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Texas Life Insurance Exam 2025 with
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Who is considered a field underwriter? - ✔✔An agent When must insurable interest exist in life insurance? - ✔✔Application or issue date If no receipt is issued at the time of application, a statement of good health is usually required at the time of? - ✔✔Policy delivery The Medical Information Bureau is?(MIB) - ✔✔a source of medical information to alert insurers to adverse medical history A substandard risk compared to a standard risk would pay? - ✔✔a higher premium Which document describes specific information about policy provisions and benefits? - ✔✔Policy summary Does not have an insurable interest? - ✔✔Insured's best friend What is the main source of underwriting information used by the company in the risk selection process? - ✔✔Application An insured submits the full premium along with a completed application, and the policy is issued 10 days later. When does the coverage begin? - ✔✔On the date of application
What is the main responsibility of a company's underwriting unit? - ✔✔Risk selection and classification What best describes the USA PATRIOT Act with regards to the insurance industry? - ✔✔To prevent terrorism activities through monitoring of financial transactions If the agent feels that could misrepresentation on the part of the applicant for insurance, what must the agent do? - ✔✔Inform the insurance comapny Representations are statements made by the applicant that are? - ✔✔Considered true to the best of the applicant's knowledge If an agent fails to obtain an applicants signature on the insurance application, the agent must?
- ✔✔Return the application to the applicant for signature What includes information regarding a person's credit, character, reputation, and habits? - ✔✔Consumer report When the insured purchased a new home, he wanted to purchase a life insurance policy that would protect his family against losing it should he die before the mortgage was paid. Which of the following policies is best suitable for that need? - ✔✔Decreasing term An annually renewable term policy? - ✔✔Renews each year with an increased premium The time period during which an annuitant contributes to annuity is called? - ✔✔The accumulation period
Which type of life insurance policy generates immediate cash value? - ✔✔Single premium What is true regarding a joint life policy? - ✔✔Premium is based on the average age of the insureds The insured is also the policyowner of a whole life policy. What age must the insured attain in order to receive the policy's face amount? - ✔✔ 100 What provision of a life insurance policy states the application is part of the contract? - ✔✔Entire contract A life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specific period of time is known as the.. - ✔✔Incontestability clause When a death claim is submitted, the insurer discovered that the insured understated her age on the application for a life policy. What will the insurer take? - ✔✔Pay a reduced death benefit based on the insured's actual age What term refers to the transfer of some or all of the ownership of some or all of the ownership rights of a life insurance policy from one individual to another? - ✔✔Assignment What is true about the free-look period in a life insurance policy? - ✔✔It commences when the policy is delivered A spouse receives $5,000 a month until the principle and interest on her husband"s life insurance policy have been paid out. Which settlement option did this beneficiary choose? - ✔✔Fixed amount
What feature allows an insurance policy to remain in force for a specific number of days beyond the premium due date? - ✔✔Grace period provision The insured usually pays $1,200 annually for her life insurance premium. This year, she has accumulated $175 in dividends, and applied that to her next premium, reducing it to $1,025. What dividend option has the insured chosen? - ✔✔Reduction of premium What is NOT a non forfeiture options in life insurance policies? - ✔✔Automatic premium loans Which of the following is true of the fixed-period and fixed-amount settlement options? - ✔✔Both guarantee that the principle and interest will be fully paid out What is NOT a standard exclusion in life insurance policies? - ✔✔Disability Under what circumstance will the contingent beneficiary receive the death benefit? - ✔✔If the primary beneficiary dies before the insured If a life insurance policy has irrevocable beneficiary designation, - ✔✔The beneficiary can only be changed with written permission of the beneficiary Because of an injury, an insured has been unable to work for 7 months. He wasn't able to pay his life insurance policy premium, yet the policy remained in force. The policy includes - ✔✔Waiver of premium rider
With personal life insurance, the lump-sum death is received by the beneficiary... - ✔✔Tax free. In group life policies, individual certificates are given to.. - ✔✔Each insured person What insurance arrangement will be appropriate for a parent buying a life insurance policy on a child where the parent is the policy-owner? - ✔✔Third-party ownership Social Security benefits - ✔✔Retirement, disability, and survivors A key-person insurance policy benefit will pay for... - ✔✔Cost of training a replacement An employee quits his job and converts his group insurance to individual policy. On which of the following will premium for the individual policy be based? - ✔✔Insured's attained age A temporary license is normally valid for.. - ✔✔ 90 Days A life agent's license must be renewed.. - ✔✔Every 2 years on the anniversary date of issuance In an insurance transaction, which of the following does a licensed agent represent? - ✔✔Insurer An agent who offers a cash reward to a prospect for buying a policy is guilty of.. - ✔✔Rebating
An insurer who deliberately makes a malicious statement about another insurance company is guilty of an illegal trade practice called.. - ✔✔Defamation Who is considered a nonresident agent? - ✔✔An agent who resides in another state, but is licensed to write insurance in this state. The Commissioner of Insurance issues a Cease and Desist Order and immediately revceives a request for the charges to be reviewed in a hearing. Within how many days must the hearing be held? - ✔✔10 Days The Commissioner of Insurance is NOT responsible for? - ✔✔Setting premium rates What is not consider an insurance transaction? - ✔✔Obtaining an insurance license What person is required to a producer license? - ✔✔A nonresident agent who negotiates insurance contracts What is the minimum required number of continuing education credits in the ethics every licensing period? - ✔✔2 Hours What is the main purpose of requiring license for persons who transact insurance? - ✔✔To protect insurance companies from incompetent producers What is NOT an example of a company's location of incorporation? - ✔✔Authorized
Dividends - ✔✔Paid only on participating polices. A return of excess premiums Not taxable Are not Guaranteed Decreasing Term - ✔✔A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy Limited payment - ✔✔A variation of whole life insurance that changes a level premium and provides a level, guaranteed death benefit to the insured's age 100 and will endow for the face amount if the insured lives to age 100. Designed so that the premiums for coverage will be completely paid-up well before age 100 Payor Benefit Rider - ✔✔Found in juvenile polices which waivers the premiums if the person paying them (often the parent) is disabled or dies while the child is still a minor Common Disaster - ✔✔Under the Uniform Simultaneous Death, the law will assume that the primary beneficiary dies first. This provides that the proceeds will be paid to either the contingent beneficiary or to the insured's estate Equity-Indexed Life - ✔✔(indexed whole life) main future is that the cash value is dependent upon the performance of the equity index, such as S&P 500, although there is a guaranteed minimum interest rate Renewable Term - ✔✔Insurance which can, at the election of the policy owner be renewed at the end of a term without evidence of insurability
Interest-sensitive Whole Life policy - ✔✔(Current Assumption) is a fixed premium whole life policy that provides a guarantee death benefit to age 100. Premiums may very according to interest rate fluctuations Nonforfeiture Option - ✔✔permenant life insurance policies have cash values, certain guarantees are built into the policy that CANNOT BE FORFEITED by the policy owner. (known as nonforfeiture values) are required by state law to be included in the policy Ex. cash surrender value, reduced paid-up insurance, or extended term Term Insurance - ✔✔Temporary protection because it only provides coverage for a specific period of time. Also know as (pure Life insurance). Provides for the greatest amount of coverage for the lowest premium compared to other forms of protection The Basic types of Term insurance are? - ✔✔Level, Increasing, Decreasing Buyers Guide - ✔✔General information about life insurance policies Insurable Interest - ✔✔The policy owner must face the possibility of losing money or something of value in the event of loss Policy Summary - ✔✔Written statement describing the FEATURES and ELEMENTS of the policy being issued The application consist of? - ✔✔ 2 Parts General Information
Annually renewable term(ART) - ✔✔the purest form of term insurance Increasing Term - ✔✔Level premiums and a death benefit that increases each year over the duration of the policy term Straight Life - ✔✔(Continuous Premiums) the basic whole life policy Limited-Pay - ✔✔designed so that the premiums for coverage will be completely paid-up way before age 100 Single premium - ✔✔Designed to provide a level death benefit to the insured's age 100 for a one-time, lump sum payment Universal Life - ✔✔(Flexible Premium Adjustable) Implies that the policy owner has the flexibility to increase the amount of premium going paid into the policy and to later decreases it again Variable Life Insurance - ✔✔a level, fixed premium investment-based product. Guaranteed minimum death benefit Cash value is not guaranteed and fluctuates with the performance of the portfolio in which premiums have been invested by insurer
Variable Universal Life Insurance - ✔✔Combines many features of the whole life with the flexible premium of universal life and the investment component of variable life. Stock Companies - ✔✔Owned by the stockholders who provide the capital necessary to establish and operate the insurance company who share in any profits or losses Mutual companies - ✔✔(Life insurance companies) Owned by policy owners and issue participating policies. Policy owners are entitled to dividends which are nontaxable Location of Incorporation(domicile) - ✔✔Insurance companies are classified by Domestic, Foreign, and Alien Domestic Insurer - ✔✔an insurance company that is incorporated in this state Foreign Insurer - ✔✔an insurance company that is incorporated in another state or territorial possession(such as Puerto Rico, Guam, or American Samoa Alien insurer - ✔✔and insurance company that is incorporated outside the united states Commissioner of Insurance - ✔✔Must be a citizen of Texas Be well informed and qualified in the field of insurance and regulation Have at least 5 years of experience in the administration of business or government of practicing attorneys or certified public accountant Serves a 2 year term ending Feb 1 of each odd number year
