Pearson Vue Texas State Life + Health Insurance Exam
Questions with Verified Answers
1. Which of the following long-term care benefits would provide coverage for
| | | | | | | | | | | care |for |functionally |impaired
| adults |on |a |less |than |24-hour |basis?
A. Residential care |
B. Assisted living |
C. Home health care | |
D. Adult day care | |
Answer |D.|Adult |day |care
2. An insured's long-tern care policy is scheduled to pay fixed amount of
| | | | | | | | | | | | coverage |of |$120 |per |day.|The |long-
term |care |facility |only |charged |$100 |per | day.|How |much |will |the |insurance |company |pay?
A. 20% of the total cost
| | | |
B. $120 a day | |
C. $100 a day | |
D. 80% of the total cost
| | | |
Answer |B.|$120 |a |day
3. In comparison to a policy that uses the accidental means definition,a policy
| | | | | | | | | | | | | that |uses |the |accidental |bodily |injury
| definition |would |provide |coverage |that | is
A. More limited in duration
| | |
B. Broader in duration | |
C. Broder in general | |
D. More limited in general
| | |
Answer |C.|Broader |in |general
4. An |individual |has |been |diagnosed |with |Alzheimer's |disease. |He |is |insured | under |a |life |insurance |policy |with
| the |accelerated |benefits |rider.|Which |of |the | following |is |true |regarding |taxation |of |the |accelerated |benefits?
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,A. The entire living benefits is considered taxable income
| | | | | | |
B. A portion of the benefits up to a limit is tax-free; the rest is taxable income
| | | | | | | | | | | | | | |
C. Principle is tax free, but interest is taxed
| | | | | | |
D. The entire benefits will be received tax free
| | | | | | |
Answer |B.|B.|A |portion |of |the |benefits |up | to |a |limit |is |tax-free; |the |rest |is |taxable |income
5. All |of |the |following |are |true |of |an |annuity |owner |EXCEPT
A. The owner has the right to name the beneficiary
| | | | | | | |
B. The owner is the party who may surrender the annuity
| | | | | | | | |
C. The owner must be the party to receive benefits
| | | | | | | |
D. The owner pays the premiums on the annuity
| | | | | | |
Answer |C.|The |owner |must |be |the |party | to |receive |benefits
6. How |is |emergency |care |covered |for |a |member |of |an |HMO?
A. An HMO emergency specialist will cover the patient
| | | | | | |
B. A member of an HMO can receive care in or out of the HMO service area,
| | | | | | | | | | | | | | | | but |care |is |preferred |in |the
| service |area
C. A member of an HMO may receive care at any emergency facility, at the same cost as if in his or her own
| | | | | | | | | | | | | | | | | | | | | |
| service |area
D. HMOs have salaried member physicians, but they do not cover emergency
| | | | | | | | | | | care
Answer |B. |A |member |of |an |HMO |can |receive |care |in |or |out |of |the |HMO |service |area, | but |care |is |preferred |in |the
| service |area
7. Death |benefits |payable |to |a |beneficiary |under |a |life |insurance |policy |are | generally
A. Subject to income taxation by the federal government
| | | | | | |
B. Exempt from income taxation if under $10,000
| | | | | |
C. Exempt from income taxation if over $10,000
| | | | | |
D. Not subject to income taxation by the federal government
| | | | | | | |
Answer |D.|Not |subject |to | income |taxation |by |the |federal |government
8. Which |of |the |following |best |describes |the |aleatory |nature |of |an |insurance | contract?
2 |/ |26
,A. Only one of the parties being legally bound by the contract
| | | | | | | | | |
B. Ambiguities are interpreted in favor of the insured | | | | | | |
C. Policies are submitted to the insurer on a take-it-or-leave-it basis
| | | | | | | | |
D. Exchange of unequal values | | |
Answer |D.|Exchange |of |unequal |values
9. Which |of |the |following |is |considered |a |presumptive |disability |under |a | disability |income |policy
A. Loss of two limbs | | |
B. Loss of an eye | | |
C. Loss of hearing in one ear
| | | | |
D. Loss of one hand or foot
| | | | |
Answer |A.|loss |of |two |limbs
10. An insured purchased a noncancelable health insurance policy 1 year
| | | | | | | | |
ago.|Which |of |the |following |circumstances |would |NOT |be |a |reason |for |the | insurance |company |to |cancel |the
| policy?
A. The insured reaches the maximum age limit specified in the policy
| | | | | | | | | |
B. Within two years of the application, the insurer discovers a misrepresenta-
| | | | | | | | | | | tion
C. The insured is an accident and incurs a large claim
| | | | | | | | |
D. The insured does not pay the premium
| | | | | |
Answer |C.|The |insured |is |an |accident |and | incurs |a |large |claim
11. When the insured selects the extended term nonforfeiture option,the cash
| | | | | | | | | | | value |will |be |used |to |purchase |term
| insurance |with |what |face |amount?
A. The same as the original policy minus the cash value
| | | | | | | | |
B. Equal to the original policy for as long as the cash values will purchase
| | | | | | | | | | | | |
C. In lesser amounts for the remaining policy term of age 100
| | | | | | | | | |
D. Equal to the cash value surrendered from the policy
| | | | | | | |
Answer |B.|Equal |to |the |original | policy |for |as |long |as |the |cash |values |will |purchase
3 |/ |26
, 12. *What is the purpose of settlement options?
| | | | | |
A. They are guarantees built into the policy
| | | | | |
B. They guarantee a return of excess premiums
| | | | | |
C. they provide the beneficiary the income he/she cannot outlive
| | | | | | | |
D. Determines how the death benefit will be paid to the beneficiary
| | | | | | | | | |
Answer |D.|Deter- | mines |how |the |death |benefit |will |be |paid |to |the |beneficiary
13. The premium charged for exercising the guaranteed insurability Rider is
| | | | | | | | | | based |upon |the |insured's
A. Assumed age |
B. Average age |
C. Issue age |
D. Attained age |
Answer |D.|Attained |age
14. Which of the following best describes the "first-dollar coverage" principle
| | | | | | | | | | in |basic |medical |insurance?
A. The insured must first pay a deductible
| | | | | |
B. The insurer covers the first claim on the policy
| | | | | | | |
C. Deductibles and coinsurance are taxed first | | | | |
D. The insured is not required to pay a deductible
| | | | | | | |
Answer |D.|The |insured |is |not |required | to |pay |a |deductible
15. Which of the following determines the cash value of a variable life policy?
| | | | | | | | | | | |
A. The performance of the policy portfolio
| | | | |
B. The company's general account
| | |
C. The policy's guarantees
| |
D. The premium mode
| |
Answer |D.|The |premium |mode
16. An individual applied for an insurance policy and paid the initial premium.
| | | | | | | | | | | | The |insurer |issued |a |conditional
| receipt. |Five |days |later |the |applicant |had |to | submit |to |a |medical |exam. |If |the |policy |is |issued, |what |would |be |the
| policy's | effective |date?
4 |/ |26
Questions with Verified Answers
1. Which of the following long-term care benefits would provide coverage for
| | | | | | | | | | | care |for |functionally |impaired
| adults |on |a |less |than |24-hour |basis?
A. Residential care |
B. Assisted living |
C. Home health care | |
D. Adult day care | |
Answer |D.|Adult |day |care
2. An insured's long-tern care policy is scheduled to pay fixed amount of
| | | | | | | | | | | | coverage |of |$120 |per |day.|The |long-
term |care |facility |only |charged |$100 |per | day.|How |much |will |the |insurance |company |pay?
A. 20% of the total cost
| | | |
B. $120 a day | |
C. $100 a day | |
D. 80% of the total cost
| | | |
Answer |B.|$120 |a |day
3. In comparison to a policy that uses the accidental means definition,a policy
| | | | | | | | | | | | | that |uses |the |accidental |bodily |injury
| definition |would |provide |coverage |that | is
A. More limited in duration
| | |
B. Broader in duration | |
C. Broder in general | |
D. More limited in general
| | |
Answer |C.|Broader |in |general
4. An |individual |has |been |diagnosed |with |Alzheimer's |disease. |He |is |insured | under |a |life |insurance |policy |with
| the |accelerated |benefits |rider.|Which |of |the | following |is |true |regarding |taxation |of |the |accelerated |benefits?
1 |/ |26
,A. The entire living benefits is considered taxable income
| | | | | | |
B. A portion of the benefits up to a limit is tax-free; the rest is taxable income
| | | | | | | | | | | | | | |
C. Principle is tax free, but interest is taxed
| | | | | | |
D. The entire benefits will be received tax free
| | | | | | |
Answer |B.|B.|A |portion |of |the |benefits |up | to |a |limit |is |tax-free; |the |rest |is |taxable |income
5. All |of |the |following |are |true |of |an |annuity |owner |EXCEPT
A. The owner has the right to name the beneficiary
| | | | | | | |
B. The owner is the party who may surrender the annuity
| | | | | | | | |
C. The owner must be the party to receive benefits
| | | | | | | |
D. The owner pays the premiums on the annuity
| | | | | | |
Answer |C.|The |owner |must |be |the |party | to |receive |benefits
6. How |is |emergency |care |covered |for |a |member |of |an |HMO?
A. An HMO emergency specialist will cover the patient
| | | | | | |
B. A member of an HMO can receive care in or out of the HMO service area,
| | | | | | | | | | | | | | | | but |care |is |preferred |in |the
| service |area
C. A member of an HMO may receive care at any emergency facility, at the same cost as if in his or her own
| | | | | | | | | | | | | | | | | | | | | |
| service |area
D. HMOs have salaried member physicians, but they do not cover emergency
| | | | | | | | | | | care
Answer |B. |A |member |of |an |HMO |can |receive |care |in |or |out |of |the |HMO |service |area, | but |care |is |preferred |in |the
| service |area
7. Death |benefits |payable |to |a |beneficiary |under |a |life |insurance |policy |are | generally
A. Subject to income taxation by the federal government
| | | | | | |
B. Exempt from income taxation if under $10,000
| | | | | |
C. Exempt from income taxation if over $10,000
| | | | | |
D. Not subject to income taxation by the federal government
| | | | | | | |
Answer |D.|Not |subject |to | income |taxation |by |the |federal |government
8. Which |of |the |following |best |describes |the |aleatory |nature |of |an |insurance | contract?
2 |/ |26
,A. Only one of the parties being legally bound by the contract
| | | | | | | | | |
B. Ambiguities are interpreted in favor of the insured | | | | | | |
C. Policies are submitted to the insurer on a take-it-or-leave-it basis
| | | | | | | | |
D. Exchange of unequal values | | |
Answer |D.|Exchange |of |unequal |values
9. Which |of |the |following |is |considered |a |presumptive |disability |under |a | disability |income |policy
A. Loss of two limbs | | |
B. Loss of an eye | | |
C. Loss of hearing in one ear
| | | | |
D. Loss of one hand or foot
| | | | |
Answer |A.|loss |of |two |limbs
10. An insured purchased a noncancelable health insurance policy 1 year
| | | | | | | | |
ago.|Which |of |the |following |circumstances |would |NOT |be |a |reason |for |the | insurance |company |to |cancel |the
| policy?
A. The insured reaches the maximum age limit specified in the policy
| | | | | | | | | |
B. Within two years of the application, the insurer discovers a misrepresenta-
| | | | | | | | | | | tion
C. The insured is an accident and incurs a large claim
| | | | | | | | |
D. The insured does not pay the premium
| | | | | |
Answer |C.|The |insured |is |an |accident |and | incurs |a |large |claim
11. When the insured selects the extended term nonforfeiture option,the cash
| | | | | | | | | | | value |will |be |used |to |purchase |term
| insurance |with |what |face |amount?
A. The same as the original policy minus the cash value
| | | | | | | | |
B. Equal to the original policy for as long as the cash values will purchase
| | | | | | | | | | | | |
C. In lesser amounts for the remaining policy term of age 100
| | | | | | | | | |
D. Equal to the cash value surrendered from the policy
| | | | | | | |
Answer |B.|Equal |to |the |original | policy |for |as |long |as |the |cash |values |will |purchase
3 |/ |26
, 12. *What is the purpose of settlement options?
| | | | | |
A. They are guarantees built into the policy
| | | | | |
B. They guarantee a return of excess premiums
| | | | | |
C. they provide the beneficiary the income he/she cannot outlive
| | | | | | | |
D. Determines how the death benefit will be paid to the beneficiary
| | | | | | | | | |
Answer |D.|Deter- | mines |how |the |death |benefit |will |be |paid |to |the |beneficiary
13. The premium charged for exercising the guaranteed insurability Rider is
| | | | | | | | | | based |upon |the |insured's
A. Assumed age |
B. Average age |
C. Issue age |
D. Attained age |
Answer |D.|Attained |age
14. Which of the following best describes the "first-dollar coverage" principle
| | | | | | | | | | in |basic |medical |insurance?
A. The insured must first pay a deductible
| | | | | |
B. The insurer covers the first claim on the policy
| | | | | | | |
C. Deductibles and coinsurance are taxed first | | | | |
D. The insured is not required to pay a deductible
| | | | | | | |
Answer |D.|The |insured |is |not |required | to |pay |a |deductible
15. Which of the following determines the cash value of a variable life policy?
| | | | | | | | | | | |
A. The performance of the policy portfolio
| | | | |
B. The company's general account
| | |
C. The policy's guarantees
| |
D. The premium mode
| |
Answer |D.|The |premium |mode
16. An individual applied for an insurance policy and paid the initial premium.
| | | | | | | | | | | | The |insurer |issued |a |conditional
| receipt. |Five |days |later |the |applicant |had |to | submit |to |a |medical |exam. |If |the |policy |is |issued, |what |would |be |the
| policy's | effective |date?
4 |/ |26
