General knowledge · Section VIII · Life, Accident and Health only
Other insurance concepts (health)
Health concepts that cut across policy types: definitions of disability, owner’s rights, dependent children, beneficiaries, premium modes, coordination of benefits, occupational coverage, taxation, managed care, workers’ compensation and subrogation.
Questions on the exam
- Life, Accident and Health: 5 questions
- Life Agent: Not on this exam
Life, Accident and Health exam
What the official outline lists
- Total, partial, recurrent and residual disability
- Owner's rights
- Dependent children benefits
- Primary and contingent beneficiaries
- Modes of premium payments
- Nonduplication and coordination of benefits
- Occupational vs. non-occupational
- Tax treatment of premiums and proceeds
- Managed care
- Workers compensation
- Subrogation
Practice questions
Choose your answer, then open “Show the answer” to see why each option is right or wrong and the exact source text.
1. Under the Texas Administrative Code standards for individual accident and health policies, a policy's definition of partial disability is defined in relation to the insured's inability to do what?
- Perform one or more, but not all, of the major, important, or essential duties of employment or occupation
- Perform all of the duties of any employment or occupation whatsoever
- Engage in any training or rehabilitation program offered by the insurer
- Perform any duty of employment for a period longer than the elimination period
Show the answer
Correct answer: A. Perform one or more, but not all, of the major, important, or essential duties of employment or occupation
According to 28 TAC §3.3013 (Policy Definition of Partial Disability), partial disability is defined in relation to the insured's inability to perform one or more, but not all, of the "major," "important," or "essential" duties of employment or occupation.
Why the other options are wrong
- B. Section 3.3013 ties partial disability to the inability to perform one or more, but not all, of the duties; inability to perform all duties is not the described standard.
- C. Section 3.3013 does not refer to training or rehabilitation programs; it refers to the major, important, or essential duties of employment or occupation.
- D. Section 3.3013 does not tie partial disability to a period longer than the elimination period; it ties it to inability to perform one or more, but not all, of the duties.
This term shall be defined in relation to the insured's inability to perform one or more, but not all, of the "major," "important," or "essential" duties of employment or occupation
2. Dana has an insurable interest in Lee and is not the insured. Dana applies for an individual accident and health policy covering Lee, to be owned by Dana, and is named to receive its indemnity. Under TIC Chapter 1201, which statement is correct about the use of the word "insured" in the chapter?
- It does not prevent Dana from applying for and owning the policy or from being entitled to an indemnity, right, or benefit under it
- It prevents Dana from owning the policy because only the insured may apply for a policy covering the insured
- It lets Dana own the policy but prevents Dana from being entitled to any indemnity, right, or benefit under it
- It lets Dana be entitled to its benefits but prevents Dana from applying for and owning the policy
Show the answer
Correct answer: A. It does not prevent Dana from applying for and owning the policy or from being entitled to an indemnity, right, or benefit under it
According to TIC §1201.010, the use of "insured" in Chapter 1201 does not prevent a person with an insurable interest, other than the insured, from (1) applying for and owning an individual accident and health insurance policy covering the insured, or (2) being entitled to an indemnity, right, or benefit provided for in such a policy. Dana may do both.
Why the other options are wrong
- B. The passage says the opposite: a person with an insurable interest, other than the insured, may apply for and own the policy covering the insured.
- C. The passage lists entitlement to an indemnity, right, or benefit as a second thing the person is not prevented from doing; ownership does not remove it.
- D. The passage lists applying for and owning the policy as the first thing the person is not prevented from doing; entitlement is not the only permitted act.
The use of "insured" in this chapter does not prevent a person with an insurable interest, other than the insured, from: (1) applying for and owning an individual accident and health insurance policy covering the insured; or (2) being entitled to an indemnity, right, or benefit provided for in an individual accident and health insurance policy covering the insured.
3. Under Texas Labor Code §417.001, the insurance carrier's subrogation interest in a third-party claim is limited to which amount?
- Total benefits paid or assumed, less the reduction for the employer's responsibility
- The full amount of the judgment against the third party, less attorney's fees
- Total benefits paid or assumed, with no reduction for the employer's responsibility
- Only the medical benefits the carrier paid, less the employer's responsibility share
Show the answer
Correct answer: A. Total benefits paid or assumed, less the reduction for the employer's responsibility
Under Texas Labor Code §417.001(b), the carrier's subrogation interest is limited to the total benefits paid or assumed by the carrier to the employee or legal beneficiary, less the amount by which the court reduces the judgment based on the employer's percentage of responsibility.
Why the other options are wrong
- B. The interest is limited to the benefits the carrier paid or assumed, not to the full amount of the judgment against the third party.
- C. The quoted limit subtracts the amount by which the court reduces the judgment for the employer's percentage of responsibility, so the total benefits are not the limit without that reduction.
- D. The quoted limit refers to the total benefits paid or assumed, not only to medical benefits.
The insurance carrier's subrogation interest is limited to the amount of the total benefits paid or assumed by the carrier to the employee or the legal beneficiary, less the amount by which the court reduces the judgment based on the percentage of responsibility determined by the trier of fact under Section 33.003, Civil Practice and Remedies Code, attributable to the employer.
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Terms on this topic
- Disability — Discapacidad
- Insurable interest — Interés asegurable
- Subrogation — Subrogación
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