Texas State Exam Simulator - Life and Health Insurance Practice Exam Graded A+ (Created for 2022/2023) Solved 100%

An annuity promises that, if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to a beneficiary until an amount equal to the contract value has been paid. This type of annuity is called An installment Refund annuity A Straight Life annuity A Cash Refund annuity A Joint Life annuity - 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 - ANSWER 5 months A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate 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 - ANSWER 20-Pay Life accumulates cash value faster than Straight Life Who makes the legally enforceable promises in a unilateral insurance policy? Beneficiary Insurance company Insured Applicant - 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 - ANSWER the initial premium Which parts of a life insurance policy are guaranteed to be true? Rating Representation Statement Warranty - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 a red flag for a(n) Federal Fair Credit Act Violation Title 18 Fraud violation Anti-Money Laundering violation Unfair Trade Practice violation - 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 - 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 for Long Term Care benefits? 1 2 3 4 - ANSWER 2 An agent who tells a client that dividends are guaranteed may be guilty of fraud rebating misrepresentation