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LIFE & HEALTH INSURANCE EXAM-TEXAS QUESTIONS AND ANSWERS
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LIFE & HEALTH INSURANCE EXAM-TEXAS QUESTIONS AND ANSWERS
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LIFE & HEALTH INSURANCE EXAM-TEXAS QUESTIONS AND ANSWERS
Sue, an annuity owner, names her 15-year-old son and 10-year-old daughter as joint
annuitants of her contract. Upon whose life (or lives) are income payments determined?
A. Sue's daughter's life
B. Sue's life
C. The joint life expectancy of Sue's son and daughter
D. Sue's son's life - Answer-C
George purchased an annuity that will provide his wife, Anna, with monthly income
payments for as long as she lives. In this scenario, what is Anna called? - Answer-The
annuitant
An annuity's beneficary is the person the owner chooses to receive the contract's values
if either the owner or the annuitant dies before annuitization
An application for health insurance requires the signature of:
A. The proposed insured and the producer
B. Only the underwriter
C. Only the producer
D. Only the proposed insured - Answer-A
What kind of information is NOT commonly requested on a HI application?
A. Likelihood of disability or illness
B. Frequency of premium payment
C. Medical history
D. Names and sex of the persons to be insured - Answer-A
Which of the following allows insureds to increase a policy's level of benefits or scope of
coverage in the future without having to prove insurability?
A. Multiple indemnity rider
B. Guaranteed insurability rider
C. Nonrenewable (cancelable or term) policy
D. Impairment rider - Answer-B
Term policies are a special class of HI policies written specifically to cover only limited
periods, such as six months.
Which statement about return of premium riders is correct?
A. Return of premium riders are not available in all states
B. They prevent the insured from receiving a premium refund if any claims are filed.
C. They refund the entire premium to the ID only if no claims are filed against the policy
D. They are available at no additional cost - Answer-A
If an insured's claims are below a certain level, the insured qualifies for a refund of
some
,Which rider is NOT commonly found in a disability income policy?
A. LTC rider
B. Return of premium rider
C. Guaranteed insurability rider
D. Social insurance supplement rider - Answer-A
Major medical plans often allow health care expenses to be credited to next year's
deductible requirement if they are incurred within how many months before the end of
the current calendar year?
A. 1 month
B. 6 months
C. 2 months
D. 3 months - Answer-D
A major medical expense policy requires the insured to pay separate deductibles for
each illness or each accident. What type of deductible does it have?
A. Per cause deductible
B. Separate risk deductible
C. Per diem deductible
D. Separate ailment deductible - Answer-A
4 shareholders of ABC Corp, who each own a $1MM interest in the company, enter into
a stock redemption agreement funded with LI. If 1 shareholder dies 6 months later, all
the following statements are correct EXCEPT:
A. The IR will pay the $1MM DB from the deceased owner's policy to ABC Corp
B. The 3 remaining shareholders will buy the deceased owner's interest from his estate
C. This is a form of entity-purchase buy-sell plan
D. Each of the surviving shareholders will then own a 1/3 share of ABC - Answer-B
Edward's AD&D policy pays a principal sum of $100k and a capital sum of 50% for loss
of a limb. How much will his policy pay for his accidental death in which he also lost one
arm? - Answer-$100k - the max amount that can be paid under AD&D is the principal
sum
The addition of Part C to Original Medicare provided Medicare-eligible individuals with:
A. prescription drug coverage
B. managed care and private fee-for-service plans
C. LTC coverage
D. Medicare supplement insurance - Answer-B
HIPAA treats premiums paid for tax-qualified long-term care insurance plans as medical
expenses that qualify for what type of tax status?
A. tax-free
B. tax-deferred
C. tax-favored
, D. tax-exempt - Answer-C - premiums are medical expenses that can be deducted on
Sch A
Beth buys a long-term care insurance policy and chooses several riders for additional
protection. Which feature does her policy automatically include?
A. nonforfeiture benefit
B. return of premium
C. guarantee of insurability
D. inflation protection - Answer-D
C lets the PO increase the daily benefit regardless of their health
Although the employer sets the eligibility standards for participation in its group health
insurance plan, the insurer alone:
A. selects the benefits
B. sets the group membership
C. sets the waiting period
D. sets the minimum participating standards - Answer-D
true or false: the fair credit reporting act does not require insurance companies to
provide applicants with copies of any inspection reports obtained on them during the
underwriting process. - Answer-true - but required if requested to provide the report's
summary if it affected the underwriting decision
Debbie owns a noncancelable individual disability income policy. She receives benefits
for one year and then returns to work. Which statement is correct about the policy's
renewal?
A. the IR can reduce the benefits
B. the IR must renew the policy if Debbie pays the premium
C. the IR can cancel the policy
D. the IR can increase the premium - Answer-B - the IR cannot cancel, increase the
premium, or reduce the benefits of a noncancelable policy as long as the ID pays the
premium
An ER with 7 EEs applies for a group medical expense insurance policy. Due to the
group's small size, the IR:
A. can exclude members with poor health
B. will refuse to insure the group to avoid adverse selection
C. can charge a higher premium for EEs who present a greater risk
D. may require the participants to complete a medical exam or provide evidence of
insurability - Answer-D - the HI portability and accountability act prohibits a group HI
plan from rejecting or excluding a member of a group that has more than 2 members,
and from charging a member a higher premium due to their health
guaranteeed renewable vs noncancelable - Answer-both can't be canceled, but
guaranteed renewable premiums can be increased (only if the increase is applied to all
policies of that class)
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