Life insurance Final Exam
Information obtained from a phone conversation to the proposed insured can be found in which of these reports ?
Inspection report
Who makes the legally enforceable promises in a unilateral insurance policy ?
Insurance company
If the insured and primary beneficiary are both killed in the same accident who died first , where are the death proceeds to be directed under the Uniform Simultaneous Death and it cannot be determined Act ?
Insured's contingent beneficiary
Which of the following claims are typically excluded from Medical expense policies ?
Intentionally self - inflicted injuries
Which of the following actions will an insurance company most likely NOT take if an applicant , who has diabetes applies for a Disability Income policy ?
Issue the policy with an altered Time of Payment of Claims provision
On January 8 , an applicant filled out an application for a life insurance policy but did not include the initial premium . The insurance company approved the application on January 14 and issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium . When did the coverage become effective ?
January 26
Which of these are NOT an example of a Nonforfeiture option ?
Life Income
If a retiree on Medicare required five hospital stays in one year , which policy would provide the best insurance for excess hospital expenses ?
Medicare Supplement
policyowner is allowed to pay premiums more than once a year under which provision ?
Mode of Premium
According to the Time Payment of Claims provision , the insurer must pay Disability Income benefits no less frequently than which of the following options ?
Monthly
Which of the following BEST describes how a Preferred Provider Organization ( PPO ) is less restrictive than a Health Maintenance Organization HMO ) ?
More physicians to choose from
Which of the following is a valid reason for an enrollee to be cancelled by a Health Maintenance Organization ( HMO ) plan ?
Nonpayment of coverage
Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2 ?
Ordinary income tax and a 10 % tax penalty for earty withdrawal
When a misrepresentation on a life insurance policy application is discovered , what action may an insurance company take ?
Void the policy only if it is discovered during the Contestable period and proven to be material
The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is :
Time Limit on Certain Defenses
Why would the Insurance Commissioner examine the records of an insurance company ?
To determine the solvency of the company
All of the following statements regarding group health insurance is true , EXCEPT
An individual policy is given to each member
Which of the following is a requirement for obtaining a Texas insurance agent's license ?
Be honest , trustworthy , and reliable
T is the policyowner for a Life Insurance policy with an Irrevocable beneficiary designation . If T wishes to change the beneficiary , T must obtain permission from the
Beneficiary
Which of the following statements is CORRECT about accelerated death benefits ?
Must have a terminal illness to qualify
A Health Reimbursement Arrangement MUST be established :
by the employer
B , an insurance agent , tells his clients that their rights may be impaired if they fail to complete a release form within a given period of time . B may be found guilty of
coercion
A term life policy is normally used when covering an insured's mortgage balance .
decreasing
purchased a $ 100,000 single premium , Straight Life annuity 5 years ago . He has received monthly payments since the inception of the annuity . If T dies , the insurance company
does NOT have to make any further payments
A _____ contained in a life insurance policy states that the policy will NOT cover certain risks .
exclusion
An insured may assign up ___ to of policy ownership under an individual life insurance policy .
100 %
____ of continuing education MUST be completed in the classroom or classroom equivalent .
50%
S buys a $ 50,000 whole life policy with a $ 50,000 Accidental Death and Dismemberment rider . S dies year later of natural causes . How much will the insurer the beneficiary ?
50,000
A temporary agent's license issued by the Commissioner of Insurance is valid for up to _____ days .
90
Which of the following reimburses its insureds for covered medical expenses ?
Commercial insurers
Which of the following is NOT included in a life insurance illustration ?
Company's mortality table
Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy ?
Complete the application and review the information with the customer prior to obtaining the customer's signature , then send the application off to the insurance company
Which of the following consists of an offer , acceptance , and consideration ?
Contract
beneficiary on Q's Accidental Death and P and Q are married and have three children . P is the primary Dismemberment ( AD & D ) policy and Q's sister R is the contingent beneficiary . P , Q , and R are involved in a car accident and Q and R are killed instantly . The Accidental Death benefits will be paid to :
P only
When an employee is terminated , which statement about a group term life conversion is true ?
Policy proceeds will be paid if the employee dies during during the conversion period
What benefit does the Payor clause on a Juvenile Life policy provide ?
Premiums are waived if payor becomes disabled
What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy ?
Premiums may increase at time of renewal
What is the purpose of the Claims provision ?
Prevents delayed claim payments made by the insurer
K is the insured and P is the sole beneficiary on a life insurance policy . Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision , which of these statements is true ?
Proceeds will be payable to K's estate if P dies within a specified time
What is the consideration given by an insurer in the Consideration clause of a life policy ?
Promise to pay a death benefit to a named beneficiary
Which provision allows a portion of any used medical benefits to be restored following a particular amount of benefit has been used , or after the policy has been in effect for a particular period of time ?
Restoration of used benefit
Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant ?
Risk classification
S recently received a $ 500,000 lump sum retirement buyout from her employer . She would like to buy an annuity that will immediately furnish her with a guaranteed income for life . What type of annuity is best suited for her situation ?
Single Premium
The percentage of an individual's Primary Insurance Amount ( PIA ) determines the benefits paid in which of the following programs ?
Social Security Disability Income
Who is liable when an insured suffers a loss on a policy sold by an agent through an insurer not authorized to conduct business in Texas ?
The agent
C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age . What factor would affect her decision the most ?
The cost
What advantage does the renewability feature give to a term policy ?
The insured may extend the coverage period
An example of rebating would be
returning a portion of a premium as inducement to purchase insurance
Typically a life insurance death benefit is paid by a lump - sum payment . A ______ method of distributing a Life Insurance policy's death benefit OTHER than by a lump sum payment
settlement
A disability elimination period is best described as a :
time deductible
ABC Insurance Company is actively engaging in boycott , coercion , and intimidation that results in the unreasonable restraint of trade . ABC is committing a prohibited act under Texas insurance laws Covering Otwisting
unfair methods of competition
ABC Insurance Company has accepted life insurance application which contains unanswered questions . The company then makes the application part of the life contract . In this situation , the insurer has :
waived one of its legal rights
The part of a life insurance policy guaranteed to be true is called a ______
warranty
How long is the typical free look period for Long Term care insurance policies ?
30 days
Every 12 - months after the initial enrollment period , an HMO must open enrollment period of days
31 days
Three law partners form a Cross - Purchase Buy and Sell agreement . This agreement is funded with individual life insurance . How many total life policies are needed for this agreement ?
6
How long can a cash surrender value payment be deferred by the insurance company under the Nonforfeiture Law ?
6 months
All are true statements regarding the underwriting process , EXCEPT :
AIDS and HIV virus exams can be conducted in a discriminatory fashion
Which of the following statements about health coverage for newborns is NOT true ?
Coverage is limited to only congenital defects
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it ?
Decreasing Term
In a life insurance policy , which feature states that will not cover certain risks ?
Exclusion
Which of these provisions is NOT required in life insurance policies ?
Extended Term
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 ?
F
P has recently signed an application for insurance . The insurer MUST advise her in writing that an investigative consumer report may be conducted according to the
Fair Credit Reporting Act
What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies ?
Family Maintenance Policy
After an insured gives notice of loss , what must he / she do if the insurer does not furnish forms ?
File written proof of loss
Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability . What kind of rider is this ?
Guaranteed insurability rider
All of these are characteristics of a Health Reimbursement Arrangement ( HRA ) EXCEPT
HRA is entirely funded by the employee
Whole Life insurance is sometimes referred to as " Straight Life " . What does the word " Straight " indicate when using this phrase ?
The duration of premium payments
A Medicare Supplement policy may be cancelled for which of the following reasons ?
The premium has not been paid by the insured
Which of the following benefits is NOT required under a group health plan for drug and alcohol treatment ?
Transportation to and from a treatment facility
Life and health insurance policies are :
Unilateral contracts
Which of the following policies is characterized by a flexible premium and death benefit and allows the policyowner control of the investment aspect of the plan ?
Variable universal life
what point does an informal agreement become a binding contract ?
When consideration is provided by one of the parties to the contract
A Term Life rider offers the insured
additional life coverage
T applied for a Disability Income policy and has a history of back injuries . The insurer issued the policy with a statement that excludes coverage for back injuries . This statement is called a ____
impairment rider
Credit Life insurance is
insurance issued on a debtor to cover outstanding loan balances
C is a key employee at ABC Incorporated . If a Key Employee life policy is purchased on her life , which of these statements would be true ?
ABC is the policyowner , C is the insured , and ABC is the beneficiary
In health insurance policies , a waiver of premium provision keeps the coverage in force without premium payments :
After an insured has become totally disabled as defined in the policy
In Texas , which of these statements regarding the Suicide clause is TRUE ?
An insurer may not use suicide as a defense against payment after the second year
A life insurance application must be signed by all of these , EXCEPT :
Beneficiary
G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled . The type of policy which BEST addresses this concern is :
Business Overhead Expense
Whose life is covered on a life insurance policy that contains a payor benefit clause ?
Child
As a condition for a loan , a bank requires the borrower to purchase credit insurance from a specific company . What is the bank guilty of ?
Coercion
When will a hearing be held after a notice of is served to a licensee or insurer by the Commissioner ? hearing , alleging participation in an unfair or deceptive act ,
No sooner than 6 days
A Disability Income policy that only the policyowner can terminate and which the rates will never go up is considered to be
Noncancellable
M purchased an Accidental Death and Dismemberment ( AD & D ) policy and named his son as beneficiary . M has the right to change the beneficiary designation at anytime . What type of beneficiary is his son ?
Revocable
Y purchased $ 100,000 worth of permanent protection on himself coverage for his wife on the same policy . Which of these policies did Y purchase ? and $ 50,000 worth of 10 - year Term
Whole Life policy with an Other Insured Rider
If an insured's age was misstated on a life insurance contract , the Misstatement of Age provision requires that any death benefit payable would be
an amount that the premiums paid would have purchased at the current age
An insurer is NOT required to provide information on fraudulent claims if requested by
an insured
T cash surrenders a recently - issued whole life policy . He also requests that the proceeds be payable to an unrelated third party . T would likely be red - flagged for violation of
anti - money laundering rules
In order to establish a Health Reimbursement Arrangement ( HRA ) , it MUST :
be established by the employer
What is the monetary penalty for willfully violating a cease - and - desist order ?
fine of up to $ 500
Which of the following will a Long Term Care plan typically provide benefits for ?
home health care
Which of these types of coverage is best described as a short term medical policy ?
interim coverage
Under a Guaranteed Renewable health insurance policy , the insurer
may cancel the policy for nonpayment only
Periodic health claim payments MUST be made at least :
monthly
An insurance agent has a fiduciary responsibility to all of the following EXCEPT
other agents
A major medical policy typically :
provides benefits for reasonable and necessary medical expenses , subject to policy
