TEXAS STATE EXAM SIMULATOR - LIFE
AND HEALTH INSURANCE (WRITTEN)
QUESTIONS AND ANSWERS
An annuity promises that, if the annuitant dies before receiving payments equal to the
correct value, the payments will be continued to a beneficiary until an amount equal to
the contract value has been paid. This type of annuity is called - Answer-An installment
Refund annuity
One becomes eligible for Social Security disability benefits after having been disabled
for - Answer-5 months
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?
Straight life accumulates faster than Limited-pay Life
20-Pay Life accumulates cash value faster than Straight Life
Cash value accumulation of both 20-Pay Life and Straight Life depend on the insurer's
financial rating
20-Pay Life and Straight Life accumulate cash value at the same rate - Answer-20-Pay
Life accumulates cash value faster than Straight Life
Who makes the legally enforceable promises in a unilateral insurance policy? - Answer-
Insurance company
The Consideration clause in a life insurance policy indicates that a policyowner's
consideration consists of a completed application and - Answer-the initial premium
Which parts of a life insurance policy are guaranteed to be true? - Answer-Warranty
A comprehensive major medical health insurance policy contains an Eligible Expenses
provision which identifies the types of health care services that are covered. All of the
following health care services are typically covered EXCEPT for
hospital charges
physician fees
experimental and investigative services
nursing services - Answer-experimental and investigative services
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
,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
All of the following are limited benefit plans EXCEPT
cancer policies
life insurance policies
dental policies
critical illness policies - Answer-life insurance policies
A physician opens up a new practice and qualifies for a $7,000/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
An agent whose license has been revoked is required to - Answer-wait at least five
years before applying for a new license
The benefits under a Disability Buy-Out policy are - Answer-payable to the company or
another shareholder
The Health Insurance Portability and Accountability Act (HIPAA) gives privacy
protection for - Answer-health information
How are surrender charges deducted in a life policy with a rear-end loaded provision? -
Answer-Deducted when the policy is discontinued
What MUST an insurance company use in its advertising? - Answer-Its true corporate
name
An accident policy will most likely pay a benefit for a(n) - Answer-off-the-job accident
M completes an application for life insurance but does not pay the initial premium. All of
these actions must occur before M's policy goes into effect EXCEPT
policy is delivered
free-look period has expired
insurance company issues policy
initial premium is collected - Answer-free-look period has expired
When a policyowner cash surrenders a Universal Life insurance policy in it's early
years, this may be considered a red flag for a(n) - Answer-Anti-Money Laundering
violation
Which of these do NOT constitute policy delivery?
, Policy mailed to applicant
Policy mailed to agent
Policy delivered to the applicant by the agent
Policy issued with a rating - Answer-Policy issued with a rating
What is the MINIMUM number of Activities of Daily Living (ADL) an insured must be
unable to perform to qualify for Long Term Care benefits? - Answer-2
An agent who tells a client that dividends are guaranteed may be guilty of - Answer-
misrepresentation
Which statement regarding a Key Employee Life policy is NOT true?
The application must be signed by the key employee
Its purpose is to prevent the financial loss that may ensue if a key employee dies
The beneficiary is named by the key employee
The company purchases, owns, pays the premiums and is the beneficiary - Answer-
The beneficiary is named by the key employee
A policyowner's rights are limited under which beneficiary designation? - Answer-
Irrevocable
Agent Hudson takes an application and initial premium from an applicant and sends the
application and premium check to the insurance company. The insurance company
returns the check back to Hudson because the check is made out to Hudson instead of
the insurance company. What action should Hudson take? - Answer-Return to the
customer, collect a new check made out to the insurance company, and send the new
check out to the insurance company
Variable Whole Life Insurance can be described as - Answer-both an insurance and
securities product
A 66 year-old is covered under a group health plan while employed with a business that
has 40 employees. If she injures herself while walking in the park, what coverage would
be considered primary? - Answer-Her group health plan
Medicare - Answer-is a hospital and medical expense insurance program
T owns 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 her
policy's coverage amount
All of the following statements about health coverage for newborns are correct EXCEPT
coverage begins and benefits are payable from the moment of birth
AND HEALTH INSURANCE (WRITTEN)
QUESTIONS AND ANSWERS
An annuity promises that, if the annuitant dies before receiving payments equal to the
correct value, the payments will be continued to a beneficiary until an amount equal to
the contract value has been paid. This type of annuity is called - Answer-An installment
Refund annuity
One becomes eligible for Social Security disability benefits after having been disabled
for - Answer-5 months
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?
Straight life accumulates faster than Limited-pay Life
20-Pay Life accumulates cash value faster than Straight Life
Cash value accumulation of both 20-Pay Life and Straight Life depend on the insurer's
financial rating
20-Pay Life and Straight Life accumulate cash value at the same rate - Answer-20-Pay
Life accumulates cash value faster than Straight Life
Who makes the legally enforceable promises in a unilateral insurance policy? - Answer-
Insurance company
The Consideration clause in a life insurance policy indicates that a policyowner's
consideration consists of a completed application and - Answer-the initial premium
Which parts of a life insurance policy are guaranteed to be true? - Answer-Warranty
A comprehensive major medical health insurance policy contains an Eligible Expenses
provision which identifies the types of health care services that are covered. All of the
following health care services are typically covered EXCEPT for
hospital charges
physician fees
experimental and investigative services
nursing services - Answer-experimental and investigative services
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
,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
All of the following are limited benefit plans EXCEPT
cancer policies
life insurance policies
dental policies
critical illness policies - Answer-life insurance policies
A physician opens up a new practice and qualifies for a $7,000/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
An agent whose license has been revoked is required to - Answer-wait at least five
years before applying for a new license
The benefits under a Disability Buy-Out policy are - Answer-payable to the company or
another shareholder
The Health Insurance Portability and Accountability Act (HIPAA) gives privacy
protection for - Answer-health information
How are surrender charges deducted in a life policy with a rear-end loaded provision? -
Answer-Deducted when the policy is discontinued
What MUST an insurance company use in its advertising? - Answer-Its true corporate
name
An accident policy will most likely pay a benefit for a(n) - Answer-off-the-job accident
M completes an application for life insurance but does not pay the initial premium. All of
these actions must occur before M's policy goes into effect EXCEPT
policy is delivered
free-look period has expired
insurance company issues policy
initial premium is collected - Answer-free-look period has expired
When a policyowner cash surrenders a Universal Life insurance policy in it's early
years, this may be considered a red flag for a(n) - Answer-Anti-Money Laundering
violation
Which of these do NOT constitute policy delivery?
, Policy mailed to applicant
Policy mailed to agent
Policy delivered to the applicant by the agent
Policy issued with a rating - Answer-Policy issued with a rating
What is the MINIMUM number of Activities of Daily Living (ADL) an insured must be
unable to perform to qualify for Long Term Care benefits? - Answer-2
An agent who tells a client that dividends are guaranteed may be guilty of - Answer-
misrepresentation
Which statement regarding a Key Employee Life policy is NOT true?
The application must be signed by the key employee
Its purpose is to prevent the financial loss that may ensue if a key employee dies
The beneficiary is named by the key employee
The company purchases, owns, pays the premiums and is the beneficiary - Answer-
The beneficiary is named by the key employee
A policyowner's rights are limited under which beneficiary designation? - Answer-
Irrevocable
Agent Hudson takes an application and initial premium from an applicant and sends the
application and premium check to the insurance company. The insurance company
returns the check back to Hudson because the check is made out to Hudson instead of
the insurance company. What action should Hudson take? - Answer-Return to the
customer, collect a new check made out to the insurance company, and send the new
check out to the insurance company
Variable Whole Life Insurance can be described as - Answer-both an insurance and
securities product
A 66 year-old is covered under a group health plan while employed with a business that
has 40 employees. If she injures herself while walking in the park, what coverage would
be considered primary? - Answer-Her group health plan
Medicare - Answer-is a hospital and medical expense insurance program
T owns 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 her
policy's coverage amount
All of the following statements about health coverage for newborns are correct EXCEPT
coverage begins and benefits are payable from the moment of birth
