Texas Life and Health Questions and
Answers Graded A+
The insuring clause - ANSWER-states the scope and the limits of coverage
An insurance company organized under New York laws and licensed to do business in
Texas is considered a(n) - ANSWER-foreign company
S, while in the process of converting her group life insurance to an individual policy,
dies. What happens to the claim her beneficiary submits? - ANSWER-Full benefits are
payable under the Master contract
Which type of renewability best describes a Disability Income policy that covers an
individual until the age of 65, but the insurer has the right to change the premium rate? -
ANSWER-Guaranteed Renewable
To terminate an agent's appointment, an insurance company must - ANSWER-send
termination notice to the Texas Department of Insurance
An insured covered by Accidental Death and Dismemberment (AD&D) insurance has
just died. What will happen if the primary beneficiary had already died before the
insured and contingent beneficiary? - ANSWER-proceeds will go to the contingent
beneficiary
A policy of adhesion can only be modified by whom? - ANSWER-the insurance
company
What should an insured do if the insurer does not send claims forms within the time
period set forth in a health policy's Claims Forms provision? - ANSWER-Submit the
claim in any form
Why would the Insurance Commissioner examine the records of an insurance
company? - ANSWER-to determine the solvency of the company
What kind of premium does a Whole Life policy have? - ANSWER-level
A license may be denied, suspended, or revoked if the licensee - ANSWER-is found
guilty of misrepresentation in obtaining the license
Generally, how long is a benefit period for a Major Medical Expense Plan - ANSWER-
one year
A potential client, age 40, would like to purchase a Whole Life policy that will
accumulate cash value at a faster rate in the early years of the policy. Which of these
,statements made by the producer would be correct? - ANSWER-20-pay life
accumulates cash value faster than Straight Life
After an insured gives notice of loss, what must he/she do if the insurer does not furnish
forms? - ANSWER-File written proof of loss
Which of these statements accurately describes the Waiver of Premium provision in an
Accident and Health Policy? - ANSWER-Premiums are waived after the insured has
been totally disabled for a specified time period
A foreign insurance company conducting insurance business in Texas - ANSWER-was
formed under the laws of another state
J chooses a monthly premium payment mode on his Whole Life insurance policy. Which
of these statements is correct? - ANSWER-The gross premium is higher on a monthly
payment mode as compared to being paid annually
Which of the following Life insurance policies combine term insurance with an
investment element? - ANSWER-Universal Life
What must the policyowner provide to the insurer for validation that a loss has occured?
- ANSWER-Proof of loss
A disability elimination period is best described as a: - ANSWER-time deductible
Which of these is NOT an example of doing insurance business? - ANSWER-selling
shares of stock
A policy loan is made possible by which of these life insurance policy features? -
ANSWER-cash value provision
Which Accident and Health policy provision addresses preexisting conditions? -
ANSWER-Time Limit on Certain Defenses
If an insured's age was misstated on a life insurance contract, the Misstatement of Age
provision requires that any death benefit payable would be - ANSWER-an amount that
the premiums would have purchased at the current age
The policy provision that entitles the insurer to establish conditions the insured must
meet while a claim is pending is: - ANSWER-Time Limit on Certain Defenses
Accidental Death coverage is provided to commercial airline passengers in which of the
following types of policies? - ANSWER-Blanket Accident policy
,C is trying to determine whether to convert her convertible term life policy to whole like
insurance using her original age or attained age. What factor would affect her decision
the most? - ANSWER-The cost
Which of the following is NOT included in an annuity contract? - ANSWER-AD&D rider
J's Major Medical policy has $2000 deductible and an 80/20 Coinsurance clause. If J is
hospitalized and receives a bill for $10,000, J would pay: - ANSWER-$3,600
(10000-2000)*20% + 2000
A student pilot can pay regular premium costs for her life insurance policy with the
addition of which of the following? - ANSWER-aviation exclusion
Dental care coverage is designed to cover the costs of all of the following EXCEPT: -
ANSWER-loss of income
Any changes made on an insurance application requires the initials of whom? -
ANSWER-applicant
A physician opens up a new practice and qualifies for a $7000/month Disability Income
policy. What rider would the physician add if he wants the ability to increase his policy
benefit as his practice and income grow? - ANSWER-Guaranteed Insurability Option
rider
A Medicare Supplement policy may be cancelled for which of the following reasons? -
ANSWER-the premium has not been paid by the insured
The provision that defines to whom the insurer will pay benefits to is called: - ANSWER-
Payment of claims
An example of false advertising would be - ANSWER-An insurer exaggerating its
dividends in a magazine advertisement
What is the purpose of the Time of Payment of Claims provision? - ANSWER-Prevents
delayed claim payments made by the insurer
Which of these is an element of a Variable Life Policy? - ANSWER-A fixed, level
premium
At what time must a policyowner have insurable interest on the insured in order for the
life policy to be valid? - ANSWER-at the time of application
Which of the following provisions guarantees that premiums will be waived if a Juvenile
Life policyowner becomes disabled? - ANSWER-Payor clause
, What action should a producer take if the initial premium is NOT submitted with the
application? - ANSWER-Forward the application to the insurer without the initial
premium
T is covered by two health insurance plans: a group plan through his employer and his
spouse's plan as a dependent. Under the Model Group Coordination of Benefits
provision, when T files a claim, his employer's plan is considered the: - ANSWER-
Primary carrier
S recently received a $500,000 lump sum retirement buyout from her employer. She
would like to buy an annuity that will immediately furnish her with a guaranteed income
for life. What type of annuity is best suited for her situation? - ANSWER-Single premium
Which of the following BEST describes a short-term medical expense policy? -
ANSWER-nonrenewable
Credit Life insurance is - ANSWER-insurance issued on a debtor to cover outstanding
loan balances
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called: - ANSWER-representations
Who is NOT required to sign a life insurance application? - ANSWER-beneficiary
N is covered by a Term Life policy and does not make the required premium payment
which was due August 1. N dies September 15. What action will the insurer take? -
ANSWER-claim will be denied
which of the following benefits is NOT required under a group health plan for drug and
alcohol treatment? - ANSWER-transportation to and from the treatment facility
T files a claim on his Accident and Health policy after being treated for an illness. The
insurance company believes that T misrepresented his actual health on the initial
insurance application and is, therefore, disputing the claim's validity. The provision that
limits the time period during which the company may dispute a claim's validity is called: -
ANSWER-Time limit on Certain defenses
Which of the following services is NOT covered under a hospitalization expense policy?
- ANSWER-surgeon fees
A new agent must complete at least _____ hours of continuing education within 24
months of initial licensure. - ANSWER-24 hours
Which of the following BEST describes how a Preferred Provider Organization (PPO) is
less restrictive than a Health Maintenance Organization (HMO) - ANSWER-more
physicians to choose from
Answers Graded A+
The insuring clause - ANSWER-states the scope and the limits of coverage
An insurance company organized under New York laws and licensed to do business in
Texas is considered a(n) - ANSWER-foreign company
S, while in the process of converting her group life insurance to an individual policy,
dies. What happens to the claim her beneficiary submits? - ANSWER-Full benefits are
payable under the Master contract
Which type of renewability best describes a Disability Income policy that covers an
individual until the age of 65, but the insurer has the right to change the premium rate? -
ANSWER-Guaranteed Renewable
To terminate an agent's appointment, an insurance company must - ANSWER-send
termination notice to the Texas Department of Insurance
An insured covered by Accidental Death and Dismemberment (AD&D) insurance has
just died. What will happen if the primary beneficiary had already died before the
insured and contingent beneficiary? - ANSWER-proceeds will go to the contingent
beneficiary
A policy of adhesion can only be modified by whom? - ANSWER-the insurance
company
What should an insured do if the insurer does not send claims forms within the time
period set forth in a health policy's Claims Forms provision? - ANSWER-Submit the
claim in any form
Why would the Insurance Commissioner examine the records of an insurance
company? - ANSWER-to determine the solvency of the company
What kind of premium does a Whole Life policy have? - ANSWER-level
A license may be denied, suspended, or revoked if the licensee - ANSWER-is found
guilty of misrepresentation in obtaining the license
Generally, how long is a benefit period for a Major Medical Expense Plan - ANSWER-
one year
A potential client, age 40, would like to purchase a Whole Life policy that will
accumulate cash value at a faster rate in the early years of the policy. Which of these
,statements made by the producer would be correct? - ANSWER-20-pay life
accumulates cash value faster than Straight Life
After an insured gives notice of loss, what must he/she do if the insurer does not furnish
forms? - ANSWER-File written proof of loss
Which of these statements accurately describes the Waiver of Premium provision in an
Accident and Health Policy? - ANSWER-Premiums are waived after the insured has
been totally disabled for a specified time period
A foreign insurance company conducting insurance business in Texas - ANSWER-was
formed under the laws of another state
J chooses a monthly premium payment mode on his Whole Life insurance policy. Which
of these statements is correct? - ANSWER-The gross premium is higher on a monthly
payment mode as compared to being paid annually
Which of the following Life insurance policies combine term insurance with an
investment element? - ANSWER-Universal Life
What must the policyowner provide to the insurer for validation that a loss has occured?
- ANSWER-Proof of loss
A disability elimination period is best described as a: - ANSWER-time deductible
Which of these is NOT an example of doing insurance business? - ANSWER-selling
shares of stock
A policy loan is made possible by which of these life insurance policy features? -
ANSWER-cash value provision
Which Accident and Health policy provision addresses preexisting conditions? -
ANSWER-Time Limit on Certain Defenses
If an insured's age was misstated on a life insurance contract, the Misstatement of Age
provision requires that any death benefit payable would be - ANSWER-an amount that
the premiums would have purchased at the current age
The policy provision that entitles the insurer to establish conditions the insured must
meet while a claim is pending is: - ANSWER-Time Limit on Certain Defenses
Accidental Death coverage is provided to commercial airline passengers in which of the
following types of policies? - ANSWER-Blanket Accident policy
,C is trying to determine whether to convert her convertible term life policy to whole like
insurance using her original age or attained age. What factor would affect her decision
the most? - ANSWER-The cost
Which of the following is NOT included in an annuity contract? - ANSWER-AD&D rider
J's Major Medical policy has $2000 deductible and an 80/20 Coinsurance clause. If J is
hospitalized and receives a bill for $10,000, J would pay: - ANSWER-$3,600
(10000-2000)*20% + 2000
A student pilot can pay regular premium costs for her life insurance policy with the
addition of which of the following? - ANSWER-aviation exclusion
Dental care coverage is designed to cover the costs of all of the following EXCEPT: -
ANSWER-loss of income
Any changes made on an insurance application requires the initials of whom? -
ANSWER-applicant
A physician opens up a new practice and qualifies for a $7000/month Disability Income
policy. What rider would the physician add if he wants the ability to increase his policy
benefit as his practice and income grow? - ANSWER-Guaranteed Insurability Option
rider
A Medicare Supplement policy may be cancelled for which of the following reasons? -
ANSWER-the premium has not been paid by the insured
The provision that defines to whom the insurer will pay benefits to is called: - ANSWER-
Payment of claims
An example of false advertising would be - ANSWER-An insurer exaggerating its
dividends in a magazine advertisement
What is the purpose of the Time of Payment of Claims provision? - ANSWER-Prevents
delayed claim payments made by the insurer
Which of these is an element of a Variable Life Policy? - ANSWER-A fixed, level
premium
At what time must a policyowner have insurable interest on the insured in order for the
life policy to be valid? - ANSWER-at the time of application
Which of the following provisions guarantees that premiums will be waived if a Juvenile
Life policyowner becomes disabled? - ANSWER-Payor clause
, What action should a producer take if the initial premium is NOT submitted with the
application? - ANSWER-Forward the application to the insurer without the initial
premium
T is covered by two health insurance plans: a group plan through his employer and his
spouse's plan as a dependent. Under the Model Group Coordination of Benefits
provision, when T files a claim, his employer's plan is considered the: - ANSWER-
Primary carrier
S recently received a $500,000 lump sum retirement buyout from her employer. She
would like to buy an annuity that will immediately furnish her with a guaranteed income
for life. What type of annuity is best suited for her situation? - ANSWER-Single premium
Which of the following BEST describes a short-term medical expense policy? -
ANSWER-nonrenewable
Credit Life insurance is - ANSWER-insurance issued on a debtor to cover outstanding
loan balances
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called: - ANSWER-representations
Who is NOT required to sign a life insurance application? - ANSWER-beneficiary
N is covered by a Term Life policy and does not make the required premium payment
which was due August 1. N dies September 15. What action will the insurer take? -
ANSWER-claim will be denied
which of the following benefits is NOT required under a group health plan for drug and
alcohol treatment? - ANSWER-transportation to and from the treatment facility
T files a claim on his Accident and Health policy after being treated for an illness. The
insurance company believes that T misrepresented his actual health on the initial
insurance application and is, therefore, disputing the claim's validity. The provision that
limits the time period during which the company may dispute a claim's validity is called: -
ANSWER-Time limit on Certain defenses
Which of the following services is NOT covered under a hospitalization expense policy?
- ANSWER-surgeon fees
A new agent must complete at least _____ hours of continuing education within 24
months of initial licensure. - ANSWER-24 hours
Which of the following BEST describes how a Preferred Provider Organization (PPO) is
less restrictive than a Health Maintenance Organization (HMO) - ANSWER-more
physicians to choose from
