Texas General Lines Life, Accident and Health Exam Prep Questions, Exams of Advanced Education

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TX GENERAL LINES LIFE, ACCIDENT AND

HEALTH EXAM PREP Q

Health insurance coverage under COBRA, HIPAA guarantees that the person will - --Have Access to a guaranteed-issue individual health policy, regardless of health All the following statements about ordinary (or straight) whole life insurance are correct - --The cash value remains level throughout the life of the policy Which activity in NOT an error or omission that makes an agent or producer legally to both the insurance and the insure - --Placing insurance with an approved surplus line insurer All the following statements about the taxation of annuities are correct EXEPT: - --Qualified annuities are taxes no different than no qualified annuities Which of the following statements about utmost good faith in insurance is correct - --Both the insurance and the insurer must act in utmost good faith Which annuity settlement option pays income for the annuitant's life, but no less than for a specified number of year - --Life income with period certain Tim has paid only four premium totally $1000 on his health insurance policy when he was diagnosed with cancer. The insurance company paid more than $100.000 to cover the medical bills for his treatments which of the following characteristics of insurance contracts - --They are aleatory Jack, an insurance agent, offers free season football tickets to anyone who buys a life insurance policy from him. This sales practice is called - --rebating

After Todd was injured in a car crash, he received occupational theyto help him return to work. His disability income policy paid for this therapy because it had

• --A rehabilitation provision If a small employer insurance decides to terminate all small employer health benefits plans it issues in TEXAS, it must notify the TEXAS commissioner and all affected employer of its intent to do so at least - --At least 180 days before it ends coverage Contract characteristics is unique to insurance contracts but NOT all contracts - --Unilateral When first meeting prospective insurance applicants, a producer must give them a document that explains the general features, benefits, and condition of type of insurance being considered. Which is called a - --Buyer's Guide Abby, who life in New York she is a licensed life insurance agent , wants to apply fo a nonresident license in Texas. To do so, she must submit which of the following to TDI - --An aplicación, few and letter of certification from her home state Amanda used a basic illustration to help Mark. a potencial cliente, de understand how the cash value of his life insurance policy would grow. Mark then agreed to buy the policy. Which of the following best describes Amanda's duties which respect to delivering a copy of the illustration used - --Amanda must deliver a signed copy ilustración to both Mark and the insurer With respect to the transfer-for-value rule, which of the following situations would result in the new owner being subject to tax on the policy's gain upon the insured's death - --Policy is sold by the insured to neighborhood in exchange for cash

Which of the following describes the options available with a universal life insurance policy the owner no longer wishes to maintain - --Surrender the policy for its cash value or let the policy continue without premium until the cash value can no longer cover monthly deductions A section 125 cafeteria plan may cover which of these expenses - --Health insurance premiums An insurance producer tells a life insurance applicant that he has the authority to waive the medical exam that is normally required by the insurer with every application. The insurer may be required to accept the application without a medical exam due to the producers: - --Apparent authority A long-term care rider on a life insurance policy will pay benefits if the insured is diagnosed as chronically ill due to which of the following? - --Either a medical or cognitive (mental health) reason Which federal law group health plans and protects their enrollees - --A What type of state regulation gives a person in poor health or with a pre- existing condition the opportunity to buy health insurance - --Guaranteed issue With certain limitations a policyowner may change all of the following in a life insurance policy, EXCEPT: - --The incontestability provision With certain limitations, a policyowner may change all of the following in a life insurance policy, EXCEPT: - --A

Where can a person set up a health care savings account (HSA) - --Financial institution Which statement about converting coverage under a children's term rider is correct - --Conversion is possible even if the child is uninsurable, and the converted policy coverage amount may be greater than amount provided under the rider Which of the statements regarding the replacement of a life insurance policy is correct - --Replacing a policy will require the insured to go through a new contestability The commissioner issued a cease and desist order against Nether Insurance Company for committing certain practices when settling claims. Nether ignores the order. The commissioner may refer to which of the following for enforcement. - --State attorney general Which type of group health insurance plan bases premios and benefits in the claim experience of similar groups in the region - --Community-rated plan Which of the following explains why the human life values approach to deter main insurance needs is rarely used today - --It doesn't factor in all that it takes to secure a family's financial futures For tax purposes, a self-employed person includes all the following, EXCEPT: - -- An incorporated business owner Which policy requires the insurer to give the insured the forms necessary to file a claim - --Claim forms

The intoxicate and marítima provision let's an insurer deny a claim if - --A loss result from intoxication or use of non-prescribed narcotics When Matthew met with a potential client, he used a life insurance illustration to show how the policy's cash value would grow over the clients lifetime. Matthew could include all of the following in the illustration without violating Texas regulations EXCEPT: - --As statement that the policy is type of investment and saving plan Annuity contracts include a provision to pay a death benefit if the owner or annuitant doesn't before the contract annuitizes. What does this death benefit typically equal - --Either the contract's accumulated valued or the amount of premium the owner invested whichever is greater The purpose of policy exclusions is to specify: - --Condiciones that the policy does not cover An insured medical expense plan requires the insured to pay the medical car provider for each service rendered. The insurer then reimburses the insured. On what basis are benefits paid - --Free-for-service Which of the following correctly describes the disability income benefit rider availability with life insurance policies - --It pays a monthly income de terminated by a formula specified in the policy if the insured becomes disabled, without impacting the policy's cash value or face amount Te Generic Informetion Nondiscrimimation Act(GINA) essentially does which of the following - --It prohibits insurance companies from discrimination on the basis of information delivered through a genetic test

JOHN a Tex resident, is covered under a credit life insurance policy while he pays off a car loan. Coverage is paid through December, when his loan is scheduled to be paid. If JOHN pays off the car loan is September (3 months early) which of the following descuwhat the very life insurance company must do with reap to a premium refund - --It must refund the premium for the thee- month period following the date JOHN paid off the loan Provider operated by an organization That has a representative form of leadership, operates on lodge system, and exist solely for the benefit of its member and their beneficiaries is called a - --Risk retention group Which of the following is correct about the HMO claims process - --Members no not need to Sumit claims forms for services provided within the network Life insurance is commonly used for all the following needed EXCEPT - --To save for a new car in several years Which association protects owners of life and health insurance policies issued by insurance who become financially unable to pay claims and benefits - --Life, Accidents, Health and Hospital Service Insurance Guaranty Association Which of the following statements regarding the taxation of deaf benefits dead paid from a group life insurance plan is correct - --The death benefits is income tax free, but interest earned on found left with the insurer under a settlement option is taxable in the year earned Besides select policy anniversary dates, a life insurance guaranteed insurability rider usually permits special alternative option dates that typically include all the following, EXCEPT - --The policyowner's loss of job Loss of a job is generally not a qualifying special event

What is the mathematical concept of probability that helps insurance estimates the statistics likelihood of mortality or morbidity losses at any given age - --Law of large number Medicare Part B benefits exclude coverage for - --G All of the following statements about indexed life insurance are correct EXCEPT

• --Vaccinations In What form does the MIB present it's information to insurance - --Memetic codes, indicating risk identified in previous applications, that are communicated electronically Which of the following types of qualified retirement plan can include life insurance in the plan funding - --With respect to annuities, the basic purpose for the exclusion ratio is to Which of the following distribution a sum of money regularly, starting very shortly after they are bought - --Retirement annuity Immediate annuities distribute a sum of money regularly, starting very shortly after they bought All the following regarding the " spendthrift clause" of life insurance policy are correct EXCEPT - --The spendthrift clauses keeps benefits from claiming any death benefits until the insurer checks their personal and business credit history

Alice Owen a long-term Carr policy, Her return of premium option allows her to have a portion of the premium - --Paid to her car estate or a named beneficiary when she dies A return of premium option in a LTC policy return a portion of the premium paid for the coverage to the insured dies. The amount of the returned premium depends on whether the insured used the policy's benefits and if so, to what extent. Structured settlement most commonly use - --Immediate fixed annuities Which of the following must HMO members to receive covered care - --HMO's network of providers and caregivers HMOs must provide their subscribers (enrollees) with evidence of coverage, which must include all the following EXCEPT - --H If a Social Security benefits recipients has income from other sources, including wages and investment earnings, what percentage of Social Security benefits exceeding a combined income threshold may be income taxable - --Anywhere from 50% to 85 percent of Social Security benefits will be subject to income taxation A Medical Expense Policy covers the cost of health care services delivered according to - --The plan or policy Care plan combines the features of others plans - --POS plan Points-of-service (POS) plan combine that the cost controles of an HMOS with the flexibility that a preferred provider organization (PPO) and traditional

medical insurance policy have with respect to the selection of health care providers How many Social Security credits must a worker earn to qualify for Social Security disability benefits - --40 credits A worker becomes fully insured and eligible for all Social Security benefits (including disability benefits) with 40 credits XYZ insurance has been changed with unfairly discrimination among insurance. Which of the following practices in unfair discrimination - --XYZ changed two individual insured of the same class and risk different premium for life insurance policies based on where they lived and their ethnicities When an applicant applies for insurance, a producer is Not required to - -- determine the premium rate SHELLY is an agent and has been misrepresentation the term of the policies that she sell in order to boost her commissions. When the Texas Deparment of Insurance discovers her actions, it can do all of the following EXCEPT - --being criminal proceedings against her If the Tecas Department of insurance discovers that Shelly is engaging in fraudulent acts, its can refer attorneys and United State attorneys Which statement about group health insurance is true - --Insurers may impose restrictions and exclusions on individual and group policies.

Mary lost her job on June 15. She wants to convert her group life insurance policy to an individual policy. To do so Mary must apply for a conversion policy buy - --July 16 Which of the following is Not correct about the income tax implications of the premium paid and benefits received under a medical expense insurance policy

• --Benefits are added to gross income Because Medical expense insurance policy benefits are not added to gross income and are not taxed. In a major medical insurance plan with a deductible and a 80/20 coinsurance requirement, how much of the covered expenses will insured pay - --20 percent of all expenses after paying the deductible All of the following Statements about the fixed amount life insurance settlement option are correct EXCEPT - --Payments must be made on a monthly basis. How does the conformity with state statues provision resolve provisions in a policy they conflict with the laws of the insured'd state. - --The policy will be automatically amended to comply with the laws of the insured's state Which type of health insurance plan is particularly suitable for the senior insurance market - --Medical plans Which optional provision limits the total coverage that a single insurance assumes with respect to any one insured, regardless of the number of policies the insured issued to this person - --Other insurance in this insurer

Advertisement for indeterminate premium whole life policies sold in Texas must prominently set forth all the following terms EXCEPT - --The fact the non guaranteed maximum premium can never be changed. Because Advertisements for indeterminate premium life policies must display the fact that maximum premium in not guaranteed and may be changed. JEFF graduated from college two years ago and wants to work in the insurance industry as a life and health insurance counselor. His mentor advises him that he must - --Pass an exam cornering the basic of life and health insurance, business insurance, and state planning, among other topics. Because To receta life health insurance counselor license, JEFF must pass and examination that covers topics such as the fundamentals of life and health insurance, financial and economics, and business insurance and estate planning. Janet has been continuously licensed as an agent in Texas for the past 25 years. Her friend, Steven, is a nonresident licensee in Texas and every year completes his state's continuing education requirements. When they ask you for advice on meeting the Texas continuing education requirements, you inform them that - --Neither Steve nor Janet needs to comply with Texas's continuing education requirements. Who would NOT be eligible for Medicare enrollment - --A person under age 65 who has received Social Security disability benefits for 6 months Frank, and aplican for life insurance who is a substandard risk, can expect to pay a premium that is best described as which of the following - --Generally higher than for a standard risk.

Because An applicants who represents a substandard risk will pay a higher premium to offset the higher risk. Bob bought a universal life insurance policy with a $100.000 stipulated amount and chose an Option 2 (increasing) death benefits. At his death ten years later, the policy's cash value had increased to 50.000 what will his beneficiary receive. - --$150. Because UL death benefits Option 2 pays an increasing death benefits equal to a level net amount at risk plus the cash value. The beneficiary will get $150, (the $100.00 specified amount plus $50.000 increase in cash value) Bob bought a $100.000 ten-year level term Insurance policy on March 1,2012. What will happen if he does on April,2020 - --Bob's benefits will not pay any benefits. Because Bobs's $100.000 ten-year level term policy gives him level $100.000 of coverage during the ten years coverage period, through March 1,2020, IF Bob's dies after the ten-years period, the policy will have expire and no benefits will be payables. What is the only restriction on naming an annuitant - --The annuity must be a natural person. An insurance incurs $7,000 in cover medical expenses. Her comprehensive major medical policy requires her to pay $500 of those espeses before the poly will pay a benefits based on the remaining $6.500. What kind of deductible does the insured have? - --Flat deductible Which of the following of health insurance based benefits on the indemnification of the insured - --basic medical expenses insurance.

Because Medical expenses (indemnity) insurance is the traditional form of health care coverage based on indemnification of the insured. What type of life company is owned by the policyholders - --Mutual company. Because Mutual companies are owed by the policy owners. These companies issue participating life insurance policies that distribute excess premium benefits n the form of dividends. The basic purpose for the re-entry option with a renewable term life insurance policy is to let the policyowner - --renew the policy at lower current rates rather than guaranteed renew rates. Because to get the lower current (" attained age') rate they is the feature of the re-entry option. The insured must prove insurability at the time of renewal or at periodic intervals throughout the policy's term ÉRISA does NOT regulate group health insurance plans with respect to - -- Promoting the sponsor's best interest. Which of the following best explains why. Sección 1035 of Tax Code does NOT permit a tax-free exchange of an annuity for a life insurance policy - --Allowing a tax-free exchange against an annuity for life insurance would enable taxable annuity gain to escape taxation vía the life insurance death benefits Under a survivor life insurance policy, when does the insurer pay the dead benefits - --Up on the death of the insured who dies second

In setting premiums for a new policy, when do actuaries assume those premiums will be paid - --They will Be paid in full at the beginning of the policy year Which of the following will happen if a traditional IRA owner dies before all of the funds in his or her account have been paid out - --H Jessica, age 25, buys a $100,000 life insurance policy. The initial premium is lower than straight whole life rates and increases each year for the first ten years of the policy period. After that, the premium levels off and stays at that amount for the life of the policy. What type of policy does Jessica own? - -- graded premium whole life All the following are types of riders that are available with most types of life insurance policies EXCEPT - --Guaranteed dividend rider Which is NOT a standard renew abilities provision - --Optionally cancelable Because the noncancellable, guaranteed renewable, conditionally renewable, optionally renewable, and cancelable provisions define the right to renew a health insurance policy. Ginny's medical plan provides coverage for the newborn children from their date of birth. She adopts a 5-year-old child on July 1. What benefits is she entitled to - --Automatic coverage for the first 31 years following adoption, after which Jenny must pay a premium. Under Texas law, an individual life insurance policy may, but is Not required to, contain a(n) - --Accelerated benefits provision

What may an insurance cancel either whole life or term iLife insurance - --The insurer may cancel both types of policies if the policyowner does not pay the premiums Because the insurer may cancel either type of life insurance policy if the policyowner does not pay premiums Which of the following will happen if the outstanding balance of whole life insurance policy loan, including accrued interest, ever exceeds the policy's cash value - --The insurer will cancel the policy The time limit on certain defenses provision in a health insurance policy is like which provision in a life insurance policy - --Incontestable clause Because the time limit on certain defenses provision is like the incontestable clause in life insurance A producer who detect inconsistent that lead her to suspect the claimant is making a false claim for benefits is required to - --Report the suspicions to TDI within 30 days From an insurance perspective, underwriting is best defined as - --The process of determining if an applicant is an insurable risk As a contract, health insurance policy requires all of the following elements EXCEPT - --A deadline Which of the following is NOT an allowance basis for excluding coverage under a long-term care policy - --Alzheimer's disease

Which statement describes the "pool of money" approach to benefits under a Long-term care insurance policy - --Benefits are defined as a total sum of money from which money can be drawn in any amount for as long as the money lasts Which is the amount that is paid for dismemberment under an accident death and dismemberment (AD&D) insurance policy - --Capital sum In a third- party life insurance contract , the parties to contract are the - --The owner, the insured, and the insurance company Because two parties in a standard two-party insurance contract are the owner and the insurance company. In a third-party contract, the owner and the insured are different people. Which statement describes the tax treatment of premium for business disability buy-out insurance - --Premium are not deductible, and benefits are not taxed Which statement correctly describes the income tax treatment of employer- funded group life insurance coverage on a covered employee - --The value of coverage exceeding $50.000 is taxable to the employee; below that, it is tax free In a participating life insurance pays, the insurance company pays the policyowner a dividend out of which of the following - --The insurer's divisible surplus A notice of claims tell the insurer that the insured - --Will make a claim and needs the necessary claims forms

Which of the following statements regarding life insurance policy cost comparison methods is correct - --There are two types, the traditional net cost Metodo and the interest-adjusted net costs method, and the interest-adjusted net cost method is most commonly used today JANET is licensed life insurance agent in Texas and was so busy with her insurance practice that she forgot to complement all of her continuing education credits. How long is the grace period she has to make up the missing credits - --She cannot make up the missing credits Christina lives in a state that prohibits medical underwriting in the sale of health insurance. What she applies for an individual health insurance policy, the insurer - --Must use a single community rate to set the premium Ben owns a $100.000 policy on his life, which sell to his younger brother, Bart, for $50.000 Bart names himself beneficiary and pays the policy's annual $1. premium. For years after the sale, Ben dies, and Bart receives the policy's $100.000 death benefits. Under the transfer-for-value rule, what is Bart's taxable "gain" on the policy - --$44, Because, Bart's gain in the policy is $44.000: the $100.000 death benefits less the $50.000 porches price and $6.000 premium paid Under the Age Discrimination in Employment Act, an employer that reduces group health benefits for older employees must: - --maintain equal contributions for all employees Because the cost of reduced benefits for older employees is similar to the cost of full benefits for younger workers. Therefore, the employer must maintain equal contribution for all employees.

Which of the following statements about insurance executives bonus plans is correct - --The portion of the premium paid by the employer can be deducted by the employer and is treated as taxable income to the executive Under an executive bonus plan, the portion of the premium paid by the employer is taxable income to the executive and deductible by the employer Which is NOT a type a basic medical expense policy - --lab expense policy If an applicant for insurance unintentional misstates her age on her life insurance application, what will the insurer do if this is discovered after the end of the contestability period - --The insurer will re-calculate the death benefits Medical expenses insurance plans are divided into which two clases - -- Indemnity plans and managed care plans Ann wants to replace her existing Medicare supplements policy with another policy because she is not satisfied with its cost and the type of coverage provided. In this case, her agent Henry must: - --Provide a notice regarding replacement to Anna stating that there will be no duplication of coverage The flat benefits amount for partial disability is usually what percent of the full disability benefits - --50 percent Which product supplements Medicare buy offerings benefits delivered through a network of health care providers - --Medicare SELECT plan Which of the following types of life insurance is the least expensive way to provide mortgage loan protection - --Decreasing term insurance

In Texas, new enrollment to an HMO who do not choose a primary care physician with an established period of time can have their coverage cancelled how many days following written notice by the HMO - --30 days Because Failure of the subscriber to establish a primary care physician (PCP) relationship within an established period can result in cancellation after 30 day's written notice Which of the following correctly describes the two basic categories of life insurance settlement options - --Those without a life contingency and those with a life contingency Adam is Medicare beneficiary and enrollment in his state's Medicare program. When he submits a claim for covered services to both, how will Medicare and Medicare pay the claims - --Medicare will be the primary insurance, and Medicaid will be the secondary insurer Because Medicare is the primary insurer, Medicaid is the secondary insurer Reimbursement health insurance policies, in contract to valued health insurance policies, pay benefits based on - --The cost of the medical care received A business offers a group disability income plan pays the premium. If an employee suffers a disabling injury, the benefits paid to the employee will be - --Taxable income to the employee Joe is employed by Delta Motors, Inc. He participates in Deltas,s group health insurance plan for employees. What should this plan be considered - --Joe's primary plan

In cases where an existing life insurance policy is going to be replaced by new life insurance policy, the producer must do all the following EXCEPT - --Sign a form assuming full responsibility for any consequences hay may result from the replacement When a person applies for Medicaid, the limits and the types of income and assets counted vary depending on: - --where the applicant has a spouse who needs support l What happens to a group health insurance plan when members leave the group - --Nothing will happen Which statement best describes the purpose for a business owning a key person disability income policy - --provide the businesses with funds to use for any purpose upon a key employee's disability When must insurable interest exist for a life insurance contract to be valid? - -- It is only necessary for insurable interest to exist at the time applicant applies for a life insurance contract Under standard exclusion, must insurers would deny coverage of which of the following - --Someone serving as an aircraft member A policyowner can access the cash value of many life insurance policies trough withdrawals, loans, or policy surrender. Which of the following describes the ability to easy convert life insurance into cash - --liquidity All of the following statements regarding a variable annuity's assumes interest rate(AIR) are correct EXCEPT - --if the actual return is greater than the AIR, payments will decrease

All the Following uses for life insurance in a business represent a valid insurance interest, EXCEPT - --Life insurance purchased on an important customer to make up for the financial losses that might occur when that customer dies! In the purchase of a life insurance contract, the applicant's considerations consist of - --the signed application and the first premium Because the consideration policyowner give insurers includes the application with the representations it contains and the first premium Which insurance company functions calculates company mortality and morbidity rates as well as the dividends on participating life insurance policies - --actuarial division If a permanent life insurance policy lapses and the owner does NOT select a non forfeitures option insurance will automatically - --apply the extended term insurance option An insurance's record of complaints must include all of the following information EXCEPT - --The commissions paid on policies for which companies were received Tax law considers any limited payment life insurance policy that is paid-up in seven years or less to be which of the following - --a modified endowed contract Because Life insurance policies that are paid-up in seven years or less are modified endowment contracts (MECs), which means that they lose some of the tax advantages usually enjoyed by life insurance policies

Which health insurance policy provides income when disability keeps the insured from working - --disability income policy An agent commissions on Medicare supplement policies in ten first year CANNOT exceed what percent of commissions in the second year - --200 percent Under a policy's of payment provision, what is the first thing an insurer tries to do with the death benefits if there is no valid beneficiary available - --The insurer looks for a blood relative or someone with a valid claims as the new beneficiary Because in these cases, the insurer name blood relative or someone with a valid claim as the new beneficiary A deferred annuities rider that lets the annuity owner commit only part of the annuity's funds providing guaranteed lifetime income, leaving the remainder available for withdrawal at the owner's discretion, is called a: - --Guaranteed income rider When does a waiver of premium rider excuse the insured from paying the policy's premium? - --When the insured is totally disable Because, a waiver of premium rider excuses the insured form paying the policy's premium during periods of total disability. The insured must pay the premium during the elimination period. If, after the period, the insured remains disabled, the waver will be effective back to the first day of disability. All the following statements regarding withdrawals from q universal life policy are correct EXCEPT - --Policy loans are not permitted with universal life insurance policies

Because. Policy loans are permitted with universal life policies as well as traditional permanent life policies. Universal life insurance policies almost permit partial surrenders. The death benefits of a fixed deferred annuity equals - --The contract's accumulated value when dead occurs From an insurance perspective, all the following statements regarding risk and loss are correct EXCEPT - --Only speculative risk is insurable All the following statements regarding perils are hazards are correct EXCEPT - -- Smoking cigarettes is an example of peril Because a peril is the event that insurance protects against. Smoking is a moral hazard that increases the chance of encountering the peril of death and illness Lucy is applying for an individual health insurance policy and disclosed that she is diabetic, which is considered which of the following - --A physical hazard Because a phisical hazard is a physical characteristic, such as diabetic, that increases the chance of loss From an insurance perspective, the term "loss exposure" means - --The extent to which an insurer is subject possible to loss Because all called loss exposure, exposure is the state of being subject to a posible loss. The extent of loss exposure on the premium it changes