Texas Life And Health Insurance Exam (Questions) Flashcards ionicons-v5-c

The Consideration clause of an insurance contract includes

the schedule and amount of premium payments

Which of these arrangements allows one to bypass insurable interest laws?

Investor-Originated Life InsuranceInvestor-originated life insurance (or IOLI), sometimes called stranger-originated life insurance (or STOLI) is used to circumvent state insurable interest statutes. This is done when an investor (or stranger) persuades an individual to take out life insurance specifically for the purpose of selling the policy to the investor. The investor compensates the insured and makes the premiums, then collects the death benefit when the insured dies.

Insurable interest must exist at what time?

at the time of application

Credit Life insurance is

issued in an amount not to exceed the amount of the loan

Term insurance has which of the following characteristics?

Expires at the end of the policy period

Which is true concerning a Variable Universal Life policy?

Policyowner controls where the investment will go and selects the amount of the premium payment

Which of these is NOT considered to be a right given to a policyowner?

Modify a provision in the insurance contract

What is the underlying concept regarding level premiums?

The early years are charged more than what is needed

A level premium indicates

the premium is fixed for the entire duration of the contract

Why is an applicant's signature required on a life insurance application?

To attest that the statements on the application are accurate to the best of the applicant's knowledge

A noncontributory group term life plan is characterized by

the entire cost of the plan is paid for by the employer

What is considered to be a characteristic of an immediate annuity?

Benefit payments start within one payment period of purchase

Which of the following is TRUE about a qualified retirement that is "top heavy"?

More than 60% of plan assets are in key employee accounts

Which statement regarding third-party ownership of a life insurance policy is true?

It is used extensively in estate-planning as well as business circumstances

Which statement regarding a Key Employee Life policy is NOT true?

The beneficiary is named by the key employee

The difference between group insurance and blanket health policies is

Blanket health policies do not issue certificates

A Business Overhead Expense policy

reimburses the company for any reduction in sales due to the owner's disability

The benefits under a Disability Buy-Out policy are

payable to the company or another shareholder

The Coordination of Benefits provision

prevents an insured covered by two health plans from making a profit on a covered loss

What does Medicare Parts A and B cover?

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

Medicare

is a hospital and medical expense insurance program

Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges?

The maximum amount considered eligible for reimbursement by an insurance company under a health plan

Which of the following BEST describes a Hospital Indemnity policy?

Coverage that pays a stated amount per day of a covered hospitalization

Which of the following costs would a Basic Hospital/Surgical policy likely cover?

Surgically removing a facial birthmarkcosmetic surgery

What does a Guaranteed Insurability rider provide a Disability Income policyowner?

The ability to periodically increase the amount of coverage without evidence of insurability

Health insurance benefits NOT covered due to an act of war are

excluded by the insurer in the contract provisions

An insurance company must do which of the following to terminate an agent's appointment?

Send notice of the termination to the Texas Department of Insurance

A certificate of authority does which of the following?

Permits an insurance company to transact business in Texas

Who can purchase a plan through the Marketplace?

Any legal resident except those incarcerated

Under the Texas insurance code, which of the following statements about the Suicide clause is CORRECT?

Suicide may not be a defense against payment after the second year

Which of the following statements is NOT CORRECT about the Commissioner of Insurance?

The Commissioner must be elected in a general election

All of the following statements about health coverage for newborns are correct EXCEPT

coverage during the first year is limited to congenital defects

Which of the following is an example of rebating?

returning a portion of a premium as inducement to purchase insurance

An insurance company may be judged guilty of false advertising if it

An insurance company may be judged guilty of false advertising if it

Which of the following actions by an insurance company is considered an unfair claims settlement practice?

Denying an insured's claim without indicating the basis of denial under the policy

Which of the following BEST describes Credit Life insurance?

Insurance issued on a debtor to cover outstanding balances on installment loans

An agent may legally share commissions only with

another agent who is licensed in the same line of insurance

An agent whose license has been revoked is required to

wait at least five years before applying for a new license

The Commissioner of insurance may suspend, revoke, or refuse to renew the license of an agent who

is found guilty of misrepresentation or fraud in obtaining the license

The Misstatement of Age provision requires that if the age of the insured is misstated, then any amount payable is

an amount that the premiums paid would have purchased at the current age or ages