1. Texas State Exam Simulator - Life and Health
Insurance (200 Questions Practice Exam) With
Correct answers
Ann nuity promises that, if the annuitant dies before receiving payments equal to the correct value, the payments
P P P P
will be continued to a beneficiary until an amount equal to the contract value has been paid. This type of annuity i
called
An installment Refund annuity
A Straight Life annuity
A Cash Refund annuity
A Joint Life annuity - Correct Answer - An installment Refund annuity
One becomes eligible for Social Security disability benefits after having been disabled for
3 months
5 months
6 months
12 months - Correct Answer - 5 months
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster ra
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 - Correct Answer - 20-Pay Life accumulat
cash value faster than Straight Life
Who makes the legally enforceable promises in a unilateral insurance policy?
Beneficiary
Insurance company
Insured
Applicant - Correct Answer - Insurance company
The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a
completed application and
the initial premium
agreeing to a physical examination
delivery of policy
disclosure of any medical conditions - Correct Answer - the initial premium
Which parts of a life insurance policy are guaranteed to be true?
,Rating
Representation
Statement
Warranty - Correct Answer - Warranty
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 - Correct Answer - experimental and investigative services
If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for
excess hospital expenses?
Long-term care
Indemnity
Medicare Supplement
Medicaid - Correct Answer - Medicare Supplement
S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the
claim her beneficiary submits?
No benefits are payable under the Master contract
Full benefits are payable under the Master contract
Full benefits are payable under the converted policy
Benefits less required premium are payable under the converted policy - Correct Answer - Full benefits are
payable under the Master contract
All of the following are limited benefit plans EXCEPT
cancer policies
life insurance policies
dental policies
critical illness policies - Correct Answer - life insurance policies
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?
Extended Term rider
Cost of Living Adjustment rider
Guaranteed Insurability Option rider
Waiver of Premium rider - Correct Answer - Guaranteed Insurability Option rider
An agent whose license has been revoked is required to
wait at least five years before applying for a new license
submit all previously written policies to the Commissioner of Insurance's office for servicing of the accounts
cancel all policies currently in effect and advise the insureds to place them elsewhere
, continue to service the existing accounts but not solicit new business - Correct Answer - wait at least five years
before applying for a new license
The benefits under a Disability Buy-Out policy are
normally paid in installments
taxable to the beneficiary
payable to the company or another shareholder
normally paid after a short elimination period - Correct Answer - payable to the company or another shareholder
he Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for
insolvency
health information
financial information
overinsurance - Correct Answer - health information
How are surrender charges deducted in a life policy with a rear-end loaded provision?
Deducted from the death benefit
Deducted when the policy is discontinued
Deducted from policy's cash value
Deducted when assigned to another policyowner - Correct Answer - Deducted when the policy is discontinued
What MUST an insurance company use in its advertising?
Its trade name
Its true corporate name
Its service mark
Its corporate logo - Correct Answer - Its true corporate name
An accident policy will most likely pay a benefit for a(n)
self-inflicted injury
critical illness
on-the-job accident
off-the-job accident - Correct Answer - off-the-job accident
M completes an application for life insurance but does not pay the initial premium. All of these actions must occur
before M's policy goes into effect EXCEPT
policy is delivered
free-look period has expired
insurance company issues policy
initial premium is collected - Correct Answer - free-look period has expired
When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may be considered
red flag for a(n)
Federal Fair Credit Act Violation
Title 18 Fraud violation
, Anti-Money Laundering violation
Unfair Trade Practice violation - Correct Answer - Anti-Money Laundering violation
Which of these do NOT constitute policy delivery?
Policy mailed to applicant
Policy mailed to agent
Policy delivered to the applicant by the agent
Policy issued with a rating - Correct Answer - Policy issued with a rating
What is the MINIMUM number of Activities of Daily Living (ADL) an insured must be unable to perform to qualify f
Long Term Care benefits?
1
2
3
4 - Correct Answer - 2
An agent who tells a client that dividends are guaranteed may be guilty of
fraud
rebating
misrepresentation
slander - Correct Answer - misrepresentation
Which statement regarding a Key Employee Life policy is NOT true?
The application must be signed by the key employee
Its purpose is to prevent the financial loss that may ensue if a key employee dies
The beneficiary is named by the key employee
The company purchases, owns, pays the premiums and is the beneficiary - Correct Answer - The beneficiary is
named by the key employee
A policyowner's rights are limited under which beneficiary designation?
Revocable
Tertiary
Contingent
Irrevocable - Correct Answer - Irrevocable
Agent J takes an application and initial premium from an applicant and sends the application and premium check
the insurance company. The insurance company returns the check back to J because the check is made out to J
instead of the insurance company. What action should J take?
Deposit the applicant's check into his account and make a personal check out to the insurance company from hi
personal account
Return to the customer, collect a new check made out to the insurance company, and send the new check out to
the insurance company
Cross off his name on the "pay to" portion of the check, write the name of the insurance company, and send the
check back to the insurance company
Insurance (200 Questions Practice Exam) With
Correct answers
Ann nuity promises that, if the annuitant dies before receiving payments equal to the correct value, the payments
P P P P
will be continued to a beneficiary until an amount equal to the contract value has been paid. This type of annuity i
called
An installment Refund annuity
A Straight Life annuity
A Cash Refund annuity
A Joint Life annuity - Correct Answer - An installment Refund annuity
One becomes eligible for Social Security disability benefits after having been disabled for
3 months
5 months
6 months
12 months - Correct Answer - 5 months
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster ra
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 - Correct Answer - 20-Pay Life accumulat
cash value faster than Straight Life
Who makes the legally enforceable promises in a unilateral insurance policy?
Beneficiary
Insurance company
Insured
Applicant - Correct Answer - Insurance company
The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a
completed application and
the initial premium
agreeing to a physical examination
delivery of policy
disclosure of any medical conditions - Correct Answer - the initial premium
Which parts of a life insurance policy are guaranteed to be true?
,Rating
Representation
Statement
Warranty - Correct Answer - Warranty
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 - Correct Answer - experimental and investigative services
If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for
excess hospital expenses?
Long-term care
Indemnity
Medicare Supplement
Medicaid - Correct Answer - Medicare Supplement
S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the
claim her beneficiary submits?
No benefits are payable under the Master contract
Full benefits are payable under the Master contract
Full benefits are payable under the converted policy
Benefits less required premium are payable under the converted policy - Correct Answer - Full benefits are
payable under the Master contract
All of the following are limited benefit plans EXCEPT
cancer policies
life insurance policies
dental policies
critical illness policies - Correct Answer - life insurance policies
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?
Extended Term rider
Cost of Living Adjustment rider
Guaranteed Insurability Option rider
Waiver of Premium rider - Correct Answer - Guaranteed Insurability Option rider
An agent whose license has been revoked is required to
wait at least five years before applying for a new license
submit all previously written policies to the Commissioner of Insurance's office for servicing of the accounts
cancel all policies currently in effect and advise the insureds to place them elsewhere
, continue to service the existing accounts but not solicit new business - Correct Answer - wait at least five years
before applying for a new license
The benefits under a Disability Buy-Out policy are
normally paid in installments
taxable to the beneficiary
payable to the company or another shareholder
normally paid after a short elimination period - Correct Answer - payable to the company or another shareholder
he Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for
insolvency
health information
financial information
overinsurance - Correct Answer - health information
How are surrender charges deducted in a life policy with a rear-end loaded provision?
Deducted from the death benefit
Deducted when the policy is discontinued
Deducted from policy's cash value
Deducted when assigned to another policyowner - Correct Answer - Deducted when the policy is discontinued
What MUST an insurance company use in its advertising?
Its trade name
Its true corporate name
Its service mark
Its corporate logo - Correct Answer - Its true corporate name
An accident policy will most likely pay a benefit for a(n)
self-inflicted injury
critical illness
on-the-job accident
off-the-job accident - Correct Answer - off-the-job accident
M completes an application for life insurance but does not pay the initial premium. All of these actions must occur
before M's policy goes into effect EXCEPT
policy is delivered
free-look period has expired
insurance company issues policy
initial premium is collected - Correct Answer - free-look period has expired
When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may be considered
red flag for a(n)
Federal Fair Credit Act Violation
Title 18 Fraud violation
, Anti-Money Laundering violation
Unfair Trade Practice violation - Correct Answer - Anti-Money Laundering violation
Which of these do NOT constitute policy delivery?
Policy mailed to applicant
Policy mailed to agent
Policy delivered to the applicant by the agent
Policy issued with a rating - Correct Answer - Policy issued with a rating
What is the MINIMUM number of Activities of Daily Living (ADL) an insured must be unable to perform to qualify f
Long Term Care benefits?
1
2
3
4 - Correct Answer - 2
An agent who tells a client that dividends are guaranteed may be guilty of
fraud
rebating
misrepresentation
slander - Correct Answer - misrepresentation
Which statement regarding a Key Employee Life policy is NOT true?
The application must be signed by the key employee
Its purpose is to prevent the financial loss that may ensue if a key employee dies
The beneficiary is named by the key employee
The company purchases, owns, pays the premiums and is the beneficiary - Correct Answer - The beneficiary is
named by the key employee
A policyowner's rights are limited under which beneficiary designation?
Revocable
Tertiary
Contingent
Irrevocable - Correct Answer - Irrevocable
Agent J takes an application and initial premium from an applicant and sends the application and premium check
the insurance company. The insurance company returns the check back to J because the check is made out to J
instead of the insurance company. What action should J take?
Deposit the applicant's check into his account and make a personal check out to the insurance company from hi
personal account
Return to the customer, collect a new check made out to the insurance company, and send the new check out to
the insurance company
Cross off his name on the "pay to" portion of the check, write the name of the insurance company, and send the
check back to the insurance company
