Life Insurance Exam (Texas) questions with accurate
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detailed answers ||
Insurance ||
(General concept) - ✔✔- transfers the risk of loss from an individual to an insurer
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- based on the principle of indemnity
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- based on the principle of risk (risk pooling)
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insurable interest || ||
(General Concept) - ✔✔- must exist at the time of the application
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- insuring one's own life, family member, or a business partner
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Solicitation and sales presentation - ✔✔- illustration- presentation of nonguaranteed
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elements
- buyer's guide is generic information about life polices which must be provided at the time
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of application
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- policy summary is a description of features and benefits of the policy being issued and
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must be provided when the policy is delivered.
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Underwriting (Field underwriting (by agent) - ✔✔- application completed and signed|| || || || || || || || || || ||
- agent's report: agent's observation about the application that can assist in underwriting
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-premiums with application and conditional receipts || || || || ||
underwriting ( company underwriting) - ✔✔- multiple sources of information: applications,
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consumer reports, MIB (Medical Information Burea)
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- Risk Classification: 3 types of risk : standard, substandard, preferred
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,Underwriting (Federal Regulation) - ✔✔- Fair Credit Reporting Act: protect consumers
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against circulations of inaccurate or obsolete information
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- USE PATRIOT Act/ Anti-money Laundering and Suspicious Activity Reports Rules
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Premium Determination - ✔✔- 3 key Factors for life insurance: mortality, interest, and
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expense
- Mode: the more frequently premium is paid, the higher the premium
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Policy Issue and Delivery - ✔✔Effective date of coverage - if the premium is not paid with
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the application, the agent must obtain the premium and a statement of continued good
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health at the time of the policy delivery
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Agent/ Producer - ✔✔a legal representative of an insurance company; the classification of
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producers usually includes agents and brokers' agents are the agents of the insurer
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Applicant of proposed insured - ✔✔a person applying for insurance
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Beneficiary - ✔✔a person who receives the benefits of an insurance policy
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Broker - ✔✔an insurance producer who is not appointed by an insurance company and
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who represents the client
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Death benefits - ✔✔the amount paid upon death of the insured in a life insurance policy
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Estate - ✔✔a person's net worth
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, Insurance policy - ✔✔a contact between a policyowner (and/or insured) and an insurance
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company which agrees to pay insured or the beneficiary for loss caused by specific events.
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Insured - ✔✔a person covered by the insurance policy; may or may not be the policyowner
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insurer (principal) - ✔✔the company who issues an insurance policy
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Lapse - ✔✔policy termination due to nonpayment of premium
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Life insurance - ✔✔coverage on human lives
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Policyowner - ✔✔the person entitled to exercise the rights and privileges in the policy
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Premium - ✔✔the money paid to the insurance company for the insurance policy
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Underwriting - ✔✔is the risk selection and classification process || || || || || || || ||
Attained age - ✔✔the insured's age at the time the policy is issued or renewed
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cash value - ✔✔a policy's saving element or living benefit
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Face amount - ✔✔the amount of benefits stated in the life insurance policy
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Fixed life insurance - ✔✔contracts that offer guaranteed minimum or fixed benefits
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Deferred - ✔✔withheld or postponed until a specified time or event in the future
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detailed answers ||
Insurance ||
(General concept) - ✔✔- transfers the risk of loss from an individual to an insurer
|| || || || || || || || || || || || || || ||
- based on the principle of indemnity
|| || || || || || ||
- based on the principle of risk (risk pooling)
|| || || || || || || ||
insurable interest || ||
(General Concept) - ✔✔- must exist at the time of the application
|| || || || || || || || || || || ||
- insuring one's own life, family member, or a business partner
|| || || || || || || || || ||
Solicitation and sales presentation - ✔✔- illustration- presentation of nonguaranteed
|| || || || || || || || || ||
elements
- buyer's guide is generic information about life polices which must be provided at the time
|| || || || || || || || || || || || || || || ||
of application
|| ||
- policy summary is a description of features and benefits of the policy being issued and
|| || || || || || || || || || || || || || || ||
must be provided when the policy is delivered.
|| || || || || || ||
Underwriting (Field underwriting (by agent) - ✔✔- application completed and signed|| || || || || || || || || || ||
- agent's report: agent's observation about the application that can assist in underwriting
|| || || || || || || || || || || || ||
-premiums with application and conditional receipts || || || || ||
underwriting ( company underwriting) - ✔✔- multiple sources of information: applications,
|| || || || || || || || || ||
consumer reports, MIB (Medical Information Burea)
|| || || || || || ||
- Risk Classification: 3 types of risk : standard, substandard, preferred
|| || || || || || || || || ||
,Underwriting (Federal Regulation) - ✔✔- Fair Credit Reporting Act: protect consumers
|| || || || || || || || || || ||
against circulations of inaccurate or obsolete information
|| || || || || || ||
- USE PATRIOT Act/ Anti-money Laundering and Suspicious Activity Reports Rules
|| || || || || || || || || ||
Premium Determination - ✔✔- 3 key Factors for life insurance: mortality, interest, and
|| || || || || || || || || || || || ||
expense
- Mode: the more frequently premium is paid, the higher the premium
|| || || || || || || || || || ||
Policy Issue and Delivery - ✔✔Effective date of coverage - if the premium is not paid with
|| || || || || || || || || || || || || || || || ||
the application, the agent must obtain the premium and a statement of continued good
|| || || || || || || || || || || || || ||
health at the time of the policy delivery
|| || || || || || ||
Agent/ Producer - ✔✔a legal representative of an insurance company; the classification of
|| || || || || || || || || || || || ||
producers usually includes agents and brokers' agents are the agents of the insurer
|| || || || || || || || || || || ||
Applicant of proposed insured - ✔✔a person applying for insurance
|| || || || || || || || ||
Beneficiary - ✔✔a person who receives the benefits of an insurance policy
|| || || || || || || || || || ||
Broker - ✔✔an insurance producer who is not appointed by an insurance company and
|| || || || || || || || || || || || || ||
who represents the client
|| || ||
Death benefits - ✔✔the amount paid upon death of the insured in a life insurance policy
|| || || || || || || || || || || || || || ||
Estate - ✔✔a person's net worth
|| || || || ||
, Insurance policy - ✔✔a contact between a policyowner (and/or insured) and an insurance
|| || || || || || || || || || || || ||
company which agrees to pay insured or the beneficiary for loss caused by specific events.
|| || || || || || || || || || || || || ||
Insured - ✔✔a person covered by the insurance policy; may or may not be the policyowner
|| || || || || || || || || || || || || || ||
insurer (principal) - ✔✔the company who issues an insurance policy
|| || || || || || || || ||
Lapse - ✔✔policy termination due to nonpayment of premium
|| || || || || || || ||
Life insurance - ✔✔coverage on human lives
|| || || || || ||
Policyowner - ✔✔the person entitled to exercise the rights and privileges in the policy
|| || || || || || || || || || || || ||
Premium - ✔✔the money paid to the insurance company for the insurance policy
|| || || || || || || || || || || ||
Underwriting - ✔✔is the risk selection and classification process || || || || || || || ||
Attained age - ✔✔the insured's age at the time the policy is issued or renewed
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cash value - ✔✔a policy's saving element or living benefit
|| || || || || || || || ||
Face amount - ✔✔the amount of benefits stated in the life insurance policy
|| || || || || || || || || || || ||
Fixed life insurance - ✔✔contracts that offer guaranteed minimum or fixed benefits
|| || || || || || || || || || ||
Deferred - ✔✔withheld or postponed until a specified time or event in the future
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