Texas Life and Health Insurance Exam Questions & Answers 2024, Exams of Nursing

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Texas Life and Health Insurance Exam Questions & Answers 2024 What type of reinsurance contract involves two companies automatically sharing their risk exposure? - Answer ✓✓Treaty The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called - Answer ✓✓reserves When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have - Answer ✓✓insurable interest Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called - Answer ✓✓representations The part of a life insurance policy guaranteed to be true is called a(n) - Answer ✓✓warranty Which of these is NOT a type of agent authority?

Express Implied Principal Apparent - Answer ✓✓Principal The Consideration clause of an insurance contract includes - Answer ✓✓the schedule and amount of premium payments E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? - Answer ✓✓In this situation, the proceeds from E's life insurance policy will go to F. Which term defines the legally enforceable promise in an insurance contract by the insurer? - Answer ✓✓Unilateral

Which of the following actions require a policy owner to provide proof of insurability in an Adjustable Life policy? - Answer ✓✓increase face amount When a policy owner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply? - Answer ✓✓Conversion provision What type of life insurance are credit policies issued as? - Answer ✓✓Term How long does the coverage normally remain on a limited-pay life policy? - Answer ✓✓age 100 All of these statements about Equity Indexed Life Insurance are correct EXCEPT

• Cash value has a minimum rate of accumulation
• If the gain on the index goes beyond the policy's minimum rate of return, the cash value will mirror that of the index
  • The premiums can be lowered or raised, based on investment performance

• Tied to an equity index such as the S&P 500 - Answer ✓✓The premiums can be lowered or raised, based on investment performance What type of life insurance incorporates flexible premiums and an adjustable death benefit? - Answer ✓✓Universal Life What type of life policy covers 2 lives and pays the face amount after the first one dies? - Answer ✓✓Joint Life Policy Life insurance that covers an insured's whole life with level premiums paid over a limited time is called - Answer ✓✓Limited-Pay Life What kind of life insurance product covers children under their parent's policy? - Answer ✓✓Term rider P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase? - Answer ✓✓Family Maintenance policy Which of the following statements about a Variable Whole Life policy is CORRECT?
• It provides a minimum guaranteed Death benefit

T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this? - Answer ✓✓Renewable 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? - Answer ✓✓Decreasing term policy G purchased a Family Income policy at age 40, The policy has a 20 - year rider period. If G were to die at age 50, how long would G's family receive an income? - Answer ✓✓10 years 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 - Answer ✓✓the cost When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n) - Answer ✓✓exclusions Which statement regarding the Misstatement of Age provision is considered to be true?

• Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered
• Requires that a new policy must be applied for if a misstatement of age is found on the current policy
• Misstatement of Age provision is valid only during the contestable period
• Insurer may void the policy if a misstatement of age is discovered - Answer ✓✓Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions? - Answer ✓✓Reinstatement provision 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? - Answer ✓✓50, D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy

• Cash Surrender
• Life Income - Answer ✓✓life income When can a policyowner change a revocable beneficiary? - Answer ✓✓anytime 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? - Answer ✓✓daughter 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?
• Answer ✓✓revocable K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, where will the money go? - Answer ✓✓To P's estate

A policyowner's rights are limited under which beneficiary designation?

• Answer ✓✓Irrevocable A level premium indicates - Answer ✓✓the premium is fixed for the entire duration of the contract On a life insurance policy, who is qualified to change the beneficiary designation? - Answer ✓✓Policyowner J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct?
• The gross premium is higher on a monthly payment mode as compared to being paid annually
  • The gross premium is lower on a monthly payment mode as compared to being paid annually
  • The cash value from a life policy paid on a monthly basis builds quicker than one paid on an annual basis
  • The face amount of a life policy paid on a monthly basis is higher than one paid on an annual b - Answer ✓✓The gross premium is higher on a monthly payment mode as compared to being paid annually

What type of group plan involves employees sharing the cost? - Answer ✓✓contributory plan A noncontributory group term life plan is characterized by - Answer ✓✓the entire cost of the plan is paid for by the employer W is a 39 - year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n)

• Flexible Premium Deferred annuity
  • Variable annuity
• Immediate annuity
  • Straight Life annuity - Answer ✓✓Immediate annuity T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this? - Answer ✓✓Life Annuity with Period Certain

The annuity that represents the largest possible monthly payment to an individual annuitant is a(n) - Answer ✓✓Straight Life annuity Which of these statements concerning an Individual Straight Life annuity is accurate? - Answer ✓✓Payments are made to an annuitant for life Which type of contract liquidates an estate through recurrent payments?

• Answer ✓✓Annuity P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase? - Answer ✓✓Deferred One becomes eligible for Social Security disability benefits after having been disabled for - Answer ✓✓5 months What is Old Age and Survivors Health Insurance (OASDHI) also known as? - Answer ✓✓Social Security Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits? - Answer ✓✓ 5

The individual who provides general medical care for a patient as well as the referral for specialized care is known as a - Answer ✓✓Primary Care Physician The health insurance program which is administered by each state and funded by both the federal and state governments is called - Answer ✓✓Medicaid Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures? - Answer ✓✓Commercial insurer What does Medicare Parts A and B cover? - Answer ✓✓Part A covers hospitalization; Part B covers doctor's services Medicare - Answer ✓✓is a hospital and medical expense insurance program Medicaid was designed to assist individuals who are - Answer ✓✓below a specific income limit Which of the following does Social Security NOT provide benefits for?

• Survivorship

• Dismemberment
• Disability
• Retirement - Answer ✓✓Dismemberment In order to establish a Health Reimbursement Arrangement (HRA), it MUST - Answer ✓✓be established by the employer All of the following are limited benefit plans EXCEPT
• cancer policies
• life insurance policies
• dental policies
• critical illness policies - Answer ✓✓life insurance policies K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income? - Answer ✓✓Disability Income If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses? - Answer ✓✓Medicare Supplement

An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the - Answer ✓✓insurer dates the policy 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? - Answer ✓✓Waiver of Premium rider Which of the following are NOT managed care organizations? - Answer ✓✓Medical Information Bureau (MIB) In general, what percent of personal health insurance premiums is deductible for federal income tax purposes? - Answer ✓✓100% A life insurance illustration is NOT required to include the - Answer ✓✓company's mortality table An insurance company must do which of the following to terminate an agent's appointment? - Answer ✓✓Send notice of the termination to the Texas Department of Insurance An organization that solicits insurance only among its members is known as a - Answer ✓✓fraternal benefit society

Before holding a hearing regarding an agent's unfair or deceptive practice, the Insurance Commissioner MUST give how many days notice? - Answer ✓✓30 days A newly licensed General Lines agent must complete a MINIMUM of how many hours of continuing education within 24 months after initial license? - Answer ✓✓24 hours Insurance agent licenses normally must be renewed every - Answer ✓✓ 2 years An insurance agent does NOT have fiduciary responsibilities to - Answer ✓✓other agents If an insurance company is organized under the laws of New Jersey and licensed to do business here, it is considered which of the following in Texas? - Answer ✓✓a foreign company In Texas, a domestic insurance company is defined as a company that - Answer ✓✓is incorporated and formed in Texas