Texas State Exam Simulator - Life and Health Insurance Exam Questions with 100% Correct SOLUTIONs Latest UPDATE 2025/2026 100% GUARANTEED PASS!!!(A+ GRADED 100% VERIFIED)

Texas State Exam Simulator - Life and Health Insurance Exam Questions with 100% Correct SOLUTIONs Latest UPDATE 2025/2026 100% GUARANTEED PASS!!!(A+ GRADED 100% VERIFIED) Term insurance has which of the following characteristics? Expires at the end of the policy period Builds cash value Has nonforfeiture options Endows at the end of the policy period - ANSWER Expires at the end of the policy period An agent MUST do which of the following during a sales presentation for a participating life insurance policy? Include a statement that dividends are NOT guaranteed Include a statement that dividends ARE guaranteed Explain the applicable Nonforfeiture values Explain the surrender cost indexes for 5 and 10 years - ANSWER Include a statement that dividends are NOT guaranteed In regards to representations or warranties, which of these statements is TRUE? Warranties are statements considered to be true to the best of the applicant's belief If material to the risk, false representations will void a policy Representations are statements guaranteed to be true in every respect If material to the risk, false representations will NOT void a policy - ANSWER If material to the risk, false representations will void a policy The Commissioner of Insurance may issue a temporary agent's license for a maximum of how many days? 180 90 60 30 - ANSWER 90 A stock insurance company is owned by it's directors stockholders agents insureds - ANSWER stockholders J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct? The gross premium is higher on a monthly payment mode as compared to being paid annually The gross premium is lower on a monthly payment mode as compared to being paid annually The cash value from a life policy paid on a monthly basis builds quicker than one paid on an annual basis The face amount of a life policy paid on a monthly basis is higher than one paid on an annual basis - ANSWER The gross premium is higher on a monthly payment mode as compared to being paid annually What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies? Family Maintenance Policy Family Income Policy Survivor Policy Family Survivor Policy - ANSWER Family Maintenance Policy Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan? Revocable assignment Beneficiary change Irrevocable assignment Collateral assignment - ANSWER Collateral assignment Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured? HMO PPO EPO PLHSO - ANSWER PPO Basic Hospital and Surgical policy benefits are lower than the actual expenses incurred higher than the actual expenses incurred normally subject to deductibles normally subject to coinsurance - ANSWER lower than the actual expenses incurred An employer that offers a qualified retirement plan to its employees is eligible to avoid ERISA regulations make tax-deductible contributions to the plan make tax deductible contributions to key employees only make partial tax-deductible contributions to the plan - ANSWER make taxdeductible contributions to the plan What action can a policyowner take if an application for a bank loan requires collateral? Utilize accelerated benefits provision Borrow against policy cash value and use as a down payment Assign policy ownership to the bank Name bank as beneficiary - ANSWER Assign policy ownership to the bank Which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due? Grace Period Consideration Waiver of Premium Reinstatement - ANSWER Grace Period The Consideration clause in a life insurance contract contains what pertinent information? Summary of benefits Offer and acceptance Entire Contract Amount of premium payments and when they are due - ANSWER Amount of premium payments and when they are due T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay? The total premiums paid minus any policy loans Nothing $50,000 $100,000 - ANSWER $50,000 T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? $1,000,000 $500,000 $250,000 $0 - ANSWER $0 The clause identifying which losses resulting from an accident or sickness are insured by the policy is called the Entire Contract provision Consideration clause Benefit clause Insuring clause - ANSWER Insuring clause What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100? Term Life Whole Life Credit Life Universal Life - ANSWER Whole Life What is the purpose of the Time of Payment of Claims provision? Requires the insured to wait 60 days after submitting Proof of Loss before filing a lawsuit Prevents delayed claim payments made by the insurer Requires a probation period for each claim filed by the insured Protects the insurer from frivolous lawsuits - ANSWER Prevents delayed claim payments made by the insurer A long-term care rider in a life insurance policy pays a daily benefit in the event of which of the following? Critical illness Terminal illness Inability of the insured to perform more than 2 Activities of Daily Living (ADL's) Inability of the insured to maintain insurance premiums due to unemployment - ANSWER Inability of the insured to perform more than 2 Activities of Daily Living (ADL's) Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability? Owner's Rights clause Incontestable Period Insuring Agreement Conversion privilege - ANSWER Conversion privilege The Insurance Commissioner may examine the records of an insurance company in order to determine the solvency of the company determine the trust deposits of the company approve the claims records of the company for tax purposes assess the company's value on behalf of a prospective client - ANSWER determine the solvency of the company What does Medicare Parts A and B cover? Part A covers hospitalization; Part B covers long-term care Part A covers doctor's services; Part B covers hospitalization Part A covers hospitalization; Part B covers doctor's services Part A covers prescription drugs; Part B covers disability - ANSWER Part A covers hospitalization; Part B covers doctor's services What is issued to each employee of an employer health plan? Provision Receipt Policy Certificate - ANSWER Certificate 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? Endowment at Age 75 Universal Life Graded Benefit Whole Life Modified Whole Life - ANSWER Universal Life When a life insurance policy exceeds certain IRS table values, the result would create which of the following? 1035 Exchange An investment Modified Endowment Contract (MEC) Endowment - ANSWER Modified Endowment Contract (MEC) Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges? The maximum premium an insurer can charge for their health insurance based on geography The maximum amount an employer can contribute to a contributory health plan The maximum deductible an insured can be charged The maximum amount considered eligible for reimbursement by an insurance company under a health plan - ANSWER The maximum amount considered eligible for reimbursement by an insurance company under a health plan K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? Return of premiums paid Cash value plus interest $20,000 death benefit Face amount plus interest - ANSWER $20,000 death benefit Which of the following are NOT managed care organizations? Point-of-Service plan (POS) Preferred Provider Organization (PPO) Medical Information Bureau (MIB) Health Maintenance Organization (HMO) - ANSWER Medical Information Bureau (MIB) K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered optionally renewable conditionally renewable guaranteed renewable noncancellable - ANSWER guaranteed renewable What type of life insurance incorporates flexible premiums and an adjustable death benefit? Endowment Policy Modified Whole Life Decreasing Term Universal Life - ANSWER Universal Life