EXAM FX life Texas life insurance practice test
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
A guaranteed renewable disability insurance policy
Is renewable at the insureds option to a specified age
Which of the following statements is NOT true concerning Medicaid?
It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income.
what would be an advantage to naming a contingent or secondary beneficiary in a life insurance policy
It determines who receives policy benefits if primary is deceased
Which of the following is NOT true of a major medical health insurance policy
It is designed to pay on a first dollar of expense basis
Which of the following is true of a children's rider added to an insured permanent life insurance policy
It is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age
Which of the following is NOT one of the three types of term coverage based on what happens to the face amount during the policy term
Renewable
A policy owner who is also the insured wants to name her husband as the beneficiary of her policy. She also wishes to retain all of the rights of ownership. The policy owner should have have her husband named as.
Revocable beneficiary
An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy
She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.
Workers comp benefits are regulated by which entity
State government
Which of the following policies would be classified as a traditional level premium contract
Straight life
Which of the following would an accident only policy NOT cover
Surgery to repair wrist damaged by tendonitis
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as
Survivor protection
WHICH OF THE FOLLOWING information will be stated in the consideration clause of a life insurance policy
The amount of premium payment
The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?
The annuitant must be a natural person
The annuitant dies while the annuity is still in the accumulation stage. Which of the following is TRUE
The beneficiary will receive the greater of the money paid into the annuity or the cash value
The period immediately following a disability during which benefits are not payable is
The elimination period
Who chooses a primary care physician in an HMO plan?
The individual member
Which statement regarding qualifications for Social Security benefits is NOT true
The individual must be 65 years old
An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?
$10,000 no tax consequence
An insured is covered by a partially contributory group disability income plan that pays benefit of $4000 a month. If the insured pays 25% of the monthly premium, how much of the monthly benefit would be taxable
$3,000
An insured owns a general disability policy and is injured during a war rendering him disabled. What will be the extent of benefits that he will recieve
0% (war IS NOT COVERED)
How many consecutive months of coverage (other than in an acute care unit of a hospital) must LTC insurance provide in this state?
12 months
What is the timeframe for filing suspicious activity reports
30 DAYS
When a disabled dependent child reaches the age limit for coverage, how long does the policyowner have to provide proof of dependency in order for the dependent to remain covered under the policy?
31 DAYS
Unreimbursed medical expenses paid for the insured may be claimed as deductions if expenses exceed what percentage of the adjusted gross income?
7.5%
If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to
Charge a higher premium
An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued?
Adjust the claim benefit to reflect the insureds age
Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance policy
Aleatory
Which of the following statements is true concerning the alteration of optional policy provisions
An insurer may change the wording of optional provisions, as long as the change does not adversely affect the policy owner.
The death protection component of Universal Life Insurance is always
Annually renewable term
Which of the following products will protect an individual from outliving their money
Annuity
Which of the following is a short term annuity that limits the amounts paid on a specific fixed period or until a specific fixed amount is liquidated
Annuity certain
An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that change?
Applicant
Which of the following explains the policy owners right to change beneficiaries, choose options, and receive proceeds of a policy
Assignment rights
Which document describes an insureds medical history including diagnosis and treatments
Attending physicians treatment
Which of the following is not true of Disability Buy Sell coverage
Benefits are considered taxable income to the business
A policy available to business owners that provides payment for normal business expenses in the event that the owner is disabled is called
Business overhead expense
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
An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the
Consideration clause
Which of the following reports will provide the underwriter with the information about an insurance applicant´s credit
Consumer report
The purpose of managed care health insurance plans is to
Control health insurance claims expenses
A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change?
Cost of living rider
A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as
Critical illness
An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased, what type of annuity is it
Deferred
The death benefit in a variable universal life policy
Depends on the performance of a separate account
Methods used to pay the death benefits to a beneficiary upon the insured's death are called
Designation options
What is the goal of the HMO?
Early detection through regular checkups
For an individual who is eligible for medicare at age 65, and who is still employed and covered under the employers plan, which of the following is true
Employer = primary coverage Medicare comes second.
The insurance policy, together with the policy application and any added riders for what is known as a
Entire contract
Which of the following best describes the aleatory nature of an insurance contract
Exchange of unequal values
An agent selling variable annuities must be registered with
FINRA
What does "level" refer to in level term insurance?
Face amount
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select
Fixed period
Which of the following is an eligibility requirement for all social security disability income benefits
Have attained fully insured status
An insured has a modified Endowment Contract. He wants to withdraw some money in order to pay medical bills. Which of the following is true
He will have a penalty if he is younger than 59 and a half.
Which of the following is NOT true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity.
In a group health policy, a probationary period is intended for people who
Join the group after the effective date
To sign up for a Medicare prescription drug plan, individuals must first be enrolled in
Medicare part A
What is a definition of a unilateral contract
One-sided: only one party makes an enforceable promise
Under which of the following organizations are the practicing providers compensated on a fee for service basis
PPO
An insured pays her Major Medical insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19 she had an accident and broke her leg. The insurance company would...
Pay the claim.
A guaranteed renewable health insurance policy allows the
Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class
If the policy owner, the insured, and the beneficiary under a life insurance policy are three different people, who has the ownership rights?
Policyowner
Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a
Premium receipt
Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe?
Presumptive disability
Another Name for a substandard risk classification is
Rated
An insured committed suicide one year after his life insurance policy was issued. The insurer will
Refund the premiums paid.
When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. which of the following would receive the death benefit?
The insured contingent beneficiary
An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true?
The insured was in compliance with the policy requirements regarding claims
How are employer contributions to Health Reimbursement Accounts treated in regards to taxation?
They are tax deductible
Social security was created to provide all of the following benefits except
Unemployment income
What kind of policy ollows withdrawals or partial surtenders?
Universal life
Which type of life insurance policy allows the policy owner to pay more or less than the planned premium
Universal life
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 initial premium, and the applicant completes an acceptable statement of good health
Which of the following is NOT a factor in determining qualifications for a social security disability benefits
Workers occupation
After a back injury, an insured is disabled for a year. His insurance polley carries a Disability Income benefit rider. Which of the following benefits will he receive?
Yearly premium waiver and income
When the insured purchased his health policy he was a window washer. He has since changed occupations and now manages a library. If the insurer is notified of the insured's change of occupation, the insurer should
adjust the benefit in accordance with the decreased risk
An absolute assignment is a
transfer of all ownership rights in a policy
