ExamFX
What is the typical deductible for basic surgical expense insurance?
$0
An individual purchased a $100,000 joint life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?
$100,000
An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?
$9,800
COBRA applies to employers with at least
20 employees - Under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), any employer with 20 or more employees must extend group health coverage to terminated employees and their families.
If an agent has completed 35 hours of continuing education in one renewal period, how CE hours will the agent have to complete in the next renewal period?
24
The commissioner of insurance issues a cease-and-desist order and immediately receives as request for the charges to be reviewed in hearing. Within how many days must the hearing be held?
30
Which of the following statement is NOT true concerning insurable interest as it applies to life insurance?
A debtor has an insurable interest in the life of a lender
Which of the following is NOT a possible penalty for a violation of the insurance code?
A fine up to $100,000
Which is not a characteristic of group health insurance?
A policy is issued to each insured individual
When transacting business in this state an insurer formed under the laws of another country is known as a/an
Allien insurer
Which of the following would be required to be licensed as an insurance producer
An employee who solicits insurance and receives a commission
All of the following are examples of third-party ownership of a life insurance policy Except
An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan
Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated?
Annuity certain
When must insurable interest exists in a life insurance policy
At the time of application
An employer quits his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his
Attained age
All of the following are considered unfair or deceptive acts in connection with the sale of insurance Except
Attempting to settle a claim in which liability is clear
The accelerated benefits provision will provide for an early payment of the death benefit when the insured
Becomes terminally ill
Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process?
Buyer's Guide
To legally transact insurance in this state, an insurer must obtain which of the following?
Certificate of authority
All of the following are duties and responsibilities of producers at the time of application Except
Change any incorrect statement on the application by personally initialing next to the corrected statement.
When delivering a policy, which of the following is an agent's responsibility
Collect payment at the time of delivery
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
Consideration
According to the entire contract provision, what document must be made part of the insurance policy?
Copy of the original application
An insurance professional advises a client regarding the benefits of her life insurance policy, in exchange for a fee. Which of the following terms best describes this type of insurance professional?
Counselor
Which of the following is not allowed in credit life insurance?
Creditor requiring that a debtor buys insurance from a certain insurer
Which of the following is Not an example of a valid insurable interest
Debtor in the life of the creditor
An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
Decreasing Life
The commissioner has full power and authority to do all of the following Except
Draft insurance laws
If an annuitant dies before annuitization occurs, what will the beneficiary receive?
Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount
Items stipulated in the contract that the insurer will not provide coverage for are found in the
Exclusion clause
What does "level" refer to in level term insurance?
Face amount
Which policy component decreases in decreasing term insurance?
Face amount
When possible, what should insurers strive to eliminate from illustrations?
Footnotes and caveats
An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?
Foreign
An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?
Illegal under any circumstances
Stranger-originated life insurance policies are in direct opposition to the principles of
Insurable interest
All advertisements are the responsibility of the
Insurer
Who must pay for the cost of a medical examination required in the process of underwriting?
Insurer
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
When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will
Issue the policy anyway and pay the face value to the beneficiary
Which of the following is true about the mandatory free look in a Life insurance policy
It commences when the policy is delivered
Which of the following is correct regarding credit life insurance
It insures the life of a debtor
What is the purpose of a conditional receipt?
It is intended to provide coverage on a date prior to the policy issue.
Which of the following is true about the premium on the children's rider in a life insurance policy?
It remains the same no matter how many children are added to the policy
Which of the following statements about the reinstatement provision is true?
It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.
Which statement is Not true regarding a straight life policy?
Its premium steadily decreases over time, in response to its growing cash value
Which statement is not true regarding a straight life policy
Its premium steadily decreases over time, in response to its growing cash value
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?
Joint life
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?
Joint life policy
A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?
Level term
Which of the following is an example of a limited-pay life policy
Life paid-up at age 65
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?
Limited-pay life
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 of the following is NOT considered a misrepresentation as it pertains to unfair trade practices
Making comparisons between different policies
Which of the following documents must be provided to the policyowner or applicant during policy replacement?
Notice regarding replacement
What is the major difference between a stock company and a mutual company?
Ownership
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?
Pay a reduced death benefit
What is the term for how frequently a policyowner is required to pay the policy premium?
Premium mode
A couple owns a life insurance policy with Children's Term rider, their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?
Proof of insurability is not required
All of the following are requirements for an individual to be licensed Except
Provide a financial Statement
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
Which of the following is not one of the three types of term coverage based on what happens the face amount during the policy term?
Renewable
The ownership provision entitles the policyowner to do all of the following Except
Set premium rates
Which of the following insurers are owned by stockholders?
Stock
Which of the following types of risk will result in the highest premium?
Substandard risk
Children's riders attached to whole life policies are usually issued as what type of insurance?
Term
Which of the following types of insurance policies would provide the greatest amount of protection for a temporary period during which an insured will have limited financial resources?
Term
Which of the following may be included on an insurance advertisement
Testimonials from compensated individuals
An agent discovers his newest client was the result of a referral. To show his thanks to the referring customer, the agent could
Thank the customer.
Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?
The beneficiary will only receive payments of the interest earned on the death benefit
Which of the following is an example of liquidity in a life insurance contract?
The cash value available to the policyowner
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 of the following best describes the tax advantage of a qualified retirement plan?
The earnings in a qualified plan accumulate tax deferred
An agent receives an emergency cease and desist order for chronically misrepresenting his insurance policies. The agent knows that he did not commit the violations stated in the emergency cease and desist order. He wants to contest the charges in a court hearing. Which of the following is true?
The hearing must be held within 30 days of receiving a request, unless both parties agree to a later date.
Who bears all of the investment risk in a fixed annuity?
The insurance company
All of the following are true statements regarding the accumulation at interest option Except
The interest is not taxable since it remains inside the insurance policy
An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?
The old policy should stay in force until the new policy is issued
What is the advantage of reinstating a policy instead of applying for a new one?
The original age is used for premium determination
In a life settlement contract, whom does the life settlement broker represent?
The owner
All of the following are true regarding a decreasing term policy Except
The payable premium amount steadily declines throughout the duration of the contract.
All of the following statements are true regarding installments for a fixed amount except
The payments will stop when the annuitant dies
Which of the following best defines the "owner" as it pertains to life settlement contract?
The policy of the life insurance policy
Which of the following best defines the owner as it pertains to life settlement contracts
The policyowner of the life insurance policy
Which of the following is TRUE regarding the premium in term policies?
The premium is level for the term of the policy.
Under an extended term nonforfeiture option, the policy cash valve is converted to
The same face amount as in the whole life policy
Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner?
Third-party ownership
What is the purpose of COBRA?
To allow continuation of health insurance coverage for terminated employees
Which of the following is the best reason to purchase life insurance rather than an annuity?
To create an estate
According to the rights of renewability rider for cancellation policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT
Unearned premiums are retained by the insurance company
In a survivorship life policy, when does the insurer pay the death benefit?
Upon the last death
All of the following benefits are available under social security except
Welfare benefits
An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?
When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of God Health
In forming an insurance contract, when does acceptance usually occur?
When the insurer's underwriter approves coverage
Which of the following types of policies will provide permanent protection?
Whole life
If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than
With the policy
Representations are written or oral statements made by the applicant that are
considered true to the best of the applicant's knowledge
In Texas, the state's continuing education requirement
consists of completing 24 hours of CE each biennium
A guaranteed renewable disability insurance policy
is renewable at the insured's option to a specified age
A participating insurance policy may do which of the following?
pay dividends to the policyowner
A man decided to purchase a $100,000 annually renewable term life policy to provide additional protection until his children finished college. He discovered that this policy
required a premium increase each renewal
