Texas Life and Health Insurance Exam//All Chapters With
100% Original Answers. 2024-2025
A Disability Income policyowner recently submitted a claim for a chronic neck problem
that has now resulted in total disability. The original neck injury occurred before the
application was taken 5 years prior. The neck injury was never disclosed to the insurer
at the time of application. How will the insurer handle this claim? - CORRECT
ANSWERS -Claim will be paid and coverage will remain in force
Which of the following health policy provisions states that the producer does NOT have
the authority to change the policy or waive any of its provisions? - CORRECT
ANSWERS -Entire Contract
In health insurance policies, a waiver of premium provision keeps the coverage in force
without premium payments - CORRECT ANSWERS -After an insured has become
totally disabled as defined in the policy
An insurer must provide an insured with claim forms within __ days after receiving
notice of a loss. - CORRECT ANSWERS -15
An insurance company normally has 2 years to contest information provided on an
accident and health application. This 2 year period begins on the date that the -
CORRECT ANSWERS -insurer dates the policy
What type of rider would be added to an Accident and Health policy if the policyowner
wants to ensure the policy will continue if he/she ever becomes totally disabled? -
CORRECT ANSWERS -Waiver of Premium rider
According to the Mandatory Uniform Policy Provisions, what is the maximum amount of
time after the premium due date during which the policy remains in force even though
the premium has not been paid? - CORRECT ANSWERS -31 days
Pre-hospitalization authorization is considered an example of - CORRECT ANSWERS -
managed care
Which of the following are NOT managed care organizations? - CORRECT ANSWERS
-Medical Information Bureau (MIB)
In general, what percent of personal health insurance premiums is deductible for federal
income tax purposes? - CORRECT ANSWERS -100%
Which mode of payment is NOT used by health insurance policies? - CORRECT
ANSWERS -Single premium
,P is self-employed and owns an Individual Disability Income policy. He becomes totally
disabled on June 1 and receives $2,000 a month for the next 10 months. How much of
this income is subject to federal income tax? - CORRECT ANSWERS -$0
An agent takes an individual Disability Income application, collects the appropriate
premium, and issues the prospective insured a conditional receipt. The next step the
insurance company will take is to - CORRECT ANSWERS -determine if the applicant is
an acceptable risk by completing standard underwriting procedures
Which of the following BEST describes how pre-admission certifications are used? -
CORRECT ANSWERS -Used to prevent nonessential medical costs
A life insurance illustration is NOT required to include the - CORRECT ANSWERS -
company's mortality table
An insurance company must do which of the following to terminate an agent's
appointment? - CORRECT ANSWERS -Send notice of the termination to the Texas
Department of Insurance
At what point must a life insurance applicant be informed of their rights that fall under
the Fair Credit Reporting Act? - CORRECT ANSWERS -Upon completion of the
application
Who elects the governing body of a mutual insurance company? - CORRECT
ANSWERS -policyholders
An insurance applicant MUST be informed of an investigation regarding his/her
reputation and character according to the - CORRECT ANSWERS -Fair Credit
Reporting Act
What type of reinsurance contract involves two companies automatically sharing their
risk exposure? - CORRECT ANSWERS -Treaty
The stated amount or percent of liquid assets that an insurer must have on hand that
will satisfy future obligations to its policyholders is called - CORRECT ANSWERS -
reserves
Which of the following requires insurers to disclose when an applicant's consumer or
credit history is being investigated - CORRECT ANSWERS -1970 - Fair Credit
Reporting Act
What is the consideration given by an insurer in the Consideration clause of a life
policy? - CORRECT ANSWERS -Promise to pay a death benefit
, When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have - CORRECT ANSWERS -insurable interest in
the proposed insured
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called - CORRECT ANSWERS -representations
The part of a life insurance policy guaranteed to be true is called a(n) - CORRECT
ANSWERS -warranty
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent - CORRECT ANSWERS -Principal
The Consideration clause of an insurance contract includes - CORRECT ANSWERS -
the schedule and amount of premium payments
E and F are business partners. Each takes out a $500,000 life insurance policy on the
other, naming himself as primary beneficiary. E and F eventually terminate their
business, and four months later E dies. Although E was married with three children at
the time of death, the primary beneficiary is still F. However, an insurable interest no
longer exists. Where will the proceeds from E's life insurance policy be directed to? -
CORRECT ANSWERS -In this situation, the proceeds from E's life insurance policy will
go to F.
Which of the following terms defines the legally enforceable promise in an insurance
contract by the insurer? - CORRECT ANSWERS -Unilateral
When must insurable interest exist for a life insurance contract to be valid? - CORRECT
ANSWERS -Inception of the contract
Insurance contracts are known as ____ because certain future conditions or acts must
occur before any claims can be paid. - CORRECT ANSWERS -conditional
Which of these require an offer, acceptance, and consideration? - CORRECT
ANSWERS -Contract
Which of these arrangements allows one to bypass insurable interest laws? -
CORRECT ANSWERS -Investor-Originated Life Insurance
Investor-originated life insurance (or IOLI), sometimes called stranger-originated life
insurance (or STOLI) is used to circumvent state insurable interest statutes. This is
done when an investor (or stranger) persuades an individual to take out life insurance
specifically for the purpose of selling the policy to the investor. The investor
100% Original Answers. 2024-2025
A Disability Income policyowner recently submitted a claim for a chronic neck problem
that has now resulted in total disability. The original neck injury occurred before the
application was taken 5 years prior. The neck injury was never disclosed to the insurer
at the time of application. How will the insurer handle this claim? - CORRECT
ANSWERS -Claim will be paid and coverage will remain in force
Which of the following health policy provisions states that the producer does NOT have
the authority to change the policy or waive any of its provisions? - CORRECT
ANSWERS -Entire Contract
In health insurance policies, a waiver of premium provision keeps the coverage in force
without premium payments - CORRECT ANSWERS -After an insured has become
totally disabled as defined in the policy
An insurer must provide an insured with claim forms within __ days after receiving
notice of a loss. - CORRECT ANSWERS -15
An insurance company normally has 2 years to contest information provided on an
accident and health application. This 2 year period begins on the date that the -
CORRECT ANSWERS -insurer dates the policy
What type of rider would be added to an Accident and Health policy if the policyowner
wants to ensure the policy will continue if he/she ever becomes totally disabled? -
CORRECT ANSWERS -Waiver of Premium rider
According to the Mandatory Uniform Policy Provisions, what is the maximum amount of
time after the premium due date during which the policy remains in force even though
the premium has not been paid? - CORRECT ANSWERS -31 days
Pre-hospitalization authorization is considered an example of - CORRECT ANSWERS -
managed care
Which of the following are NOT managed care organizations? - CORRECT ANSWERS
-Medical Information Bureau (MIB)
In general, what percent of personal health insurance premiums is deductible for federal
income tax purposes? - CORRECT ANSWERS -100%
Which mode of payment is NOT used by health insurance policies? - CORRECT
ANSWERS -Single premium
,P is self-employed and owns an Individual Disability Income policy. He becomes totally
disabled on June 1 and receives $2,000 a month for the next 10 months. How much of
this income is subject to federal income tax? - CORRECT ANSWERS -$0
An agent takes an individual Disability Income application, collects the appropriate
premium, and issues the prospective insured a conditional receipt. The next step the
insurance company will take is to - CORRECT ANSWERS -determine if the applicant is
an acceptable risk by completing standard underwriting procedures
Which of the following BEST describes how pre-admission certifications are used? -
CORRECT ANSWERS -Used to prevent nonessential medical costs
A life insurance illustration is NOT required to include the - CORRECT ANSWERS -
company's mortality table
An insurance company must do which of the following to terminate an agent's
appointment? - CORRECT ANSWERS -Send notice of the termination to the Texas
Department of Insurance
At what point must a life insurance applicant be informed of their rights that fall under
the Fair Credit Reporting Act? - CORRECT ANSWERS -Upon completion of the
application
Who elects the governing body of a mutual insurance company? - CORRECT
ANSWERS -policyholders
An insurance applicant MUST be informed of an investigation regarding his/her
reputation and character according to the - CORRECT ANSWERS -Fair Credit
Reporting Act
What type of reinsurance contract involves two companies automatically sharing their
risk exposure? - CORRECT ANSWERS -Treaty
The stated amount or percent of liquid assets that an insurer must have on hand that
will satisfy future obligations to its policyholders is called - CORRECT ANSWERS -
reserves
Which of the following requires insurers to disclose when an applicant's consumer or
credit history is being investigated - CORRECT ANSWERS -1970 - Fair Credit
Reporting Act
What is the consideration given by an insurer in the Consideration clause of a life
policy? - CORRECT ANSWERS -Promise to pay a death benefit
, When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have - CORRECT ANSWERS -insurable interest in
the proposed insured
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called - CORRECT ANSWERS -representations
The part of a life insurance policy guaranteed to be true is called a(n) - CORRECT
ANSWERS -warranty
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent - CORRECT ANSWERS -Principal
The Consideration clause of an insurance contract includes - CORRECT ANSWERS -
the schedule and amount of premium payments
E and F are business partners. Each takes out a $500,000 life insurance policy on the
other, naming himself as primary beneficiary. E and F eventually terminate their
business, and four months later E dies. Although E was married with three children at
the time of death, the primary beneficiary is still F. However, an insurable interest no
longer exists. Where will the proceeds from E's life insurance policy be directed to? -
CORRECT ANSWERS -In this situation, the proceeds from E's life insurance policy will
go to F.
Which of the following terms defines the legally enforceable promise in an insurance
contract by the insurer? - CORRECT ANSWERS -Unilateral
When must insurable interest exist for a life insurance contract to be valid? - CORRECT
ANSWERS -Inception of the contract
Insurance contracts are known as ____ because certain future conditions or acts must
occur before any claims can be paid. - CORRECT ANSWERS -conditional
Which of these require an offer, acceptance, and consideration? - CORRECT
ANSWERS -Contract
Which of these arrangements allows one to bypass insurable interest laws? -
CORRECT ANSWERS -Investor-Originated Life Insurance
Investor-originated life insurance (or IOLI), sometimes called stranger-originated life
insurance (or STOLI) is used to circumvent state insurable interest statutes. This is
done when an investor (or stranger) persuades an individual to take out life insurance
specifically for the purpose of selling the policy to the investor. The investor
