tfia final exam practice

Regarding an Agent's Report during the policy application process, which of the following statements is TRUE? -It becomes a part of the entire contract after the policy is issued -It is a required element of the contract -It provides the agent's personal observations pertaining to the proposed insured -It is only used when the initial premium is not collected with the application

It provides the agent's personal observations pertaining to the proposed insured

Which of the following time periods is the general enrollment period for Medicare Part B? -March 1 through March 31 every year -January 1 through March 31 every year -March 1 through May 31 every year -January 1 through January 31 every year

January 1 through March 31 every year

When comparing a Joint Life Policy to two individual life policies of the same amount on the same insured's, which condition is true? -Joint Life has a lower premium than the total of the two individual policies -Joint Life has a premium that is identical to the sum of the two individual policies -The Joint Life premium can only be paid monthly -Joint Life has a higher premium than the total of the two individual policies

Joint life has a lower premium than the total of the two individual policies

If a business wants to ensure it can cover losses because of the disability of its top employee, the business should get which type of insurance? -Key person disability -Group health insurance policy -Health Savings Account (HSA) -Business overhead expense

Key person disability income

An illustration used in the sale of a life insurance policy has to include a label stating? -Life insurance illustration -Guaranteed items -Subject to change -Representation of insurance

Life insurance illustration

In an individual health insurance policy, all of the following are excluded from coverage EXCEPT? -Purely cosmetic surgery -Treatment received in a government hospital -Mental illness -Experimental procedures

Mental illness

The reduction of premium option uses the dividend to reduce? -This year's premium -The previous year's premium -The premium on any other policy owned by the policyowner -Next year's premium

Next year's premium

Dividends received on participating life insurance policies are? -Not taxable because they are a return of unused premiums -Taxable because they are a return on your investment -Not taxable because they are a return on your investment -Taxable because they are a return of unused premiums.

Not taxable because they are a return of unused premiums.

What does it mean when insurance contracts are unilateral in nature? -The insured is required to make a promise to pay the premium. -Each party to the contract exchanges something of value. -A promise is made only at the time of policy application. -Only one party makes a promise.

Only one party makes a promise

Which of the following dividend options is being used when the owner of a participating whole life policy uses the dividend to provide more life insurance coverage? -Paid-up additions -Reduce the premium -Fixed amount -Reduced paid up

Paid-up additions

Which of the following is consideration on the part of an insurance provider? -Decreasing premium amounts -Paying the premium -Underwriting -Paying a claim

Paying a claim

A married couple buys a life insurance policy on their newborn child. They are concerned about what would happen to the policy if either one of them were unable to continue making the premium payments because of a disability or death. Which policy rider should their agent recommend? -Payor benefit -Guaranteed insurability -Automatic premium loan -Waiver of premium

Payor benefit

Ellen is covered under a health plan provided by her employer. She was told that her insurance would pay the majority of the covered expenses if she would choose to see a provider in her plan's list. If Ellen chose to be treated by a provider who was not on the list, her portion of the bill would be greater. Ellen is covered under a/an? -Limited health plan -Preferred Provider Plan -Coordinated Plan -HMO group plan

Preferred Provider Plan

What is the difference between a 20-pay whole life policy and a straight life policy? -Premium payment period -The benefit settlement option -The face amount and cash value -Policy maturity date

Premium payment period

Which of the following does NOT have to be included on the first page of Medicare supplement policy? -Continuation Provision -The company's rights to change premiums -Premium rates -Renewal Provision

Premium rates

Jake's retirement plan meets all federal requirements and entitles him to certain tax benefits as the owner of the plan. What term best describes Jake's retirement plan? -Unqualified -Variable -Deferred -Qualified

Qualified

A person buys a life insurance policy and lists his parents as the beneficiaries. He can change beneficiaries at any time. The policy has what type of beneficiary designation? -Irrevocable -Contingent -Primary -Revocable

Revocable

Variable insurance and variable annuities are regulated by? -SEC, FINRA and Department of Insurance -Department of Insurance only -NAIC -SEC and FINRA only

SEC,FINRA and Department of Insurance

An agent delivers a life policy. She explains a policy change was made and asks the applicant to sign a statement acknowledging the changes were explained. The agent says the premium has not been paid and needs to be paid before the policy goes into effect. She collects a Statement of Good Health, relinquishes the policy, and leaves. What did she do wrong? -She left the policy with the insured without collecting the premium -She should have created a new policy instead of changing the old one -She didnt need to collect a statement of good health -Nothing

She left the policy with the insured without collecting the premium

An insured has an individual disability income policy with a 30-day elimination period. She becomes disabled on June 1st for 15 days. When will she collect on her disability income payments? -She won't collect anything -She will collect 15 days of payment after 30 days. -She will begin collecting on the 15th day. -She will begin collecting on June 1st.

She won't collect anything

What does the application of contract of adhesion mean? -Since the insured does not take part in preparing the contract, any ambiguities would be resolved in favor of the insured. -The contract holder has the ultimate power of promise -The insurance provider can go to another for representation -It makes sure that the insured does not receive more than the value of the loss

Since the insured does not take part in preparing the contract, any ambiguities would be resolved in favor of the insured.

A whole life policy that will generate immediate cash value is a? -Variable life policy -Limited-pay policy -Single premium policy -Continuous premium policy

Single premium policy

Which of the following is a daily nursing and rehabilitative care that can only be delivered by medical personnel, under the direction of a physician? -Assisted living -Skilled care -Intermediate care -Custodial care

Skilled care

Which of the following statements is CORRECT? -Advertisements can imply false statements as long as they do not guarantee false statements. -Solicitation of insurance cannot be associated with the federal government -An advertisement can mislead the public about corporate structure as long as it is not guaranteed. -Advertisements can use term that may not be understood by the general public

Solicitation of insurance cannot be associated with the federal government

The family term rider incorporates? -Whole life and other-insured term -Key person whole life and dependents term -A cost of living rider and a family protection rider -Spouse term and children's term

Spouse term and children's term

Which risk classification is representative of the majority of people in a certain age group and with similar lifestyles? -Standard -Substandard -Declined -Preferred

Standard

In contrasting mutual insurers with stock insurers, which statement is true? -Stock insurers issue nonparticipating policies and are owned by the shareholders. -Stock dividends are tax free while policy dividends are taxable -Nonparticipating policies are able to pay out dividends to the policyowners -Mutual insurers issue participating policies and are owned by the shareholders

Stock insurers issue nonparticipating policies and are owned by the shareholders.

If the benefits of basic medical insurance plan are exhausted, what type of plan will begin covering those losses? -social security -Supplementary major medical -Supplementary basic medical -None. Once benefits are exhausted the insurance provider is responsible for covering the remainder of the expenses

Supplementary major medical

Which of the following is INCORRECT? -Testimonials used in advertisements may or may not apply to the advertised policy -Testimonials used in advertisements have to be genuine -Advertisements cannot imply that the applicant's health will not be considered in insuring the policy unless true. -Advertisements may not imply special treatment beyond policy terms.

Testimonials used in advertisements may or may not apply to the advertised policy

Which of the following statements about the Medical Information Bureau is correct? -Information contained in the Medical Information Bureau report is available to all physicians. -The Medical Information Bureau assists underwriters in evaluating and classifying risks. -The Medical Information Bureau report has to be attached to every life insurance policy issued. -Every applicant for life insurance receives a copy of the findings of the life insurance medical exam.

The Medical Information Bureau assists underwriters in evaluating and classifying risks.

Who is obligated to make sure that every question is answered and all necessary signatures are collected on the application? -The agent -The applicant -The insurer -The issuer

The agent

Whose responsibility is it to ensure that the application for health insurance is accurate and complete? -The agent's -The policyowners -The underwriters -The applicants

The agent's

Which of the following is a permissible reason for an insurance company to contest payment of a claim based on statements in the application? -The insured died too soon after applying for the policy. -The insurance company has already paid out the expected amount of benefits for the year. -The application contains a correction. -The application contains material misstatements.

The applicant contains material misstatements.

Life insurance creates an immediate estate. which of the following statements best explains this? -The death benefit will always be paid to the insured's estate -The face value of the policy is payable to the beneficiary upon the insured's death -The policy has cash values and nonforfeiture values -The policy generates immediate cash value

The face value of the policy is payable to the beneficiary upon the insured's death

In a health insurance policy, which entity has the option of including optional provisions? -The state -The policyholder -The federal government -The insurance provider

The insurance provider

Which of the following statements is INCORRECT? -The physical exam and autopsy provision gives the insurance provider the right to examine the insured as often as may be reasonably necessary while a claim is pending. -The insurance provider also has the right to conduct an autopsy, if not forbidden by state law. -The insurance provider does not have the right to conduct an autopsy -The physical exam and autopsy provision gives the insurance provider the right to examine the insured, at its own expense.

The insurance provider does not have the right to conduct an autopsy.

Which of the following entities is considered the principal? -The insurance provider issuing a policy -The agent or producer soliciting the policy -The director of the insurance company

The insurance provider issuing a policy

Under the Payment of Claims provision, if the insured is deceased, to whom will the insured's benefits be paid? -The insured's estate even if a beneficiary is alive -The insured's beneficiary's first choice -To any remaining debtors the insured owes -The insured's primary beneficiary

The insured's primary beneficiary

Sharing commissions is legal if? -The other party is an insurance company -The other party is licensed for the same lines of insurance as the agent sharing the commission -The other party has permission of the agent's client.

The other party is licensed for the same lines of insurance as the agent sharing the commission

As it pertains to life settlements, the term owner means? -The owner of the original life policy. -The owner of the insurance company -Life settlement broker -Life settlement provider

The owner of the original life policy

As it pertains to the premium in a 10-year level premium policy, which of the following is TRUE? -The premium will remain the same at renewal -The premium will decrease at the end of the term -The premium will be level for the first few years of the policy, but will increase by the 10th year -The premium will remain level for 10 years

The premium will remain level for 10 years

According to the Common Disaster clause, which of the following will be assumed if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first? -The primary beneficiary's estate and the contingent beneficiary split benefits equally -The insured died before the primary beneficiary -The primary beneficiary died before the insured -The deaths occurred at the same time.

The primary beneficiary died before the insured

The guaranteed insurability rider allows the owner to buy additional amounts of life insurance without proof of insurability at all of the following EXCEPT ? -The birth of a child -Marriage -The purchase of a new home -Approximately every 3 years between the ages of 25 and 40

The purchase of a new home

Which statement is an accurate description of dividends from a life insurance policy? -They are not taxable and are not guaranteed -They are paid as a return of premium to policyowners by stock insurers -They are guaranteed to be paid and they are taxable as income -They are likely to be larger in nonparticipating policies

They are not taxable and are not guaranteed

What is the purpose of a buy-sell agreement? -To help the business meet overhead expenses in case of the owners death -To reimburse the business in case of a key employees death -To protect business employees against loss of income because of the owner's death -To allow the business buyout in case of the owner's death

To allow the business buyout in cash of the owner's death

What is the purpose of a key-person insurance? -To provide retirement benefits to key employees -To provide senior managers with the ability to purchase shares in the business -To cover decreased business revenues as a result of a key persons employees death -To provide key employees with life insurance coverage

To cover decreased business revenues as a result of a key employee's death

In a health insurance policy, what is the purpose of the impairment rider -To cover impairments that otherwise could not be covered -To provide disability coverage -To identify pre-existing conditions -To exclude coverage for a specified impairment

To exclude coverage for a specific impairment

What is the purpose of a benefit schedule? -To provide the average charges for procedures. -To include the dates for the payment of benefits -To list the insured's copayments and deductibles -To state what and how much is covered in the plan

To state what and how much is covered in the plan

Which of the following services will NOT be provided by an HMO? -Emergency care -Inpatient hospital care outside the HMO's service area -Unlimited coverage for drug rehabilitation treatment -Treatment for mental disorders

Unlimited coverage for drug rehabilitation treatment

Due to an injury, an insured has been unable to work for 8 months. When her life insurance premium came due, she was unable to pay, yet the policy remained in force. The policy includes? -Nonforfeiture options -Waiver of premium rider -Guaranteed insurability benefits -Facility of payment clause

Waiver of premium rider

When an insured terminates membership in the insured group, the insured can convert to? -Term with proof of insurability -Whole life without proof of insurability -Whole life with proof of insurability -Term without proof of insurability

Whole life without proof of insurability

If an insured is not entirely satisfied with a policy issued, the insured may return in to the insurance company and receive a refund of the entire premium paid, at which of the following times? -Within 10 days of when the insurance company received the first premium -Within 10 days of when the policy was delivered -Before any claim has been filed on the policy -Within 10 days of when the policy was issued

Within 10 days of when the policy was delivered

In individual health insurance coverage, the insurance provider must cover a newborn from the moment of birth, and if additional premium payment is required, how many days should be allowed for payment? -Within 15 working days -Within 31 days of birth -Within a reasonable period of time -Within 10 calendar days

Within 31 days of birth

Which of the following is NOT true regarding a noncancelable policy? -The guarantee to renew coverage typically only applies until the insured reaches age 65. -The insured has the unilateral right to renew the policy for the life of the contract and can discontinue paying premiums to cancel it. -The insurer can increase the premium above what is stated in the policy if claims experience is greater than expected. -The insurer cannot cancel the policy

-The insurer can increase the premium above what is stated in the policy if claims experience is greater than expected.

In a noncontributory group policy? -100% of eligible employees have to participate -75% of all employees have to elect to join the plan -100% of employees have to be allowed to participate -75% of eligible employees have to elect to join the plan

100% of eligible employees have to participate

The death proceeds for life insurance policies have to be paid to the claimant within what period of time after receiving proof of the insured's death? -10 days -30 days -2 months -6 months

2 months

A newborn child will automatically be covered under a parent's health insurance plan for how many days? -60 days -180 days -364 days -31 days

31 days

Under an HMO, child immunization costs cannot be charged for children under what minimum age? -3 -6 -7 -10

6

Policy loan requests, except for loan requests for payment of past-due premiums, can be deferred for a period of up to? -30 days -90 days -6 months -9 months

6 months

In Texas, in order for an employer to obtain group health coverage for small employers, what percentage of employees are required to be covered by the plan? -25% -50% -75% -100%

75%

A temporary license in Texas is valid for? -60 days -90 days -120 days -30 days

90 days

Under the mandatory uniform provision Proof of Loss, the claimant is required to submit proof of loss within what time period after the loss? -60 days -90 days -two years -30 days

90 days

The policyowner has the ability to pledge the life insurance policy as collateral for a blank loan. This is called? -A collateral assignment -An insurance pledge -A unilateral agreement -An absolute assignment

A collateral assignment

A Texas resident agent seeking to sell insurance to clients in another state needs? -A certificate of authority in that state -A nonresident license in that state -A foreign agent's license in that state -A resident license in that state

A nonresident license in that state

What guarantees that the information explained in the insurance contract is true? -A binder -A warranty -A representation -Utmost good faith

A warranty

An insurance provider who conducts insurance in Texas but whose articles of incorporation are registered in Canada is considered what type of insurer? -Foreign -Alien -Unauthorized -Surplus lines

Alien

Regarding health insurance policy provisions, which of the following statements is NOT true? -Insurance providers can add provisions that are not in conflict with uniform standards. -All additional provisions written by insurance providers are cataloged by their respective states. -All individual policies include Universal Mandatory Provisions -Insurance Providers can only offer optional provisions that are allowed by the state where the policy is delivered

All additional provisions written by insurance providers are cataloged by their respective states.

Which of the following best describes a rebate? -An agent selling insurance primarily to himself, his family, and his friends -An agent returning part of her commission to her client, as an inducement to buy -An agent misrepresenting policy provisions or coverages at issue -An agent requiring an insured to purchase insurance from her as a condition to a loan

An agent returning part of her commission to her client, as an inducement to buy

Which of the following premium modes would result in the lowest overall premium? -Quarterly -Semi-annual -Monthly -Annual

Annual

An underwriter is reviewing an applicant with an extensive medical history. Which of the following would provide the underwriter with a better understanding of how the applicant has been treated for various illnesses? -MIB Report -Policy application -Medical exam -Attending Physician's Statement

Attending Physicians Statement

Which provision can be added to a permanent life insurance policy, at no cost, to ensure that the policy will not lapse as long as there is cash value? -Past Due Premium option -Application to Reduce Premium option -Automatic Premium Loan option -Mode of Premium option

Automatic Premium Loan option

The corridor deductible applies between? -Basic and major medical coverage -Limited and comprehensive -Minor and major coverage -Primary and secondary coverage

Basic and major medical coverage

Which of the following would NOT trigger the payment of Accelerated Death Benefits? -Being permanently disabled -Terminal illness -Requiring an organ transplant for the insured to survive -Being permanently institutionalized

Being permanently disable

Answers to questions in an insurance application are called representations and, as such, they are? -Absolutely true -Not true -Warranties -Believed to be true to the best of the applicants knowledge

Believed to be true to the best of the applicants knowledge

Which of the following is true regarding coverage for drug and alcohol addiction treatment in group health insurance policies issued in Texas? -Benefits provided have to be the same as for any other physical illness -Coverage cannot be less than for any other physical illness. -Coverage is optional and can be offered at the discretion of the insurance provider -Coverage is not available

Benefits provided have to be the same as for any other physical illness

Which of the following is NOT an indicator of a competent party? -Mental proficiency -Comprehension of contract -Business profession -Legal age

Business profession

Insurance providers CANNOT conduct insurance business in Texas without a? -Certificate of Insurance -Letter of Clearance -Certificate of Authority -Broker license

Certificate of Authority

Which of the following is NOT normally an excluded cause of disability in an individual disability income policy? -War -Complications from pregnancy -injury resulting from illegal activity -Suicide

Complications from pregnancy

Which of the following is the distinguishing characteristic of the interest-adjusted net cost method? -Comparing interest rates at a specified point in time -Buying equity indexed life insurance -Keeping yearly premiums and dividends level -Considering the time value of money in comparing life insurance costs

Considering the time value of money in comparing life insurance costs.

When a whole life policy is surrendered for a reduced paid-up policy, the new policy's cash value will? -Remain the same -Decrease over time -Reduce to the pre-surrender value -Continue to decrease

Continue to decrease

In an HMO, what is the purpose of the gatekeeper? -Ensuring that patients do not go to physicians outside of the HMO's area -Establishing strong prevention care -Ensuring that services are properly prepaid -Controlling cost

Controlling cost

HMO members pay a small fee when they see their primary care physician. This fee is called a? -Stop-loss -Copay -Coinsurance -Deductible

Copay

When filling out an application for insurance, the applicant makes a mistake. If a fresh application is not available, what can the applicant do to properly correct the mistake? -White out the incorrect answer and write the new one over it. -Cross the incorrect answer out, write the correct one beside it, and initial the answer -Either white out the answer or cross it out and write the new answer beside it -Nothing. A fresh application has to be obtained.

Cross the incorrect answer out, write the correct one beside it, and initial the answer

Which of the following is provided by nonmedical personnel, and meets the insured's personal needs? -Custodial Care -Skilled care -Assisted living -Intermediate care

Custodial Care

An adjustable life policy can assume the form of? -Only term insurance -Only permanent insurance -Either term insurance or permanent insurance -Neither term insurance nor permanent insurance

Either term insurance or permanent insurance

The stop-loss feature on a major medical policy is intended to? -Establish the number of claims that can be filled on a policy in a calendar year. -Establish a maximum amount of out-of-pocket cost that an insured will have to pay for medical expense in a calendar year -Establish a maximum amount of out-of-pocket cost that an insured will have to pay for medical expense in a calendar year

Establish a maximum amount of out-of-pocket cost that an insured will have to pay for medical expense in a calendar year.

What is the automatic option when a whole life policy is surrendered for its nonforfeiture value? -Reduced paid up -Extended term -Paid up additions -Cash surrender value

Extended term

An annuity owner receives the same guaranteed payment each month. What type of annuity is it? -Fixed -Immediate -Guaranteed -Single

Fixed

At what point would an automatic premium loan be generated? -Upon the insured's death -Once the policy is delivered -Upon the surrender of the policy -Following the grace period

Following the grace period

The guaranteed purchase option is also referred to as the? -Multiple indemnity rider -Impairment rider -Evidence of insurability rider -Future increase option

Future increase option

What provision helps to ensure that the insured is protected in the event of an unintentional lapse in the policy? -Lapse protection -Continuity -Free look -Grace period

Grace period

A Medicare supplement plan is required to have at least which of the following renewal provisions? -Guaranteed renewable -Conditionally renewable -Nonrenewable -Noncancelable

Guaranteed renewable

What type of health insurance plan provides broad medical expense coverage without requiring an insured to satisfy a deductible? -Blanket -Comprehensive -Indemnity -Major medical

Indemnity

Medicare is a health insurance program for all of the following except? -Individuals with permanent kidney failure -Individuals who have been on Social Security Disability for 2 years. -Individuals with low assets and low income -Individuals with low assets and low income

Individuals with low assets and low income

To buy insurance, the policyowner must face the possibility of losing money or something of value in the event of loss. What is this concept called? -Insurable interest -Indemnity -Exposure -Pure loss

Insurable interest

All of the following are required to sign an application for health insurance EXCEPT the? -Producer -Insurer -The proposed insured -Applicant

Insurer

Jacki reviews an agreement on the first page of her policy which contains a list of losses that will be covered by her insurance provider. What is the name of this agreement? -Statement of Loss Coverage -Consideration Clause -Insuring Clause -Coverage Provision

Insuring Clause

With respect to a network-model HMO, which of the following is true? -It is the same as a group-model HMO. -It contracts with one exclusive group of physicians to cover all medical services. -All patients are treated on a fee-for service basis -It contracts with independent groups of physicians to provide medical services to subscribers.

It contracts with independent groups of physicians to provide medical services to subscribers

Which of the following best describes a Major Medical Expense Policy? -It delivers coverage to an insured who is confined to a hospital with a daily benefit amount and a specified benefit period -It delivers catastrophic medical coverage beyond basic benefits on a usual, customary and reasonable basis. -it delivers surgical coverage to an insured with a schedule indicating charges for each procedure

It delivers catastrophic medical coverage beyond basic benefits on a usual, customary and reasonable basis.

Regarding an Ordinary(Straight) Life Policy, all of the following statements are true EXCEPT -It does not have a guaranteed death benefit -It is funded by a level premium -It builds cash value -If the insured reaches age 100, the policy matures, and the face amount is paid to the insured

It does not have a guaranteed death benefit