Texas Life and Health Insurance
Exam 2026 Exam Questions and
Verified Answers | Already
Graded A+
At what point must a life insurance applicant be informed of their rights that
fall under the Fair Credit Reporting Act? - 🧠 ANSWER ✔✔Upon completion
of the application
Who elects the governing body of a mutual insurance company? - 🧠
ANSWER ✔✔policyholders
,An insurance applicant MUST be informed of an investigation regarding
his/her reputation and character according to the - 🧠 ANSWER ✔✔Fair
Credit Reporting Act
What type of reinsurance contract involves two companies automatically
sharing their risk exposure? - 🧠 ANSWER ✔✔Treaty
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 - 🧠
ANSWER ✔✔reserves
Which of the following requires insurers to disclose when an applicant's
consumer or credit history is being investigated - 🧠 ANSWER ✔✔1970 -
Fair Credit Reporting Act
What is the consideration given by an insurer in the Consideration clause of
a life policy? - 🧠 ANSWER ✔✔Promise to pay a death benefit
When third-party ownership is involved, applicants who also happen to be
the stated primary beneficiary are required to have - 🧠 ANSWER
✔✔insurable interest in the proposed insured
,Statements made on an insurance application that are believed to be true
to the best of the applicant's knowledge are called - 🧠 ANSWER
✔✔representations
The part of a life insurance policy guaranteed to be true is called a(n) - 🧠
ANSWER ✔✔warranty
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent - 🧠 ANSWER ✔✔Principal
The Consideration clause of an insurance contract includes - 🧠 ANSWER
✔✔the schedule and amount of premium payments
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
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
, will the proceeds from E's life insurance policy be directed to? - 🧠 ANSWER
✔✔In this situation, the proceeds from E's life insurance policy will go to F.
Which of the following terms defines the legally enforceable promise in an
insurance contract by the insurer? - 🧠 ANSWER ✔✔Unilateral
When must insurable interest exist for a life insurance contract to be valid?
- 🧠 ANSWER ✔✔Inception of the contract
Insurance contracts are known as ____ because certain future conditions
or acts must occur before any claims can be paid. - 🧠 ANSWER
✔✔conditional
Which of these require an offer, acceptance, and consideration? - 🧠
ANSWER ✔✔Contract
Which of these arrangements allows one to bypass insurable interest laws?
- 🧠 ANSWER ✔✔Investor-Originated Life Insurance
Investor-originated life insurance (or IOLI), sometimes called stranger-
originated life insurance (or STOLI) is used to circumvent state insurable
interest statutes. This is done when an investor (or stranger) persuades an
Exam 2026 Exam Questions and
Verified Answers | Already
Graded A+
At what point must a life insurance applicant be informed of their rights that
fall under the Fair Credit Reporting Act? - 🧠 ANSWER ✔✔Upon completion
of the application
Who elects the governing body of a mutual insurance company? - 🧠
ANSWER ✔✔policyholders
,An insurance applicant MUST be informed of an investigation regarding
his/her reputation and character according to the - 🧠 ANSWER ✔✔Fair
Credit Reporting Act
What type of reinsurance contract involves two companies automatically
sharing their risk exposure? - 🧠 ANSWER ✔✔Treaty
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 - 🧠
ANSWER ✔✔reserves
Which of the following requires insurers to disclose when an applicant's
consumer or credit history is being investigated - 🧠 ANSWER ✔✔1970 -
Fair Credit Reporting Act
What is the consideration given by an insurer in the Consideration clause of
a life policy? - 🧠 ANSWER ✔✔Promise to pay a death benefit
When third-party ownership is involved, applicants who also happen to be
the stated primary beneficiary are required to have - 🧠 ANSWER
✔✔insurable interest in the proposed insured
,Statements made on an insurance application that are believed to be true
to the best of the applicant's knowledge are called - 🧠 ANSWER
✔✔representations
The part of a life insurance policy guaranteed to be true is called a(n) - 🧠
ANSWER ✔✔warranty
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent - 🧠 ANSWER ✔✔Principal
The Consideration clause of an insurance contract includes - 🧠 ANSWER
✔✔the schedule and amount of premium payments
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
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
, will the proceeds from E's life insurance policy be directed to? - 🧠 ANSWER
✔✔In this situation, the proceeds from E's life insurance policy will go to F.
Which of the following terms defines the legally enforceable promise in an
insurance contract by the insurer? - 🧠 ANSWER ✔✔Unilateral
When must insurable interest exist for a life insurance contract to be valid?
- 🧠 ANSWER ✔✔Inception of the contract
Insurance contracts are known as ____ because certain future conditions
or acts must occur before any claims can be paid. - 🧠 ANSWER
✔✔conditional
Which of these require an offer, acceptance, and consideration? - 🧠
ANSWER ✔✔Contract
Which of these arrangements allows one to bypass insurable interest laws?
- 🧠 ANSWER ✔✔Investor-Originated Life Insurance
Investor-originated life insurance (or IOLI), sometimes called stranger-
originated life insurance (or STOLI) is used to circumvent state insurable
interest statutes. This is done when an investor (or stranger) persuades an
