Texas Life and Health Insurance Exam
Questions and Answers
What type of reinsurance contract involves two companies automatically sharing their
risk exposure? - ANS-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 - ANS-reserves
When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have - ANS-insurable interest
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called - ANS-representations
The part of a life insurance policy guaranteed to be true is called a(n) - ANS-warranty
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent - ANS-Principal
The Consideration clause of an insurance contract includes - ANS-the schedule and
amount of premium payments
M purchased an Accidental Death and Dismemberment (AD&D) policy and named his
son as beneficiary. M has the right to change the beneficiary designation at anytime.
What type of beneficiary is his son? - ANS-revocable
K is the insured and P is the sole beneficiary on a life insurance policy. Both are
involved in a fatal accident where K dies before P. Under the Common Disaster
provision, where will the money go? - ANS-To P's estate
A policyowner's rights are limited under which beneficiary designation? - ANS-
Irrevocable
A level premium indicates - ANS-the premium is fixed for the entire duration of the
contract
, On a life insurance policy, who is qualified to change the beneficiary designation? -
ANS-Policyowner
J chooses a monthly premium payment mode on his Whole Life insurance policy. Which
of these statements is correct?
-The gross premium is higher on a monthly payment mode as compared to being paid
annually
-The gross premium is lower on a monthly payment mode as compared to being paid
annually
-The cash value from a life policy paid on a monthly basis builds quicker than one paid
on an annual basis
-The face amount of a life policy paid on a monthly basis is higher than one paid on an
annual basis - ANS-The gross premium is higher on a monthly payment mode as
compared to being paid annually
Any changes made on an insurance application requires the initials of whom? - ANS-
Applicant
In order for coverage on a non-medical insurance application to take effect the same
day, the producer must collect a signed application and - ANS-the initial premium
Which of these factors do NOT play a role in the underwriting of a life insurance policy?
-Avocations
-Credit status
-Marital status
- Occupation - ANS-marital status
An insurance company may NOT reject a prospective insured's life application on the
basis of which of the following factors?
-Height
- Weight
-Gender
-Medical history - ANS-gender
What type of group plan involves employees sharing the cost? - ANS-contributory plan
A noncontributory group term life plan is characterized by - ANS-the entire cost of the
plan is paid for by the employer
W is a 39-year old female who just purchased an annuity to provide income for life
starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n)
-Flexible Premium Deferred annuity
-Variable annuity
-Immediate annuity
-Straight Life annuity - ANS-Immediate annuity
Questions and Answers
What type of reinsurance contract involves two companies automatically sharing their
risk exposure? - ANS-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 - ANS-reserves
When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have - ANS-insurable interest
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called - ANS-representations
The part of a life insurance policy guaranteed to be true is called a(n) - ANS-warranty
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent - ANS-Principal
The Consideration clause of an insurance contract includes - ANS-the schedule and
amount of premium payments
M purchased an Accidental Death and Dismemberment (AD&D) policy and named his
son as beneficiary. M has the right to change the beneficiary designation at anytime.
What type of beneficiary is his son? - ANS-revocable
K is the insured and P is the sole beneficiary on a life insurance policy. Both are
involved in a fatal accident where K dies before P. Under the Common Disaster
provision, where will the money go? - ANS-To P's estate
A policyowner's rights are limited under which beneficiary designation? - ANS-
Irrevocable
A level premium indicates - ANS-the premium is fixed for the entire duration of the
contract
, On a life insurance policy, who is qualified to change the beneficiary designation? -
ANS-Policyowner
J chooses a monthly premium payment mode on his Whole Life insurance policy. Which
of these statements is correct?
-The gross premium is higher on a monthly payment mode as compared to being paid
annually
-The gross premium is lower on a monthly payment mode as compared to being paid
annually
-The cash value from a life policy paid on a monthly basis builds quicker than one paid
on an annual basis
-The face amount of a life policy paid on a monthly basis is higher than one paid on an
annual basis - ANS-The gross premium is higher on a monthly payment mode as
compared to being paid annually
Any changes made on an insurance application requires the initials of whom? - ANS-
Applicant
In order for coverage on a non-medical insurance application to take effect the same
day, the producer must collect a signed application and - ANS-the initial premium
Which of these factors do NOT play a role in the underwriting of a life insurance policy?
-Avocations
-Credit status
-Marital status
- Occupation - ANS-marital status
An insurance company may NOT reject a prospective insured's life application on the
basis of which of the following factors?
-Height
- Weight
-Gender
-Medical history - ANS-gender
What type of group plan involves employees sharing the cost? - ANS-contributory plan
A noncontributory group term life plan is characterized by - ANS-the entire cost of the
plan is paid for by the employer
W is a 39-year old female who just purchased an annuity to provide income for life
starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n)
-Flexible Premium Deferred annuity
-Variable annuity
-Immediate annuity
-Straight Life annuity - ANS-Immediate annuity
