ExamFX Guarantee Exam

what is the max period of time the commissioner may revoke your agents licences

NO max time period

which of the following indicates the person upon whose life the annuity income amount is determined? a. owner b. insured c. annuitant d. beneficiary

c. annuitant

riley reads an agreement on the first page of her policy which includes a list of losses that will be covered by her insurer. what is the name of this agreement?

insuring clause the insuring clause lists the insured, insurance company, what kind of losses covered, & how much the losses will be compensated

a texas resident seeking to sell insurance to custom tees in another state needs

a nonresident license in that state

the PPACA includes all of the following provisions except a. individual tax deduction for premiums paid b. right to appeal c. coverage for preventive benefits d. no lifetime tax dollar limits

a. individual tax deduction for premiums paid the Act does not offer tax deductions, but it DOES offer tax credit

in addition to participation requirements, how does an insurer guard against adverse selection when underwriting group health?

c. by requiring that the insurance be incidental to the group

when life insurance proceeds are used to pay inheritance taxes & federal estate taxes, it is known as

estate conservation

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?

extended term the automatic nonforfeiture option is extended term.

When may HIV-related test results be provided to the MIB?

only if the individual is not identified insurance companies must maintain strict confidentiality regarding HIV-related test results or diagnoses. test results may not be provided to the MIB if the individual is identified.

an equity indexed annuity will grow upon

performance of a recognized index dow jones it standard & poor's 500

if an agent suspects that a fraudulent insurance act has been committed in this state, whom should the agent notify first?

the insurance fraud unit of the texas department of insurance if a person suspects that a fraudulent insurance act has been or is about to be committed in this state, the person must report the information in writing to the insurance fraud unit of the department within 30 days

as it relates to life settlements, the term "owner" means

the owner of the original life policy the term "owner", relates to the owner of the insurance policy (policy owner)

which of the following would NOT trigger the payment of accelerated death benefits? a. being permanently disabled b. terminal illness c. requiring an organ transplant d. being permanently institutionalized

a. being permanently disabled do not cover disability

an agent has created a new advertisement to help expand his business. prior to use, the advertisement must be approved by

a. the insurer's home office & must receive a written approval

why do HMOs offer prepaid services?

d. to encourage preventive medicine for individual members

An insurer mails an insurance policy to a new policyowner. When the insurer relinquishes control of the policy, the policy is considered

delivered

in the event an annuitant does during the accumulation period, & there is a beneficiary named in the annuity, annuity benefits would be paid to the

named beneficiary if not named = paid to annuitant's estate

a husband and wife both incur expenses that are attributed to a single major medical insurance deductible. which type of policy do they have?

family with a family deductible, expenses for 2 or more family members can satisfy a common deductible in a given year, regardless of the amount of expenses incurred by other family members.

on an AD&D policy, the death benefit is payable is known as

principal sum

what type of health insurance plan provides broad medical expense coverage without requiring a insured to meet a deductible?

indemnity indemnity health insurance plans, otherwise known as first-dollar insurance, do not require insureds to satisfy a deductible before providing benefits

an insured and his spouse had a child. which of the following riders would allow the avo hole to insure the child for a limited period of time at specified amount? a. spouse term rider b. children's term rider c. payor rider d. guaranteed insurability rider

b. children's term rider the children's term rider allows children to be added to coverage for a limited period of time for a specified amount

which of the following is consideration on the part of an insurer? a. underwriting b. paying a claim c. decreasing premium accounts d. paying the premium

b. paying the claim

which of the following is NOT mandatory under the uniform provision law as applied to accident and health policies? a. physical examination and autopsy b. entire contract c. probationary period d. time limit on certain defenses

c. probationary period probationary period is an optional provision

whose responsibility is it to ensure that the application for health insurance is complete and accurate?

the agent's as a field underwriter, the agent must ensure that the applications are complete & accurate.

all of the following statements about mutual insurance companies are correct EXCEPT a. mutual companies issue policies referred to as participating b. policy dividends issued by mutual companies are guaranteed and not taxable c. dividends allow policyholders to share a mutual company's divisible surplus d. dividends are a return of unused premiums insurance policy dividends are not guaranteed and are not taxable

b. policy dividends issued by mutual companies are guaranteed and not taxable insurance policy dividends are not guaranteed and not taxable

a whole life policy is surrendered for a reduced-paid up policy. the cash value in the new policy will

continue to increase the new policy continues to build its own cash value and will remain in force until the insured's death or maturity

if a credit life policy is terminated upon the payment of the death benefit, what happens to the premium paid in the policy?

the premium is considered EARNED, so no refund is required

which of the following statements is INCORRECT regarding the definition of total disability

total disability is the inability to perform PARTIAL duties of any occupation for which a person is suited by reason of education, training, or experience

in a non contributory plan

100% of employees MUST participate

a married couple purchase a life insurance policy on their newborn baby. they are concerned about what would happen to the policy of either of them were unable to continue making premium payments due to death or disability. which policy rider should their agent recommend?

a. payor benefit

which of the following would NOT be considered limited coverage policy? a. accident-only insurance b. travel policy c. major medical expense insurance d. special risk policy

c. major medical exoense insurance limited policies cover only expense incurred from specific diseases, or specific causes

all of the following are excluded from coverage in an individual health insurance policy EXCEPT a. purely cosmetic surgery b. treatment received in a government hospital c. mental illness d. experimental procedures

c. mental illness

an insured's flexible premium is invested into a separate account. what type of insurance product did he purchase?

c. variable universal life Variable=separate accounts universal life=flexible premium

if a life insurance company uses HIV testing as part of its underwriting, when must an applicant be notified of the procedure?

prior to the performance of the test prior to testing, the insurer must disclose in writing its intent to test the applicant for the HIV or for a specific health condition derived from HIV. the insurer must obtain the applicant's written informed consent to administer the test.

An annuity would normally be purchased by an individual who wants to

provide income for retirement the main purpose of an annuity is to liquidate an estate and provide income for retirement. life insurance creates an estate and provides a death benefit to the beneficiaries.

an insured had a heart attack while jogging, but is expected to return to work in approximately 6 weeks. the insured's disability income policy will

replace a percentage of his lost income disability income insurance covers income ONLY, not medical expenses

in texas, nonforfeiture law applies to which of the following insurance policies? a. group insurance b. whole life insurance c. decreasing term policies d. annuities

b. whole life insurance nonforfeiture law applies to policies that have cash values of nonforfeiture values, such as whole life policies. annuities, term insurance & group insurance are exempt from this regulation.

to purchase insurance, the policy owner must face the possibility of losing money or something of value in the event of loss. what is this concept called?

insurable interest to purchase insurance, the policy owner must face the possibility of losing money or something of value in the event of loss.

an insured was diagnosed 2 years ago with kidney cancer. she was treated with surgeries and chemotherapy & is now in remission. she also has a 30 year smoking history. the insured is now healthy enough to work and has just started a full-time job. which describes the health insurance that she will mostly like receive?

d. she would be covered under her employer's group health insurance policy, WITHOUT higher premiums

which of the following is true regarding a network-model HMO? a. all patients are treated on a fee-for-fee basis b. it contracts with independent groups of physicians to provide medical services to subscribers c. it is the same as group-model HMO d. it contracts with one exclusive group of physicians to cover all medical expenses

b. it contracts with independent groups of physicians to provide medical services to subscribers a network-model HMO differs from a group-model HMO in that it contacts with 2 or more independent groups of physicians to provide medical services to its subscribers. physician groups that enter into this type of arrangement often treat non-HMO patients on a fee-to-fee service basis.

with respect to the entire contract clause in health policies, who has the authority to make changes to an existing policy?

only an executive office of the company no changes may be made to the policy without the express written agreement of both parties, and any changes must be also made a part of the contract. only an executive officer of the company, not an agent, has authority to make any changes to the policy.

which of the following best describes the unfair trade practice of rebating? a. making false statements that are maliciously critical and intended to injury another person in the business of insurance b. offering an inducement of something of value not specified in the policy c. making statements that misrepresent an insurance policy in order to induce an insured to replace the policy d. charging premium amounts in excess of the amount stated in the policy

b. offering an inducement of something of value not specified in the policy rebating is offering anything of value that is not specified in the policy as an inducement to purchase insurance

life insurance creates an immediate estate, which of the following best explains this statement? a. the policy has cash values & nonforfeiture values b. the policy generates immediate cash value c. the death benefit will always be paid to the estate of the insured d. the face value of the policy is payable to the beneficiary upon the death of the insured

d. the face value of the policy is payable to the beneficiary upon the death of the insured

an annuitant pays the annuity premium on the 14th of each month. which of the following best describes this arrangement? a. single b. level c. flexible d. lump sum

b. level - same for each payment

a major medical expense would exclude coverage for all of the following treatments EXCEPT a. dental care b. cosmetic surgery c. drug addiction d. eye refractions

c. drug addiction treatment for drug & alcohol addiction is provided on a limited basis

if an insurance company issued a policy even though some questions on the application were unanswered, when can the insured get the answers to those questions?

never, the insurer has waived its right to those answer by issuing the policy if an insurer accepts an application with unanswered questions & issues the policy, it has waived its right to those answers

which of the following is NOT correct concerning taxation of disability income benefits? a. if paid by the individual, the premiums are tax deductible b. if the employer paid the premiums, income benefits are taxable to the insured as ordinary income c. if the insured paid the premium, any disability income benefits are tax-free d. if the benefits are for permanent loss, they are subject to income taxation no matter who paid the premium

a. if paid by the individual, the premiums are tax deductible premium payments on personally owned disability income policies are non-deductible by the individual. however disability income benefits are received income tax free by the individual

insureds have the right to do which of the following if they have NOT received the proper claim forms within 15 days of their notice to the insurer of a covered loss under a major medical policy? a. submit the description in their own words on a plain sheet of paper b. be reimbursed any copayment or deductible on the claim c. demand full payment immediately for the claim d. speak with a claims adjuster or another representative from the insurance company

a. submit the description in their own words in a plain sheet of paper insureds have the right to submit the description in their own words on a plain sheet of paper if a proper form is not supplied. this a mandatory provision in all individual health insurance policies.

all of the following must sign an application for health care EXCEPT: a. the proposed insured b. applicant c producer d. insurer

health insurance applications require signatures of the proposed insured, the policy owner (if different than the insured), the agent or producer

which of the following is provided by skilled medical personnel to those who need occasional medical assistance or rehabilitative care?

intermediate care changes bandages or administers medications

all of the following would be classified as "limited insurance coverage" EXCEPT a. accidental death & dismemberment policy b. supplement social security coverage c. travel insurance policy d. dread disease policy

b. supplement social security coverage supplement social security coverage is a rider to a disability policy

guaranteeing future dividends is considered to be an unfair of deceptive act known as

misrepresentation HAVE TO DO WITH DIVIDENDS

an applicant for a disability insurance policy has a heart condition of which they are unaware and therefore the answer no to the question pertaining to heart problems on their application. their answer is considered to be a

representation statements believed to be true best to one's knowledge

an illustration used in the sale of a life insurance policy must include a label stating

"life insurance illustration" an illustration used in the sale of a life insurance policy must be clearly labeled "life insurance illustration"

which of the following does NOT have to be included on the first page of a medicare supplement policy? a. continuation provision b. the company's right to change premiums c. premium rates d. renewal provision

c. premium rates medicare supplement policies must include tweak or continuation provision that is appropriately captioned and on the first page of the policy. it must include any reservation by the insurance company if the right to change premiums and any automatic renewal premium increases based on the policyholder's age (attained age policies)

J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J choose?

d. fixed amount

An insured needs ongoing treatment for a diabetic condition. Under the PPACA, which of the following is correct? a) The condition is covered if the insured's plan specifies the condition b) Treatment is subject to pre-existing conditions exclusion c) Treatment is subject to an annual dollar maximum d) The condition must be covered under the insured's plan

d. the condition must be covered under the insured's plan

which of the following best defines the probationary period in group health policies? a. the stated amount of time where benefits may be reduced under certain conditions b. the # of days that must expire after onset of an illness before benefits will be earned c. a specified period of time that a person joint a group has to wait before becoming eligible for coverage d. the # of days the insured has to determine if he/she will accept the policy as received

c. a specified period of time that a person joining a group has to wait fr becoming eligible for coverage the probationary period is the waiting period that new employees would normally have to satisfy before becoming eligible for benefits

which of the following is true regarding coverage for drug & alcohol addiction treatment in group health insurance policies issued in this state? a. coverage is optional and may be offered at the discretion of the insurer b. coverage is not available c. benefits provided must be the same as for any other physical illness d. coverage cannot be less than for any other physical illness

c. benefits must be the same as for any other physical illness all group health insurance benefit plans in texas must provide drug & alcohol addiction treatment on the same basis as the benefits provided for physical illness. coverage amount may be less, but must be sufficient to treat the chemical dependency

an insurance agent visits a potential client and explained various types of policies. the customer displays a lack of interest, so the agent guarantees higher dividends than he knows would be possible. which term describes what the agent has done?

misrepresentation

which of the following statements is CORRECT? a. advertisements may imply false statements b. solicitation of insurance may not be associated with the federal government c. an advertisement may mislead the public about corporate structure as long as it is not guaranteed d. advertisements may use terminology that may not be understood by the general public

b. solicitation of insurance may not be associated with the federal government advertisements may not mislead the public in any way; they cannot imply association with the federal government

life insurance creates a immediate estate. which of the following best explains this statement? a. the death benefit will always be paid to estate of insured b. the face value of the policy is payable to the beneficiary upon death of the insured c. the policy has cash value & nonforfeiture values d. the policy generates immediate cash value

b. the face value of the policy is payable to the beneficiary upon death of the insured unlike a traditional estate where the value of personal wealth is usually built up over time, a life insurance policy's face value is available immediately in one lump-sum upon the death of the insured.

what type of life policies requires nonforfeiture provision?

cash value any life insurance policy that has cash value must have a nonforfeiture provision

a limited death benefit health insurance policy that will pay a lump sum to an insured diagnosed with a heart attack, stroke, or renal failure is known as

critical illness insurance

which of the following is true regarding conversion from group to individual coverage? a. if the insured dies during the conversion period, benefits will be forfeited b. insurer must require evidence of insurability c. conversion must occur within 31 days d. the amount of individual coverage must be greater than in the group policy

c. conversion must over within 31 days the eligible individuals who have been covered under a group policy for at least 5 years must apply for individual policy and pay the first premium to the insurer within 31 days after the date the individual's membership in a group plan terminates.

regarding the PPACA health care tax credit, which of the following is true? a. tax credits are based upon a taxpayer's or family's expected annual medical expenses b. all wage earners who purchase a health care insurance are eligible for the tax credit c. tax credits are sent to the tax payer to reduce monthly insurance premiums d. persons receiving medicaid are not eligible

d. persons receiving medicaid are not eligible under PPACA, satiates can extend medicaid to people under 138% of the poverty level. people on public coverage programs such as medicaid are not religions for the health care tax credit

in group insurance, the primary purpose of the coordination of benefits provision is to

prevent over insurance

an employee is covered under COBRA. his previous premium payment was $100 per months. his employer now collects $102 each month. why does the employer collect and extra $2?

to cover employer's administration costs the employer is permitted to collect a premium from the terminated employee at a rate of no more than 102# of the individual's group premium rate. the 2% charge is to cover the employer's administrative costs.

what is the purpose of the impairment rider?

to exclude coverage for a specific impairment the impairment rider may be attached to a contract for the purpose of eliminating coverage for a specifically define condition.