Texas State Exam Simulator - Life and
Health Insurance ACTUAL QUESTIONS
AND CORRECT ANSWERS
An annuity promises that, if the annuitant dies before receiving payments equal to the correct
value, the payments will be continued to a beneficiary until an amount equal to the contract value
has been paid. This type of annuity is called
An installment Refund annuity
A Straight Life annuity
A Cash Refund annuity
A Joint Life annuity - Correct answers✔An installment Refund annuity
One becomes eligible for Social Security disability benefits after having been disabled for
3 months
5 months
6 months
12 months - Correct answers✔5 months
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?
Straight life accumulates faster than Limited-pay Life
20-Pay Life accumulates cash value faster than Straight Life
, Cash value accumulation of both 20-Pay Life and Straight Life depend on the insurer's financial
rating
20-Pay Life and Straight Life accumulate cash value at the same rate - Correct answers✔20-Pay
Life accumulates cash value faster than Straight Life
Who makes the legally enforceable promises in a unilateral insurance policy?
Beneficiary
Insurance company
Insured
Applicant - Correct answers✔Insurance company
The Consideration clause in a life insurance policy indicates that a policyowner's consideration
consists of a completed application and
the initial premium agreeing to a physical examination delivery of policy
disclosure of any medical conditions - Correct answers✔the initial premium
Which parts of a life insurance policy are guaranteed to be true?
Rating
Representation
Statement
Warranty - Correct answers✔Warranty
,A comprehensive major medical health insurance policy contains an Eligible Expenses provision
which identifies the types of health care services that are covered. All of the following health
care services are typically covered EXCEPT for
hospital charges physician fees experimental and investigative services
nursing services - Correct answers✔experimental and investigative services
If a retiree on Medicare required five hospital stays in one year, which policy would provide the
best insurance for excess hospital expenses?
Long-term care
Indemnity
Medicare Supplement
Medicaid - Correct answers✔Medicare Supplement
S, while in the process of converting her group life insurance to an individual policy, dies. What
happens to the claim her beneficiary submits?
No benefits are payable under the Master contract
Full benefits are payable under the Master contract
Full benefits are payable under the converted policy
Benefits less required premium are payable under the converted policy - Correct answers✔Full
benefits are payable under the Master contract
All of the following are limited benefit plans EXCEPT
, cancer policies life insurance policies dental policies critical
illness policies - Correct answers✔life insurance policies
A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy.
What rider would the physician add if he wants the ability to increase his policy benefit as his
practice and income grow?
Extended Term rider
Cost of Living Adjustment rider
Guaranteed Insurability Option rider
Waiver of Premium rider - Correct answers✔Guaranteed Insurability Option rider
An agent whose license has been revoked is required to
wait at least five years before applying for a new license
submit all previously written policies to the Commissioner of Insurance's office for servicing of
the accounts cancel all policies currently in effect and advise the insureds to place them
elsewhere
continue to service the existing accounts but not solicit new business - Correct answers✔wait at
least five years before applying for a new license
The benefits under a Disability Buy-Out policy are
normally paid in installments taxable to the
beneficiary payable to the company or another
shareholder
Health Insurance ACTUAL QUESTIONS
AND CORRECT ANSWERS
An annuity promises that, if the annuitant dies before receiving payments equal to the correct
value, the payments will be continued to a beneficiary until an amount equal to the contract value
has been paid. This type of annuity is called
An installment Refund annuity
A Straight Life annuity
A Cash Refund annuity
A Joint Life annuity - Correct answers✔An installment Refund annuity
One becomes eligible for Social Security disability benefits after having been disabled for
3 months
5 months
6 months
12 months - Correct answers✔5 months
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?
Straight life accumulates faster than Limited-pay Life
20-Pay Life accumulates cash value faster than Straight Life
, Cash value accumulation of both 20-Pay Life and Straight Life depend on the insurer's financial
rating
20-Pay Life and Straight Life accumulate cash value at the same rate - Correct answers✔20-Pay
Life accumulates cash value faster than Straight Life
Who makes the legally enforceable promises in a unilateral insurance policy?
Beneficiary
Insurance company
Insured
Applicant - Correct answers✔Insurance company
The Consideration clause in a life insurance policy indicates that a policyowner's consideration
consists of a completed application and
the initial premium agreeing to a physical examination delivery of policy
disclosure of any medical conditions - Correct answers✔the initial premium
Which parts of a life insurance policy are guaranteed to be true?
Rating
Representation
Statement
Warranty - Correct answers✔Warranty
,A comprehensive major medical health insurance policy contains an Eligible Expenses provision
which identifies the types of health care services that are covered. All of the following health
care services are typically covered EXCEPT for
hospital charges physician fees experimental and investigative services
nursing services - Correct answers✔experimental and investigative services
If a retiree on Medicare required five hospital stays in one year, which policy would provide the
best insurance for excess hospital expenses?
Long-term care
Indemnity
Medicare Supplement
Medicaid - Correct answers✔Medicare Supplement
S, while in the process of converting her group life insurance to an individual policy, dies. What
happens to the claim her beneficiary submits?
No benefits are payable under the Master contract
Full benefits are payable under the Master contract
Full benefits are payable under the converted policy
Benefits less required premium are payable under the converted policy - Correct answers✔Full
benefits are payable under the Master contract
All of the following are limited benefit plans EXCEPT
, cancer policies life insurance policies dental policies critical
illness policies - Correct answers✔life insurance policies
A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy.
What rider would the physician add if he wants the ability to increase his policy benefit as his
practice and income grow?
Extended Term rider
Cost of Living Adjustment rider
Guaranteed Insurability Option rider
Waiver of Premium rider - Correct answers✔Guaranteed Insurability Option rider
An agent whose license has been revoked is required to
wait at least five years before applying for a new license
submit all previously written policies to the Commissioner of Insurance's office for servicing of
the accounts cancel all policies currently in effect and advise the insureds to place them
elsewhere
continue to service the existing accounts but not solicit new business - Correct answers✔wait at
least five years before applying for a new license
The benefits under a Disability Buy-Out policy are
normally paid in installments taxable to the
beneficiary payable to the company or another
shareholder
