TEXAS LIFE CH 4 EXAM QUESTIONS

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TEXAS LIFE CH 4 EXAM QUESTIONS

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -69 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Interest only

Answer:

Retains the policy proceeds and pays interest on the proceeds to the beneficiary at regular intervals Temporary

Question 2: Term Riders

Answer:

Allow for the additional amount of temporary insurance to be provided on the insured, w/o the need to issue another policy

Question 3: Life Income

Answer:

Straight Life Installment payments are guaranteed for as long as the recipient lives Based on the beneficiary's life expectancy and the amount of principal If the beneficiary dies shortly after the installments, the principal is forfeited to the insurer

Question 4: Cash (dividends)

Answer:

Insurer sends the PO a check for the declared dividend Annually

Question 5: Common Disaster

Answer:

Insured and the Primary die at the same time Insured dies first - proceeds are paid to the Primary's estate Primary dies first - proceeds are paid to the Contingent's estate or the insured's estate (if there is no Contingent)

Question 6: Double (Triple) indemnity

Answer:

benefit is two (three) times the face amount for accidental death

Question 7: Uniform Simultaneous Death Law

Answer:

Assumes that the Primary dies first in a common disaster to fulfill the wishes of the PO 14 - 30 days in which death (the Primary) must occur for this provision to apply

Question 8: Reinstatement

Answer:

Allows a lapsed policy to be put back in force Max time limit for reinstatement is 3 years after the policy has lapsed PO must provide insurability, pay premiums plus interest Everything will go back to the original status

Question 9: Grace Period

Answer:

The period of time after the premium date that the PO has to pay the premium before the policy lapses (30 -31 days) Protects against an unintentional lapse of the policy If the insured dies during the GP, the DB is payable, but the unpaid premium will be deducted

Question 10: Nonforfeiture Policies

Answer:

Cash surrendered value Reduced Paid-Up Insurance Extended term Can't be forfeited If no NF policy is chosen, Extended term is automatically chosen

Question 11: Paid-up additions

Answer:

Dividends are used to purchase a single premium policy in addition to the face amount of the permanent policy Each of these single premiums will increase the original DB The PU policies will accumulate cash value and pay dividends

Question 12: Accidental Death and Dismemberment rider

Answer:

Pays the face principal (face amount) for accidental death and a capital sum (percentage of that amount) for accidental dismemberment Amount of the percentage is dependent on the severity of the dismemberment (2 arms vs 1 arm)

Question 13: Revocable

Answer:

The PO can change the beneficiary designation

Question 14: Contingent Beneficiary

Answer:

Second claim to the proceeds Do not receive anything if the Primary is still alive

Question 15: Level premium

Answer:

the premium remains the same throughout the duration of the contract

Question 16: Policy loan

Answer:

Found only in policies that contain cash value PO is entitled to borrow an amount equal to the available cash value Outstanding loans and interest will be deducted from the DB The policy won't lapse with an outstanding policy loan unless the amount of the loan (and interest) exceeds the available cash value( Insurer must provide 30 days written notice if the policy will lapse) May defer a policy loan for up to 6 months Not subject to income taxation

Question 17: Return of Premium

Answer:

Increasing Term Insurance When added to WL policy, it provides that at death, not only is the original face amount payable, but an amount equal to all premiums previously paid is also payable to the beneficiary expires at age 60

Question 18: Settlement Options

Answer:

Methods used to pay the DB to the beneficiary upon the insured's death Lump Sum Fixed period Fixed Amount Life Income Interest Only

Question 19: Waiver of Premium with Disability Income

Answer:

Insurer will waive the policy premiums and pay a monthly income to the insured Based on a percentage of the face amount

Question 20: Irrevocable

Answer:

May not be changed without the written consent of the beneficiary The PO cannot borrow against the policy's cash value

Question 21: Total disablity

Answer:

Inability to engage in any work No benefits are payable for partial disability

Question 22: Flexible premium

Answer:

Allow the Po to pay more or less than the planned premium (Universal Life)