Life Insurance Test

A temporary's agent license issued by the Commissioner of Insurance is valid for up to ___ days.

90

Which of these is NOT considered to be a cost connected with an individual's death?

Business expenses

How long can a cash surrender value payment be deferred by the insurance company under the Nonforfeiture Law?

6 months

What is an organization that solicits insurance only to its members?

Fraternal benefit society

A Medical Information Report (MIB) report may disclose which of the following

Prior use of marijuana

In Texas, an individual life insurance policy is REQUIRED to have a grace period of

31 days

The USA Patriot Act was enacted in

2001

A new general property and casualty licensee must complete at LEAST ___ hours of continuing education within 24 months of initial license.

24 hours

a promotional advertising item is not considered a rebate unless it has a value equal to less or less than what amount?

$25

An employee is covered under a company group life plan with a $50,000 death benefit. What is the MAXIMUM amount a spouse may be insured for under this program?

$25,000

G purchased a Family Income policy at age 40, The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income?

10 years

A non-contributory plan requires _ participation of all eligible employees.

100%

In texas how long must a policy be in force before an insurance company must pay death benefits for suicide?

2 years

Which life insurance rider typically appears on a Juvenile life insurance policy?

A payor benefit rider

Before a life policy is issued which of these contract elements is necessary?

A signed application by the prospect

Which of the following actions does the Commissioner of Insurance NOT have the power to conduct?

Activate insurance companies' financial reserves.

What does a term life rider offers the insured?

Additional Life Coverage

The amount of monthly disability benefits payable under Social Security is affected by which of the following factors?

Amount of the benefits available from other sources

Which of these factors does not influence an applicants need for life insurance?

An individual's need for a death benefit for survivors is influenced by all of the following factors EXCEPT self-maintenance expenses.

An example of false advertising would be

An insurer exaggerating its dividends in a magazine advertisement

In Texas, which of these statements regarding the Suicide clause is True?

An insurer may not use suicide as a defense against payment after the second year

Company XYZ offers a group Term Life insurance plan to its employees. What does each employee covered under this plan receive?

Certificate of Insurance

Whose life is covered on a life insurance policy that contains a payor benefit clause?

Child

As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?

Coercion

A nonforfeiture clause gives the policyowner

Guaranteed values even if the policy has lapsed

Which of the following groups may not be issued by a group life insurance policy?

Insurance are related by blood

Credit life insurance is?

Insurance issued on a debtor to cover outstanding loan balances

The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n):

Insuring agreement

A license may be denied, suspended or revoked if the licensee?

Is found guilty in misrepresentation of obtaining the license

A domestic insurance company in Texas is considered a company that?

Is incorporated and formed and formed in Texas

What is the purpose of a Policy Summary?

It highlights the critical parts of the policy issued

K, age 45, and his wife, age 43, have three children. They purchase a Family Policy that covers K's wife to age 65. All of these situations will pay a death benefit EXCEPT

K's wife dies at age 66

D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed?

Level term

T has an annuity that guarantees and income payments for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?

Life Annuity with period Certain

All of these are considered sources of underwriting information about an applicant EXCEPT

Rating Services

an example of rebating would be

Returning a portion of the premium as inducement to purchase insurance

Which of the following is not a required provision in group life policies?

Right to loan

To terminate an agent's appointment, an insurance company must

Send termination notice to the Texas Department of Insurance

What is Old Age and Survivors Health Insurance (OASDHI) also known as?

Social Security

Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?

Split-dollar plan

Q is looking to buy a life insurance policy that will provide the greatest amount of protection for a temporary time period.

Term Life

Which of these life insurance riders allows the applicant to have excess coverage?

Term riders

Who is liable when an insured suffers a loss on a policy sold by an agent through an insurer not authorized to conduct business in Texas?

The agent of the company

Which of the following Life Insurance policies combine term insurance with an investment element?

Universal Life

Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid

conditional

What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?

conversion

What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan?

50%

Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life policy?

increase face amount

Information obtained from a phone conversation to the proposed insured can be found in which of these reports?

inspection report

Credit life insurance is:

issued in an amount not to exceed the amount of the loan

During a sales presentation for a participating life insurance policy, an agent MUST

make a prospect understand that dividends are NOT guaranteed

Stranger Owned Life Insurance (STOLI) is when a person purchases life insurance only to sell an:

third-party with no insurable interest

An example of an unfair claims settlement practice is

turning down a claim before providing the basis of denial

ABC Insurance Company is actively engaging in a boycott, coercion, and intimidation, that results in the unreasonable restraint of trade. ABC is committing a prohibited act under Texas insurance laws covering

unfair methods of competition

The part of a life insurance policy guaranteed to be true is called a(n)

warranty

what is the function of an annuity?

The systematic liquidation of accumulated funds

Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company?

Annuity

P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insurer take?

Beneficiary will be paid the Death Benefit

B the insurance agent tells his clients that their rights may be impaired if they fail to complete a release form within a given period of time. B may be found guilty of

Coercion

On August 6, D submitted an application for a Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was given by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take?

Collect initial premium along with a signed health statement

Which of the following is not included in a life insurance illustration?

Company's mortality table

T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later, provided that T is an acceptable risk. What item is given to T?

Conditional receipt

Which of the following consists of an offer, acceptance, and consideration?

Contract

Insurance policies are offered on a "take it or leave it" basis, which make them?

Contracts of Adhesion

Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability?

Conversion privilege

The Universal Life Policy is called an unbundled Life Policy because the policyholder can see the expense charges, the interest earned, and the

Cost of insurance

Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?

Decreasing Term

What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?

Decreasing term

How often must an insurance agent license normally be renewed?

Every two years

Which of the following is an important underwriting principle of group life insurance?

Everyone must be covered in the group

Which of these provisions is NOT required in the life insurance policies?

Extended Term

S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits?

Full benefits are payable under the Master contract

Which Unfair Trade Practice involves an agent telling a prospective client that a policy's dividends are guaranteed?

Misrepresentation

When will a hearing be held after a notice of hearing alleging participation in an unfair or deceptive act is served to a licensee or insurer by the Commissioner?

No sooner than 6 days

Stanger Originated life insurance (STOLI) has been found to be in violation of which of the following contractual elements?

Offer/Acceptance

P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability?

P will still receive declared dividends.

Which action will a life insurance company most likely take if an insured dies and it is discovered that the insured's age was misstated on the application?

Pay an amount the premiums would have purchased at the insured's actual age

When an employee is terminated, which statement about a group term life conversion is true?

Policy proceeds will be paid if the employee dies during the conversion period

The _____ is authorized to assign a Life insurance policy as collateral for a loan.

Policyowner

All of these statements about the Commissioner of Insurance are true EXCEPT

The commissioner must be elected

In order for coverage on a non-medical Insurance application take effect the same day, the producer must collect a signed application and

The initial premium

Why would the Insurance Commissioner examine the records of an insurance company?

To determine the solvency of the company

Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?

Variable Universal Life

Term Life Policies that have the ability to be converted to permanent coverage may do so during a specific time period. This conversion period

Varies according to the contract

What is required for an agent whose license has been revoked

Wait at least 5 years before applying for a new license

A foreign insurance company conducting insurance business in Texas

Was formed under the laws of another state

When does a life insurance contract become effective if the initial premium is not collected during the application process?

When producer delivers policy and collects initial premium

A $20,000 life insurance policy application is completed; however the producer does not collect the initial premium. At what point does the coverage go into effect?

When the applicant receives the policy and pays the initial premium

A life insurance policy provides a policyowner with cash value along with a level face amount is called:

Whole life

A Return of Premium life insurance policy is:

Whole life and Increasing term

L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of age provision, the insurer will:

adjust the death benefit to a reduced amount

If an insured's age was misstated on a life insurance contract, the Misstatement of Age provision requires that any death benefit payable would be

an amount that the premiums paid would have purchased at the current age

An insurer is NOT required to provide information on fraudulent claims if requested by

an insured

T cash surrenders a recently issued whole life policy. He also requests that the proceeds be payable to an unrelated third party. T would likely be red flagged for violation of

anti-money laundering rules

Variable Life products require a producer to

hold a Life Insurance license and a Securities license

A long-term care rider in a life insurance policy pays a daily benefit in the event of which of the following?

inability of the insured to perform more than 2 activities of daily living (ADL's)

An insurance agent has a fiduciary responsibility to all of the following EXCEPT

other agents

Which of these is NOT an example of doing insurance business?

selling shares of stock

The premiums paid by an employer for his employee's group life insurance are usually considered to be:

tax deductible to the employer