EXAM FX TEXAS INSURANCE CARDS

In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?

45 days

Which of the following is the required number of participants in a contributory group plan?

75%

Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain

A statement that is sufficiently clear to identify the insured and the nature of the claim.

When the insured purchased his health policy he was a window washer. He has since changed occupations and now manages a library. If the insurer is notified of the insured's change of occupation, the insurer should

Adjust the benefit in accordance with the decreased risk.

Group health insurance is characterized by all of the following EXCEPT

Adverse selection.

A 63-year-old man is planning to be employed until age 68. When will he be eligible for Medicare?

Age 65, regardless of his employment status

How can a new physician be added to the PPO's approved list?

Agree to follow the PPO standards and charge the appropriate fees.

When an insured purchased her disability income policy, she misstated her age to the agent. She told the agent that she was 30 years old, when in fact, she was 37. If the policy contains the optional misstatement of age provision

Amounts payable under the policy will reflect the insured's correct age.

Under which condition would an employee's group medical benefits be exempt from income taxes?

An employee's group medical benefits are generally exempt from taxation as income.

The current interest rate on an equity indexed annuity is often based on

An index like Standard & Poor's 500.

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?

Cash surrender

Which of the following components must a life insurance policy have to allow policy loans?

Cash value

Which of the following features of the Indexed Whole Life policy is NOT fixed?

Cash value growth

A tax-sheltered annuity is a special tax-favored retirement plan available to

Certain groups of employees only

The gatekeeper of an HMO helps

Control specialist costs.

In a relative value system of determining coverage for a given procedure, what term describes the total amount payable per point?

Conversion factor

In a basic expense policy, after the limits of the basic policy are exhausted, the insured must pay what kind of deductible?

Corridor

What is another name for interest-sensitive whole life insurance?

Current assumption life

The death benefit in a variable universal life policy

Depends on the performance of a separate account.

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day

Elimination period.

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This would indicate that his policy was written with a 30-day

Elimination period.

The HMO Act of 1973 required employers to offer an HMO plan as an alternative to regular health plans if the company had more than 25 employees. How has this plan since changed?

Employers are no longer forced to offer HMO plans.

In the underwriting process, it was determined that the applicant for life insurance is in poor health and has some dangerous habits. Which of the following is true concerning the policy premium?

It will likely be higher because the applicant is a substandard risk.

Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?

Life expectancy

The form of life annuity which pays benefits throughout the lifetime of the annuitant and also guarantees payment for a minimum number of years is called

Life income with period certain.

If a business owner becomes totally disabled, a Business Overhead Expense policy will pay all of the following EXCEPT

Loss of the owner's income.

Which part of an insurance application would contain information regarding the cause of death of the applicant's deceased relatives?

Medical Information

Medicare Advantage is also known as

Medicare Part C.

What is the term for how frequently a policyowner is required to pay the policy premium?

Mode

After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?

Monthly premium waiver and monthly income

Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is

Monthly.

An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point?

Neither approved the application nor issued the policy

Which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss?

Notice of Claim

An insured has health insurance that covers them at work and at home. This policy was written on what basis?

Occupational

How many pairs of glasses in a 12-month period will a vision expense insurance plan cover?

One

The part of Medicare that helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care, is known as

Part A.

Prior to purchasing a Medigap policy, a person must be enrolled in which of the following?

Parts A and B of Medicare

Which of the following has the right to convert the existing term coverage to permanent insurance?

Policyowner

An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called?

Profit sharing plan

In respect to the consideration clause, which of the following is consideration on the part of the insurer?

Promising to pay in accordance with the contract terms

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to

Purchase a single premium policy for a reduced face amount.

An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?

Revocable

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

Signed waiver of premium.

What is the best way to change an application?

Start over with a fresh application

Which of the following types of annuities will generally provide the highest monthly income?

Straight Life

Which of the following types of risk will result in the highest premium?

Substandard risk

Which of the following would provide an underwriter with information concerning an applicant's health history?

The Medical Information Bureau

Which of the following statements about HRAs is TRUE?

The account allows roll-over of unused balances at the end of the year at the employer's discretion

Which of the following would qualify as a competent party in an insurance contract?

The applicant has a prior felony conviction.

What happens if a non-member physician is utilized under the Point-Of-Service plan?

The attending physician will be paid a fee for service, but the member patient will have to pay a higher coinsurance amount.

If the annuitant dies during the accumulation period, who will receive the annuity benefits?

The beneficiary

Which is NOT true about beneficiary designations?

The beneficiary must have insurable interest in the insured.

The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

The death benefit can be increased by providing evidence of insurability.

Which statement is NOT true regarding underwriting group health insurance?

The group is assessed individually for insurability.

The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT

The insured's age at death.

In a life settlement contract, whom does the life settlement broker represent?

The owner

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of premium.

When would a 20-pay whole life policy endow?

When the insured reaches age 100

How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company?

Within 90 days or as soon as reasonably possible, but not to exceed 1 year

Items stipulated in the contract that the insurer will not provide coverage for are found in the

Exclusions clause.

Which one of the following is an eligibility requirement for Social Security disability income benefits?

Fully insured status

If an insured worker has earned 40 quarters of coverage, the worker's status under Social Security disability is

Fully insured.

What required provision protects against unintentional lapse of the policy?

Grace period

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

Guaranteed insurability rider.

Before an agent delivers a policy, the insurer makes a last-minute change to the policy. The agent informs the insured of this change, and he accepts it. In response, the agent must

Have the insured sign a statement acknowledging that he is aware of the change.

What are the 2 types of Flexible Spending Accounts?

Health Care Accounts and Dependent Care Accounts

Fixed annuities provide all of the following EXCEPT

Hedge against inflation.

Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information

Held or transmitted in any form.

In which of the following locations would skilled care most likely be provided?

In an institutional setting

The benefits received by the business in a Disability Buy-Sell policy are

Income tax free.

In long-term care (LTC) policies, as the benefit period lengthens, the premium

Increases.

Who must pay for the cost of a medical examination required in the process of underwriting?

Insurer

Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?

Insuring clause

The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the

Insuring clause.

During partial withdrawal from a universal life policy, which portion will be taxed?

Interest

An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an

Interest-sensitive Whole Life.

What is the purpose of a conditional receipt?

It is intended to provide coverage on a date prior to the policy issue.

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2,500

The sole proprietor of a business makes a total salary of $50,000 a year. This year, his medical expenses have reached a total of $75,000. What amount may the sole proprietor deduct in regards to his medical expenses?

$50,000

Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is CORRECT?

100% participation of members is required in noncontributory plans.

The time limit of certain defenses provision prohibits insurers from denying a claim due to misrepresentation, as long as the policy has been in force for at least

2 years.

The LEAST expensive first-year premium is found in which of the following policies?

Annually Renewable Term

An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that change?

Applicant

What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided?

Application

The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?

As of the application date

In a replacement situation, all of the following must be considered EXCEPT

Assets.

When must insurable interest exist in a life insurance policy?

At the time of application

What document describes an insured's medical history, including diagnoses and treatments?

Attending Physician's Statement

The accelerated benefits provision will provide for an early payment of the death benefit when the insured

Becomes terminally ill.

All of the following are true of the Key Person disability income policy EXCEPT

Benefits are considered taxable income to the business.

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash option

All of the following are general requirements of a qualified plan EXCEPT

The plan must provide an offset for social security benefits.

The policyowner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as

The policy contains sufficient cash value to cover the cost of insurance.

Which of the following is TRUE regarding the premium in term policies?

The premium is level for the term of the policy.

An HSA holder who is 65 years old decides to use the money in the account for a nonhealth expense. Which of the following is true?

There will be a tax.

Which of the following is TRUE about nonforfeiture values?

They are required by state law to be included in the policy.

Premiums paid by self-employed sole proprietors or partners for medical expense insurance are

Totally tax deductible.

According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT

Unearned premiums are retained by the insurance company.

Social Security was created to provide all of the following benefits EXCEPT

Unemployment income.

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Unilateral