Page 1 of 55
TEXAS State Insurance License Exam ALL
QUESTIONS AND CORRECT ANSWERS LATEST
UPDATE THIS YEAR
QUESTION: Which of these is NOT considered to be an element of an insurance contract?
the offer
acceptance
negotiating
consideration - ANSWER-negotiating
QUESTION: An agent is an individual that represents whom? - ANSWER-Insurer
QUESTION: Insurable interest must exist at what time? - ANSWER-at the time of application
QUESTION: Which policy requires an agent to register with the National Association of
Securities Dealers (NASD) before selling? - ANSWER-Variable Life
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QUESTION: Which of the following actions require a policy owner to provide proof of
insurability in an Adjustable Life policy? - ANSWER-increase face amount
QUESTION: 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
QUESTION: What type of life insurance are credit policies issued as? - ANSWER-Term
QUESTION: How long does the coverage normally remain on a limited-pay life policy? -
ANSWER-age 100
QUESTION: 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
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Tied to an equity index such as the S&P 500 - ANSWER-The premiums can be lowered or raised,
based on investment performance
QUESTION: Which of these is an element of a Variable Life policy? - ANSWER-A fixed, level
premium
QUESTION: What type of life insurance incorporates flexible premiums and an adjustable death
benefit? - ANSWER-Universal Life
QUESTION: T would like to be assured $10,000 is available in 10 years to replace a roof on his
house. What kind of $10,000 policy should T purchase? - ANSWER-Ten-Year Endowment
QUESTION: What type of life policy covers 2 lives and pays the face amount after the first one
dies? - ANSWER-Joint Life Policy
QUESTION: Life insurance that covers an insured's whole life with level premiums paid over a
limited time is called - ANSWER-Limited-Pay Life
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QUESTION: What kind of life insurance product covers children under their parent's policy? -
ANSWER-Term rider
Q.; 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
QUESTION: Who elects the governing body of a mutual insurance company? - ANSWER-
policyholders
QUESTION: An insurance applicant MUST be informed of an investigation regarding his/her
reputation and character according to the - ANSWER-Fair Credit Reporting Act
QUESTION: What type of reinsurance contract involves two companies automatically sharing
their risk exposure? - ANSWER-Treaty
QUESTION: 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
4
TEXAS State Insurance License Exam ALL
QUESTIONS AND CORRECT ANSWERS LATEST
UPDATE THIS YEAR
QUESTION: Which of these is NOT considered to be an element of an insurance contract?
the offer
acceptance
negotiating
consideration - ANSWER-negotiating
QUESTION: An agent is an individual that represents whom? - ANSWER-Insurer
QUESTION: Insurable interest must exist at what time? - ANSWER-at the time of application
QUESTION: Which policy requires an agent to register with the National Association of
Securities Dealers (NASD) before selling? - ANSWER-Variable Life
1
, Page 2 of 55
QUESTION: Which of the following actions require a policy owner to provide proof of
insurability in an Adjustable Life policy? - ANSWER-increase face amount
QUESTION: 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
QUESTION: What type of life insurance are credit policies issued as? - ANSWER-Term
QUESTION: How long does the coverage normally remain on a limited-pay life policy? -
ANSWER-age 100
QUESTION: 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
2
, Page 3 of 55
Tied to an equity index such as the S&P 500 - ANSWER-The premiums can be lowered or raised,
based on investment performance
QUESTION: Which of these is an element of a Variable Life policy? - ANSWER-A fixed, level
premium
QUESTION: What type of life insurance incorporates flexible premiums and an adjustable death
benefit? - ANSWER-Universal Life
QUESTION: T would like to be assured $10,000 is available in 10 years to replace a roof on his
house. What kind of $10,000 policy should T purchase? - ANSWER-Ten-Year Endowment
QUESTION: What type of life policy covers 2 lives and pays the face amount after the first one
dies? - ANSWER-Joint Life Policy
QUESTION: Life insurance that covers an insured's whole life with level premiums paid over a
limited time is called - ANSWER-Limited-Pay Life
3
, Page 4 of 55
QUESTION: What kind of life insurance product covers children under their parent's policy? -
ANSWER-Term rider
Q.; 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
QUESTION: Who elects the governing body of a mutual insurance company? - ANSWER-
policyholders
QUESTION: An insurance applicant MUST be informed of an investigation regarding his/her
reputation and character according to the - ANSWER-Fair Credit Reporting Act
QUESTION: What type of reinsurance contract involves two companies automatically sharing
their risk exposure? - ANSWER-Treaty
QUESTION: 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
4
