TEXAS LIFE AND HEALTH FINAL EXAM
QUESTIONS AND ANSWERS
A certificate of _____ permits an insurance company to transact business in Texas. -
Answer-Authority
Which of the following statements about Health Reimbursement Arrangements (HRA) is
CORRECT? - Answer-If the employee paid for qualified medical expenses, the
reimbursements may be tax-free
The individual who provides general medical care for a patient as well as the referral for
specialized care is known as: - Answer-Primary Care Physician
Medicaid was designed to assist individuals who are - Answer-Below a specific income
limit
Which of the following is a valid reason for an enrollee to be cancelled by a Health
Maintenance Organization (HMO) plan? - Answer-Nonpayment of Coverage
Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a
contributory group Term Life plan to all its eligible employees? - Answer-Portion of the
premiums paid for by the EMPLOYER may be a tax deduction.
Under a Long Term Care policy, which benefit would be typically excluded or limited? -
Answer-Alcohol Rehabilitation
What is considered to be a characteristic of a Conditionally Renewable Health
Insurance policy? - Answer-Premiums may increase at time of renewal
Which Long Term Care insurance statement is true? - Answer-Pre-existing conditions
must be covered after the coverage has been in force for six months
Group/voluntary long-term care policy premiums are typically deducted from the
employee's income and - Answer-Are less costly as compared to individual long term
care coverage
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and
their families) whose employment has been terminated the right to: - Answer-continue
group health benefits
Which of these terms accurately defines an underwriters assessment of information on
a life insurance application? - Answer-Risk Classification
, Any changes made on an insurance application requires the initials of whom? - Answer-
Applicant
A medicare supplement policy may be cancelled for which of the following reasons? -
Answer-The premium has not been paid by the insured
A 55 year old recently received $30,000 distribution from a previous employers 401k
plan, minus the $6,000 withholding. Which federal taxes apply if none if none of the
funds were rolled over? - Answer-Income taxes plus a 10% penalty tax on $30,000
To terminate an agents appointment, an insurance company must - Answer-send
termination notice to the Texas Department of Insurance
L takes out a life insurance policy and dies 10 years later. During the claim process, the
insurer discovers that L had understated her age on the application. Under the
Misstatement of Age provision, the insurer will - Answer-adjust the death benefit to a
reduced amount
Which of the following actions will an insurance company most likely NOT take if an
applicant, who has diabetes, applies for a disability income policy? - Answer-Issue the
policy with an altered Time of Payment of Claims provision
The Notice of Claims provision requires a policy owner to: - Answer-Notify an insurer of
a claim within a specified time
As a condition for a loan, a bank requires the borrower to purchase credit insurance
from a specific company. What is the bank guilty of? - Answer-Coercion
Which of these arrangements allows one to bypass insurable interest laws? - Answer-
Investor-Originated Life Insurance
An insured pays premiums on an annual basis for an individual health insurance policy.
What is the MINIMUM number of days for the Grace Period provision? - Answer-31
Days
Which of the following actions does the Commissioner of Insurance NOT have the
power to conduct? - Answer-Activate Insurance Companies financial reserves
Which of these statements concerning an Individual Straight Life annuity is accurate? -
Answer-Payments are made to an annuitant for life
When is the face amount of a Whole Life policy paid? - Answer-When the insured dies
or at the policy's maturity date, whichever happens first
Basic Medical Expense Insurance - Answer-has lower benefit limits than Major Medical
insurance
QUESTIONS AND ANSWERS
A certificate of _____ permits an insurance company to transact business in Texas. -
Answer-Authority
Which of the following statements about Health Reimbursement Arrangements (HRA) is
CORRECT? - Answer-If the employee paid for qualified medical expenses, the
reimbursements may be tax-free
The individual who provides general medical care for a patient as well as the referral for
specialized care is known as: - Answer-Primary Care Physician
Medicaid was designed to assist individuals who are - Answer-Below a specific income
limit
Which of the following is a valid reason for an enrollee to be cancelled by a Health
Maintenance Organization (HMO) plan? - Answer-Nonpayment of Coverage
Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a
contributory group Term Life plan to all its eligible employees? - Answer-Portion of the
premiums paid for by the EMPLOYER may be a tax deduction.
Under a Long Term Care policy, which benefit would be typically excluded or limited? -
Answer-Alcohol Rehabilitation
What is considered to be a characteristic of a Conditionally Renewable Health
Insurance policy? - Answer-Premiums may increase at time of renewal
Which Long Term Care insurance statement is true? - Answer-Pre-existing conditions
must be covered after the coverage has been in force for six months
Group/voluntary long-term care policy premiums are typically deducted from the
employee's income and - Answer-Are less costly as compared to individual long term
care coverage
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and
their families) whose employment has been terminated the right to: - Answer-continue
group health benefits
Which of these terms accurately defines an underwriters assessment of information on
a life insurance application? - Answer-Risk Classification
, Any changes made on an insurance application requires the initials of whom? - Answer-
Applicant
A medicare supplement policy may be cancelled for which of the following reasons? -
Answer-The premium has not been paid by the insured
A 55 year old recently received $30,000 distribution from a previous employers 401k
plan, minus the $6,000 withholding. Which federal taxes apply if none if none of the
funds were rolled over? - Answer-Income taxes plus a 10% penalty tax on $30,000
To terminate an agents appointment, an insurance company must - Answer-send
termination notice to the Texas Department of Insurance
L takes out a life insurance policy and dies 10 years later. During the claim process, the
insurer discovers that L had understated her age on the application. Under the
Misstatement of Age provision, the insurer will - Answer-adjust the death benefit to a
reduced amount
Which of the following actions will an insurance company most likely NOT take if an
applicant, who has diabetes, applies for a disability income policy? - Answer-Issue the
policy with an altered Time of Payment of Claims provision
The Notice of Claims provision requires a policy owner to: - Answer-Notify an insurer of
a claim within a specified time
As a condition for a loan, a bank requires the borrower to purchase credit insurance
from a specific company. What is the bank guilty of? - Answer-Coercion
Which of these arrangements allows one to bypass insurable interest laws? - Answer-
Investor-Originated Life Insurance
An insured pays premiums on an annual basis for an individual health insurance policy.
What is the MINIMUM number of days for the Grace Period provision? - Answer-31
Days
Which of the following actions does the Commissioner of Insurance NOT have the
power to conduct? - Answer-Activate Insurance Companies financial reserves
Which of these statements concerning an Individual Straight Life annuity is accurate? -
Answer-Payments are made to an annuitant for life
When is the face amount of a Whole Life policy paid? - Answer-When the insured dies
or at the policy's maturity date, whichever happens first
Basic Medical Expense Insurance - Answer-has lower benefit limits than Major Medical
insurance
