Texas Life and Health Insurance Exam
Questions and Solutions
What type of reinsurance contract involves two companies automatically sharing their
risk exposure? - ANS-Treaty
The stated amount or percent of liquid assets that an insurer must have on hand that
will satisfy future obligations to its policyholders is called - ANS-reserves
When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have - ANS-insurable interest
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called - ANS-representations
The part of a life insurance policy guaranteed to be true is called a(n) - ANS-warranty
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent - ANS-Principal
The Consideration clause of an insurance contract includes - ANS-the schedule and
amount of premium payments
E and F are business partners. Each takes out a $500,000 life insurance policy on the
other, naming himself as primary beneficiary. E and F eventually terminate their
business, and four months later E dies. Although E was married with three children at
the time of death, the primary beneficiary is still F. However, an insurable interest no
longer exists. Where will the proceeds from E's life insurance policy be directed to? -
ANS-In this situation, the proceeds from E's life insurance policy will go to F.
Which term defines the legally enforceable promise in an insurance contract by the
insurer? - ANS-Unilateral
Medicaid was designed to assist individuals who are - ANS-below a specific income
limit
Which of the following does Social Security NOT provide benefits for?
, -Survivorship
-Dismemberment
-Disability
-Retirement - ANS-Dismemberment
In order to establish a Health Reimbursement Arrangement (HRA), it MUST - ANS-be
established by the employer
All of the following are limited benefit plans EXCEPT
-cancer policies
- life insurance policies
- dental policies
-critical illness policies - ANS-life insurance policies
K becomes ill after traveling overseas and is unable to work for 3 months. What kind of
policy would cover her loss of income? - ANS-Disability Income
If a retiree on Medicare required five hospital stays in one year, which policy would
provide the best insurance for excess hospital expenses? - ANS-Medicare Supplement
Which of the following will a Long Term Care plan typically provide benefits for? - ANS-
home health care
How long is the typical free look period for Long Term care insurance policies? - ANS-
30 days
A Disability Income policyowner recently submitted a claim for a chronic neck problem
that has now resulted in total disability. The original neck injury occurred before the
application was taken 5 years prior. The neck injury was never disclosed to the insurer
at the time of application. How will the insurer handle this claim? - ANS-Claim will be
paid and coverage will remain in force
Which of the following health policy provisions states that the producer does NOT have
the authority to change the policy or waive any of its provisions? - ANS-Entire Contract
An insurer must provide an insured with claim forms within __ days after receiving
notice of a loss. - ANS-15
An insurance company normally has 2 years to contest information provided on an
accident and health application. This 2 year period begins on the date that the - ANS-
insurer dates the policy
What type of rider would be added to an Accident and Health policy if the policyowner
wants to ensure the policy will continue if he/she ever becomes totally disabled? - ANS-
Waiver of Premium rider
Questions and Solutions
What type of reinsurance contract involves two companies automatically sharing their
risk exposure? - ANS-Treaty
The stated amount or percent of liquid assets that an insurer must have on hand that
will satisfy future obligations to its policyholders is called - ANS-reserves
When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have - ANS-insurable interest
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called - ANS-representations
The part of a life insurance policy guaranteed to be true is called a(n) - ANS-warranty
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent - ANS-Principal
The Consideration clause of an insurance contract includes - ANS-the schedule and
amount of premium payments
E and F are business partners. Each takes out a $500,000 life insurance policy on the
other, naming himself as primary beneficiary. E and F eventually terminate their
business, and four months later E dies. Although E was married with three children at
the time of death, the primary beneficiary is still F. However, an insurable interest no
longer exists. Where will the proceeds from E's life insurance policy be directed to? -
ANS-In this situation, the proceeds from E's life insurance policy will go to F.
Which term defines the legally enforceable promise in an insurance contract by the
insurer? - ANS-Unilateral
Medicaid was designed to assist individuals who are - ANS-below a specific income
limit
Which of the following does Social Security NOT provide benefits for?
, -Survivorship
-Dismemberment
-Disability
-Retirement - ANS-Dismemberment
In order to establish a Health Reimbursement Arrangement (HRA), it MUST - ANS-be
established by the employer
All of the following are limited benefit plans EXCEPT
-cancer policies
- life insurance policies
- dental policies
-critical illness policies - ANS-life insurance policies
K becomes ill after traveling overseas and is unable to work for 3 months. What kind of
policy would cover her loss of income? - ANS-Disability Income
If a retiree on Medicare required five hospital stays in one year, which policy would
provide the best insurance for excess hospital expenses? - ANS-Medicare Supplement
Which of the following will a Long Term Care plan typically provide benefits for? - ANS-
home health care
How long is the typical free look period for Long Term care insurance policies? - ANS-
30 days
A Disability Income policyowner recently submitted a claim for a chronic neck problem
that has now resulted in total disability. The original neck injury occurred before the
application was taken 5 years prior. The neck injury was never disclosed to the insurer
at the time of application. How will the insurer handle this claim? - ANS-Claim will be
paid and coverage will remain in force
Which of the following health policy provisions states that the producer does NOT have
the authority to change the policy or waive any of its provisions? - ANS-Entire Contract
An insurer must provide an insured with claim forms within __ days after receiving
notice of a loss. - ANS-15
An insurance company normally has 2 years to contest information provided on an
accident and health application. This 2 year period begins on the date that the - ANS-
insurer dates the policy
What type of rider would be added to an Accident and Health policy if the policyowner
wants to ensure the policy will continue if he/she ever becomes totally disabled? - ANS-
Waiver of Premium rider
