TEXAS LIFE INSURANCE LAW EXAM QUESTIONS

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TEXAS LIFE INSURANCE LAW EXAM QUESTIONS

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -59 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Group Life needs a minimum of...

Answer:

• employees

Question 2: Mandatory Life Insurance Provisions

Answer:

Designed to protect the insured (client)

Question 3: Interest Adjusted Net Cost Method

Answer:

Also known as the Life Insurance Surrender Cost Index, useful if you consider the level of cash values to be of primary importance.Question 4: In all solicitations the agent must:

Answer:

Inform buyer of full name of the insurer represented.Provide a Policy Summary and Buyer's Guide prior to accepting the premium.Recognize the time value of money when comparing cost of policies.

Question 5: Credit Life

Answer:

Decreasing term insurance, may be either individual or group (most is group).

Question 6: FINRA

Answer:

Financial Industry Regulatory Authority, formerly NASD

Question 7: Reinstatement

Answer:

Policy may be reinstated within three years (or longer) if policy lapsed and value has been applied for the purchase of other insurance (as a non-forfeiture option), if this insurance is still in force and policy has not been surrendered. Must provide evidence of insurability and pay arrears of premiums with interest.Question 8: For Group life, employees receive:

Answer:

A Certificate of Insurance Question 9: Examples of False Advertising:

Answer:

Implying Coverage beyond the terms of the policy.Imply that past performance is indicative of future results.Omit information or use words that have the effect of misleading or deceiving purchasers.Contain untrue statements about time period for claim payments or imply that settlements will be beyond terms of policy.Falsely represent policy may only be sold to certain persons.Benefits provided by a rider shall not be advertised in a way that misleads or deceives purchasers as to the existence or nature of primary policy benefits.Question 10: Is a small or larger index number better when doing cost comparison?

Answer:

Smaller is generally a better buy

Question 11: Compatibility and Suitability of Annuity Sales

Answer:

When recommending purchase or exchange of an annuity an agent shall have reasonable grounds for believing that the transaction is suitable.

Question 12: Credit life may not be written on a loan of not more than...

Answer:

10 years, NOT used as mortgage protection insurance Question 13: Insurers and agents have no obligation to a consumer regarding annuity suitability if...

Answer:

the consumer refuse to provide relevant information, decides to enter into a transaction that is not based on recommendation, or fails to provide complete or accurate information.Question 14: If replacing insurance, agents should be concerned about the possibility of:

Answer:

The possibility of Errors and Omissions when replacing coverage, since the incontestability and suicide clauses start over.Question 15: Automatic Non-forfeiture option in Texas not later than 60th day after due date of premium that is in default...

Answer:

Reduced paid-up. May request different election if submitted not later than 60th day after due date of premium that is in default.Question 16: If a customer exercises their 10 day free look they are entitled to:

Answer:

A full refund

Question 17: Misstatement of Age or Gender

Answer:

Allows for an adjustment of benefits - amount payable is the amount that the premium paid would have purchased for correct age or gender.

Question 18: Statements of insured are considered to be:

Answer:

Representations, not warranties

Question 19: Who is required to be members of the Guaranty Association?

Answer:

All insurers authorized to transact life, accident and health, annuities or hospital service coverage insurance as a condition of their Certificate of Authority.

Question 20: Twisting

Answer:

Replacement to the detriment of your client - Illegal

Question 21: Who must sign notice regarding replacement?

Answer:

Both the agent and customer.

Question 22: Incontestability

Answer:

Must provide that a policy in force for 2 years from its date of issue is incontestable during the lifetime of the insured.Question 23: Group policy conversion rules:

Answer:

Convertible to individual whole life for 31 days after employment termination without a physical exam.Must be issued by same insurer.May be to any policy, EXCEPT term.Conversion premiums based on current/attained age.May not be to a higher amount.Dependents may also convert.

Question 24: Do group life policies cover dependents?

Answer:

They may, but are not required to.