TEXAS STATE LIFE AND HEALTH INSURANCE EXAM
SIMULATOR 2025-2026 ACTUAL EXAM 300
QUESTIONS AND CORRECT DETAILED ANSWERS
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
Who |elects |the |governing |body |of |a |mutual |insurance |company? |- |ANSWER-policyholders
An |insurance |applicant |MUST |be |informed |of |an |investigation |regarding |his/her |reputation |and
|character |according |to |the |- |ANSWER-Fair |Credit |Reporting |Act
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
Which |of |the |following |requires |insurers |to |disclose |when |an |applicant's |consumer |or |credit |history |is
|being |investigated |- |ANSWER-1970 |- |Fair |Credit |Reporting |Act
What |is |the |consideration |given |by |an |insurer |in |the |Consideration |clause |of |a |life |policy? |- |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 |- |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 |- |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 |of |the |following |terms |defines |the |legally |enforceable |promise |in |an |insurance |contract |by |the
|insurer? |- |ANSWER-Unilateral
When |must |insurable |interest |exist |for |a |life |insurance |contract |to |be |valid? |- |ANSWER-Inception |of
|the |contract
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 |arrangements |allows |one |to |bypass |insurable |interest |laws? |- |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
|
consideration |- |ANSWER-negotiating
An |agent |is |an |individual |that |represents |whom? |- |ANSWER-Insurer
Insurable |interest |must |exist |at |what |time? |- |ANSWER-at |the |time |of |application
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
|
SIMULATOR 2025-2026 ACTUAL EXAM 300
QUESTIONS AND CORRECT DETAILED ANSWERS
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
Who |elects |the |governing |body |of |a |mutual |insurance |company? |- |ANSWER-policyholders
An |insurance |applicant |MUST |be |informed |of |an |investigation |regarding |his/her |reputation |and
|character |according |to |the |- |ANSWER-Fair |Credit |Reporting |Act
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
Which |of |the |following |requires |insurers |to |disclose |when |an |applicant's |consumer |or |credit |history |is
|being |investigated |- |ANSWER-1970 |- |Fair |Credit |Reporting |Act
What |is |the |consideration |given |by |an |insurer |in |the |Consideration |clause |of |a |life |policy? |- |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 |- |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 |- |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 |of |the |following |terms |defines |the |legally |enforceable |promise |in |an |insurance |contract |by |the
|insurer? |- |ANSWER-Unilateral
When |must |insurable |interest |exist |for |a |life |insurance |contract |to |be |valid? |- |ANSWER-Inception |of
|the |contract
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 |arrangements |allows |one |to |bypass |insurable |interest |laws? |- |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
|
consideration |- |ANSWER-negotiating
An |agent |is |an |individual |that |represents |whom? |- |ANSWER-Insurer
Insurable |interest |must |exist |at |what |time? |- |ANSWER-at |the |time |of |application
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
|
