TEXAS LIFE AND HEALTH INSURANCE
PRACTICE TEST QUESTIONS AND
ANSWERS
T owns an Accident & Health policy and notifies her insurance company that she has
chosen a less hazardous occupation. Under the Change of Occupation provision, which
of the following actions may her insurance company take? - Answer-Increase her
policy's coverage amount
When an insurer issues a policy that refuses to cover certain risks, this is referred to as
a(n) - Answer-Exclusion
An agent who tells claimants that their rights may be impaired if they fail to complete a
release form within a given period of time could be guilty of..? - Answer-Coercion
What does the insuring agreement in a Life insurance contract establish? - Answer-An
insurer's basic promise
The first portion of a covered Major Medical insurance expense that the insured is
required to pay is called the..? - Answer-Initial deductible
A "reimbursement policy" pays what amount of covered Long-Term Care expenses? -
Answer-Actual covered expenses up to the daily maximum
The agreement in a life insurance contract that states a specific sum of money will be
paid to a designated person upon an insured's death is called a(n) - Answer-Insuring
agreement
W is a 39-year old female who just purchased an annuity to provide income for life
starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n) -
Answer-Immediate annuity
Which of these are NOT an example of a Nonforfeiture option? - Answer-Life Income
S filed a written Proof of Loss for a Disability Income claim on September 1. The
insurance company did not respond to the claim. S can take legal action against the
insurer beginning..? - Answer-November 1
An enrollee of a Health Maintenance Organization (HMO) may be cancelled or
nonrenewed for which of the following reasons? - Answer-Failure to pay for coverage
An agent who tells a client that dividends are guaranteed may be guilty of..? - Answer-
misrepresentation
,On delivery of a policy, a signed statement of good health is typically requested if..? -
Answer-The application was submitted without the initial premium.
One becomes eligible for Social Security disability benefits after having been disabled
for..? - Answer-5 mo.
M is insured under a basic Hospital/Surgical Expense policy. A physician performs
surgery on M. What determines the claim M is eligible for? - Answer-Determined by the
terms of the policy
When an insurance application is taken by a producer, which of these statements is
true? - Answer-Any changes made on the application require the applicant's initials
Which of the following statements BEST describes the intent of a Coinsurance clause in
a Major Medical policy? - Answer-Discourages over utilization of the insurance
coverage
Health insurance benefits NOT covered due to an act of war are..? - Answer-excluded
by the insurer in the contract provisions
Under the Texas code, the MAXIMUM for which a spouse may be insured in a company
group life program with a $50,000 death benefit is: - Answer-25,000 (or 1/2 of the death
benefit)
An agent MUST give a prospective insured an Outline of Coverage when taking an
application for a..? - Answer-Medicare Supplement policy
If the insured and primary beneficiary are both killed in the same accident and it cannot
be determined who died first, where are the death proceeds to be directed under the
Uniform Simultaneous Death Act? - Answer-Insured's contingent beneficiary (policy
proceeds will be paid as if the insured died last. In other words, the proceeds will be
paid to the secondary or contingent beneficiary)
A policyowner's rights are limited under which beneficiary designation? - Answer-
Irrevocable
An agent whose license has been revoked is required to..? - Answer-wait at least five
years before applying for a new license
An agent may legally share commissions only with - Answer-another agent who is
licensed in the same line of insurance
Who can purchase a plan through the Marketplace? - Answer-Any legal resident except
those incarcerated
, Which of the following circumstances would cause a Medicare Supplement policy to be
cancelled? - Answer-The insured fails to pay the premium
In Texas, a domestic insurance company is defined as a company that..? - Answer-is
incorporated and formed in Texas
All of the following provisions must be included in life insurance policies EXCEPT -
Answer-Extended Term
The Insurance Commissioner may examine the records of an insurance company in
order to - Answer-determine the solvency of the company
Before holding a hearing regarding an agent's unfair or deceptive practice, the
Insurance Commissioner MUST give how many days notice? - Answer-30
Boycott, coercion, and intimidation that result in the unreasonable restraint of trade are
prohibited under the Texas Insurance Code covering - Answer-unfair methods of
competition
Which life insurance rider typically appears on a Juvenile life insurance policy? -
Answer-Payor Benefit rider
Which of the following health insurance policy provisions specifies the health care
services a policy will provide? - Answer-Insuring Clause
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? - Answer-Her group health plan. If the employer has more than
20 employees, the group health plan generally pays first.
A life insurance policy which ensures that the premium will be paid if the insured
becomes disabled has what kind of rider attached? - Answer-Waiver of Premiums
The option that provides an additional death benefit for a limited amount of time at the
lowest possible cost is called a(n) - Answer-Accidental Death and Dismemberment rider
(AD&D)
What is the consideration given by an insurer in the Consideration clause of a life
policy? - Answer-Promise to pay a death benefit to a named beneficiary
The individual most likely to buy a Medicare Supplement policy would be a(n) - Answer-
68-year old male covered by Medicare
After the initial enrollment period, an HMO must hold an open enrollment period of how
many days at LEAST once in every 12-month period? - Answer-31
PRACTICE TEST QUESTIONS AND
ANSWERS
T owns an Accident & Health policy and notifies her insurance company that she has
chosen a less hazardous occupation. Under the Change of Occupation provision, which
of the following actions may her insurance company take? - Answer-Increase her
policy's coverage amount
When an insurer issues a policy that refuses to cover certain risks, this is referred to as
a(n) - Answer-Exclusion
An agent who tells claimants that their rights may be impaired if they fail to complete a
release form within a given period of time could be guilty of..? - Answer-Coercion
What does the insuring agreement in a Life insurance contract establish? - Answer-An
insurer's basic promise
The first portion of a covered Major Medical insurance expense that the insured is
required to pay is called the..? - Answer-Initial deductible
A "reimbursement policy" pays what amount of covered Long-Term Care expenses? -
Answer-Actual covered expenses up to the daily maximum
The agreement in a life insurance contract that states a specific sum of money will be
paid to a designated person upon an insured's death is called a(n) - Answer-Insuring
agreement
W is a 39-year old female who just purchased an annuity to provide income for life
starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n) -
Answer-Immediate annuity
Which of these are NOT an example of a Nonforfeiture option? - Answer-Life Income
S filed a written Proof of Loss for a Disability Income claim on September 1. The
insurance company did not respond to the claim. S can take legal action against the
insurer beginning..? - Answer-November 1
An enrollee of a Health Maintenance Organization (HMO) may be cancelled or
nonrenewed for which of the following reasons? - Answer-Failure to pay for coverage
An agent who tells a client that dividends are guaranteed may be guilty of..? - Answer-
misrepresentation
,On delivery of a policy, a signed statement of good health is typically requested if..? -
Answer-The application was submitted without the initial premium.
One becomes eligible for Social Security disability benefits after having been disabled
for..? - Answer-5 mo.
M is insured under a basic Hospital/Surgical Expense policy. A physician performs
surgery on M. What determines the claim M is eligible for? - Answer-Determined by the
terms of the policy
When an insurance application is taken by a producer, which of these statements is
true? - Answer-Any changes made on the application require the applicant's initials
Which of the following statements BEST describes the intent of a Coinsurance clause in
a Major Medical policy? - Answer-Discourages over utilization of the insurance
coverage
Health insurance benefits NOT covered due to an act of war are..? - Answer-excluded
by the insurer in the contract provisions
Under the Texas code, the MAXIMUM for which a spouse may be insured in a company
group life program with a $50,000 death benefit is: - Answer-25,000 (or 1/2 of the death
benefit)
An agent MUST give a prospective insured an Outline of Coverage when taking an
application for a..? - Answer-Medicare Supplement policy
If the insured and primary beneficiary are both killed in the same accident and it cannot
be determined who died first, where are the death proceeds to be directed under the
Uniform Simultaneous Death Act? - Answer-Insured's contingent beneficiary (policy
proceeds will be paid as if the insured died last. In other words, the proceeds will be
paid to the secondary or contingent beneficiary)
A policyowner's rights are limited under which beneficiary designation? - Answer-
Irrevocable
An agent whose license has been revoked is required to..? - Answer-wait at least five
years before applying for a new license
An agent may legally share commissions only with - Answer-another agent who is
licensed in the same line of insurance
Who can purchase a plan through the Marketplace? - Answer-Any legal resident except
those incarcerated
, Which of the following circumstances would cause a Medicare Supplement policy to be
cancelled? - Answer-The insured fails to pay the premium
In Texas, a domestic insurance company is defined as a company that..? - Answer-is
incorporated and formed in Texas
All of the following provisions must be included in life insurance policies EXCEPT -
Answer-Extended Term
The Insurance Commissioner may examine the records of an insurance company in
order to - Answer-determine the solvency of the company
Before holding a hearing regarding an agent's unfair or deceptive practice, the
Insurance Commissioner MUST give how many days notice? - Answer-30
Boycott, coercion, and intimidation that result in the unreasonable restraint of trade are
prohibited under the Texas Insurance Code covering - Answer-unfair methods of
competition
Which life insurance rider typically appears on a Juvenile life insurance policy? -
Answer-Payor Benefit rider
Which of the following health insurance policy provisions specifies the health care
services a policy will provide? - Answer-Insuring Clause
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? - Answer-Her group health plan. If the employer has more than
20 employees, the group health plan generally pays first.
A life insurance policy which ensures that the premium will be paid if the insured
becomes disabled has what kind of rider attached? - Answer-Waiver of Premiums
The option that provides an additional death benefit for a limited amount of time at the
lowest possible cost is called a(n) - Answer-Accidental Death and Dismemberment rider
(AD&D)
What is the consideration given by an insurer in the Consideration clause of a life
policy? - Answer-Promise to pay a death benefit to a named beneficiary
The individual most likely to buy a Medicare Supplement policy would be a(n) - Answer-
68-year old male covered by Medicare
After the initial enrollment period, an HMO must hold an open enrollment period of how
many days at LEAST once in every 12-month period? - Answer-31
