TEXAS LIFE PRE-LICENSING: CHAPTER V EXAM

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TEXAS LIFE PRE-LICENSING: CHAPTER V EXAM

QUESTIONS

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -15 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: A $20,000 life insurance policy application completed, however the producer does not collect the initial premium. At what point does the coverage go into effect?

Answer:

When the applicant receives the policy and pays the initial premium.Coverage on this policy becomes effective when the applicant receives the policy and pays the initial premium.Question 2: When a policyowner cash surrenders a Universal Life Insurance policy in it's early

years, this may be considered a red flag for a(n):

Answer:

Anti-Money Laundering Violation Cash surrender of a Universal Life Insurance policy in its early years might be flagged as suspicious under anti-money laundering regulations because it could be seen as an attempt to launder money.Question 3: An underwriter determines that a life insurance applicant's risk should be

reclassified due to a health issue. This policy may be issued with a(n):

Answer:

Extra Premium An extra premium is charged to compensate for the increased risk associated with the health issue.

Question 4: Teresa cash surrenders a recently-issued whole life policy and requests that the proceeds be payable to an unrelated third party. Teresa would likely be red-flagged for violation

of:

Answer:

Anti-Money Laundering Rules Question 5: An(n) _______ contained in a life insurance policy states that the policy will NOT

cover certain risks:

Answer:

Exclusion Question 6: Q applied for life insurance and submitted the initial premium on January

• The Policy was issued February 1, but it was not delivered by the agent until February 7. Q is

dissatisfied and returns the policy February 13. How will the insurer handle this situation?

Answer:

Policy was returned within the free-look period, premium will be fully refunded Question 7: A pilot applies for Life insurance. The insurer approves the application with a $10 additional monthly premium modification due to the risk involved. The pilot declines the additional premium modification. The insurer will then likely issue the coverage with a(n):

Answer:

Aviation Exclusion:

Since the pilot declined the additional premium modification, the insurer is likely to issue the policy with an aviation exclusion to mitigate the risk associated with the pilot's occupation.Question 8: Before a life policy is issued, which of these contract elements is necessary?

Answer:

A signed application by the prospect:

A signed application by the prospect is necessary for the issuance of a life insurance policy.Question 9: A Medical Information Bureau (MIB) report may disclose:

Answer:

Prior use of Marijuana

Question 10: David the agent met with a prospect and ended up selling an insurance policy.While filling out the insurance application, David makes a mistake. In this situation, David

MUST:

Answer:

Correct the information and have the prospect initial the change Question 11: Consumer reports requested by an underwriter during the application process of a

life insurance policy can be used to determine:

Answer:

Probability of making timely premium payments The purpose of these reports is to provide a picture of an applicant's general character and reputation, mode of living, finances, and any exposure to abnormal hazards.Question 12: The reason for backdating a policy is:

Answer:

To obtain a premium rate based on an earlier age Backdating a policy allows the policyholder to pay premiums based on a younger age, thereby reducing the premium amount.Question 13: Peter has recently signed an application for insurance. The insurer MUST advise her in writing that an investigative consumer report may be conducted according to the:

Answer:

Fair Credit Reporting Act Question 14: Upon delivery of a rated life insurance policy, the producer must obtain each of the

following, EXCEPT:

Answer:

• Signed HIPAA disclosure

• Signed amendment

• Signed statement of Good Health

• The required premium

Question 15: When an insurance application is taken by a producer, which of these statements is true?

Answer:

Any changes made on the application require the applicant's initials