life and health insurance

Which these statements concerning an Individual's straight life annuity is accurate?

Payments are made to annuitant for life

Which of the following best describes a contingent beneficiary?

Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured.

Who has the right to change a revocable beneficiary?

Policy owner

How does group insurance differ from individual insurance?

Premiums are lower

The provision that can be used to put an insurance policy back in force after it has lapsed due to non payment is called

Reinstatement

T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this?

Renewable

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

Which of these are NOT an example of doing insurance business?

Selling shares of stock

Upon delivery of a rated life insurance policy, the Producer must obtain each of the following EXCEPT

Signed HIPPA disclosure

Which of the following is TRUE if the owner of the IRA names their spouse as beneficiary, but then dies before and distributions are made?

The account can be rolled into the surviving spouse's IRA

J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct?

The gross premium is higher on a monthly payment mode as compared to being paid annually

How does a typical Variable Life Policy investment account grow?

Through mutual funds, stocks, bonds

an example of unfair claims settlement practice is

Turning down a claim without providing the basis of denial

which of the following BEST describes how pre-admissions certification is used?

Used to prevent nonessential medical costs

If an individual is covered under an Accidental Death Policy and dies, an autopsy can be performed in all these situations , EXCEPT

When the states prohibits this by law

Medicare part C is

available to those who are enrolled in Medicare Part A and Part B

Under an interest sensitive whole life policy

cash values are determined by interest rates

The phrase "transacting business" includes

collecting premiums

Which of these factors does not influence how much time consumers spend searching for information?

self-maintenance expenses

Under a Renewable Term policy,

the renewal premium is calculated on the basis of the insured's attained age

Why would the Insurance Commissioner examine the records of an insurance company?

to determine the solvency of the company

The USA Patriot Act was enacted in:

2001

A new agent musty complete at LEAST _______ hours of continuing education within 24 months of initial licensure

24

According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid?

31 days

Every 12-months after the initial enrollment period, an HMO must hold an open enrollment period of

31 days

In Texas, an individual life insurance policy is required to have a grace period

31 days

S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations?

36 (Under COBRA, if an employee dies, the dependents may continue their group health coverage for up to 36 months.)

_______ of continuing education MUST be completed in the classroom or classroom equivalent

50%

All students attending a large university could be covered by

A blanket policy

What is Medicare?

A hospital and medical expense insurance program

Aa statement made by the insured in an insurance application that must be true to the best of one's knowledge and which becomes a part of the contract is known as:

A representation

The option that provides an optional death benefit for a limited amount of time at the lowest possible cost is possible a(n)?

Accidental Death & Disbursement rider (AD&D)

Which of the following actions does the Commissioner of Insurance NOT have the power to conduct?

Activate insurance company's financial reserves

Which of the following types of care is typically NOT covered in a long-term care policy

Acupuncture

Which of the following statements describes what an Accident and Health policy owner may NOT do?

Adjust the premium payments

Which of the following features of a group term life policy enables an individual to leave the group and continue his and her insurance without providing evidence and insurability?

Conversion Privilege

Which of the following statements about health coverage for newborns is NOT true?

Coverage is limited to only congenital defects

Which of the following best describes a hospital indemnity policy?

Coverage that pays a stated amount per day of a covered hospitalization. (The typical Hospital Indemnity policy pays a stated amount per day of a covered hospitalization.)

A(n) ______ term life policy is normally used when covering an insured's mortgage balance

Decreasing

Additional coverage can be added to a Whole Life policy by adding a(n)

Decreasing term rider

A CEOs personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant?

Disability Income

Which of the following statements does NOT accurately describe the tax treatments of premiums and benefits of individual accident and health insurance?

Disability income policy premiums are tax-deductible (Premiums paid by individuals for Disability income policies are NOT tax-deductible. However, the benefits would be considered tax-free to the individual.)

T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take?

Increase her policy's coverage amount

AN insurance company normally has two years to contest the information provided on an accident and health application. This two year period begins on the date that the:

Insurer dates the policy

The clause in an accident and health policy which defines the benefit amounts the insurer will pay is called the?

Insuring Clause

All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT

Interest Only

Which of these types of coverage is best described as a short term medical policy?

Interim Coverage

Which of the following situations does a Critical Illness plan cover?

Leukemia

Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies?

Long-Term Care

An insurance company would MOST likely pay benefits under an Accidental Death and Dismemberment policy for which of the following losses?

Loss of eyesight due to an accidental injury

During a sales presentation for a participating life insurance policy, an agent MUST

Make a prospect understand that dividends are NOT guaranteed

Which of the following are NOT managed care organizations?

Medical Maintenance organization (HMO)

An applicant MUST receive an Outline of Coverage when an application is taken for a(n)

Medicare supplement supply

Which of these is NOT an element of life insurance premiums?

Morbidity Rate

Which of the following is a valid reason for an enrollee to be cancelled by a Health Maintenance Organization (HMO) plan?

Nonpayment of Coverage

Under the USA Patriot Act, insurers are required to report receipt of cash payments in excess of

$10,000

An employee is covered under a company group life plan with a $50,000 death benefit. What is the MAXIMUM amount a spouse may be insured for under this program?

$25,000

An insurer must provide an insured with claim forms within __ days after receiving notice of a loss.

15

in Texas, how long must a policy be in force before an insurance company must pay death benefits for suicide?

2 years

An insured must notify an insurer of a medical claim within ______ days after an accident?

20

A plan through the Marketplace may be purchase by

Any legal resident (except those imprisoned)

what is the initial source of underwriting for an insurance policy?

Application containing statements from the insured

Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks?

Business overhead expense

A Disability Income policy owner recently submitted a claim for a chronic neck problem that has now resulted in total disabilityThe original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim?

Claim will be paid and coverage will remain in force

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.

Insurance policies are offered on a "take it or leave it" basis, which make them:

Contracts of Adhesion

Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance?

Entire cash surrender value is taxable

Which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due?

Grace Period ( is the additional period of time after a premium payment is due that will allow the policy to remain in force in the event of nonpayment.)

X is insured with a disability income policy that provides coverage until age 65. This policy allows the insurer to change the premium rate for the overall risk class assigned. Which of these renewability features does this policy contain?

Guaranteed Renewable

Under the individual health insurance policy, the time limit of certain defenses provision states that non fraudulent misstatements first become incontestable two years

from the date that the policy was issued

Which of the following statement about Health Reimbursement Agreements (HRA) is correct?

if the employee paid for the qualified medical expenses, the reimbursement may be tax-free

A domestic insurance company in Texas is considered a company that

is incorporated and formed in Texas

J's Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance clause. If J is hospitalized and receives a bill for $10,000, J would pay?

$3,600

B has a $100,000 Accidental Death and Dismemberment policy that pays triple indemnity for common carrier death. If B is killed from an accident on a commercial flight, what will the policy pay B's beneficiary?

$300,000

What action can a policyowner take if an application for a bank loan requires collateral?

Assign policy ownership to the bank

A certificate of ____ permits an insurance company to transact business in Texas

Authority

Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?

Decreasing Term

A life insurance policy would be considered a wagering contract WITHOUT:

Insurable interest

If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?

Insured's contingent beneficiary

Which of the factors are taken into consideration when an insurance company determines the premium rate for a Whole Life Policy on an applicant?

Risk Classification

Who owns a stock insurance company?

Stockholders

What is the maximum Social Security Disability benefit amount an insured can receive?

100% of the insured Primary Insurance Amount (PIA)

A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?

20 Pay Life accumulates cash value faster than Straight Life.

J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value?

20 pay-life

How long can a cash surrender value payment be deferred by the insurance company under the Nonforfeiture Law?

6 months

A contract where one party either accepts or reject the terms of a contract written by another party is called a contract of

Adhesion Contract

An insurer is NOT required to provide information on fraudulent claims if requested by

An Insured

An example of false advertising would be

An insurer exaggerating its dividends in a magazine advertisement.

What does an insuring agreement in a life insurance contract establish?

An insurer's basic promise

Medicaid was designed to assist individuals who are

Below a specific income limit

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

B the 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 major medical Policy typically contains a provision that requires the insurer to pay only part of the loss, while the balance is payed by the insured. The provision is called

Coinsurance

An evidence of coverage form may be issued by a Health Maintenance Organization (HMO) after being approved by the

Commissioner

Which of the following is NOT included in a life insurance illustration?

Company's mortality table

K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?

Conditional

An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet?

Consideration clause

Which of the following consists of an offer, acceptance, and consideration?

Contract

How are Roth IRA distributions normally taxed?

Distributions are received tax-free (Qualified distributions are received income tax-free in a Roth IRA.)

T 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

M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate?

Earned, but Unpaid benefits

In a life insurance policy, which feature states that the policy will NOT cover certain risks?

Exclusion

A(n) _________ contained in a life insurance policy states that the policy will NOT cover certain risks

Exclusions

An underwriter determines that an applicant's risk should be reclassified due to a health issue. This policy may be issued with a(n)

Extra Premium

This type of deductible provision waives the deductible for all family members after some of them have satisfied individual deductibles within the same year:

Family Maximum deductible

Which of these is NOT a source of Social Security benefits?

Federal Government

A life insurance application may be rejected on the basis of all these factors EXCEPT

Gender

Which requirement must be met for an association to be eligible for a group life plan?

Group was formed for a purpose other than acquiring insurance

K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered

Guaranteed renewable

A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?

Her group health plan. (if the the employer has more than 20 employees, the group health plan generally pays first)

A long-term care rider in a life insurance policy pays a daily benefit in the event of which of the following?

Inability of the insured to perform more than 2 Activities of Daily Living (ADL's)

Which of the following groups may NOT be insured by a group life insurance policy?

Individuals who are related by blood

Which of these actions should a producer take when submitting an insurance application to an insurer?

Inform insurer of relevant information not included on the application

Information obtained from a phone conversation to the proposed insured can be found in which of these reports?

Inspection Report

Which health policy clause specifies the amount of benefits to be paid?

Insuring (Accident and health policy)

Which of the following 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.

Which of the following may NOT charge fees for insurance advice?

Legal Reserve Agents

K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?

Level

Which of these is NOT relevant when determining the amount of personal life insurance needed?

Local Unemployment Rate

If a corporation pays the premium on a group life policy for its employees, the corporation is required to report how much additional taxable income for each employee?

Nothing

What does medicare part A and B cover?

Part A covers hospitalization; Part B covers doctor's services

Which statement is TRUE in regards to a policy loan?

Past-due interest on a policy loan is added to the total debt

Which of theses is considered a mandatory provision?

Payment of Claims

What is the purpose of the Time of Payment of Claims provision?

Prevents delayed claim payments made by the insurer

Which of the following is considered to be the time period after the health policy is issued, during which no benefits are provided for illness?

Probationary Period (the time between the effective date and the time the coverage begins)

R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity?

Residual Disability

Which provision allows 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

What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's Claims Forms provision?

Submit the claim in any form.

which of the following services is NOT included under hospitalization expense coverage?

Surgical Fees

What type of life policy covers two people and pays upon the death of the last insured?

Survivorship

Which of these life insurance riders allows the applicant to have excess coverage?

Term Rider

G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G's policy, who is responsible for paying the medical bills?

The Insured

All these statements about the commissioner of insurance are true EXCEPT

The commissioner must be elected (the governor appoints the commissioner to a two year term, the commissioner is not elected)

Whole Life insurance is sometimes refereed to as "Straight Life". What does the word "Straight" indicate when using this phrase?

The duration of premium payments

Which statement regarding the change of the beneficiary provision is TRUE

The policy owner can change the beneficiary

A Medicare Supplement policy may be cancelled for which of the following reasons

The premium has not been paid by the insured

The Consideration clause of an insurance contract includes

The schedule and amount of premium payments

Which of the following benefits is NOT required under a group health plan for drug and alcohol treatment?

Transportation to and from treatment facility

What type of annuity has a cash value that is based upon the performance of it's underlying investment funds?

Variable

What is required for an agent whos license has been revoked?

Wait at least five years before applying for a new license

The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the

Waiting Period

The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the:

Waiver of premium

Disability policies do NOT normally pay for disabilities arising from which of the following?

War

Which of these is considered a statement that is assured to be true in every respect?

Warranty

At what point does an informal agreement become a binding contract?

When consideration is provided by one of the parties to the contract

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

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

How often must an insurance agent license normally be renewed?

every TWO years

An insurance company organized under New York laws and licensed to do business in Texas is considered a(n)?

foreign company

A limited Pay-Life policy has:

premium payments limited to a specified number of years