Life, Health, And Accident Insurance Exam
(Texas)
If an application is issued as applied for, when is the effective date of coverage?
the day the application is submitted
An insurer that is authorized to do business in this state must be:
-an alien insurer
-a foreign insurer
-a domestic insurer
-an admitted insurer
an admitted insurer
What is a material representation?
A statement by the applicant that, upon discovery, would affect the underwriting
decision of the insurance company
A unilateral contract is which of the following:
-legally binding to one party
-results in an unequal exchange of consideration
-negotiable
-non negotiable
legally binding to one party
An aleatory contract is which of the following:
-legally binding to one party
-results in an unequal exchange of consideration
-negotiable
-non negotiable
results in an unequal exchange of consideration
A contract of adhesion is which of the following:
-legally binding to one party
-results in an unequal exchange of consideration
-negotiable
-non negotiable
non negotiable
What elements are required for a legal contract?
1.) Competent Parties
2.) Legal Purpose
3.) Agreement (Offer and Acceptance)
4.) Consideration
In the case of life and health insurance, when should insurable interest exist?
At the time of application
Insurance is designed to restore an insured to the same physical or financial
condition which existed prior to a loss without a profit or a gain based on what?
Principle of Indemnity
To compensate a loss or to make one whole again
to indemnify
What are the steps of the FCRA?
pre-notification -> written consent -> post-notification
, Under what may credit reports be obtained to determine the financial and moral
status of an applicant?
Fair Credit Reporting Act (FCRA)
An admitted or authorized insurer is approved to transact insurance in a given
state IF:
it has been granted a Certificate of Authority
Typically, a mutual insurers issue what type of policy?
Participating policies
Policyholders of mutual insurance companies receive what as a return of unused
premium?
non-taxable dividends
What is a mutual insurance company owned by?
Policyholders
What type of policies do stock-holders issue?
non-participating policies
What represents the executive branch of the insurance industry and has the
power to issue rules and regulations to enforce existing statutes?
The Commissioner
The person or entity that has insurance protection under a policy for a covered
loss is known as what?
the insured
What provides insurance coverage by issuing particular insurance policies or
contracts?
Insurers (Insurance Companies or Carriers)
Independent sales organizations that provide service and distribute insurance
policies to consumers
Insurance agencies
Licensed individuals representing an insurance company when transacting
insurance business
Insurance Agents or Producers
the death benefit payable on the policy if the insured dies before the policy ends
face amount
considered pure insurance and provides a pure death benefit
term insurance
What are the types of term policies?
1.) Level
2.) Increasing
3.) Decreasing
4.) Annually Renewable
5.) Return of Premium
Increasing term insurance and provides for an additional death benefit that
equals a full refund of premiums if the insured is still living at the end of the term
Return of Premium Term Insurance
The death benefit remains level and the premiums increase yearly as the policy
renews up to a specified age
Annually Renewable Term Insurance
(Texas)
If an application is issued as applied for, when is the effective date of coverage?
the day the application is submitted
An insurer that is authorized to do business in this state must be:
-an alien insurer
-a foreign insurer
-a domestic insurer
-an admitted insurer
an admitted insurer
What is a material representation?
A statement by the applicant that, upon discovery, would affect the underwriting
decision of the insurance company
A unilateral contract is which of the following:
-legally binding to one party
-results in an unequal exchange of consideration
-negotiable
-non negotiable
legally binding to one party
An aleatory contract is which of the following:
-legally binding to one party
-results in an unequal exchange of consideration
-negotiable
-non negotiable
results in an unequal exchange of consideration
A contract of adhesion is which of the following:
-legally binding to one party
-results in an unequal exchange of consideration
-negotiable
-non negotiable
non negotiable
What elements are required for a legal contract?
1.) Competent Parties
2.) Legal Purpose
3.) Agreement (Offer and Acceptance)
4.) Consideration
In the case of life and health insurance, when should insurable interest exist?
At the time of application
Insurance is designed to restore an insured to the same physical or financial
condition which existed prior to a loss without a profit or a gain based on what?
Principle of Indemnity
To compensate a loss or to make one whole again
to indemnify
What are the steps of the FCRA?
pre-notification -> written consent -> post-notification
, Under what may credit reports be obtained to determine the financial and moral
status of an applicant?
Fair Credit Reporting Act (FCRA)
An admitted or authorized insurer is approved to transact insurance in a given
state IF:
it has been granted a Certificate of Authority
Typically, a mutual insurers issue what type of policy?
Participating policies
Policyholders of mutual insurance companies receive what as a return of unused
premium?
non-taxable dividends
What is a mutual insurance company owned by?
Policyholders
What type of policies do stock-holders issue?
non-participating policies
What represents the executive branch of the insurance industry and has the
power to issue rules and regulations to enforce existing statutes?
The Commissioner
The person or entity that has insurance protection under a policy for a covered
loss is known as what?
the insured
What provides insurance coverage by issuing particular insurance policies or
contracts?
Insurers (Insurance Companies or Carriers)
Independent sales organizations that provide service and distribute insurance
policies to consumers
Insurance agencies
Licensed individuals representing an insurance company when transacting
insurance business
Insurance Agents or Producers
the death benefit payable on the policy if the insured dies before the policy ends
face amount
considered pure insurance and provides a pure death benefit
term insurance
What are the types of term policies?
1.) Level
2.) Increasing
3.) Decreasing
4.) Annually Renewable
5.) Return of Premium
Increasing term insurance and provides for an additional death benefit that
equals a full refund of premiums if the insured is still living at the end of the term
Return of Premium Term Insurance
The death benefit remains level and the premiums increase yearly as the policy
renews up to a specified age
Annually Renewable Term Insurance
