TEXAS State Insurance License Exam ALL 300 QUESTIONS AND CORRECT ANSWERS LATEST UPDATE THIS YEAR

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TEXAS State Insurance License Exam ALL 300
QUESTIONS AND CORRECT ANSWERS LATEST
UPDATE THIS YEAR


QUESTION: A 60-year-old participant in a 401(k) plan takes a distribution and rolls it over to an

IRA within 60 days. Which of the following is true? - ANSWER-The amount of the distribution is

reduced by the amount of a 20% withholding tax.




QUESTION: Which of the following best describes annually renewable term insurance? -

ANSWER-It's Level Term Insurance




QUESTION: Which of the following documents delivered to the policyowner includes

information about premium amounts, cash values, surrender values and death benefits for

specific policy years? - ANSWER-A Policy Summary




QUESTION: Which of the following policies would be classified as a traditional level premium

contract? - ANSWER-Straight Life


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QUESTION: Which option is being utilized when the insurer accumulates dividends at interest

and then uses the accumulated dividends, plus interest, and the policy cash value to pay the

policy up early? - ANSWER-Paid Up Option




QUESTION: A couple owns a life insurance policy with a Children's Term rider. Their daughter is

reaching the maximum age of dependent coverage, so she will have to convert to permanent

insurance in the near future. Which of the following will she need to provide for proof of

insurability? - ANSWER-Proof Of Insurability is not required




QUESTION: When a whole life policy lapses or is surrendered prior to maturity, the cash value

can be used to - ANSWER-Purchase a single premium policy for a reduced face amount.




QUESTION: All of the following are examples of third-party ownership of a life insurance policy

EXCEPT - ANSWER-An insured borrows money from the bank and makes a collateral assignment

of a part of the death benefit to secure the loan.




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QUESTION: Which two terms are associated directly with the way an annuity is funded? -

ANSWER-Single Payment or Periodic Payments




QL; An insurer neglects to pay a legitimate claim that is covered under the terms of the policy.

Which of the following insurance principles has the insurer violated? - ANSWER-Consideration




QUESTION: Which of the following statements regarding HIV testing for insurance purposes is

NOT true? - ANSWER-Insurers are barred from requesting HIV testing.




QUESTION: All of the following are dividend options EXCEPT - ANSWER-Fixed period

installments




QUESTION: A business owner was trying to obtain a bank loan to fund the purchase of a new

business facility, but the bank required proof of additional assets to secure the loan. The

business owner then decided to use her $250,000 life insurance policy to secure the loan.

Which provision makes this possible? - ANSWER-Collateral Assignment




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QUESTION: Which of the following insurance arrangements will be appropriate for a parent

buying a life insurance policy on a child where the parent is the policyowner? - ANSWER-Third

Party Ownership




QUESTION: What is the other term for the cash payment settlement option? - ANSWER-Lump

Sum




QUESTION: All of the following are Nonforfeiture options EXCEPT - ANSWER-Intrest only




QUESTION: Traditional IRA contributions are - ANSWER-Tax deductible




QUESTION: Which of the following is NOT the consideration in a policy? - ANSWER-The

application given to a prospective insured




QUESTION: Which of the following terms means a result of calculation based on the average

number of months the insured is projected to live due to medical history and mortality factors?

- ANSWER-Life expectancy




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