FINAL EXAM - TEXAS LIFE AND HEALTH
QUESTIONS WITH COMPLETE
SOLUTIONS
T applies for a life insurance policy and is told by the producer that the insurer is bound
to the coverage as of the date of the application or medical examination, whichever is
later. Assuming that T is an acceptable risk, what item is given to T? - Answer-
Conditional receipt
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
J is a subscriber to a plan which contracts with doctors and hospitals to provide medical
benefits at a predetermined price. What type of plan does J belong to? - Answer-Health
Maintenance Organization
Which of the following is a valid reason for an enrollee to be canceled by a Health
Maintenance Organization (HMO) plan? - Answer-Nonpayment of coverage
What type of rider would be added to an Accident and Health policy if the policyowner
wants to ensure the policy will continue is he/she ever becomes totally disabled? -
Answer-Waiver of Premium rider
A new general property and casualty licensee must complete at LEAST _ hours of
continuing education within 24 months of initial license. - Answer-24
A business overhead expense policy: - Answer-Covers business expenses such as rent
and utilities
Which of the following statements is CORRECT about an agent who is taking an
insurance application? - Answer-The agent should have the applicant initial any
changes made on the application
Every 12-months after the initial enrollment period, an HMO must hold an open
enrollment period of - Answer-31 days
When an individual is planning to protect his family with life insurance, one method of
doing so is called needs analysis. What exactly does needs analysis involve? - Answer-
Establishes the needs of the individual and his dependents
P and Q are married and have three children. P is the primary beneficiary on Q's
Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent
beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly.
The Accidental Death benefits will be paid to - Answer-P only
, Under which circumstances will the benefits under COBRA continuation coverage end?
- Answer-All group health plans are terminated by the employer
When a misrepresentation on a life insurance policy application is discovered, what
action may an insurance company take? - Answer-Void the policy only if it is discovered
during the Contestable period and proven to be material
A plan through the Marketplace may be purchased by - Answer-Any legal resident
(except those imprisoned)
A Life insurance policyowner would like to take out a policy loan against the cash value
in his Whole Life policy. The interest rated applied to this loan may vary over time. This
is referred to as a(n) _____ rate loan - Answer-Variable
Premature IRA distributions are assessed a penalty tax of - Answer-10%
Which of the following costs would a Basic Hospital/Surgical policy likely cover? -
Answer-Surgically removing a facial birthmark
Life insurance immediately creates an estate upon the death of an insured. Which of the
following policies is characterized by a guaranteed minimum death benefit? - Answer-
Variable life
A level premium indicates - Answer-the premium is fixed for the entire duration of the
contract
How long does an insurance company appointment remain in force? - Answer-Until
terminated
Which settlement option pays a stated amount to an annuitant, but no residual value to
a beneficiary? - Answer-Life income
Who is liable when an insured suffers a loss on a policy sold by an agent through an
insurer not authorized to conduct business in Texas? - Answer-The agent
Which of the following statements describes what and Accident and Health policyowner
may NOT do? - Answer-Adjust the premium payments
An insurance company organized under New York laws and licensed to do business in
Texas is considered a(n) - Answer-foreign company
What type of group insurance plan involves employees sharing the cost? - Answer-
contributory plan
QUESTIONS WITH COMPLETE
SOLUTIONS
T applies for a life insurance policy and is told by the producer that the insurer is bound
to the coverage as of the date of the application or medical examination, whichever is
later. Assuming that T is an acceptable risk, what item is given to T? - Answer-
Conditional receipt
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
J is a subscriber to a plan which contracts with doctors and hospitals to provide medical
benefits at a predetermined price. What type of plan does J belong to? - Answer-Health
Maintenance Organization
Which of the following is a valid reason for an enrollee to be canceled by a Health
Maintenance Organization (HMO) plan? - Answer-Nonpayment of coverage
What type of rider would be added to an Accident and Health policy if the policyowner
wants to ensure the policy will continue is he/she ever becomes totally disabled? -
Answer-Waiver of Premium rider
A new general property and casualty licensee must complete at LEAST _ hours of
continuing education within 24 months of initial license. - Answer-24
A business overhead expense policy: - Answer-Covers business expenses such as rent
and utilities
Which of the following statements is CORRECT about an agent who is taking an
insurance application? - Answer-The agent should have the applicant initial any
changes made on the application
Every 12-months after the initial enrollment period, an HMO must hold an open
enrollment period of - Answer-31 days
When an individual is planning to protect his family with life insurance, one method of
doing so is called needs analysis. What exactly does needs analysis involve? - Answer-
Establishes the needs of the individual and his dependents
P and Q are married and have three children. P is the primary beneficiary on Q's
Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent
beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly.
The Accidental Death benefits will be paid to - Answer-P only
, Under which circumstances will the benefits under COBRA continuation coverage end?
- Answer-All group health plans are terminated by the employer
When a misrepresentation on a life insurance policy application is discovered, what
action may an insurance company take? - Answer-Void the policy only if it is discovered
during the Contestable period and proven to be material
A plan through the Marketplace may be purchased by - Answer-Any legal resident
(except those imprisoned)
A Life insurance policyowner would like to take out a policy loan against the cash value
in his Whole Life policy. The interest rated applied to this loan may vary over time. This
is referred to as a(n) _____ rate loan - Answer-Variable
Premature IRA distributions are assessed a penalty tax of - Answer-10%
Which of the following costs would a Basic Hospital/Surgical policy likely cover? -
Answer-Surgically removing a facial birthmark
Life insurance immediately creates an estate upon the death of an insured. Which of the
following policies is characterized by a guaranteed minimum death benefit? - Answer-
Variable life
A level premium indicates - Answer-the premium is fixed for the entire duration of the
contract
How long does an insurance company appointment remain in force? - Answer-Until
terminated
Which settlement option pays a stated amount to an annuitant, but no residual value to
a beneficiary? - Answer-Life income
Who is liable when an insured suffers a loss on a policy sold by an agent through an
insurer not authorized to conduct business in Texas? - Answer-The agent
Which of the following statements describes what and Accident and Health policyowner
may NOT do? - Answer-Adjust the premium payments
An insurance company organized under New York laws and licensed to do business in
Texas is considered a(n) - Answer-foreign company
What type of group insurance plan involves employees sharing the cost? - Answer-
contributory plan
