LIFE INSURANCE EXAM TEXAS

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LIFE INSURANCE EXAM (TEXAS)

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -100 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: incontestability (standard provision)

Answer:

insurer cannot contest misstatements on the application after a time period

Question 2: Indemnity

Answer:

a principle of reimbursement of which insurance is based; in the event of loss, an insurer reimburses the insureds or beneficiaries for the loss

Question 3: other polices

Answer:

Joint Life Survivorship life

Question 4: Nonforfeiture values

Answer:

benefits in a life insurance policy that the policyowner cannot lose even if the policy is surrendered or lapses

Question 5: Insurance policy

Answer:

a contact between a policyowner (and/or insured) and an insurance company which agrees to pay insured or the beneficiary for loss caused by specific events.

Question 6: Decreasing Term (Term life)

Answer:

coverage gradually decrease at predetermined times; best used when the need for protection declines from year to year

Question 7: Nonforfeiture options

Answer:

• cash
• extended terms (automatic)
• reduced paid up

Question 8: Succession ( beneficiaries)

Answer:

• the level of priority. each level in the succession is only eligible if the beneficiary in the level above has

died:

- primary: first claim to the policy proceeds

- contingent (secondary, tertiary): next claim after primary

Question 9: underwriting ( company underwriting)

Answer:

• multiple sources of information: applications, consumer reports, MIB (Medical Information Burea)
• Risk Classification: 3 types of risk : standard, substandard, preferred

Question 10: Premium Payments (annuities)

Answer:

• Single premium: One lumps- sum payment; the principal is created immediately (both immediate and

deferred annuities)

• Periodic (Flexible) premium: multiple payments; the principal is created over time (used for deferred

annuity only)

Question 11: entire contact (standard provision)

Answer:

policy (with riders and amendments) and copy of the application

Question 12: Reinstatement

Answer:

a policy can be restored within a specified period of time with proof of insurability Question 13: Policyowner's right to change a beneficiary:

Answer:

- revocable: can be change at any time

- irrevocable: can be changed with the beneficiary's consent

Question 14: Flexible- premium policies

Answer:

• adjustable life

- universal life : options A, option B

• Variable Life insurance
• Variable Universal life insurance

Question 15: Wavier of premium (Disability )

Answer:

waves the premium if the insured becomes totally disabled; 6 months waiting period before benefits begin

Question 16: Whole Life insurance

Answer:

• straight life
• limited payment
• single premium

Question 17: Applicant of proposed insured

Answer:

a person applying for insurance

Question 18: Types of Annuities

Answer:

• fixed annuities: guaranteed, fixed payment amount; premiums in general account
• variable annuities:payment not guaranteed; premiums in separate account, and invested in stock and

bonds.

• indexed annuities: interest rate tied to an index; earn higher rate than fixed annuities, not as risky as

variable annuities or mutual funds

Question 19: Fixed life insurance

Answer:

contracts that offer guaranteed minimum or fixed benefits

Question 20: Underwriting

Answer:

is the risk selection and classification process

Question 21: Suitability

Answer:

a requirement to determine if an insurance product is appropriate for a customer

Question 22: Free Look (other provisions)

Answer:

policy can be returned for a refund or premium within a specified time period

Question 23: cash value

Answer:

a policy's saving element or living benefit

Question 24: Accessing cash value

Answer:

policy loan automatic premium loan withdrawal partial surrender