Texas Life and Health Insurance Exam
Study online at https://quizlet.com/_3121r2
1. What type of reinsurance contract involves two companies automatically
sharing their risk exposure?: Treaty
2. The stated amount or percent of liquid assets that an insurer must have on
hand that will satisfy future obligations to its policyholders is called: reserves
3. When third-party ownership is involved, applicants who also happen to be
the stated primary beneficiary are required to have: insurable interest
4. Statements made on an insurance application that are believed to be true
to the best of the applicant's knowledge are called: representations
5. The part of a life insurance policy guaranteed to be true is called a(n): war-
ranty
6. Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent: Principal
7. The Consideration clause of an insurance contract includes: the schedule
and amount of premium payments
8. E and F are business partners. Each takes out a $500,000 life insurance
policy on the other, naming himself as primary beneficiary. E and F eventually
terminate their business, and four months later E dies. Although E was married
with three children at the time of death, the primary beneficiary is still F.
However, an insurable interest no longer exists. Where will the proceeds from
E's life insurance policy be directed to?: In this situation, the proceeds from E's
life insurance policy will go to F.
9. Which term defines the legally enforceable promise in an insurance contract
by the insurer?: Unilateral
10. Insurance contracts are known as because certain future conditions
or acts must occur before any claims can be paid.: conditional
11. Which of these require an offer, acceptance, and consideration?: Contract
12. Which of these is NOT considered to be an element of an insurance
contract?
the offer
acceptance
negotiating
consideration: negotiating
13. An agent is an individual that represents whom?: Insurer
14. Which policy requires an agent to register with the National Association
of Securities Dealers (NASD) before selling?: Variable Life
1/9
, Texas Life and Health Insurance Exam
Study online at https://quizlet.com/_3121r2
15. Which of the following actions require a policy owner to provide proof of
insurability in an Adjustable Life policy?: increase face amount
16. When a policy owner exchanges a term policy for a whole life policy without
providing proof of good health, which of these apply?: Conversion provision
17. What type of life insurance are credit policies issued as?: Term
18. How long does the coverage normally remain on a limited-pay life policy?-
: age 100
19. All of these statements about Equity Indexed Life Insurance are correct
EXCEPT
- Cash value has a minimum rate of accumulation
- If the gain on the index goes beyond the policy's minimum rate of return, the
cash value will mirror that of the index
-The premiums can be lowered or raised, based on investment performance
-Tied to an equity index such as the S&P 500: The premiums can be lowered or
raised, based on investment performance
20. What type of life insurance incorporates flexible premiums and an ad-
justable death benefit?: Universal Life
21. What type of life policy covers 2 lives and pays the face amount after the
first one dies?: Joint Life Policy
22. Life insurance that covers an insured's whole life with level premiums paid
over a limited time is called: Limited-Pay Life
23. What kind of life insurance product covers children under their parent's
policy?: Term rider
24. P is looking to purchase a life insurance policy that will pay a stated
monthly income to his beneficiaries for 20 years after he dies and a lump
sum of $20,000 at the end of that 20 year period. What type of policy should P
purchase?: Family Maintenance policy
25. Which of the following statements about a Variable Whole Life policy is
CORRECT?
-It provides a minimum guaranteed Death benefit
- It is a combination of a Limited Period Endowment and a Decreasing Term
policy
- Its premiums and benefits are variable
- It has a guaranteed rate of return: It provides a minimum guaranteed Death
benefit
26. Credit Life insurance is: issued in an amount not to exceed the amount of the
loan
27. When does Term Life expire?: At the end of the policy period
2/9
Study online at https://quizlet.com/_3121r2
1. What type of reinsurance contract involves two companies automatically
sharing their risk exposure?: Treaty
2. The stated amount or percent of liquid assets that an insurer must have on
hand that will satisfy future obligations to its policyholders is called: reserves
3. When third-party ownership is involved, applicants who also happen to be
the stated primary beneficiary are required to have: insurable interest
4. Statements made on an insurance application that are believed to be true
to the best of the applicant's knowledge are called: representations
5. The part of a life insurance policy guaranteed to be true is called a(n): war-
ranty
6. Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent: Principal
7. The Consideration clause of an insurance contract includes: the schedule
and amount of premium payments
8. E and F are business partners. Each takes out a $500,000 life insurance
policy on the other, naming himself as primary beneficiary. E and F eventually
terminate their business, and four months later E dies. Although E was married
with three children at the time of death, the primary beneficiary is still F.
However, an insurable interest no longer exists. Where will the proceeds from
E's life insurance policy be directed to?: In this situation, the proceeds from E's
life insurance policy will go to F.
9. Which term defines the legally enforceable promise in an insurance contract
by the insurer?: Unilateral
10. Insurance contracts are known as because certain future conditions
or acts must occur before any claims can be paid.: conditional
11. Which of these require an offer, acceptance, and consideration?: Contract
12. Which of these is NOT considered to be an element of an insurance
contract?
the offer
acceptance
negotiating
consideration: negotiating
13. An agent is an individual that represents whom?: Insurer
14. Which policy requires an agent to register with the National Association
of Securities Dealers (NASD) before selling?: Variable Life
1/9
, Texas Life and Health Insurance Exam
Study online at https://quizlet.com/_3121r2
15. Which of the following actions require a policy owner to provide proof of
insurability in an Adjustable Life policy?: increase face amount
16. When a policy owner exchanges a term policy for a whole life policy without
providing proof of good health, which of these apply?: Conversion provision
17. What type of life insurance are credit policies issued as?: Term
18. How long does the coverage normally remain on a limited-pay life policy?-
: age 100
19. All of these statements about Equity Indexed Life Insurance are correct
EXCEPT
- Cash value has a minimum rate of accumulation
- If the gain on the index goes beyond the policy's minimum rate of return, the
cash value will mirror that of the index
-The premiums can be lowered or raised, based on investment performance
-Tied to an equity index such as the S&P 500: The premiums can be lowered or
raised, based on investment performance
20. What type of life insurance incorporates flexible premiums and an ad-
justable death benefit?: Universal Life
21. What type of life policy covers 2 lives and pays the face amount after the
first one dies?: Joint Life Policy
22. Life insurance that covers an insured's whole life with level premiums paid
over a limited time is called: Limited-Pay Life
23. What kind of life insurance product covers children under their parent's
policy?: Term rider
24. P is looking to purchase a life insurance policy that will pay a stated
monthly income to his beneficiaries for 20 years after he dies and a lump
sum of $20,000 at the end of that 20 year period. What type of policy should P
purchase?: Family Maintenance policy
25. Which of the following statements about a Variable Whole Life policy is
CORRECT?
-It provides a minimum guaranteed Death benefit
- It is a combination of a Limited Period Endowment and a Decreasing Term
policy
- Its premiums and benefits are variable
- It has a guaranteed rate of return: It provides a minimum guaranteed Death
benefit
26. Credit Life insurance is: issued in an amount not to exceed the amount of the
loan
27. When does Term Life expire?: At the end of the policy period
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