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Texas Life and Health Insurance Exam
/ Complete Questions & Correct
Detailed Answers (100% Correct)
_____________Quiz____________? At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? -
Answer ✓✓
Upon completion of the application _____________Quiz____________? Who elects the governing body of a mutual insurance company? -
Answer ✓✓
policyholders _____________Quiz____________? An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the -
Answer ✓✓
Fair Credit Reporting Act _____________Quiz____________?
What type of reinsurance contract involves two companies automatically sharing their risk exposure? -
Answer ✓✓
Treaty _____________Quiz____________? The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called -
Answer ✓✓
reserves _____________Quiz____________? Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated -
Answer ✓✓
1970 - Fair Credit Reporting Act _____________Quiz____________? What is the consideration given by an insurer in the Consideration clause of a life policy? -
Answer ✓✓
Promise to pay a death benefit _____________Quiz____________? When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have -
Answer ✓✓
insurable interest in the proposed insured _____________Quiz____________?
primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? -
Answer ✓✓
In this situation, the proceeds from E's life insurance policy will go to F. _____________Quiz____________? Which of the following terms defines the legally enforceable promise in an insurance contract by the insurer? -
Answer ✓✓
Unilateral _____________Quiz____________? When must insurable interest exist for a life insurance contract to be valid? -
Answer ✓✓
Inception of the contract _____________Quiz____________? Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid. -
Answer ✓✓
conditional _____________Quiz____________? Which of these require an offer, acceptance, and consideration? -
Answer ✓✓
Contract _____________Quiz____________?
Which of these arrangements allows one to bypass insurable interest laws? -
Answer ✓✓
Investor-Originated Life Insurance Investor-originated life insurance (or IOLI), sometimes called stranger-originated life insurance (or STOLI) is used to circumvent state insurable interest statutes. This is done when an investor (or stranger) persuades an individual to take out life insurance specifically for the purpose of selling the policy to the investor. The investor compensates the insured and makes the premiums, then collects the death benefit when the insured dies. _____________Quiz____________? Which of these is NOT considered to be an element of an insurance contract? the offer acceptance negotiating consideration -
Answer ✓✓
negotiating _____________Quiz____________? An agent is an individual that represents whom? -
Answer ✓✓
Insurer _____________Quiz____________? Insurable interest must exist at what time? -
Answer ✓✓
at the time of application
_____________Quiz____________? All of these statements about Equity Indexed Life Insurance are correct EXCEPT Cash value has a minimum rate of accumulation If the gain on the index goes beyond the policy's minimum rate of return, the cash value will mirror that of the index The premiums can be lowered or raised, based on investment performance Tied to an equity index such as the S&P 500 -
Answer ✓✓
The premiums can be lowered or raised, based on investment performance _____________Quiz____________? Which of these is an element of a Variable Life policy? -
Answer ✓✓
A fixed, level premium _____________Quiz____________? What type of life insurance incorporates flexible premiums and an adjustable death benefit?
Answer ✓✓
Universal Life _____________Quiz____________? T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase? -
Answer ✓✓
Ten-Year Endowment _____________Quiz____________? What type of life policy covers 2 lives and pays the face amount after the first one dies? -
Answer ✓✓
Joint Life Policy _____________Quiz____________? Life insurance that covers an insured's whole life with level premiums paid over a limited time is called -
Answer ✓✓
Limited-Pay Life _____________Quiz____________? What kind of life insurance product covers children under their parent's policy? -
Answer ✓✓
Term rider _____________Quiz____________? Which is true concerning a Variable Universal Life policy? Policyowner controls where the investment will go and selects the amount of the premium payment Policyowner has no say where the investment will go but can choose the premium mode The investment vehicle for this type of policy is held in the insurer's general portfolio The death benefit can vary but the policyowner has no say in the premium amount paid -
Answer ✓✓
Policyowner controls where the investment will go and selects the amount of the premium payment _____________Quiz____________? P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase? -
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death? -
Answer ✓✓
Face amount plus the policy's cash value _____________Quiz____________? A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as -
Answer ✓✓
Variable Life _____________Quiz____________? K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this? -
Answer ✓✓
Modified Whole Life _____________Quiz____________? Which of these life products is NOT considered interest-sensitive? -
Answer ✓✓
Modified Whole Life _____________Quiz____________? What type of life policy covers two people and pays upon the death of the last insured? -
Answer ✓✓
Survivorship _____________Quiz____________?
Which is true concerning a Variable Universal Life policy? -
Answer ✓✓
Policyowner controls where the investment will go and selects the amount of the premium payment _____________Quiz____________? T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this? -
Answer ✓✓
Renewable _____________Quiz____________? F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed? -
Answer ✓✓
Decreasing term policy _____________Quiz____________? G purchased a Family Income policy at age 40, The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income? -
Answer ✓✓
10 years _____________Quiz____________? The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is -
Answer ✓✓
the cost
J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions? -
Answer ✓✓
Reinstatement provision _____________Quiz____________? 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? -
Answer ✓✓
_____________Quiz____________? D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive? -
Answer ✓✓
The full face amount _____________Quiz____________? Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE? Coverage can be added at specific events such as marriage or having a child Evidence of insurability is not required when the option is exercised Evidence of insurability is required when the option is exercised Coverage can be added at specific ages -
Answer ✓✓
Evidence of insurability is required when the option is exercised _____________Quiz____________?
An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period? -
Answer ✓✓
Full face amount minus any past due premiums _____________Quiz____________? Which of these are NOT an example of a Nonforfeiture option? Extended Term Reduced Paid-up Cash Surrender Life Income -
Answer ✓✓
life income _____________Quiz____________? A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the -
Answer ✓✓
Policy Loan provision _____________Quiz____________? The Consideration clause in a life insurance contract contains what pertinent information? -
Answer ✓✓
Amount of premium payments and when they are due _____________Quiz____________? What does the insuring agreement in a Life insurance contract establish? -
Answer ✓✓
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? -
Answer ✓✓
revocable _____________Quiz____________? K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true? -
Answer ✓✓
Proceeds will be paid to P's estate _____________Quiz____________? Which statement regarding the Change of Beneficiary provision is true? -
Answer ✓✓
The policyowner can change the beneficiary _____________Quiz____________? A policyowner's rights are limited under which beneficiary designation? -
Answer ✓✓
Irrevocable _____________Quiz____________? What is the underlying concept regarding level premiums? -
Answer ✓✓
The early years are charged more than what is needed _____________Quiz____________?
A level premium indicates -
Answer ✓✓
the premium is fixed for the entire duration of the contract _____________Quiz____________? On a life insurance policy, who is qualified to change the beneficiary designation? -
Answer ✓✓
Policyowner _____________Quiz____________? J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct? The gross premium is higher on a monthly payment mode as compared to being paid annually The gross premium is lower on a monthly payment mode as compared to being paid annually The cash value from a life policy paid on a monthly basis builds quicker than one paid on an annual basis The face amount of a life policy paid on a monthly basis is higher than one paid on an annual basis -
Answer ✓✓
The gross premium is higher on a monthly payment mode as compared to being paid annually _____________Quiz____________? An incomplete life insurance application submitted to an insurer will result in which of these actions? -
Answer ✓✓
Application will be returned to the writing agent
_____________Quiz____________? Which of these factors do NOT play a role in the underwriting of a life insurance policy? Avocations Credit status Marital status Occupation -
Answer ✓✓
marital status _____________Quiz____________? Before a life insurance policy is issued, which of these components of the contract is required? -
Answer ✓✓
Applicant's signature on application _____________Quiz____________? An insurance company may NOT reject a prospective insured's life application on the basis of which of the following factors? Height Weight Gender Medical history -
Answer ✓✓
gender _____________Quiz____________? P completes an application for a $10,000 life policy, but does not give the producer the initial premium. P's coverage becomes effective when -
Answer ✓✓
P receives the policy and pays the premium _____________Quiz____________? What type of group plan involves employees sharing the cost? -
Answer ✓✓
contributory plan _____________Quiz____________? A noncontributory group term life plan is characterized by -
Answer ✓✓
the entire cost of the plan is paid for by the employer _____________Quiz____________? Under a trustee group life policy, who would be eligible for a certificate of coverage? -
Answer ✓✓
Employee _____________Quiz____________? Which provision is NOT a requirement in a group life policy? -
Answer ✓✓
Accidental _____________Quiz____________? If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have? -
Answer ✓✓
Contributory
