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TEXAS LIFE AND HEALTH INSURANCE
EXAM 2025 UPDATED ACTUAL EXAM
WITH CORRECT SOLUTIONS.
At what point must a life insurance applicant be informed of their
| | | | | | | | | | |
rights that fall under the Fair Credit Reporting Act? - correct
| | | | | | | | | | |
answer- Upon completion of the application
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Who elects the governing body of a mutual insurance company? -
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correct answer- policyholders
| | |
An insurance applicant MUST be informed of an investigation
| | | | | | | |
regarding his/her reputation and character according to the -
| | | | | | | | |
correct answer- Fair Credit Reporting Act
| | | | | |
What type of reinsurance contract involves two companies
| | | | | | |
automatically sharing their risk exposure? - correct 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 - correct answer- reserves
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,2 | Page
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Which of the following requires insurers to disclose when an
| | | | | | | | |
applicant's consumer or credit history is being investigated -
| | | | | | | | |
correct answer- 1970 - Fair Credit Reporting Act
| | | | | | | |
What is the consideration given by an insurer in the Consideration
| | | | | | | | | |
clause of a life policy? - correct 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
| | | | | | | | | | |
- correct 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 - correct
| | | | | | | | | | | | |
answer- representations
| |
The part of a life insurance policy guaranteed to be true is called
| | | | | | | | | | | |
a(n) - correct answer- warranty
| | | | |
Which of these is NOT a type of agent authority? Express
| | | | | | | | | |
,3 | Page
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Implied
Principal
|
Apparent - correct answer- Principal | | | |
The Consideration clause of an insurance contract includes -
| | | | | | | |
correct 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? - correct 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? - correct
| | | | | | | | | |
answer- Unilateral
| |
When must insurable interest exist for a life insurance contract to
| | | | | | | | | |
be valid? - correct answer- Inception of the contract
| | | | | | | | |
, 4 | Page
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Insurance contracts are known as because certain future
| | | | | | | | |
conditions or acts must occur before any claims can be paid. -
| | | | | | | | | | | |
correct answer- conditional
| | |
Which of these require an offer, acceptance, and
| | | | | | |
consideration? - correct answer- Contract
| | | | |
Which of these arrangements allows one to bypass insurable
| | | | | | | |
interest laws? - correct answer- Investor-Originated Life
| | | | | | |
Insurance
|
Investor-originated life insurance (or IOLI), sometimes called | | | | | |
stranger-originated life insurance (or STOLI) is used to
| | | | | | | |
circumvent state insurable interest statutes. This is done when
| | | | | | | | |
an investor (or stranger) persuades an individual to take out life
| | | | | | | | | | |
insurance specifically for the purpose of selling the policy to the
| | | | | | | | | | |
investor. The investor compensates the insured and makes the
| | | | | | | | |
premiums, then collects the death benefit when the insured dies.
| | | | | | | | | |
Which of these is NOT considered to be an element of an
| | | | | | | | | | |
insurance contract?
| |
the offer |
| acceptance
negotiating
|
| | | | | |
TEXAS LIFE AND HEALTH INSURANCE
EXAM 2025 UPDATED ACTUAL EXAM
WITH CORRECT SOLUTIONS.
At what point must a life insurance applicant be informed of their
| | | | | | | | | | |
rights that fall under the Fair Credit Reporting Act? - correct
| | | | | | | | | | |
answer- Upon completion of the application
| | | | | |
Who elects the governing body of a mutual insurance company? -
| | | | | | | | | |
correct answer- policyholders
| | |
An insurance applicant MUST be informed of an investigation
| | | | | | | |
regarding his/her reputation and character according to the -
| | | | | | | | |
correct answer- Fair Credit Reporting Act
| | | | | |
What type of reinsurance contract involves two companies
| | | | | | |
automatically sharing their risk exposure? - correct 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 - correct answer- reserves
| | | | | | |
,2 | Page
| | | | | |
Which of the following requires insurers to disclose when an
| | | | | | | | |
applicant's consumer or credit history is being investigated -
| | | | | | | | |
correct answer- 1970 - Fair Credit Reporting Act
| | | | | | | |
What is the consideration given by an insurer in the Consideration
| | | | | | | | | |
clause of a life policy? - correct 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
| | | | | | | | | | |
- correct 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 - correct
| | | | | | | | | | | | |
answer- representations
| |
The part of a life insurance policy guaranteed to be true is called
| | | | | | | | | | | |
a(n) - correct answer- warranty
| | | | |
Which of these is NOT a type of agent authority? Express
| | | | | | | | | |
,3 | Page
| | | | | |
Implied
Principal
|
Apparent - correct answer- Principal | | | |
The Consideration clause of an insurance contract includes -
| | | | | | | |
correct 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? - correct 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? - correct
| | | | | | | | | |
answer- Unilateral
| |
When must insurable interest exist for a life insurance contract to
| | | | | | | | | |
be valid? - correct answer- Inception of the contract
| | | | | | | | |
, 4 | Page
| | | | | |
Insurance contracts are known as because certain future
| | | | | | | | |
conditions or acts must occur before any claims can be paid. -
| | | | | | | | | | | |
correct answer- conditional
| | |
Which of these require an offer, acceptance, and
| | | | | | |
consideration? - correct answer- Contract
| | | | |
Which of these arrangements allows one to bypass insurable
| | | | | | | |
interest laws? - correct answer- Investor-Originated Life
| | | | | | |
Insurance
|
Investor-originated life insurance (or IOLI), sometimes called | | | | | |
stranger-originated life insurance (or STOLI) is used to
| | | | | | | |
circumvent state insurable interest statutes. This is done when
| | | | | | | | |
an investor (or stranger) persuades an individual to take out life
| | | | | | | | | | |
insurance specifically for the purpose of selling the policy to the
| | | | | | | | | | |
investor. The investor compensates the insured and makes the
| | | | | | | | |
premiums, then collects the death benefit when the insured dies.
| | | | | | | | | |
Which of these is NOT considered to be an element of an
| | | | | | | | | | |
insurance contract?
| |
the offer |
| acceptance
negotiating
|
