Texas State Exam Simulator - Life and Health
Insurance (200 Questions Practice Exam)
A 42-year-old executive wants to purchase life insurance that will allow for increases or
decreases to coverage as his/her needs change. Which of the following policies will best meet
this need?
Endowment at Age 75
Universal Life
Graded Benefit Whole Life
Modified Whole Life - ANS-Universal Life
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?
Medicaid
Long-term care
Medicare
Her group health plan - ANS-Her group health plan
A Business Disability Buyout plan policy is designed
as an incurred expense plan
with a very short Elimination period
to pay benefits to the Corporation or other shareholders
to pay benefits to the insured's spouse - ANS-to pay benefits to the Corporation or other
shareholders
A certificate of authority does which of the following?
Gives an agent authority to represent a specific insurance company
Permits an agent to solicit insurance in Texas
Permits a decreased agent's relative to act as an agent for a limited period of time
Permits an insurance company to transact business in Texas - ANS-Permits an insurance
company to transact business in Texas
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 - ANS-experimental and investigative services
A creditor who requires a debtor to obtain insurance from a particular company or agent as a
condition for a loan is
guilty of
coercion
fraud
rebating
boycotting - ANS-coercion
A father who dies within 3 years after purchasing a life insurance policy on his infant daughter
can have the policy premiums waived under which provision?
Payor provision
Accelerated Benefits provision
Assignment provision
Waiver of Premium provision - ANS-Payor provision
A foreign insurance company is one that is incorporated
under Texas law
under the laws of another state
is a territory of the United States
outside the United States - ANS-under the laws of another state
A group life insurance policy may NOT insure groups consisting exclusively of persons who are
salaried, clerical, or administrative employees
hourly paid laborers or their supervisors
administrative, managerial, or sales personnel
related by marriage, blood or legal adoption - ANS-related by marriage, blood or legal adoption
A group-owned insurance company that is formed to assume and spread the liability risks of its
members is known as a
treaty insurer
risk retention group
risk assumption group
captive insurer - ANS-risk retention group
,A Health Reimbursement Arrangement MUST be established
with employee funding
with other employer-sponsored benefit plans
by the employer
only during specific open enrollment periods - ANS-by the employer
A life insurance illustration is NOT required to include the
name of the insurer
underwriting or rating classification upon which the illustration is based
initial death benefit
company's mortality table - ANS-company's mortality table
A Long-Term Care policy must offer a MINIMUM benefit period of how many months?
12
18
24
30 - ANS-12
A long-term care rider in a life insurance policy pays a daily benefit in the event of which of the
following?
Critical illness
Terminal illness
Inability of the insured to perform more than 2 Activities of Daily Living (ADL's)
Inability of the insured to maintain insurance premiums due to unemployment - ANS-Inability of
the insured to perform more than 2 Activities of Daily Living (ADL's)
A Loss-Purchase Buy and Sell agreement among three partners, funded with individual life
insurance, would require how many policies?
3
6
9
12 - ANS-6
A newly licensed General Lines agent must complete a MINIMUM of how many hours of
continuing education within 24 months after initial license?
10
15
20
, 24 - ANS-24
A mnonprofit mincorporated msociety mthat mdoes mnot mhave mcapital mstock mand moperates mfor mthe
msole mbenefit mof mits mmembers mis mknown mas
a mfraternal mbenefit
msociety ma mstock minsurer
a mmutual minsurer
the mLife mand mHealth mInsurance mGuaranty mAssociation m- mANS-a mfraternal mbenefit msociety
A mphysician mopens mup ma mnew mpractice mand mqualifies mfor ma m$7,000/month mDisability mIncome
mpolicy. mWhat mrider mwould mthe mphysician madd mif mhe mwants mthe mability mto mincrease mhis mpolicy
mbenefit mas mhis mpractice mand mincome mgrow?
Extended mTerm mrider
Cost mof mLiving mAdjustment mrider
mGuaranteed mInsurability mOption mrider
Waiver mof mPremium mrider m- mANS-Guaranteed mInsurability mOption mrider
A mpolicyowner's mrights mare mlimited munder mwhich mbeneficiary
mdesignation? mRevocable
Tertiary
mContingent
Irrevocable m- mANS-Irrevocable
A mpotential mclient, mage m40, mwould mlike mto mpurchase ma mWhole mLife mpolicy mthat mwill maccumulate
mcash mvalue mat ma mfaster mrate min mthe mearly myears mof mthe mpolicy. mWhich mof mthese mstatements
mmade mby mthe mproducer mwould m be mcorrect?
Straight mlife maccumulates mfaster mthan mLimited-pay mLife
20-Pay mLife maccumulates mcash mvalue mfaster mthan mStraight mLife
Cash mvalue maccumulation mof mboth m20-Pay mLife mand mStraight mLife mdepend mon mthe minsurer's
mfinancial mrating
20-Pay mLife mand mStraight mLife maccumulate mcash mvalue mat mthe msame mrate m- mANS-20-Pay mLife
maccumulates mcash mvalue mfaster mthan mStraight mLife
A mRenewable mTerm mPolicy mis mrenewable mat mthe moption mof
mthe mOwner
Company
Insured
Assignee m- mANS-insured
Insurance (200 Questions Practice Exam)
A 42-year-old executive wants to purchase life insurance that will allow for increases or
decreases to coverage as his/her needs change. Which of the following policies will best meet
this need?
Endowment at Age 75
Universal Life
Graded Benefit Whole Life
Modified Whole Life - ANS-Universal Life
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?
Medicaid
Long-term care
Medicare
Her group health plan - ANS-Her group health plan
A Business Disability Buyout plan policy is designed
as an incurred expense plan
with a very short Elimination period
to pay benefits to the Corporation or other shareholders
to pay benefits to the insured's spouse - ANS-to pay benefits to the Corporation or other
shareholders
A certificate of authority does which of the following?
Gives an agent authority to represent a specific insurance company
Permits an agent to solicit insurance in Texas
Permits a decreased agent's relative to act as an agent for a limited period of time
Permits an insurance company to transact business in Texas - ANS-Permits an insurance
company to transact business in Texas
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 - ANS-experimental and investigative services
A creditor who requires a debtor to obtain insurance from a particular company or agent as a
condition for a loan is
guilty of
coercion
fraud
rebating
boycotting - ANS-coercion
A father who dies within 3 years after purchasing a life insurance policy on his infant daughter
can have the policy premiums waived under which provision?
Payor provision
Accelerated Benefits provision
Assignment provision
Waiver of Premium provision - ANS-Payor provision
A foreign insurance company is one that is incorporated
under Texas law
under the laws of another state
is a territory of the United States
outside the United States - ANS-under the laws of another state
A group life insurance policy may NOT insure groups consisting exclusively of persons who are
salaried, clerical, or administrative employees
hourly paid laborers or their supervisors
administrative, managerial, or sales personnel
related by marriage, blood or legal adoption - ANS-related by marriage, blood or legal adoption
A group-owned insurance company that is formed to assume and spread the liability risks of its
members is known as a
treaty insurer
risk retention group
risk assumption group
captive insurer - ANS-risk retention group
,A Health Reimbursement Arrangement MUST be established
with employee funding
with other employer-sponsored benefit plans
by the employer
only during specific open enrollment periods - ANS-by the employer
A life insurance illustration is NOT required to include the
name of the insurer
underwriting or rating classification upon which the illustration is based
initial death benefit
company's mortality table - ANS-company's mortality table
A Long-Term Care policy must offer a MINIMUM benefit period of how many months?
12
18
24
30 - ANS-12
A long-term care rider in a life insurance policy pays a daily benefit in the event of which of the
following?
Critical illness
Terminal illness
Inability of the insured to perform more than 2 Activities of Daily Living (ADL's)
Inability of the insured to maintain insurance premiums due to unemployment - ANS-Inability of
the insured to perform more than 2 Activities of Daily Living (ADL's)
A Loss-Purchase Buy and Sell agreement among three partners, funded with individual life
insurance, would require how many policies?
3
6
9
12 - ANS-6
A newly licensed General Lines agent must complete a MINIMUM of how many hours of
continuing education within 24 months after initial license?
10
15
20
, 24 - ANS-24
A mnonprofit mincorporated msociety mthat mdoes mnot mhave mcapital mstock mand moperates mfor mthe
msole mbenefit mof mits mmembers mis mknown mas
a mfraternal mbenefit
msociety ma mstock minsurer
a mmutual minsurer
the mLife mand mHealth mInsurance mGuaranty mAssociation m- mANS-a mfraternal mbenefit msociety
A mphysician mopens mup ma mnew mpractice mand mqualifies mfor ma m$7,000/month mDisability mIncome
mpolicy. mWhat mrider mwould mthe mphysician madd mif mhe mwants mthe mability mto mincrease mhis mpolicy
mbenefit mas mhis mpractice mand mincome mgrow?
Extended mTerm mrider
Cost mof mLiving mAdjustment mrider
mGuaranteed mInsurability mOption mrider
Waiver mof mPremium mrider m- mANS-Guaranteed mInsurability mOption mrider
A mpolicyowner's mrights mare mlimited munder mwhich mbeneficiary
mdesignation? mRevocable
Tertiary
mContingent
Irrevocable m- mANS-Irrevocable
A mpotential mclient, mage m40, mwould mlike mto mpurchase ma mWhole mLife mpolicy mthat mwill maccumulate
mcash mvalue mat ma mfaster mrate min mthe mearly myears mof mthe mpolicy. mWhich mof mthese mstatements
mmade mby mthe mproducer mwould m be mcorrect?
Straight mlife maccumulates mfaster mthan mLimited-pay mLife
20-Pay mLife maccumulates mcash mvalue mfaster mthan mStraight mLife
Cash mvalue maccumulation mof mboth m20-Pay mLife mand mStraight mLife mdepend mon mthe minsurer's
mfinancial mrating
20-Pay mLife mand mStraight mLife maccumulate mcash mvalue mat mthe msame mrate m- mANS-20-Pay mLife
maccumulates mcash mvalue mfaster mthan mStraight mLife
A mRenewable mTerm mPolicy mis mrenewable mat mthe moption mof
mthe mOwner
Company
Insured
Assignee m- mANS-insured
