TEXAS INSURANCE LICENSE EXAM 3
2024-2025 WITH ACTUAL CORRECT
QUESTIONS AND VERIFIED DETAILED
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An architecture firm would stand to lose a lot of money in the event of the death of its project manager.
Which type of policy should the firm purchase on its project manager?
Key Person Life Policy
Which provision is NOT a requirement in a group life policy?
accidental
The phrase "transacting business" includes
collecting premiums
T applied for a Disability Income policy and has a history of back injuries. The insurer issued the policy
with a statement that excludes coverage for back injuries. This statement is called a(n)
Impairment rider
Credit Life Insurance is
insurance issued on a debtor to cover outstanding loan balances
Which of the following benefits is NOT required under a group health plan for drug and alcohol
treatment?
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,Transportation to and from a treatment facility
M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary.
M has the right to change the beneficiary designation at anytime. What type of beneficiary iS his son?
Revocable
Which of the following correctly explains the actions an agent should take if a customer wants to apply
for an insurance policy?
Complete the application and review the information with the customer prior to obtaining the
customer's signature, then send the application off to the insurance company
X is insured with a Disability Income policy that provides coverage until age 65. This policy allows the
insurer to change the premium rate for the overall risk class assigned. Which of these renewability
features does this policy contain?
Guaranteed renewable
In Texas, an individual life insurance policy is REQUIRED to have a grace period of
31 days
The reason for backdating a policy is
to obtain a premium rate based on an earlier age
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?
Entire Contract provision
Who has the right to change a revocable beneficiary?
Policyowner
What must the policyowner provide to the insurer for validation that a loss has occurred?
Proof of Loss
Which of the following actions require a policyowner to provide proof of insurability in an Adjustable
Life policy?
increase face amount
Upon policy delivery, a signed good health statement is requested from the applicant. Why would this
be necessary?
The initial premium was NOT submitted with the application
Medicare Part A and Part B do NOT pay for.
dental work
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,A prepaid application for individual Disability Income insurance was recently submitted to an insurer.
When the insurer received the Medical Information Bureau (MIB) report, the report showed that the
applicant had suffered a stroke 18 months ago, something that was not disclosed on the application
Which of the following actions would the insurance company NOT take?
Send a notice to the MIB that the applicant was declined
A CEO's personal assistant suffered infuries at home and as a result, was unable to work for four
months. Which type of policy will pay a monthly benefit to the personal assistant?
Disability Income
P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and
Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P. Q, and R are involved in
a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to
P only
C was injured while deep sea diving and requires a hospital stay. C has a Major Medical policy with a
80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered
medical expenses are $2000?
$720
What should an insured do if the insurer does not send claims forms within the time period set forth in a
health policy's Claims Forms provision?
Submit the claim in any form
An insurance agent has a fiduciary responsibility to all of the following EXCEPT
other agents
Which factors are taken into consideration when an insurance company determines the premium rate
for a Whole Life policy on an applicant?
Risk classification
Insurance contracts are known as ____ because certain future conditions or acts must occur before any
claims can be paid.
conditional
"A producer does not have the authority to change a policy or waive any of its provisions". The health
provision that best describes this statement is called the
Entire Contract
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?
PPO
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, What advantage does the renewability feature give to a term policy?
The insured may extend the coverage period
An Evidence of Coverage form may be issued by a Health Maintenance Organization (HMO) after being
approved by the
commissioner
An insurance company organized under New York laws and licensed to do business in Texas is
considered a(n)
foreign company
If an insurance company issues a Disability income policy that it cannot cancel or for which it cannot
increase premiums, the type of renewability that best desribes this policy is called
noncancellable
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
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following
contractual elements?
Legal Purpose (Insurable Interest)
in a qualified retirement plan, the yearly contributions to an employee's account:
are restricted to maximum levels set by the IRS
Who is NOT required to sign a life insurance application?
beneficiary
Which of these is NOT considered to be a right given to a policyowner?
Modify a provision in the insurance contract
Which of the following statements about health coverage for newborns is NOT true?
Coverage is limited to only congenital defects
Which of the following best describes a contingent beneficiary?
Person designated by the insured to receive policy proceeds in the event that the primary beneficiary
dies before the insured
The federal income tax treatment of employer-provided group Medical Expense insurance can be
accurately described as.
Employee's premiums paid by the employer is tax-deductible to the employer as a business expenditure
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