Texas General Lines - Life, accident and health insurance PRACTICE EXAM- Rated A+

1) Sandra Timms, age 27, is advised by her producer to purchase Life insurance to cover a 20-year-amortized $50,000 business-improvement loan. Which of the following plans would adequately protect Ms. Timms at the minimum premium outlay? - Answer- A- $50,000 Whole Life policy B- $50,000 Level Term policy for 20 years C- $50,000 20 Pay Life policy D- $50,000 Decreasing Term policy for 20 years 2) A 45-year old customer who is seeking to supplement his retirement income at age 65 would not buy a: - Answer- A- Deferred Annuity B- Equity Indexed Annuity C- Variable Annuity D- Immediate Annuity 3) John Livingston owns a 30-Pay Life policy that he purchased at the age of 30. The cash value will equal the face amount of the policy when he reaches the age of: - Answer- A- 60 B- 70 C- 100 D- 30 4) Which of the following is an example of a Limited-Pay Life policy? - Answer- A- Universal life B- Whole Life C- Life Paid-Up at Age 65 D- Renewable Term to Age 70 5) Which of the following policies provides the greatest amount of protection for an insured's premium dollar as well as some cash accumulation? - Answer- A- Annuity B- Whole Life C- Term D- Limited-Pay Life 6) Which of the following individual policy conversions is usually permitted without any evidence of insurability? - Answer- A- Conversion to a lower-premium plan B- Conversion from a Whole Life policy to a Term policy C- Conversion from a Term policy to a Whole Life policy D- Conversion to a larger amount of insurance 7) Which of the following is NOT correct regarding Ordinary Whole Life policies? - Answer- A- The premiums payments are owed annually until you die or reach age 100 B- The cash value grows more quickly in the beginning years of the policy C- Coverage lasts for your own life D- Ordinary Whole Life is a type of permanent insurance