PEARSON VUE TEXAS LI FE AND

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PEARSON VUE TEXAS LI FE AND

HEALTH INSURANCE TES T

QUESTIONS GRADED A+

(a) Question: Which of the following long-term care

benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis?

• Residential care
• Assisted living
• Home health care
• Adult day care

Correct answer: D. Adult day care

(b) Question: An insured's long-tern care policy is

scheduled to pay fixed amount of coverage of $120 per day. The long-term care facility only charged $100 per day. How much will the insurance company pay?

• 20% of the total cost
• $120 a day
• $100 a day
• 80% of the total cost

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Correct answer: B. $120 a day

(c) Question: In comparison to a policy that uses the

accidental means definition, a policy that uses the accidental bodily injury definition would provide coverage that is

• More limited in duration
• Broader in duration
• Broder in general
• More limited in general

Correct answer: C. Broader in general

(d) Question: An individual has been diagnosed with

Alzheimer's disease. He is insured under a life insurance policy with the accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefits?

• The entire living benefits is considered taxable income
• A portion of the benefits up to a limit is tax-free; the

rest is taxable income

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• Principle is tax free, but interest is taxed
• The entire benefits will be received tax free

Correct answer: B. B. A portion of the benefits up to a

limit is tax-free; the rest is taxable income

(e) Question: All of the following are true of an annuity

owner EXCEPT

• The owner has the right to name the beneficiary
• The owner is the party who may surrender the annuity
• The owner must be the party to receive benefits
• The owner pays the premiums on the annuity

Correct answer: C. The owner must be the party to

receive benefits

(f) Question: How is emergency care covered for a

member of an HMO?

• An HMO emergency specialist will cover the patient
• A member of an HMO can receive care in or out of the

HMO service area, but care is preferred in the service area

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• A member of an HMO may receive care at any

emergency facility, at the same cost as if in his or her own service area

• HMOs have salaried member physicians, but they do

not cover emergency care

Correct answer: B. A member of an HMO can receive

care in or out of the HMO service area, but care is preferred in the service area

(g) Question: Death benefits payable to a beneficiary

under a life insurance policy are generally

• Subject to income taxation by the federal government
• Exempt from income taxation if under $10,000
• Exempt from income taxation if over $10,000
• Not subject to income taxation by the federal

government

Correct answer: D. Not subject to income taxation by the

federal government