TEXAS INSURANCE LICENSE EXAMINATION
GRADED A+ WITH CORRECT ANSWERS FOR ALL
THE QUESTIONS
Which of the following statements BEST defines usual, customary, and reasonable
(UCR) charges? – ANSWER The maximum amount considered eligible for
reimbursement by an insurance company under a health plan
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of
the following contractual elements? – ANSWER Legal Purpose (Insurable Interest)
in a qualified retirement plan, the yearly contributions to an employee's account: -
ANSWER are restricted to maximum levels set by the IRS
Who is NOT required to sign a life insurance application? – ANSWER beneficiary
Which of these is NOT considered to be a right given to a policyowner?
–ANSWER Modify a provision in the insurance contract
Which of the following statements about health coverage for newborns is NOT true?
–ANSWER Coverage is limited to only congenital defects
Which of the following best describes a contingent beneficiary? – ANSWER
Persondesignated by the insured to receive policy proceeds in the event that the
primary beneficiary dies before the insured
The federal income tax treatment of employer-provided group Medical Expense
insurance can be accurately described as. – ANSWER Employee's premiums paid by
theemployer are tax-deductible to the employer as a business expenditure
Which of the following is NOT included in a life insurance illustration?
–ANSWER company's mortality table
Which of the following is NOT a required provision in group life policies?
–ANSWER Right to Loan
Which of the following is a valid reason for an enrollee to be cancelled by a Health
Maintenance
Organization (HMO) plan? – ANSWER Nonpayment of coverage
What is considered to be a characteristic of a Conditionally Renewable Health
Insurance policy? – ANSWER Premiums may increase at the time of renewal
Under a Renewable Term policy. – ANSWER the renewal premium is calculated on
thebasis of the insured's attained age
,A pilot applies for Life insurance. The insurer approves the application with a $10
additional monthly premium modification due to the risk involved. The pilot declines the
additional premium modification.
All of the following are considered to be typical characteristics describing the nature of
an insurance contract, EXCEPT – ANSWER Bilateral
A domestic insurance company in Texas is considered a company that? - ANSWERis
incorporated and formed in Texas
A certificate of
permits an insurance company to transact business in Texas. - ANSWERauthority
Which of the following BEST describes how a Preferred Provider Organization (PPO) is
less restrictive than a Health Maintenance Organization (HMO)? - ANSWERMore
physicians to choose from
What type of annuity has a cash value that is based upon the performance of it's
underlying investment funds? - ANSWERvariable
When an insured changes to a more hazardous occupation, which disability policy
provision allows an insurer to adjust policy benefits and rates? - ANSWERChange of
occupation provision
A plan through the Marketplace may be purchased by - ANSWERAny legal resident
(except those imprisoned)
A license may be denied, suspended, or revoked if the licensee? - ANSWERis found
guilty of misrepresentation in obtaining the license
A Business Overhead Expense policy - ANSWERcovers business expenses such as
,rent and utilities
, The policy provision that entitles the insurer to establish conditions the insured must
meet while a claim is pending is - ANSWERTime Limit on Certain Defenses
T is the policyowner for a Life Insurance policy with an Irrevocable beneficiary
designation, If T wishes to change the beneficiary, T must obtain permission from the -
ANSWERbeneficiary
The individual Health Insurance policy that offers the broadest protection is a(n)
policy - ANSWERmajor medical
When an insurance application is taken by a producer, which of these statements is
true? - ANSWERAny changes made on the application require the applicant's initials
Term Life Policies that have the ability to be converted to permanent coverage may do
so during a specific time period. This conversion period - ANSWERvaries according to
the contract
A Disability Income policy that only the policyowner can terminate and which the rates
will never go up is considered to be - ANSWERnoncancellable
An example of false advertising would be - ANSWERAn insurer exaggerating its
dividends in a magazine advertisement
B has a $100,000 Accidental Death and Dismemberment policy that pays triple
indemnity for common carrier death. If B is killed from an accident on a commercial
flight, what will the policy pay B's beneficiary? - ANSWER$300,000
Which of the following is an example of a nonforfeiture option? - ANSWERreduced paid-
up option
An applicant MUST receive an Outline of Coverage when an application is taken for
a(n) - ANSWERMedicare Supplement policy
Which mode of payment is NOT used by health insurance policies? - ANSWERSingle
Premium
What type of life policy covers two people and pays upon the death of the last insured? -
ANSWERsurvivorship
During a sales presentation for a participating life insurance policy, an agent MUST -
ANSWERmake a prospect understand that dividends are NOT guaranteed
What is the elimination period of an individual disability policy? - ANSWERTime period a
disabled person must wait before benefits are paid
GRADED A+ WITH CORRECT ANSWERS FOR ALL
THE QUESTIONS
Which of the following statements BEST defines usual, customary, and reasonable
(UCR) charges? – ANSWER The maximum amount considered eligible for
reimbursement by an insurance company under a health plan
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of
the following contractual elements? – ANSWER Legal Purpose (Insurable Interest)
in a qualified retirement plan, the yearly contributions to an employee's account: -
ANSWER are restricted to maximum levels set by the IRS
Who is NOT required to sign a life insurance application? – ANSWER beneficiary
Which of these is NOT considered to be a right given to a policyowner?
–ANSWER Modify a provision in the insurance contract
Which of the following statements about health coverage for newborns is NOT true?
–ANSWER Coverage is limited to only congenital defects
Which of the following best describes a contingent beneficiary? – ANSWER
Persondesignated by the insured to receive policy proceeds in the event that the
primary beneficiary dies before the insured
The federal income tax treatment of employer-provided group Medical Expense
insurance can be accurately described as. – ANSWER Employee's premiums paid by
theemployer are tax-deductible to the employer as a business expenditure
Which of the following is NOT included in a life insurance illustration?
–ANSWER company's mortality table
Which of the following is NOT a required provision in group life policies?
–ANSWER Right to Loan
Which of the following is a valid reason for an enrollee to be cancelled by a Health
Maintenance
Organization (HMO) plan? – ANSWER Nonpayment of coverage
What is considered to be a characteristic of a Conditionally Renewable Health
Insurance policy? – ANSWER Premiums may increase at the time of renewal
Under a Renewable Term policy. – ANSWER the renewal premium is calculated on
thebasis of the insured's attained age
,A pilot applies for Life insurance. The insurer approves the application with a $10
additional monthly premium modification due to the risk involved. The pilot declines the
additional premium modification.
All of the following are considered to be typical characteristics describing the nature of
an insurance contract, EXCEPT – ANSWER Bilateral
A domestic insurance company in Texas is considered a company that? - ANSWERis
incorporated and formed in Texas
A certificate of
permits an insurance company to transact business in Texas. - ANSWERauthority
Which of the following BEST describes how a Preferred Provider Organization (PPO) is
less restrictive than a Health Maintenance Organization (HMO)? - ANSWERMore
physicians to choose from
What type of annuity has a cash value that is based upon the performance of it's
underlying investment funds? - ANSWERvariable
When an insured changes to a more hazardous occupation, which disability policy
provision allows an insurer to adjust policy benefits and rates? - ANSWERChange of
occupation provision
A plan through the Marketplace may be purchased by - ANSWERAny legal resident
(except those imprisoned)
A license may be denied, suspended, or revoked if the licensee? - ANSWERis found
guilty of misrepresentation in obtaining the license
A Business Overhead Expense policy - ANSWERcovers business expenses such as
,rent and utilities
, The policy provision that entitles the insurer to establish conditions the insured must
meet while a claim is pending is - ANSWERTime Limit on Certain Defenses
T is the policyowner for a Life Insurance policy with an Irrevocable beneficiary
designation, If T wishes to change the beneficiary, T must obtain permission from the -
ANSWERbeneficiary
The individual Health Insurance policy that offers the broadest protection is a(n)
policy - ANSWERmajor medical
When an insurance application is taken by a producer, which of these statements is
true? - ANSWERAny changes made on the application require the applicant's initials
Term Life Policies that have the ability to be converted to permanent coverage may do
so during a specific time period. This conversion period - ANSWERvaries according to
the contract
A Disability Income policy that only the policyowner can terminate and which the rates
will never go up is considered to be - ANSWERnoncancellable
An example of false advertising would be - ANSWERAn insurer exaggerating its
dividends in a magazine advertisement
B has a $100,000 Accidental Death and Dismemberment policy that pays triple
indemnity for common carrier death. If B is killed from an accident on a commercial
flight, what will the policy pay B's beneficiary? - ANSWER$300,000
Which of the following is an example of a nonforfeiture option? - ANSWERreduced paid-
up option
An applicant MUST receive an Outline of Coverage when an application is taken for
a(n) - ANSWERMedicare Supplement policy
Which mode of payment is NOT used by health insurance policies? - ANSWERSingle
Premium
What type of life policy covers two people and pays upon the death of the last insured? -
ANSWERsurvivorship
During a sales presentation for a participating life insurance policy, an agent MUST -
ANSWERmake a prospect understand that dividends are NOT guaranteed
What is the elimination period of an individual disability policy? - ANSWERTime period a
disabled person must wait before benefits are paid
