TEXAS STATE EXAM SIMULATOR - LIFE AND HEALTH
INSURANCE (200 QUESTIONS PRACTICE EXAM)
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
An installment Refund annuity
A Straight Life annuity
A Cash Refund annuity
A Joint Life annuity - Answers-An installment Refund annuity
One becomes eligible for Social Security disability benefits after having been disabled
for
3 months
5 months
6 months
12 months - Answers-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 - Answers-20-
Pay Life accumulates cash value faster than Straight Life
Who makes the legally enforceable promises in a unilateral insurance policy?
Beneficiary
Insurance company
Insured
Applicant - Answers-Insurance company
The Consideration clause in a life insurance policy indicates that a policyowner's
consideration consists of a completed application and
the initial premium
agreeing to a physical examination
delivery of policy
,disclosure of any medical conditions - Answers-the initial premium
Which parts of a life insurance policy are guaranteed to be true?
Rating
Representation
Statement
Warranty - Answers-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 - Answers-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?
Long-term care
Indemnity
Medicare Supplement
Medicaid - Answers-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?
No benefits are payable under the Master contract
Full benefits are payable under the Master contract
Full benefits are payable under the converted policy
Benefits less required premium are payable under the converted policy - Answers-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 - Answers-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?
,Extended Term rider
Cost of Living Adjustment rider
Guaranteed Insurability Option rider
Waiver of Premium rider - Answers-Guaranteed Insurability Option rider
An agent whose license has been revoked is required to
wait at least five years before applying for a new license
submit all previously written policies to the Commissioner of Insurance's office for
servicing of the accounts
cancel all policies currently in effect and advise the insureds to place them elsewhere
continue to service the existing accounts but not solicit new business - Answers-wait at
least five years before applying for a new license
The benefits under a Disability Buy-Out policy are
normally paid in installments
taxable to the beneficiary
payable to the company or another shareholder
normally paid after a short elimination period - Answers-payable to the company or
another shareholder
he Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection
for
insolvency
health information
financial information
overinsurance - Answers-health information
How are surrender charges deducted in a life policy with a rear-end loaded provision?
Deducted from the death benefit
Deducted when the policy is discontinued
Deducted from policy's cash value
Deducted when assigned to another policyowner - Answers-Deducted when the policy
is discontinued
What MUST an insurance company use in its advertising?
Its trade name
Its true corporate name
Its service mark
Its corporate logo - Answers-Its true corporate name
An accident policy will most likely pay a benefit for a(n)
, self-inflicted injury
critical illness
on-the-job accident
off-the-job accident - Answers-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 - Answers-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)
Federal Fair Credit Act Violation
Title 18 Fraud violation
Anti-Money Laundering violation
Unfair Trade Practice violation - Answers-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 - Answers-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?
1
2
3
4 - Answers-2
An agent who tells a client that dividends are guaranteed may be guilty of
fraud
rebating
misrepresentation
slander - Answers-misrepresentation
Which statement regarding a Key Employee Life policy is NOT true?
INSURANCE (200 QUESTIONS PRACTICE EXAM)
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
An installment Refund annuity
A Straight Life annuity
A Cash Refund annuity
A Joint Life annuity - Answers-An installment Refund annuity
One becomes eligible for Social Security disability benefits after having been disabled
for
3 months
5 months
6 months
12 months - Answers-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 - Answers-20-
Pay Life accumulates cash value faster than Straight Life
Who makes the legally enforceable promises in a unilateral insurance policy?
Beneficiary
Insurance company
Insured
Applicant - Answers-Insurance company
The Consideration clause in a life insurance policy indicates that a policyowner's
consideration consists of a completed application and
the initial premium
agreeing to a physical examination
delivery of policy
,disclosure of any medical conditions - Answers-the initial premium
Which parts of a life insurance policy are guaranteed to be true?
Rating
Representation
Statement
Warranty - Answers-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 - Answers-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?
Long-term care
Indemnity
Medicare Supplement
Medicaid - Answers-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?
No benefits are payable under the Master contract
Full benefits are payable under the Master contract
Full benefits are payable under the converted policy
Benefits less required premium are payable under the converted policy - Answers-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 - Answers-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?
,Extended Term rider
Cost of Living Adjustment rider
Guaranteed Insurability Option rider
Waiver of Premium rider - Answers-Guaranteed Insurability Option rider
An agent whose license has been revoked is required to
wait at least five years before applying for a new license
submit all previously written policies to the Commissioner of Insurance's office for
servicing of the accounts
cancel all policies currently in effect and advise the insureds to place them elsewhere
continue to service the existing accounts but not solicit new business - Answers-wait at
least five years before applying for a new license
The benefits under a Disability Buy-Out policy are
normally paid in installments
taxable to the beneficiary
payable to the company or another shareholder
normally paid after a short elimination period - Answers-payable to the company or
another shareholder
he Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection
for
insolvency
health information
financial information
overinsurance - Answers-health information
How are surrender charges deducted in a life policy with a rear-end loaded provision?
Deducted from the death benefit
Deducted when the policy is discontinued
Deducted from policy's cash value
Deducted when assigned to another policyowner - Answers-Deducted when the policy
is discontinued
What MUST an insurance company use in its advertising?
Its trade name
Its true corporate name
Its service mark
Its corporate logo - Answers-Its true corporate name
An accident policy will most likely pay a benefit for a(n)
, self-inflicted injury
critical illness
on-the-job accident
off-the-job accident - Answers-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 - Answers-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)
Federal Fair Credit Act Violation
Title 18 Fraud violation
Anti-Money Laundering violation
Unfair Trade Practice violation - Answers-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 - Answers-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?
1
2
3
4 - Answers-2
An agent who tells a client that dividends are guaranteed may be guilty of
fraud
rebating
misrepresentation
slander - Answers-misrepresentation
Which statement regarding a Key Employee Life policy is NOT true?
