Texas Life Insurance Exam with Questions and Answers 1

Texas Life Insurance Exam with Questions and Answers An individual wants to purchase a life insurance policy. His agent asks if the transaction will involve replacing any existing life insurance policies. If the customer replies, "Yes," which of the following best describes the agent's next step? a) The agent must get his supervisor involved in the transaction. b) The agent has no further duties. c) The agent must provide a replacement notice to the applicant. d) The agent must collect the existing policies and turn them over to the replacing insurer. ANSWER c) The agent must provide a replacement notice to the applicant. In a replacement transaction, an agent must present to the applicant a Notice Regarding Replacement that is signed by both the applicant and the agent. Which of the following types of insurance policies is most commonly used in credit life insurance? a) Whole life b) Equity indexed life c) Decreasing term d) Increasing term ANSWER c) Decreasing term Credit insurance is a special type of coverage written to insure the life of the debtor and pay off the balance of a loan in the event of the death of the debtor. It is usually written as decreasing term insurance.