TEXAS STATE INSURANCE LICENSE EXAM

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TEXAS STATE INSURANCE LICENSE EXAM

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -42 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Variable Life insurance is based on what kind of premium?

Answer:

Level Fixed Question 2: What is the advantage of reinstating a policy instead of applying for a new one?

Answer:

The original age is used for premium determination

Question 3: All of the following are dividend options EXCEPT

Answer:

Fixed period installments Question 4: All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

Answer:

Dividends from a mutual insurer.Question 5: Which of the following is the closest term to an authorized insurer?

Answer:

Admitted

Question 6: Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?

Answer:

Life expectancy

Question 7: Which is TRUE about the cash surrender nonforfeiture option?

Answer:

Funds exceeding the premium paid are taxable as ordinary income.Question 8: An insurance agent wants for a client to replace her current annuities plan with another one. He presents the new one in an incomplete and dishonest way, which makes the new contract seem far more appealing than the original one. The policyowner ends up surrendering her original contract and replacing it with the new one. Which term best describes what the agent did?

Answer:

Twisting Question 9: The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the

Answer:

Entire Contract

Question 10: All of the following are Nonforfeiture options EXCEPT

Answer:

Intrest only Question 11: An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an

Answer:

Authorized Insurer Question 12: A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

Answer:

Proof Of Insurability is not required

Question 13: Which of the following documents delivered to the policyowner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years?

Answer:

A Policy Summary Question 14: Which two terms are associated directly with the way an annuity is funded?

Answer:

Single Payment or Periodic Payments Question 15: When an individual obtains an insurance license for the primary purpose of writing insurance on him- or herself, or for members of his or her immediate family, or business, this is called

Answer:

Controlled business.

Question 16: Which is NOT true about beneficiary designations?

Answer:

The beneficiary must have insurable interest in the insured.

Question 17: Which of the following is NOT the consideration in a policy?

Answer:

The application given to a prospective insured Question 18: A 60-year-old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true?

Answer:

The amount of the distribution is reduced by the amount of a 20% withholding tax.Question 19: All of the following are examples of third-party ownership of a life insurance policy

EXCEPT

Answer:

An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan.

Question 20: What is the other term for the cash payment settlement option?

Answer:

Lump Sum Question 21: An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen?

Answer:

The Policy will not be affected Question 22: Which of the following types of insurance policies is most commonly used in credit life insurance?

Answer:

Decreasing term Question 23: An agent holds an insurance license in the state of Kansas and would like to transact insurance in Texas. The agent became licensed before written examinations were required. Therefore, the agent has not actually passed any kind of examination. Which of the following is true?

Answer:

The written examination requirement will be waived.Question 24: A temporary license holder can receive a commission from a sale made to all of the following EXCEPT

Answer:

The license holder's sister-in-law.Question 25: Which rule would apply if an agent knows that an insured is going to cash in an old policy and use the funds to purchase new insurance?

Answer:

Replacement

Question 26: In Texas, how is the Commissioner of Insurance placed in office?

Answer:

Appointed by the Governor for a term of 2 years