk involved. The pilot declines the additional premium modification. The insurer will then likely issue the coverage with a(n) - ✔️ Aviation Exclusion
K has inherited a large sum of money. K purchases an annuity with this sum on July 1, and starts receiving payments August 1. These payments will continue for as long as she and her spouse lives. Which type of annuity did K purchase? - ✔️ Single Premium Immediate Joint with Survivor Annuity
The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is: - ✔️ The Cost
An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the - ✔️ Fair Credit Reporting Act
Before a life policy is issued, which of these contract elements is necessary? - ✔️ A signed application by the prospect
Which statement is TRUE in regards to a policy loan? - ✔️ Past-due interest on a policy loan is added to the total debt
An immediate annuity consists of a - ✔️ Single Premium
Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted? - ✔️ If Tom's employment is terminated, 20% of the funds would be forfeited
If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act? - ✔️ Insured's contingent beneficiary
Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy? - ✔️ Discourages overutilzation the insurance coverage
What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy? - ✔️ Premiums may increase at time of renewable
Stranger-Owned Life Insurance (STOLI) is when a person purchases life insurance only to sell to a(n): - ✔️ Third-party with no insurable interest
Which of these statements describe a Modified Endowment Contract (MEC)? - ✔️ Exceed the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract
Medicare Part A and Part B do NOT pay for - ✔️ dental work
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
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? -
When must insurable interest exist for a life insurance contract to be valid? - ✔️ Inception of the contract
Which statement is correct regarding the premium payment schedule for whole life policies? - ✔️ Premiums are payable throughout the insured's lifetime/ coverage lasts until death of the insured
An insurer may normally delay the payment of cash value loan or surrender value for up to - ✔️ 6 months
Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase? - ✔️ Applicant's monthly income
Which of the following BEST describes how pre-admission certification is used? - ✔️ Used to prevent nonessential medical costs
Which of the following actions does the Commissioner of Insurance NOT have the power to conduct? - ✔️ Activate insurance companies' financial reserves
X is insured with a disability income policy that provides coverage until age 65. This policy allows the insurer to change the premium rate for the overall risk class assigned. Which of these renewability features does this policy contain? - ✔️ Guaranteed Renewable
Who is liable when an insured suffers a loss on a policy sold by an agent through an insurer not authorized to conduct business in Texas? - ✔️ The agent and the company
As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of? - ✔️ coercion
A provision in a life insurance policy that pays the policy owner an amount that does not surpass the guaranteed cash value is called the: - ✔️ Policy Loan Provision
Which of these describe a participating insurance policy? - ✔️ Policyowners are entitled to receive dividends
Who owns a stock insurance company? - ✔️ Stockholders
What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled? - ✔️ Waiver of Premium Loan
The consideration clause of an insurance contract includes - ✔️ the schedule and amount of premium payments
In Texas, an individual life insurance policy is REQUIRED to have a grace period of - ✔️ 31 days
Which of the following actions is required by an insured who leave the primary area of medical coverage and seeks medical care? - ✔️ Obtain prior approval from the insurer to the medical service
Which of the following is a requirement for obtaining a Texas insurance agent's license? - ✔️ Be honest, trustworthy, and reliable
When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits? - ✔️ Recurrent disability
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? - ✔️ $20,000 death benefit
When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have - ✔️ insurable interest in the proposed insured
Which of these options can an individual use their medical flexible spending account to pay for? - ✔️ prescription drugs
A medicare supplement policy may be cancelled for which of the following reasons?
✔️ The premium has not been paid by the insured
T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide? - ✔️ Income that cannot be outlived by the owner
A policy owner would like to change the beneficiary on a life insurance policy and make the change permanent. which type of designation would fulfill this need? - ✔️ irrevocable
T purchased a $100,000 single premium, Straight Life annuity 5 years ago. He has received monthly payments since the inception of the annuity. If T dies, the insurance company - ✔️ does NOT have to make any further payments
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
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death? - ✔️ Face amount plus the policy's cash value
During a sales presentation for a participating life insurance policy, an agent MUST - ✔️ make a prospect understand that dividends are NOT guaranteed
