Texas Life Insurance Exam Exam Questions with
Correct Answers Graded A+, Latest updates
P completes an application for a $10,000 life policy, but does not give the
producer the initial premium. P's coverage becomes effective when
P receives the policy and pays the premium
A potential client, age 40, would like to purchase a Whole Life policy that will
accumulate cash value at a faster rate in the early years of the policy. Which of
these statements made by the producer would be carrer?
20-Pay Life accumulates cash value faster than Straight Life
How does an indexed annuity differ from a fixed annuity ?
Indexed annuity owners receive credited interest tied to the fluctuations of the linked
index
During a sales presentation for a participating life insurance policy, an agent
MUST
make a prospect understand that dividends are NOT guaranteed
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has
an irrevocable beneficiary. What action will the insurance company take if T
requests a change of beneficiary?
request of the change will be refused
Which provision allows the policyowner to change a term life policy to a
permanent one without providing proof of good health?
conversion
T has a term policy that allows him to continue the coverage after expiration of
the initial policy period. What type of term coverage is this?
renewable
What is NOT a required provision in group life policies?
Right to loan
,The Insurance Commissioner must give how many days notice prior to holding a
hearing regarding an agent's unfair or deceptive practice?
30
The Accelerated Death Benefit provision in a life insurance policy is also known
as a(n)
Living Benefit
In Texas, an individual life insurance policy is required to have a grace period of
31 days
Which statement is correct regarding the premium payment schedule for whole
life policies?
Premiums are payable throughout the insured's lifetime/ coverage lasts until death of
the insured
Company Z has a Cross Purchase Buy-Sell Agreement in place among its three
founding partners. If the agreement is funded with individual life insurance, what
would it require?
Each partner must own a policy on the other partners
Why would the Insurance Commissioner examine the records of an insurance
company?
To determine the solvency of the company
Which of the following features of a group Term Life policy enables an individual
to leave the group and continue his or her insurance without providing evidence
of insurability?
Conversion privilege
Taking receipt of premiums and holding them for the insurance company is an
example of:
fiduciary responsibility
K buys a policy where the premium stays fixed for the first 5 years. The premium
then increases in year 6 and stays level thereafter, all the while the death benefit
remains the same. What kind of policy is this?
Modified Whole Life
, What does a Face Amount Plus Cash Value Policy supposed to pay at the
insured's death?
Face amount plus the policy's cash value
In regards to representations or warranties, which of these statements is TRUE?
false representations will void a policy
What provision in a life insurance policy states that the application is considered
part of the contract?
Entire Contract provision
J is 35-years old and looking to purchase a whole life insurance policy. Which of
the following types of policies will provide the most rapid growth of cash value?
20-pay life
Which of the following statements about accumulated interest eared on dividends
from an insurance policy is TRUE?
It is taxed as ordinary income
A life insurance policy which ensures that the premium will be paid if the insured
becomes disabled has what kind of rider attached?
Waiver of Premium
Which of the following is a requirement for obtaining a Texas insurance agent's
license?
Be honest, trustworthy, and reliable
Which of the following groups may NOT be insured by a group life insurance
policy?
Individuals who are related by blood
The amount of coverage on a group credit life policy is limited to
the insured's total loan value
D was actively serving in the Marines when he was killed in an automobile
accident while on leave. His $100,000 Whole life policy contains a War Exclusion
clause. How much will D's beneficiary's receive?
The full face amount
The underwriting process involves all of these EXCEPT for
Policy loan
Correct Answers Graded A+, Latest updates
P completes an application for a $10,000 life policy, but does not give the
producer the initial premium. P's coverage becomes effective when
P receives the policy and pays the premium
A potential client, age 40, would like to purchase a Whole Life policy that will
accumulate cash value at a faster rate in the early years of the policy. Which of
these statements made by the producer would be carrer?
20-Pay Life accumulates cash value faster than Straight Life
How does an indexed annuity differ from a fixed annuity ?
Indexed annuity owners receive credited interest tied to the fluctuations of the linked
index
During a sales presentation for a participating life insurance policy, an agent
MUST
make a prospect understand that dividends are NOT guaranteed
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has
an irrevocable beneficiary. What action will the insurance company take if T
requests a change of beneficiary?
request of the change will be refused
Which provision allows the policyowner to change a term life policy to a
permanent one without providing proof of good health?
conversion
T has a term policy that allows him to continue the coverage after expiration of
the initial policy period. What type of term coverage is this?
renewable
What is NOT a required provision in group life policies?
Right to loan
,The Insurance Commissioner must give how many days notice prior to holding a
hearing regarding an agent's unfair or deceptive practice?
30
The Accelerated Death Benefit provision in a life insurance policy is also known
as a(n)
Living Benefit
In Texas, an individual life insurance policy is required to have a grace period of
31 days
Which statement is correct regarding the premium payment schedule for whole
life policies?
Premiums are payable throughout the insured's lifetime/ coverage lasts until death of
the insured
Company Z has a Cross Purchase Buy-Sell Agreement in place among its three
founding partners. If the agreement is funded with individual life insurance, what
would it require?
Each partner must own a policy on the other partners
Why would the Insurance Commissioner examine the records of an insurance
company?
To determine the solvency of the company
Which of the following features of a group Term Life policy enables an individual
to leave the group and continue his or her insurance without providing evidence
of insurability?
Conversion privilege
Taking receipt of premiums and holding them for the insurance company is an
example of:
fiduciary responsibility
K buys a policy where the premium stays fixed for the first 5 years. The premium
then increases in year 6 and stays level thereafter, all the while the death benefit
remains the same. What kind of policy is this?
Modified Whole Life
, What does a Face Amount Plus Cash Value Policy supposed to pay at the
insured's death?
Face amount plus the policy's cash value
In regards to representations or warranties, which of these statements is TRUE?
false representations will void a policy
What provision in a life insurance policy states that the application is considered
part of the contract?
Entire Contract provision
J is 35-years old and looking to purchase a whole life insurance policy. Which of
the following types of policies will provide the most rapid growth of cash value?
20-pay life
Which of the following statements about accumulated interest eared on dividends
from an insurance policy is TRUE?
It is taxed as ordinary income
A life insurance policy which ensures that the premium will be paid if the insured
becomes disabled has what kind of rider attached?
Waiver of Premium
Which of the following is a requirement for obtaining a Texas insurance agent's
license?
Be honest, trustworthy, and reliable
Which of the following groups may NOT be insured by a group life insurance
policy?
Individuals who are related by blood
The amount of coverage on a group credit life policy is limited to
the insured's total loan value
D was actively serving in the Marines when he was killed in an automobile
accident while on leave. His $100,000 Whole life policy contains a War Exclusion
clause. How much will D's beneficiary's receive?
The full face amount
The underwriting process involves all of these EXCEPT for
Policy loan
