Texas Life And Health Insurance Exam
Questions and Answers Graded A+
In Texas, which of these statements regarding the Suicide clause is True? - ANSWER-
An Insurer may not use suicide as a defense against payment after the second year
S owns a life insurance policy with cash values that fluctuate according to the
underlying investment performance of common stocks. Which of these policies does S
own? - ANSWER-Variable Whole Life
The percentage of an individual's Primary Insurance Amount (PIA) determines the
benefits paid
which of the following programs? - ANSWER-Social Security Disability Income
What type of life insurance incorporates flexible premiums and an adjustable death
benefit? - ANSWER-Universal Life
Which of the following policy provisions prohibits an insurance company from
incorporating external
documents into an insurance policy? - ANSWER-Entire Contract
Which of the following actions may NOT be taken by an insurance company to insure a
substandard
applicant for disability income coverage? - ANSWER-Lengthen the contestability period
The provision in a Group Health policy that allows the insurer to postpone coverage for
a critical
illness 30 days after the policy's effective date is referred to as the: - ANSWER-Waiting
Period
K is shopping for a permanent life insurance policy that will offer her the MOST
protection per dollar of
annual premium. Which of these policies best fits her needs? - ANSWER-Straight life
All of these statements about the Commissioner of Insurance are true EXCEPT -
ANSWER-The Commissioner must be elected
The _________ policy clause identifies which losses resulting from an accident or
sickness are insured by which policy? - ANSWER-Insuring
What group term life feature permits an individual to depart from the group and continue
to be covered
without providing evidence of insurability? - ANSWER-Conversion
,Which of the following characteristics is associated with a large group disability income
policy? - ANSWER-No medical underwriting
What is the initial requirement for an insured to become eligible for benefits under the
Waiver of
Premium provision? - ANSWER-Insured must be under a physician's care
Q applied for life insurance and submitted the initial premium on January 1. The policy
was issued
February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and
returns the
policy February 13. How will the insurer handle this situation? - ANSWER-Policy was
returned within the free-look period, premium will be fully refunded
T was insured under an individual Disability Income policy and was severely burned in a
fire. As a
result, T became totally disabled. The insurer began making monthly benefit payments,
but later
discovered that the fire was set by T in what was described as arson. What actions will
the insurer
take? - ANSWER-The insurer will rescind the policy, deny the claim, and recover all
payments made
Variable annuities may invest premiums in each of the following, EXCEPT: - ANSWER-
Insurer's corporate business account
Which of the following is TRUE about a qualified retirement that is "top heavy"? -
ANSWER-More than 60% of plan assets are in key employee accounts
A level premium indicates: - ANSWER-The premium is fixed for the entire duration of
the contract
P died five years after purchasing a life policy. While investigating the policy material
misrepresentations made by P during the application. What process insurer take? -
ANSWER-Beneficiary will be paid the Death Benefit
In Texas, how long must a policy be in force before an insurance company must pay
death benefits for
suicide? - ANSWER-2 years
D owns a Whole Life policy that was purchased 10 years ago. If the premium payments
suddenly stop
and D takes no additional action, which Nonforfeiture Option will the insurer likely
proceed with? - ANSWER-Extended term
, 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 for the overall risk
class? - ANSWER-Guaranteed renewable
An applicant MUST receive an Outline of Coverage when an application is taken for
a(n) - ANSWER-Medicare Supplement policy
The cash value in a(n)
Life policy may fluctuate to reflect changing assumptions
regarding mortality cost, interest, and expense factors. - ANSWER-Universal
The Notice of Claims provision requires a policyowner to: - ANSWER-notify an insurer
of a claim within a specified time
Towns an Accident & Health policy and notifies her insurance company that she has
chosen a less
hazardous occupation. Under the Change of Occupation provision, which of the
following actions may her insurance company take? - ANSWER-Increase he policy's
coverage amount
In an insurance contract, the insurer is the only party who makes a legally enforceable
promise. What
kind of contract is this? - ANSWER-Unilateral
When is the face amount of a Whole Life policy paid? - ANSWER-When the insured
dies or at the policy's maturity date, whichever happens first
Which of the following actions is NOT possible with a Universal Life policy? - ANSWER-
Premiums may be applied as a credit against income tax
Which of the following will a Long Term Care plan typically provide benefits for? -
ANSWER-home health care
Which health policy clause stipulates that an insurance company must attach a copy of
the application to the policy to ensure that it is part of the contract? - ANSWER-Entire
Contract
D is the policyowner and insured for a $50,000 life insurance policy. The beneficiary is
D's wife. D and
his wife divorce and D remarries, transferring ownership of his policy to his new wife. If
D dies without
making any further changes, to whom will the policy proceeds be paid to? - ANSWER-
Ex-wife
Questions and Answers Graded A+
In Texas, which of these statements regarding the Suicide clause is True? - ANSWER-
An Insurer may not use suicide as a defense against payment after the second year
S owns a life insurance policy with cash values that fluctuate according to the
underlying investment performance of common stocks. Which of these policies does S
own? - ANSWER-Variable Whole Life
The percentage of an individual's Primary Insurance Amount (PIA) determines the
benefits paid
which of the following programs? - ANSWER-Social Security Disability Income
What type of life insurance incorporates flexible premiums and an adjustable death
benefit? - ANSWER-Universal Life
Which of the following policy provisions prohibits an insurance company from
incorporating external
documents into an insurance policy? - ANSWER-Entire Contract
Which of the following actions may NOT be taken by an insurance company to insure a
substandard
applicant for disability income coverage? - ANSWER-Lengthen the contestability period
The provision in a Group Health policy that allows the insurer to postpone coverage for
a critical
illness 30 days after the policy's effective date is referred to as the: - ANSWER-Waiting
Period
K is shopping for a permanent life insurance policy that will offer her the MOST
protection per dollar of
annual premium. Which of these policies best fits her needs? - ANSWER-Straight life
All of these statements about the Commissioner of Insurance are true EXCEPT -
ANSWER-The Commissioner must be elected
The _________ policy clause identifies which losses resulting from an accident or
sickness are insured by which policy? - ANSWER-Insuring
What group term life feature permits an individual to depart from the group and continue
to be covered
without providing evidence of insurability? - ANSWER-Conversion
,Which of the following characteristics is associated with a large group disability income
policy? - ANSWER-No medical underwriting
What is the initial requirement for an insured to become eligible for benefits under the
Waiver of
Premium provision? - ANSWER-Insured must be under a physician's care
Q applied for life insurance and submitted the initial premium on January 1. The policy
was issued
February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and
returns the
policy February 13. How will the insurer handle this situation? - ANSWER-Policy was
returned within the free-look period, premium will be fully refunded
T was insured under an individual Disability Income policy and was severely burned in a
fire. As a
result, T became totally disabled. The insurer began making monthly benefit payments,
but later
discovered that the fire was set by T in what was described as arson. What actions will
the insurer
take? - ANSWER-The insurer will rescind the policy, deny the claim, and recover all
payments made
Variable annuities may invest premiums in each of the following, EXCEPT: - ANSWER-
Insurer's corporate business account
Which of the following is TRUE about a qualified retirement that is "top heavy"? -
ANSWER-More than 60% of plan assets are in key employee accounts
A level premium indicates: - ANSWER-The premium is fixed for the entire duration of
the contract
P died five years after purchasing a life policy. While investigating the policy material
misrepresentations made by P during the application. What process insurer take? -
ANSWER-Beneficiary will be paid the Death Benefit
In Texas, how long must a policy be in force before an insurance company must pay
death benefits for
suicide? - ANSWER-2 years
D owns a Whole Life policy that was purchased 10 years ago. If the premium payments
suddenly stop
and D takes no additional action, which Nonforfeiture Option will the insurer likely
proceed with? - ANSWER-Extended term
, 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 for the overall risk
class? - ANSWER-Guaranteed renewable
An applicant MUST receive an Outline of Coverage when an application is taken for
a(n) - ANSWER-Medicare Supplement policy
The cash value in a(n)
Life policy may fluctuate to reflect changing assumptions
regarding mortality cost, interest, and expense factors. - ANSWER-Universal
The Notice of Claims provision requires a policyowner to: - ANSWER-notify an insurer
of a claim within a specified time
Towns an Accident & Health policy and notifies her insurance company that she has
chosen a less
hazardous occupation. Under the Change of Occupation provision, which of the
following actions may her insurance company take? - ANSWER-Increase he policy's
coverage amount
In an insurance contract, the insurer is the only party who makes a legally enforceable
promise. What
kind of contract is this? - ANSWER-Unilateral
When is the face amount of a Whole Life policy paid? - ANSWER-When the insured
dies or at the policy's maturity date, whichever happens first
Which of the following actions is NOT possible with a Universal Life policy? - ANSWER-
Premiums may be applied as a credit against income tax
Which of the following will a Long Term Care plan typically provide benefits for? -
ANSWER-home health care
Which health policy clause stipulates that an insurance company must attach a copy of
the application to the policy to ensure that it is part of the contract? - ANSWER-Entire
Contract
D is the policyowner and insured for a $50,000 life insurance policy. The beneficiary is
D's wife. D and
his wife divorce and D remarries, transferring ownership of his policy to his new wife. If
D dies without
making any further changes, to whom will the policy proceeds be paid to? - ANSWER-
Ex-wife
