TEXAS LIFE AND HEALTH STATE EXAM
SIMULATER QUESTIONS WITH
COMPLETE SOLUTIONS
Bryce purchased a disability income policy with a rider that guarantees him the
additional amounts of coverage at predetermined times without requiring to provide
evidence of option of purchasing insurability . What kind of rider is this ? - Answer-
guaranteed insurability rider
In a qualified retirement plan , the yearly contributions to an employee's account : -
Answer-are restricted to maximum levels set by the IRS
Which tax would an IRA participant be subjected to on distributions received prior to age
59 1/2 ? - Answer-Ordinary income tax and a 10 % tax penalty for early withdrawal
An insurance agent has a fiduciary responsibility to all of the following EXCEPT -
Answer-other agents
Which of the following statements is true about most Blue Cross / Blue Shield
organizations ? - Answer-They are nonprofit organizations
Which of the following statements is CORRECT regarding the tax treatment of a lump -
sum payment paid to a life insurance policy's primary beneficiary ? - Answer-all
proceeds are income tax free in the year they are received
Group life insurance policies are generally written as : - Answer-annually renewable
term
Which of the following will a Long Term Care plan typically provide benefits for ? -
Answer-home health care
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
An insurance company organized under New York laws and licensed to do business in
Texas is considered a ( n ) - Answer-foreign company
A temporary agent's licènse issued by the Commissioner of Insurance is valid for up to
days . - Answer-90
What type of life policy covers two people and pays upon the death of the last insured ?
- Answer-Survivorship
,How long can a cash surrender value payment be deferred by the insurance company
under the Nonforfeiture Law ? - Answer-6 months
An employer that offers a qualified retirement plan to its employees is eligible to : -
Answer-make tax - deductible contributions to the plan
Which of the following statements BEST describes the intent of a Coinsurance clause in
a Major Medical policy ? - Answer-Discourages overutilization of the insurance
coverage
S is covered by a whole life policy . Which insurance product can cover his children ? -
Answer-Child term rider
Which of the following medical expenses does Cancer insurance NOT cover ? -
Answer-Arthritis
A life policy with a death benefit and cash value that can fluctuate according to the
performance of its underlying investment portfolio is referred to as : - Answer-Variable
Life
A policy of adhesion can only be modified by whom ? - Answer-The insurance company
The Legal Actions provision of an insurance contract is designed to do all of the
following , EXCEPT : - Answer-protect the producer
If a corporation pays the premium on a group life policy for its employees , the
corporation is required to report how much additional taxable income for each employee
? - Answer-Nothing
D is an architect receiving Disability Income benefits who is not able to return to work
full time , but can work on a part - time basis . Which of these features would allow D to
continue receiving benefits ? - Answer-Residual Benefit clause
Which factors are taken into consideration when an insurance company determines the
premium rate for a Whole Life policy on an applicant ? - Answer-Risk classification
Which of the following BEST describes a short - term medical expense policy ? -
Answer-Nonrenewable
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
A promotional advertising item is not considered a rebate unless it has a value equal to
or less than what amount ? - Answer-$ 25
, J would like to maintain the right to change beneficiaries . Which beneficiary designation
should be used ? - Answer-Revocable
Which type of life insurance beneficiary attempted by the policyowner ? requires his /
her consent when a change of beneficiary is - Answer-Irrevocable beneficiary
Under an Interest Sensitive Whole Life policy , - Answer-cash values are determined by
interest rates
Which of these is considered a statement that is assured to be true in every respect ? -
Answer-Warranty
An example of rebating would be - Answer-returning a portion of a premium as
inducement to purchase insurance
additional monthly The insurer will then likely issue the coverage with a ( n ) premium
modification due to the risk A pilot applies for Life insurance . The insurer approves the
application with a $ 10 involved . The pilot declines the additional premium
modification . - Answer-Aviation Exclusion
P loses an arm in a farm accident and is paid $ 10,000 from his Accidental Death and
Dismemberment policy . This benefit is known as the - Answer-Capital Sum
The reason for backdating a policy is - Answer-to obtain a premium rate based on an
earlier age
Which type of plan normally includes hospice benefits ? - Answer-Managed care plans
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 the medical history questions conditions that E did not meet ?
the medical history questions and paying the initial premium . E is not . weeks later E
suffers a heart attack and is . because she could not receives E's application for an
individual remember the exact dates . E signed the policy health policy . E did not
complete all of insured . Which of the following clauses details the hospitalized without
completing and submitted it to the insurance company anyway . A few - Answer-
Consideration clause
Whose life is covered on a life insurance policy that contains a payor benefit clause ? -
Answer-Child
In health insurance policies , a waiver of premium provision keeps the coverage in force
without premium payments : - Answer-After an insured has become totally disabled as
defined in the policy .
SIMULATER QUESTIONS WITH
COMPLETE SOLUTIONS
Bryce purchased a disability income policy with a rider that guarantees him the
additional amounts of coverage at predetermined times without requiring to provide
evidence of option of purchasing insurability . What kind of rider is this ? - Answer-
guaranteed insurability rider
In a qualified retirement plan , the yearly contributions to an employee's account : -
Answer-are restricted to maximum levels set by the IRS
Which tax would an IRA participant be subjected to on distributions received prior to age
59 1/2 ? - Answer-Ordinary income tax and a 10 % tax penalty for early withdrawal
An insurance agent has a fiduciary responsibility to all of the following EXCEPT -
Answer-other agents
Which of the following statements is true about most Blue Cross / Blue Shield
organizations ? - Answer-They are nonprofit organizations
Which of the following statements is CORRECT regarding the tax treatment of a lump -
sum payment paid to a life insurance policy's primary beneficiary ? - Answer-all
proceeds are income tax free in the year they are received
Group life insurance policies are generally written as : - Answer-annually renewable
term
Which of the following will a Long Term Care plan typically provide benefits for ? -
Answer-home health care
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
An insurance company organized under New York laws and licensed to do business in
Texas is considered a ( n ) - Answer-foreign company
A temporary agent's licènse issued by the Commissioner of Insurance is valid for up to
days . - Answer-90
What type of life policy covers two people and pays upon the death of the last insured ?
- Answer-Survivorship
,How long can a cash surrender value payment be deferred by the insurance company
under the Nonforfeiture Law ? - Answer-6 months
An employer that offers a qualified retirement plan to its employees is eligible to : -
Answer-make tax - deductible contributions to the plan
Which of the following statements BEST describes the intent of a Coinsurance clause in
a Major Medical policy ? - Answer-Discourages overutilization of the insurance
coverage
S is covered by a whole life policy . Which insurance product can cover his children ? -
Answer-Child term rider
Which of the following medical expenses does Cancer insurance NOT cover ? -
Answer-Arthritis
A life policy with a death benefit and cash value that can fluctuate according to the
performance of its underlying investment portfolio is referred to as : - Answer-Variable
Life
A policy of adhesion can only be modified by whom ? - Answer-The insurance company
The Legal Actions provision of an insurance contract is designed to do all of the
following , EXCEPT : - Answer-protect the producer
If a corporation pays the premium on a group life policy for its employees , the
corporation is required to report how much additional taxable income for each employee
? - Answer-Nothing
D is an architect receiving Disability Income benefits who is not able to return to work
full time , but can work on a part - time basis . Which of these features would allow D to
continue receiving benefits ? - Answer-Residual Benefit clause
Which factors are taken into consideration when an insurance company determines the
premium rate for a Whole Life policy on an applicant ? - Answer-Risk classification
Which of the following BEST describes a short - term medical expense policy ? -
Answer-Nonrenewable
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
A promotional advertising item is not considered a rebate unless it has a value equal to
or less than what amount ? - Answer-$ 25
, J would like to maintain the right to change beneficiaries . Which beneficiary designation
should be used ? - Answer-Revocable
Which type of life insurance beneficiary attempted by the policyowner ? requires his /
her consent when a change of beneficiary is - Answer-Irrevocable beneficiary
Under an Interest Sensitive Whole Life policy , - Answer-cash values are determined by
interest rates
Which of these is considered a statement that is assured to be true in every respect ? -
Answer-Warranty
An example of rebating would be - Answer-returning a portion of a premium as
inducement to purchase insurance
additional monthly The insurer will then likely issue the coverage with a ( n ) premium
modification due to the risk A pilot applies for Life insurance . The insurer approves the
application with a $ 10 involved . The pilot declines the additional premium
modification . - Answer-Aviation Exclusion
P loses an arm in a farm accident and is paid $ 10,000 from his Accidental Death and
Dismemberment policy . This benefit is known as the - Answer-Capital Sum
The reason for backdating a policy is - Answer-to obtain a premium rate based on an
earlier age
Which type of plan normally includes hospice benefits ? - Answer-Managed care plans
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 the medical history questions conditions that E did not meet ?
the medical history questions and paying the initial premium . E is not . weeks later E
suffers a heart attack and is . because she could not receives E's application for an
individual remember the exact dates . E signed the policy health policy . E did not
complete all of insured . Which of the following clauses details the hospitalized without
completing and submitted it to the insurance company anyway . A few - Answer-
Consideration clause
Whose life is covered on a life insurance policy that contains a payor benefit clause ? -
Answer-Child
In health insurance policies , a waiver of premium provision keeps the coverage in force
without premium payments : - Answer-After an insured has become totally disabled as
defined in the policy .
