Texas State Exam Simulator - Life and Health Insurance
(Written) questions with verified answers
A 42-year-old executive wants to purchase life insurance that will allow for
increases or decreases to coverage as his/her needs change. Which of the
following policies will best meet this need? Ans✓✓✓ Universal Life
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? Ans✓✓✓ Her group health plan
A Business Disability Buyout plan policy is designed Ans✓✓✓ to pay benefits to
the Corporation or other shareholders
A comprehensive major medical health insurance policy contains an Eligible
Expenses provision which identifies the types of health care services that are
covered. All of the following health care services are typically covered EXCEPT for
hospital charges
physician fees
experimental and investigative services
nursing services Ans✓✓✓ experimental and investigative services
A creditor who requires a debtor to obtain insurance from a particular company
or agent as a condition for a loan is
guilty of Ans✓✓✓ coercion
,A father who dies within 3 years after purchasing a life insurance policy on his
infant daughter can have the policy premiums waived under which provision?
Ans✓✓✓ Payor provision
A foreign insurance company is one that is incorporated Ans✓✓✓ under the laws
of another state
A group life insurance policy may NOT insure groups consisting exclusively of
persons who are Ans✓✓✓ related by marriage, blood or legal adoption
A group-owned insurance company that is formed to assume and spread the
liability risks of its members is known as a Ans✓✓✓ risk retention group
A Health Reimbursement Arrangement MUST be established Ans✓✓✓ by the
employer
A life insurance illustration is NOT required to include the
name of the insurer
underwriting or rating classification upon which the illustration is based
initial death benefit
company's mortality table Ans✓✓✓ company's mortality table
A Long-Term Care policy must offer a MINIMUM benefit period of how many
months? Ans✓✓✓ 12
,A long-term care rider in a life insurance policy pays a daily benefit in the event of
Ans✓✓✓ Inability of the insured to perform more than 2 Activities of Daily Living
(ADL's)
A Loss-Purchase Buy and Sell agreement among three partners, funded with
individual life insurance, would require how many policies? Ans✓✓✓ 6
A newly licensed General Lines agent must complete a MINIMUM of how many
hours of continuing education within 24 months after initial license? Ans✓✓✓ 24
A nonprofit incorporated society that does not have capital stock and operates for
the sole benefit of its members is known as Ans✓✓✓ a fraternal benefit society
A physician opens up a new practice and qualifies for a $7,000/month Disability
Income policy. What rider would the physician add if he wants the ability to
increase his policy benefit as his practice and income grow? Ans✓✓✓
Guaranteed Insurability Option rider
A policyowner's rights are limited under which beneficiary designation? Ans✓✓✓
Irrevocable
A potential client, age 40, would like to purchase a Whole Life policy that will
accumulate cash value at a faster rate in the early years of the policy. Which of
these statements made by the producer would be correct?
Straight life accumulates faster than Limited-pay Life
20-Pay Life accumulates cash value faster than Straight Life
, Cash value accumulation of both 20-Pay Life and Straight Life depend on the
insurer's financial rating
20-Pay Life and Straight Life accumulate cash value at the same rate Ans✓✓✓
20-Pay Life accumulates cash value faster than Straight Life
A Renewable Term Policy is renewable at the option of the Ans✓✓✓ insured
A stock insurance company is owned by it's Ans✓✓✓ stockholders
A student pilot can pay regular premium costs for her life insurance policy with
the addition of what? Ans✓✓✓ Aviation exclusion
A whole life insurance policyowner does not wish to continue making premium
payments. Which of the following enables the policyowner to sell the policy for
more than its cash value? Ans✓✓✓ Life settlement contract
Adam 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 Adam
belong to? Ans✓✓✓ Health Maintenance Organization
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? Ans✓✓✓ 31
Agent Hudson takes an application and initial premium from an applicant and
sends the application and premium check to the insurance company. The
insurance company returns the check back to Hudson because the check is made
out to Hudson instead of the insurance company. What action should Hudson
(Written) questions with verified answers
A 42-year-old executive wants to purchase life insurance that will allow for
increases or decreases to coverage as his/her needs change. Which of the
following policies will best meet this need? Ans✓✓✓ Universal Life
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? Ans✓✓✓ Her group health plan
A Business Disability Buyout plan policy is designed Ans✓✓✓ to pay benefits to
the Corporation or other shareholders
A comprehensive major medical health insurance policy contains an Eligible
Expenses provision which identifies the types of health care services that are
covered. All of the following health care services are typically covered EXCEPT for
hospital charges
physician fees
experimental and investigative services
nursing services Ans✓✓✓ experimental and investigative services
A creditor who requires a debtor to obtain insurance from a particular company
or agent as a condition for a loan is
guilty of Ans✓✓✓ coercion
,A father who dies within 3 years after purchasing a life insurance policy on his
infant daughter can have the policy premiums waived under which provision?
Ans✓✓✓ Payor provision
A foreign insurance company is one that is incorporated Ans✓✓✓ under the laws
of another state
A group life insurance policy may NOT insure groups consisting exclusively of
persons who are Ans✓✓✓ related by marriage, blood or legal adoption
A group-owned insurance company that is formed to assume and spread the
liability risks of its members is known as a Ans✓✓✓ risk retention group
A Health Reimbursement Arrangement MUST be established Ans✓✓✓ by the
employer
A life insurance illustration is NOT required to include the
name of the insurer
underwriting or rating classification upon which the illustration is based
initial death benefit
company's mortality table Ans✓✓✓ company's mortality table
A Long-Term Care policy must offer a MINIMUM benefit period of how many
months? Ans✓✓✓ 12
,A long-term care rider in a life insurance policy pays a daily benefit in the event of
Ans✓✓✓ Inability of the insured to perform more than 2 Activities of Daily Living
(ADL's)
A Loss-Purchase Buy and Sell agreement among three partners, funded with
individual life insurance, would require how many policies? Ans✓✓✓ 6
A newly licensed General Lines agent must complete a MINIMUM of how many
hours of continuing education within 24 months after initial license? Ans✓✓✓ 24
A nonprofit incorporated society that does not have capital stock and operates for
the sole benefit of its members is known as Ans✓✓✓ a fraternal benefit society
A physician opens up a new practice and qualifies for a $7,000/month Disability
Income policy. What rider would the physician add if he wants the ability to
increase his policy benefit as his practice and income grow? Ans✓✓✓
Guaranteed Insurability Option rider
A policyowner's rights are limited under which beneficiary designation? Ans✓✓✓
Irrevocable
A potential client, age 40, would like to purchase a Whole Life policy that will
accumulate cash value at a faster rate in the early years of the policy. Which of
these statements made by the producer would be correct?
Straight life accumulates faster than Limited-pay Life
20-Pay Life accumulates cash value faster than Straight Life
, Cash value accumulation of both 20-Pay Life and Straight Life depend on the
insurer's financial rating
20-Pay Life and Straight Life accumulate cash value at the same rate Ans✓✓✓
20-Pay Life accumulates cash value faster than Straight Life
A Renewable Term Policy is renewable at the option of the Ans✓✓✓ insured
A stock insurance company is owned by it's Ans✓✓✓ stockholders
A student pilot can pay regular premium costs for her life insurance policy with
the addition of what? Ans✓✓✓ Aviation exclusion
A whole life insurance policyowner does not wish to continue making premium
payments. Which of the following enables the policyowner to sell the policy for
more than its cash value? Ans✓✓✓ Life settlement contract
Adam 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 Adam
belong to? Ans✓✓✓ Health Maintenance Organization
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? Ans✓✓✓ 31
Agent Hudson takes an application and initial premium from an applicant and
sends the application and premium check to the insurance company. The
insurance company returns the check back to Hudson because the check is made
out to Hudson instead of the insurance company. What action should Hudson
