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Questions and 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 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?
One becomes eligible for Social Security disability benefits after having been disabled for how long?
One becomes eligible for Social Security disability benefits after having been disabled for how long?
Which statement made by the producer would be correct for a potential client, age 40, looking to purchase a Whole Life policy that accumulates cash value faster?
Which statement made by the producer would be correct for a potential client, age 40, looking to purchase a Whole Life policy that accumulates cash value faster?
Who makes the legally enforceable promises in a unilateral insurance policy?
Who makes the legally enforceable promises in a unilateral insurance policy?
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The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of what?
The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of what?
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Which parts of a life insurance policy are guaranteed to be true?
Which parts of a life insurance policy are guaranteed to be true?
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A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies types of health care services covered. Which of the following is typically excluded?
A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies types of health care services covered. Which of the following is typically excluded?
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If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?
If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?
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What happens to the claim a beneficiary submits if the insured dies while converting group life insurance to an individual policy?
What happens to the claim a beneficiary submits if the insured dies while converting group life insurance to an individual policy?
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All of the following are limited benefit plans EXCEPT?
All of the following are limited benefit plans EXCEPT?
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A physician qualifies for a $7,000/month Disability Income policy. What rider would allow him to increase his policy benefit as his practice and income grow?
A physician qualifies for a $7,000/month Disability Income policy. What rider would allow him to increase his policy benefit as his practice and income grow?
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An agent whose license has been revoked is required to?
An agent whose license has been revoked is required to?
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The benefits under a Disability Buy-Out policy are?
The benefits under a Disability Buy-Out policy are?
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The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for?
The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for?
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How are surrender charges deducted in a life policy with a rear-end loaded provision?
How are surrender charges deducted in a life policy with a rear-end loaded provision?
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What MUST an insurance company use in its advertising?
What MUST an insurance company use in its advertising?
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An accident policy will most likely pay a benefit for a(n)?
An accident policy will most likely pay a benefit for a(n)?
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M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT?
M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT?
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What violation may be indicated if a policyowner cash surrenders a Universal Life insurance policy in its early years?
What violation may be indicated if a policyowner cash surrenders a Universal Life insurance policy in its early years?
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Which of these do NOT constitute policy delivery?
Which of these do NOT constitute policy delivery?
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What is the MINIMUM number of Activities of Daily Living (ADL) an insured must be unable to perform to qualify for Long Term Care benefits?
What is the MINIMUM number of Activities of Daily Living (ADL) an insured must be unable to perform to qualify for Long Term Care benefits?
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An agent who tells a client that dividends are guaranteed may be guilty of?
An agent who tells a client that dividends are guaranteed may be guilty of?
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Which statement regarding a Key Employee Life policy is NOT true?
Which statement regarding a Key Employee Life policy is NOT true?
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A policyowner's rights are limited under which beneficiary designation?
A policyowner's rights are limited under which beneficiary designation?
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Agent J takes an application and initial premium from an applicant. The insurance company returns the check back because it was made out to J instead of the company. What action should J take?
Agent J takes an application and initial premium from an applicant. The insurance company returns the check back because it was made out to J instead of the company. What action should J take?
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Variable Whole Life Insurance can be described as?
Variable Whole Life Insurance can be described as?
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A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?
A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?
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Medicare is?
Medicare is?
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T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take?
T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take?
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All of the following statements about health coverage for newborns are correct EXCEPT?
All of the following statements about health coverage for newborns are correct EXCEPT?
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Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself?
Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself?
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An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to?
An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to?
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M purchases a $70,000 Life Insurance Policy with premium payments of $550 a year for the first 5 years. At the beginning of the sixth year, the premium will increase to $800 per year but will remain level thereafter. What type of policy has M purchased?
M purchases a $70,000 Life Insurance Policy with premium payments of $550 a year for the first 5 years. At the beginning of the sixth year, the premium will increase to $800 per year but will remain level thereafter. What type of policy has M purchased?
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S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT?
S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT?
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Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?
Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?
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Which of the following statements is CORRECT about the period in which a Term Policy can be converted?
Which of the following statements is CORRECT about the period in which a Term Policy can be converted?
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If, at the time of an insured's death, the insurance company discovers that the insured's age was misstated on the application for life insurance, the company will most likely?
If, at the time of an insured's death, the insurance company discovers that the insured's age was misstated on the application for life insurance, the company will most likely?
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K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective?
K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective?
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An assignment of benefits of a Health Policy?
An assignment of benefits of a Health Policy?
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What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?
What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?
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K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income?
K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income?
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M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. What type of beneficiary is his son?
M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. What type of beneficiary is his son?
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The Accidental Death and Dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured?
The Accidental Death and Dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured?
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Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deductible?
Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deductible?
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T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?
T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?
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On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. What action should the producer take when the policy is delivered on August 20?
On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. What action should the producer take when the policy is delivered on August 20?
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Which of the following costs would a Basic Hospital/Surgical policy likely cover?
Which of the following costs would a Basic Hospital/Surgical policy likely cover?
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Which of these statements concerning an Individual Straight Life annuity is accurate?
Which of these statements concerning an Individual Straight Life annuity is accurate?
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J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions?
J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions?
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What is the Reinstatement provision?
What is the Reinstatement provision?
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After the expiration of COBRA laws, which of the following statements is TRUE?
After the expiration of COBRA laws, which of the following statements is TRUE?
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Which option enables the policyowner to sell the policy for more than its cash value?
Which option enables the policyowner to sell the policy for more than its cash value?
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Who can purchase a plan through the Marketplace?
Who can purchase a plan through the Marketplace?
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What is Old Age and Survivors Health Insurance (OASDHI) also known as?
What is Old Age and Survivors Health Insurance (OASDHI) also known as?
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Which of these require an offer, acceptance, and consideration?
Which of these require an offer, acceptance, and consideration?
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How does a typical Variable Life Policy investment account grow?
How does a typical Variable Life Policy investment account grow?
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An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the?
An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the?
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After the initial enrollment period, an HMO must hold an open enrollment period of how many days at LEAST once in every 12-month period?
After the initial enrollment period, an HMO must hold an open enrollment period of how many days at LEAST once in every 12-month period?
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Which of the following is NOT included in the policy face?
Which of the following is NOT included in the policy face?
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A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following?
A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following?
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In a life insurance policy, which provision states who may select policy options and designate beneficiaries?
In a life insurance policy, which provision states who may select policy options and designate beneficiaries?
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A Renewable Term Policy is renewable at the option of the?
A Renewable Term Policy is renewable at the option of the?
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Which of these is considered a true statement regarding Medicaid?
Which of these is considered a true statement regarding Medicaid?
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Which is true concerning a Variable Universal Life policy?
Which is true concerning a Variable Universal Life policy?
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In life insurance, the needs approach is used mostly to establish?
In life insurance, the needs approach is used mostly to establish?
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A life insurance illustration is NOT required to include the?
A life insurance illustration is NOT required to include the?
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Which of these characteristics is consistent with a Straight Life policy?
Which of these characteristics is consistent with a Straight Life policy?
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Under the Texas insurance code, which of the following statements about the Suicide clause is CORRECT?
Under the Texas insurance code, which of the following statements about the Suicide clause is CORRECT?
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Which of the following best describes a contingent beneficiary?
Which of the following best describes a contingent beneficiary?
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A Business Disability Buyout plan policy is designed?
A Business Disability Buyout plan policy is designed?
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Term insurance has which of the following characteristics?
Term insurance has which of the following characteristics?
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An agent MUST do which of the following during a sales presentation for a participating life insurance policy?
An agent MUST do which of the following during a sales presentation for a participating life insurance policy?
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In regards to representations or warranties, which of these statements is TRUE?
In regards to representations or warranties, which of these statements is TRUE?
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The Commissioner of Insurance may issue a temporary agent's license for a maximum of how many days?
The Commissioner of Insurance may issue a temporary agent's license for a maximum of how many days?
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A stock insurance company is owned by its?
A stock insurance company is owned by its?
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J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct?
J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct?
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What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?
What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?
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Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?
Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?
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Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured?
Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured?
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Basic Hospital and Surgical policy benefits are?
Basic Hospital and Surgical policy benefits are?
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An employer that offers a qualified retirement plan to its employees is eligible to?
An employer that offers a qualified retirement plan to its employees is eligible to?
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What action can a policyowner take if an application for a bank loan requires collateral?
What action can a policyowner take if an application for a bank loan requires collateral?
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Which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due?
Which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due?
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The Consideration clause in a life insurance contract contains what pertinent information?
The Consideration clause in a life insurance contract contains what pertinent information?
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T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?
T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?
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T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?
T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?
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The clause identifying which losses resulting from an accident or sickness are insured by the policy is called the?
The clause identifying which losses resulting from an accident or sickness are insured by the policy is called the?
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What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100?
What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100?
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What is the purpose of the Time of Payment of Claims provision?
What is the purpose of the Time of Payment of Claims provision?
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A long-term care rider in a life insurance policy pays a daily benefit in the event of which of the following?
A long-term care rider in a life insurance policy pays a daily benefit in the event of which of the following?
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Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability?
Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability?
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The Insurance Commissioner may examine the records of an insurance company in order to?
The Insurance Commissioner may examine the records of an insurance company in order to?
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What does Medicare Parts A and B cover?
What does Medicare Parts A and B cover?
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What is issued to each employee of an employer health plan?
What is issued to each employee of an employer health plan?
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A 42-year-old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his/her needs change. Which of the following policies will best meet this need?
A 42-year-old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his/her needs change. Which of the following policies will best meet this need?
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When a life insurance policy exceeds certain IRS table values, the result would create which of the following?
When a life insurance policy exceeds certain IRS table values, the result would create which of the following?
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Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges?
Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges?
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K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?
K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?
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Which of the following are NOT managed care organizations?
Which of the following are NOT managed care organizations?
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K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered?
K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered?
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What type of life insurance incorporates flexible premiums and an adjustable death benefit?
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
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Study Notes
Annuities and Insurance Policies
- An installment Refund annuity continues payments to a beneficiary if the annuitant dies before receiving the contract value.
- A whole life policy, such as the 20-Pay Life, accumulates cash value faster than a Straight Life policy.
- In a unilateral insurance policy, legally enforceable promises are made by the insurance company.
Social Security and Disability
- Social Security disability benefits become available after a waiting period of 5 months.
Policy Provisions and Rights
- The Consideration clause specifies that a policyowner's consideration consists of a completed application and the initial premium.
- Warranties in insurance policies are guaranteed to be true.
- An irrevocable beneficiary designation limits the policyowner's rights.
Healthcare and Medicare
- Comprehensive major medical health insurance typically does not cover experimental and investigative services.
- For retirees on Medicare needing hospital care, a Medicare Supplement policy is the best option to cover excess expenses.
Insurance Coverage Considerations
- Full benefits under a group life insurance master contract are payable if the insured dies while converting to an individual policy.
- Group term life insurance can be converted into a $25,000 individual whole life policy after termination of employment.
- Surrender charges in a life policy with a rear-end loaded provision are deducted when the policy is discontinued.
Agent and Policyholder Responsibilities
- An agent must submit a properly completed application and initial premium to the insurance company for coverage to take effect.
- If an agent accepts a check made out to himself instead of the insurance company, he must return it and collect a new check.
Coverage Specifics
- Variable Whole Life Insurance combines both insurance and securities investment features.
- Dread disease insurance provides coverage for specific illnesses such as cancer or stroke.
Health Policies and Rights
- Assignment of benefits in a health policy allows payments to be transferred to someone other than the policyowner.
- A disability income policy covers loss of income due to inability to work from illness or injury.
Key Features and Provisions
- The Carryover provision allows insured individuals to defer current health charges to the next year’s deductible.
- A Life Annuity with Period Certain guarantees income payments for the annuitant’s lifetime, with payments to a beneficiary if the annuitant dies early.
Final Observations
- The Reinstatement provision allows coverage to be reestablished after policy lapse due to nonpayment.
- Legal residents, except those incarcerated, can purchase a health plan through the Marketplace.### Insurance Fundamentals
- Insurance policies can be tied to various financial instruments such as mutual funds, stocks, and bonds, and may also relate to the price of gold or Treasury Bills.
- The Medical Information Bureau (MIB) allows sharing of applicants' medical information primarily with the applicant's physician.
Health Maintenance Organization (HMO)
- After the initial enrollment period, an HMO is required to hold at least one open enrollment period of a minimum of 31 days annually.
Policy Components
- The exclusions section is not included in the policy face, while the name of the insured and insurer, as well as the Free Look provision, are included.
- A "renewable term policy" gives the insured the option to renew, not the owner or company.
Life Insurance Policies
- Guaranteed Insurability riders are needed for students pilots, emphasizing the importance of understanding exclusions related to aviation.
- Owner's rights in a life insurance policy allow the policy owner to choose options and beneficiaries.
Medicaid and Variable Policies
- Medicaid is funded by both state and federal governments, catering to low-income individuals, including those receiving Social Security disability benefits.
- In Variable Universal Life policies, the policy owner has control over investments and premium payments.
Determining Insurance Needs
- The needs approach in life insurance helps determine the necessary coverage amount for a client.
- Life insurance illustrations do not require the company’s mortality table to be disclosed.
Policy Characteristics
- Straight Life policies require premiums to be paid throughout the life of the coverage.
- The Suicide Clause in Texas must ensure that insurance benefits cannot be denied for suicides occurring after the second year.
Beneficiaries and Policy Assignments
- A contingent beneficiary receives policy proceeds if the primary beneficiary passes away before the insured.
- Collateral assignments allow a policy owner to use their life insurance policy as security for a bank loan.
Hospital and Surgical Insurance
- Basic Hospital and Surgical policies often provide benefits lower than the actual incurred expenses.
Retirement Plans
- Employers can make tax-deductible contributions to qualified retirement plans.
Claims and Provisions
- The grace period dictates how long coverage remains effective if a premium is unpaid.
- The consideration clause details the amount of premium payments and their due dates within a life insurance contract.
Claims Payments
- If a person with a life insurance policy dies by suicide, the insurer pays the face value of the policy minus any loans, provided it’s not within the exclusion period.
- A Family Maintenance Policy provides income to beneficiaries for a specified period following the insured's death.
Medicare Coverage
- Medicare Parts A and B cover hospitalization and doctor’s services respectively, while part D covers prescription drugs.
Educational Aspects
- Certificates are issued to employees as evidence of insurance under employer-sponsored health plans.
- Universal Life policies allow for adjustable premiums and death benefits, catering to changing coverage needs.
Long-term Care and Managed Care
- Long-term care riders in life policies pay benefits if the insured cannot perform two or more Activities of Daily Living (ADLs).
- Medical Information Bureau (MIB) is not classified as a managed care organization unlike HMOs and PPOs.
Insurance Classes
- Guaranteed renewable policies ensure premiums can only be increased for an entire class of insured individuals, making them a stable option for consumers.
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Description
Prepare for the Texas State Exam with this comprehensive practice exam featuring 200 questions focused on Life and Health Insurance concepts. This quiz will help reinforce your understanding of annuities, their types, and key terminologies crucial for passing the exam. Test your knowledge and get ready for success!
