Texas Life and Health Insurance Actual Exam Questions and Answers

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 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