EXAM FX TEXAS LIFE AND
HEALTH INSURANCE QUESTIONS
AND ANSWERS 100% PASS
What law protects consumers from the circulation of inaccurate or obsolete
information? - CORRECT ANSWER-The Fair Credit Reporting Act
What do individuals use to transfer their risk of loss to a larger group? -
CORRECT ANSWER-Insurance
What term describes the fee a person pays an insurance company to start coverage?
- CORRECT ANSWER-Premium
When a change needs to be made on the application for insurance, which is the
best method for correcting the information? - CORRECT ANSWER-complete a
new application or ask the applicant to initial the corrections on the original
application
how is the information obtained for an investigative consumer report? -
CORRECT ANSWER-through interviews with the applicants associates, friends,
and neighbors.
What risk classification would typically qualify for lower premiums? - CORRECT
ANSWER-Preferred Risk
,what are the three risk classifications in life insurance? - CORRECT ANSWER-
Standard, Substandard, Preferred
what is the main responsibility of a company's underwriting unit? - CORRECT
ANSWER-Risk Selection
When would a misrepresentation be considered material? - CORRECT ANSWER-
when it may alter the underwriting decision
What entities make up the Medical Information Bureau? - CORRECT ANSWER-
Insurers
if an applicant for an insurance policy and the potential insured are two different
people, what would be the underwriters main concern? - CORRECT ANSWER-
the existence of insurable interest between the applicant and the insured
What is adverse selection? - CORRECT ANSWER-People who are more likely to
submit insurance claims are seeking insurance more often than preferred risks
What type of report provides information about the applicant's hobbies, habits and
financial status? - CORRECT ANSWER-Inspection report
At what point does coverage begin when an agent issues a conditional receipt for a
life insurance policy? - CORRECT ANSWER-either on the date of the application
or the date of the medical exam (whichever occurs last)
COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED
,what is the best way to handle incomplete insurance applications? - CORRECT
ANSWER-return the application to the applicant for completion
when does an insurance policy go into effect? - CORRECT ANSWER-When the
policy is delivered and the premium is paid
what are the three main instances when insurable interest exists in life insurance? -
CORRECT ANSWER-Insuring your own life, the life of a family member, or the
life of a business partner or someone who has a financial obligation to the
policyholder.
Insurance is a contract that protects the insured from what? - CORRECT
ANSWER-loss
what report is used to assess risk associated with a health insurance applicants
lifestyle and character? - CORRECT ANSWER-Investigative consumer report
If an agent fails to obtain the applicant's signature on the insurance application,
what must the insurer do? - CORRECT ANSWER-send the application back to
the applicant for signature
what is policy replacement? - CORRECT ANSWER-a new policy is issue while an
existing policy is terminated or reissued with a reduction in cash value
When would a misrepresentation on an insurance application be considered fraud?
- CORRECT ANSWER-when it is intentional and material
, who must have insurable interest in the insured? - CORRECT ANSWER-the
policy holder
during what stage in the insurance process do insurers evaluate information that
identifies adverse selection risks? - CORRECT ANSWER-underwriting
Who is a field underwriter? - CORRECT ANSWER-Agent/Producer
how can health insurance policies be delivered to the insured? - CORRECT
ANSWER-Personally delivered by the agent or mailed
in forming an insurance contract, when does an acceptance usually occur? -
CORRECT ANSWER-when the insurer approves a prepaid application
what two elements are necessaryfor a life insurance contract to have a legal
purpose? - CORRECT ANSWER-insurable interest and consent
in insurance, when is the offer usually made on a contract? - CORRECT
ANSWER-when the insurance application is submitted.
when must the policy summary for a life insurance policy be delivered to the
policyowner? - CORRECT ANSWER-at the time of policy delivery
if an insurer needs to obtain information about the applicant from investigators,
what is the insurer required to do? - CORRECT ANSWER-provide the applicant a
disclosure authorization notice
COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED
HEALTH INSURANCE QUESTIONS
AND ANSWERS 100% PASS
What law protects consumers from the circulation of inaccurate or obsolete
information? - CORRECT ANSWER-The Fair Credit Reporting Act
What do individuals use to transfer their risk of loss to a larger group? -
CORRECT ANSWER-Insurance
What term describes the fee a person pays an insurance company to start coverage?
- CORRECT ANSWER-Premium
When a change needs to be made on the application for insurance, which is the
best method for correcting the information? - CORRECT ANSWER-complete a
new application or ask the applicant to initial the corrections on the original
application
how is the information obtained for an investigative consumer report? -
CORRECT ANSWER-through interviews with the applicants associates, friends,
and neighbors.
What risk classification would typically qualify for lower premiums? - CORRECT
ANSWER-Preferred Risk
,what are the three risk classifications in life insurance? - CORRECT ANSWER-
Standard, Substandard, Preferred
what is the main responsibility of a company's underwriting unit? - CORRECT
ANSWER-Risk Selection
When would a misrepresentation be considered material? - CORRECT ANSWER-
when it may alter the underwriting decision
What entities make up the Medical Information Bureau? - CORRECT ANSWER-
Insurers
if an applicant for an insurance policy and the potential insured are two different
people, what would be the underwriters main concern? - CORRECT ANSWER-
the existence of insurable interest between the applicant and the insured
What is adverse selection? - CORRECT ANSWER-People who are more likely to
submit insurance claims are seeking insurance more often than preferred risks
What type of report provides information about the applicant's hobbies, habits and
financial status? - CORRECT ANSWER-Inspection report
At what point does coverage begin when an agent issues a conditional receipt for a
life insurance policy? - CORRECT ANSWER-either on the date of the application
or the date of the medical exam (whichever occurs last)
COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED
,what is the best way to handle incomplete insurance applications? - CORRECT
ANSWER-return the application to the applicant for completion
when does an insurance policy go into effect? - CORRECT ANSWER-When the
policy is delivered and the premium is paid
what are the three main instances when insurable interest exists in life insurance? -
CORRECT ANSWER-Insuring your own life, the life of a family member, or the
life of a business partner or someone who has a financial obligation to the
policyholder.
Insurance is a contract that protects the insured from what? - CORRECT
ANSWER-loss
what report is used to assess risk associated with a health insurance applicants
lifestyle and character? - CORRECT ANSWER-Investigative consumer report
If an agent fails to obtain the applicant's signature on the insurance application,
what must the insurer do? - CORRECT ANSWER-send the application back to
the applicant for signature
what is policy replacement? - CORRECT ANSWER-a new policy is issue while an
existing policy is terminated or reissued with a reduction in cash value
When would a misrepresentation on an insurance application be considered fraud?
- CORRECT ANSWER-when it is intentional and material
, who must have insurable interest in the insured? - CORRECT ANSWER-the
policy holder
during what stage in the insurance process do insurers evaluate information that
identifies adverse selection risks? - CORRECT ANSWER-underwriting
Who is a field underwriter? - CORRECT ANSWER-Agent/Producer
how can health insurance policies be delivered to the insured? - CORRECT
ANSWER-Personally delivered by the agent or mailed
in forming an insurance contract, when does an acceptance usually occur? -
CORRECT ANSWER-when the insurer approves a prepaid application
what two elements are necessaryfor a life insurance contract to have a legal
purpose? - CORRECT ANSWER-insurable interest and consent
in insurance, when is the offer usually made on a contract? - CORRECT
ANSWER-when the insurance application is submitted.
when must the policy summary for a life insurance policy be delivered to the
policyowner? - CORRECT ANSWER-at the time of policy delivery
if an insurer needs to obtain information about the applicant from investigators,
what is the insurer required to do? - CORRECT ANSWER-provide the applicant a
disclosure authorization notice
COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED
