TEXAS STATE LIFE AND HEALTH INSURANCE EXAM
SIMULATOR ACTUAL EXAM 300 QUESTIONS AND
CORRECT DETAILED ANSWERS WITH RATIONALES|
ALREADY GRADED A+||BRAND NEW!!
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
When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have - ANSWER: insurable interest
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 term defines the legally enforceable promise in an insurance contract by the
insurer? - ANSWER: Unilateral
Insurance contracts are known as ____ because certain future conditions or acts
must occur before any claims can be paid. - ANSWER: conditional
Which of these require an offer, acceptance, and consideration? - ANSWER: Contract
, Which of these is NOT considered to be an element of an insurance contract?
the offer
acceptance
negotiating
consideration - ANSWER: negotiating
An agent is an individual that represents whom? - ANSWER: Insurer
Which policy requires an agent to register with the National Association of Securities
Dealers (NASD) before selling? - ANSWER: Variable Life
Which of the following actions require a policy owner to provide proof of insurability
in an Adjustable Life policy? - ANSWER: increase face amount
When a policy owner exchanges a term policy for a whole life policy without
providing proof of good health, which of these apply? - ANSWER: Conversion
provision
What type of life insurance are credit policies issued as? - ANSWER: Term
How long does the coverage normally remain on a limited-pay life policy? - ANSWER:
age 100
All of these statements about Equity Indexed Life Insurance are correct EXCEPT
- Cash value has a minimum rate of accumulation
- If the gain on the index goes beyond the policy's minimum rate of return, the cash
value will mirror that of the index
-The premiums can be lowered or raised, based on investment performance
-Tied to an equity index such as the S&P 500 - ANSWER: The premiums can be
lowered or raised, based on investment performance
What type of life insurance incorporates flexible premiums and an adjustable death
benefit? - ANSWER: Universal Life
What type of life policy covers 2 lives and pays the face amount after the first one
dies? - ANSWER: Joint Life Policy
Life insurance that covers an insured's whole life with level premiums paid over a
limited time is called - ANSWER: Limited-Pay Life
What kind of life insurance product covers children under their parent's policy? -
ANSWER: Term rider
P is looking to purchase a life insurance policy that will pay a stated monthly income
to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end
of that 20 year period. What type of policy should P purchase? - ANSWER: Family
Maintenance policy
SIMULATOR ACTUAL EXAM 300 QUESTIONS AND
CORRECT DETAILED ANSWERS WITH RATIONALES|
ALREADY GRADED A+||BRAND NEW!!
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
When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have - ANSWER: insurable interest
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 term defines the legally enforceable promise in an insurance contract by the
insurer? - ANSWER: Unilateral
Insurance contracts are known as ____ because certain future conditions or acts
must occur before any claims can be paid. - ANSWER: conditional
Which of these require an offer, acceptance, and consideration? - ANSWER: Contract
, Which of these is NOT considered to be an element of an insurance contract?
the offer
acceptance
negotiating
consideration - ANSWER: negotiating
An agent is an individual that represents whom? - ANSWER: Insurer
Which policy requires an agent to register with the National Association of Securities
Dealers (NASD) before selling? - ANSWER: Variable Life
Which of the following actions require a policy owner to provide proof of insurability
in an Adjustable Life policy? - ANSWER: increase face amount
When a policy owner exchanges a term policy for a whole life policy without
providing proof of good health, which of these apply? - ANSWER: Conversion
provision
What type of life insurance are credit policies issued as? - ANSWER: Term
How long does the coverage normally remain on a limited-pay life policy? - ANSWER:
age 100
All of these statements about Equity Indexed Life Insurance are correct EXCEPT
- Cash value has a minimum rate of accumulation
- If the gain on the index goes beyond the policy's minimum rate of return, the cash
value will mirror that of the index
-The premiums can be lowered or raised, based on investment performance
-Tied to an equity index such as the S&P 500 - ANSWER: The premiums can be
lowered or raised, based on investment performance
What type of life insurance incorporates flexible premiums and an adjustable death
benefit? - ANSWER: Universal Life
What type of life policy covers 2 lives and pays the face amount after the first one
dies? - ANSWER: Joint Life Policy
Life insurance that covers an insured's whole life with level premiums paid over a
limited time is called - ANSWER: Limited-Pay Life
What kind of life insurance product covers children under their parent's policy? -
ANSWER: Term rider
P is looking to purchase a life insurance policy that will pay a stated monthly income
to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end
of that 20 year period. What type of policy should P purchase? - ANSWER: Family
Maintenance policy
