Texas Life and Health Insurance Licensing

Texas Life and Health Insurance Licensing
Practice Test (Questions 1–50)
1. is emergency care covered for a member of an HMO?
a. How An HMO emergency specialist will cover the patient
b. A member of an HMO can receive care in or out of the HMO service
area, but care is preferred in the service area
c. A member of an HMO may receive care at any emergency facility, at
the same cost as if in his or her own service area
d. HMOs have salaried member physicians, but they do not cover
emergency care - ANSWER B. A member of an HMO can receive care
in or out of the HMO service area, but care is preferred in the service
area


2. Death benefits payable to a beneficiary under a life insurance policy are
generally
a. Subject to income taxation by the federal government
b. Exempt from income taxation if under $10,000
c. Exempt from income taxation if over $10,000
d. Not subject to income taxation by the federal government - ANSWER
D. Not subject to income taxation by the federal government


3. Which of the following best describes the aleatory nature of an insurance
contract?
a. Only one of the parties being legally bound by the contract
b. Ambiguities are interpreted in favor of the insured
c. Policies are submitted to the insurer on a take-it-or-leave-it basis
d. Exchange of unequal values - ANSWER D. Exchange of unequal values




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, 4. Which of the following is considered a presumptive disability under a
disability income policy
a. Loss of two limbs
b. Loss of an eye
c. Loss of hearing in one ear
d. Loss of one hand or foot - ANSWER A. loss of two limbs


5. An insured purchased a noncancelable health insurance policy 1 year ago.
Which of the following circumstances would NOT be a reason for the
insurance company to cancel the policy?
a. The insured reaches the maximum age limit specified in the policy
b. Within two years of the application, the insurer discovers a
misrepresentation
c. The insured is an accident and incurs a large claim
d. The insured does not pay the premium - ANSWER C. The insured is an
accident and incurs a large claim


6. When the insured selects the extended term nonforfeiture option, the cash
value will be used to purchase term insurance with what face amount?
a. The same as the original policy minus the cash value
b. Equal to the original policy for as long as the cash values will
purchase
c. In lesser amounts for the remaining policy term of age 100
d. Equal to the cash value surrendered from the policy - ANSWER B.
Equal to the original policy for as long as the cash values will
purchase


7. *What is the purpose of settlement options?
a. They are guarantees built into the policy
b. They guarantee a return of excess premiums

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, c. they provide the beneficiary the income he/she cannot outlive
d. Determines how the death benefit will be paid to the beneficiary -
ANSWER D. Determines how the death benefit will be paid to the
beneficiary


8. The premium charged for exercising the guaranteed insurability Rider is
based upon the insured's
a. Assumed age
b. Average age
c. Issue age
d. Attained age - ANSWER D. Attained age


9. Which of the following best describes the "first-dollar coverage" principle in
basic medical insurance?
a. The insured must first pay a deductible
b. The insurer covers the first claim on the policy
c. Deductibles and coinsurance are taxed first
d. The insured is not required to pay a deductible - ANSWER D. The
insured is not required to pay a deductible


10.Which of the following determines the cash value of a variable life policy?
a. The performance of the policy portfolio
b. The company's general account
c. The policy's guarantees
d. The premium mode - ANSWER D. The premium mode


11.An individual applied for an insurance policy and paid the initial premium.
The insurer issued a conditional receipt. Five days later the applicant had to



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