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2024 TEXAS LIFE, ACCIDENT AND HEALTH STATE EXAM
PREP Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -80 Questions and Answers
-Format: Multiple-choice / Flashcard
Question 1: Nick has a policy that the insurer can cancel when he turns 65. Which type of policy is it?
Answer:
Conditionally renewable A conditionally renewable policy allows the insurer to cancel the policy if certain stated conditions happen. Examples of conditions are losing a job or reaching a specified age, such as 65.Question 2: In a life policy, a statement of good health is needed when:
Answer:
The application does not include the premium.A statement of good health is needed when the application does not include the initial premium with the application.Question 3: What approach calculates the amount of money a family needs immediately upon the death of the insured to pay for their expenses and basic necessities?
Answer:
Needs The needs approach calculates the amount of money a family needs immediately upon the death of the insured to pay for their expenses and basic necessities.
Question 4: The producer realizes that the prospective client omitted information about a prior illness. What should the producer do?
Answer:
Tell the prospective client that a claim might be rejected later due to the omission.The producer has the duty to inform the prospective insured that a claim might be rejected later on with possible repercussions. This is a form of fraud, and a claim might be rejected on this basis.Question 5: Cindy has a new medical plan that provides both health care services and health
care insurance. She is covered by:
Answer:
An HMO (Health Maintenance Organization) She is covered under an HMO.Question 6: Which of the following could be used to prevent a lapse in the payment of life insurance premiums?
Answer:
Automatic premium loan The automatic premium loan allows the insurer to tap into the cash value of a policy to pay an overdue premium.
Question 7: What is the grace period for life insurance policies in Texas?
Answer:
31 days In Texas, life insurance policies have a grace period of 31 days or one month.Question 8: Jeff and Mike own an architect firm with 20 employees and worry about the company if one of them becomes permanently disabled. What type of policy should they buy?
Answer:
Disability Buy-Out They should buy a disability buy-out policy.Question 9: The life insurance rider that pays the face amount plus the total premiums paid into
the policy is known as:
Answer:
Return of premium The return of premium rider pays the total amount of premiums paid into the policy as long as the insured dies within a certain time period specified in the policy. The death benefit is comprised of the face amount plus the total premiums paid into the policy.
Question 10: A life insurance policy in Texas must contain all the following provisions, except:
Answer:
Settlement A life insurance policy in Texas must contain the following provisions: entire contract, payment of premiums, grace period, reinstatement, incontestability, statements of insured, misstatement of age, payment of claim, legal action, assignment, and accelerated life benefits.Question 11: The insurer has a maximum of how many days after receiving notice of a claim to provide claims forms?
Answer:
15 days Claims forms must be provided to the claimant a maximum of 15 days after receiving a notice of claim.Question 12: What document authorizes an insurer to engage in the insurance business?
Answer:
Certificate of Authority A certificate of authority issued to an insurer authorizes the insurer to engage in the business of insurance in Texas.Question 13: Tyler owns a major medical policy with 70/30 coinsurance and a $3,000 deductible.If he submits a claim for $20,000, how much will he pay?
Answer:
$8,100
He'll pay $8,100. The math works out $20,000 - $3,000 = $17,000. Then $17,000 x .30 = $5,100. Then add the $3,000 deductible with the $5,100 coinsurance ($3,000 + $5,100= $8,100).Question 14: Kim's policy remained in force for a certain number of days even though she
forgot to pay the premium. The provision that allows this is called:
Answer:
The grace period provision The grace period allows the policy to remain in force for a specified number of days beyond the premium due date.Question 15: Sam works for large corporation and is eligible for both his company's health plan and Medicare. Which plan would be primary?
Answer:
Work Employer sponsored health plans, are always primary, and Medicare is secondary, as long as the company plan has more than 20 employees.
Question 16: What are the two most common adjustments made during a month with a universal life insurance policy?
Answer:
Cost of death protection deducted and current interest rate credited Each month, the cost of the death protection is deducted from the cash value, and the current interest rate is credited.
Question 17: How many days does an insured have to file a notice of claim?
Answer:
20 days A notice of claim must be given to the insurer within 20 days.Question 18: Sue's hospital bill is $4,500. Her major medical policy has a $500 deductible and then it pays 80% of the remaining bill. The policy also has a maximum out-of-pocket of $2,000.How much of the total bill will the insurance company pay?
Answer:
$3,200
The bill is $4,500. Subtract $500 for the deductible. The company will pay 80% of the balance, which is .80 x $4,000 = $3,200
Question 19: In the state of Texas, when must newborn child coverage begin?
Answer:
From the moment of birth Newborns must be covered from the moment of birth.Question 20: What type policy would pay the death benefits after the first person dies, if it covers two or more lives?
Answer:
Joint life Joint life pays the death benefits after the first person dies. A survivorship life policy pays after the second person or last survivor dies.Question 21: In life insurance, insurance interest must be present at the time of:
Answer:
Application Insurable interest must be present when the application is made.
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