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Life Insurance Fundamentals, Exams of Personal Health

Tarrant County CollegePersonal Health

A comprehensive overview of various life insurance policies, including variable universal life, term coverage, and whole life policies. It covers key concepts such as grace periods, misrepresentation, suicide clauses, policy loans, and beneficiary designations. The document also discusses insurance regulations, including the usa patriot act, and unfair claims settlement practices. Additionally, it covers topics related to retirement accounts, annuities, and the tax treatment of life insurance. This document could be a valuable resource for students studying insurance, finance, or related fields, as it covers a wide range of fundamental life insurance principles and regulations.

Typology: Exams

2024/2025

Available from 09/29/2024

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XCEL Insurance license practice
solutions EXAM #12 – Texas.
1. Which settlement option pays a stated amount to an annuitant,
but no residual value to a beneficiary? - ✔✔Life income
2. which of the following policies combines investment choices with
a form of Term coverage? - ✔✔Variable universal life
3. which type of life policy contains a monthly mortality charge as
well as a self-directed investment choices? - ✔✔Variable universal
life
4. How long does an insurance company appointment remain in
force? - ✔✔Until terminated
5. in Texas an individual life insurance policy is REQUIRED to have a
grace period of? - ✔✔31 days
6. Which statement is TRUE regarding a variable whole life policy? -
✔✔A minimum guaranteed death benefit is provided
7. in an insurance contract the insurer is the only party who makes a
- ✔✔Unilateral
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XCEL Insurance license practice

solutions EXAM #12 – Texas.

  1. Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? - ✔✔Life income
  2. which of the following policies combines investment choices with a form of Term coverage? - ✔✔Variable universal life
  3. which type of life policy contains a monthly mortality charge as well as a self-directed investment choices? - ✔✔Variable universal life
  4. How long does an insurance company appointment remain in force? - ✔✔Until terminated
  5. in Texas an individual life insurance policy is REQUIRED to have a grace period of? - ✔✔31 days
  6. Which statement is TRUE regarding a variable whole life policy? - ✔✔A minimum guaranteed death benefit is provided
  7. in an insurance contract the insurer is the only party who makes a
    • ✔✔Unilateral
  1. which of these is NOT considered to be an element of an insurance contract? - ✔✔Negotiating
  2. What does a 401(k) plan generally provide its participants? - ✔✔Salary-deferral contributions
  3. All these statements concerning Settlement Options are true, EXCEPT? - ✔✔Only the beneficiary may select
  4. A domestic insurance company in Texas is considered a company that? - ✔✔Is incorporated and formed in Texas
  5. Which of the following statements about non-contributory employee group life insurance is FALSE? - ✔✔A minimum number of employees is required to participate
  1. What type of life policy covers 2 lives and pays the face amount after the first one dies? - ✔✔Joint life policy
  2. Which of these provisions is not required in life insurance policies? - ✔✔Extended term
  3. If you insured's age was misstated on a life insurance contract, the misstatement of age provision requires that any death benefit payable would be? - ✔✔an amount that the premiums paid would have purchased at the current age
  4. what provision in a life insurance policy states that the application is considered part of the contract? - ✔✔Entire contract provision
  5. M has an insurance policy that also has an outstanding policy loan at a time of M's death. The insurer will deduct the outstanding loan balance from the? - ✔✔Policy proceeds
  1. Under the USA Patriot act, insurers are required to report receipt of cash payments in excess of? - ✔✔$10,
  2. L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L has understated range on the application. Under the misstatement of age provision the insurer will? - ✔✔Adjust the death benefits to a reduced amount
  3. Credit life insurance is? - ✔✔insurance issued on a debtor to cover outstanding loan balance
  4. The phrase "transacting business" includes - ✔✔Collecting premiums
  5. What is the purpose of the USA Patriot act? - ✔✔Detect and deter terrorism

benefit at the end of that 30 years? - ✔✔Family maintenance policy

  1. which statement regarding the Misstatement of Age provision is considered to be true? - ✔✔Coverage will be adjusted to reflect the insurance true age if misstatement of age is discovered
  2. An example of false advertising would be? - ✔✔And insurer exaggerating in dividends in a magazine advertisement
  3. In a key employee life insurance policy the third-party owner can be all the following EXCEPT - ✔✔The insured
  4. Insured may assign up to ____ of the policy ownership under an individual life insurance policy - ✔✔100%
  1. Which of these is NOT a reason for purchasing life insurance on the life of a minor? - ✔✔If both parents were to die, it would provide death benefits that the child
  2. A policy that becomes a modified endowment contract - ✔✔Will lose many of its tax advantages
  3. An underwriter determines that an applicant's risk should be recognized due to a health issue. This policy may be issued with a(n)? - ✔✔Exclusion for the medical condition
  4. A temporary agents license issued by the commissioner of Insurance is valid for up to ____ days - ✔✔90 day
  5. L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They purchase a family policy that covers L's spouse at age 65. A death benefit will NOT be paid in which of the following? - ✔✔L's spouse dies at age 66
  1. What is an organization that solicits insurance only to its members? - ✔✔Fraternal benefit society
  2. All of these statements about the Commissioner of Insurance are true EXCEPT? - ✔✔The commissioner must be elected
  3. a life insurance policy that provides a policy owner with cash value along with face value amount is called? - ✔✔Whole life
  4. An insurance company may NOT reject a prospective insured life application on the basis of which of the following factors? - ✔✔Gender or Marital status
  5. How often must an insurance agent license normally be renewed? - ✔✔Every two years
  1. Group life insurance policies are generally written as? - ✔✔Annually renewable term
  2. On August 6, Submitted an application for a $50,000 life insurance policy and did not pay the initial premium. On August 18, D went to the doctor complaining of chest pain, and some tests were given by the doctor. the life policy was delivered by the producer on August 20th and they explained what had taken place with the doctor. What action should the producer then take? - ✔✔Collect initial premium along with a signed health statement
  3. the Insurance Commissioner must give how many days notice prior to holding a hearing regarding an agent's unfair or deceptive practice? - ✔✔30 days
  4. Insurance agent as a fiduciary responsibility to all of the following EXCEPT? - ✔✔Other agents
  5. S is covered by a whole life policy. Which insurance products can cover his children? - ✔✔Child term Rider
  1. Which of the following groups may NOT be insured by a group life insurance policy? - ✔✔Individuals who are related by blood
  2. Q applied for life insurance and submitted the initial premium on January 1. Policy was issued February 1, but it was not delivered by the agent until February 7. Q is disqualified and returns the policy February 13. How will the insurer handle this situation? - ✔✔Policy was returned within the free look period, premium will be fully refunded
  3. one becomes eligible for social security disability benefits after having been disabled for? - ✔✔5 months
  4. Which of these is not an example of doing insurance business? - ✔✔Selling shares of stock
  5. which of these factors do NOT play a role in the underwriting of a life insurance policy? - ✔✔Marital status
  1. if father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision? - ✔✔Payor provision
  2. Q would like to purchase a $100,000 a permanent protection on his wife in 50,000 of term coverage on himself and it's the same policy. what kind of policy should Q purchase? - ✔✔A whole life policy with other insured rider
  3. how long can a cash surrender value payment be deferred by the insurance company under the nonforfeiture law? - ✔✔ 6 months
  4. which provision prevents an insurer from changing the terms of the contract with the policy owner by referring to documents not found within the policy itself? - ✔✔Entire contract provision
  5. Why would the Insurance Commissioner examine the records of an insurance company? - ✔✔To determine the solvency of the company
  1. on a life insurance policy who is qualified to change the beneficiary designation? - ✔✔Policyowner
  2. In Texas, which of these statements regarding the suicide clause is TRUE? - ✔✔an insurer may not use suicide as a defense against payment after the second year
  3. It certificate of ____ commence an insurance company to transact business in Texas - ✔✔Authority
  4. an insurance company organized under New York laws and licensed to do business in Texas is considered a(n)? - ✔✔Foreign company
  5. P is blinded in an accident. which provision of his life insurance policy will pay a stated benefit amount? - ✔✔Accidental death and dismemberment clause
  6. Life and health insurance policies are? - ✔✔Unilateral contracts
  7. As a condition for a loan, a bank requires the borrower to purchase credit Insurance from a specific company. What is the bank guilty of? - ✔✔Coercion
  1. at what time must a policy owner have insurable interest on the insured in order for the life policy to be valid? - ✔✔At the time of application
  2. which of the following is not required provision in group life policies? - ✔✔Right to loan
  3. In a life insurance policy, which provision States who may select policy options,designate and name a beneficiary and be the recipient of any financial benefits from the policy? - ✔✔Owner's rights
  4. How does an indexed annuity differ from a fixed annuity? - ✔✔Indexed annuity owners receive crediting interest time to the fluctuation of the linked index
  5. which of these statements is INCORRECT regarding the federal income tax treatment of Life Insurance? - ✔✔Entire cast surrender value is taxable
  6. N is a student pilot with a large life insurance policy. which of these features would limit the insurers obligation in the event N was killed while flying as a student pilot? - ✔✔Exclusion
  1. M purchases a $70,000 life insurance policy with a premium payments of $550 a year for the first five years at the beginning of the 60 or the premium will increase to $800 per year but will remain level thereafter the face amount will remain $70, throughout the life of the policy. The type of policy that M has purchased is? - ✔✔Modified premium life
  2. During a sales presentation for a participating life insurance policy, an agent MUST? - ✔✔Make a prospect understand that dividends are not guaranteed
  3. A license may be denied, suspended, or revoked if the license - ✔✔Is found guilty of misrepresentation in obtaining the license