Additional Questions
No one whose license has been revoked can receive another license in Texas for
5 years
An events license will terminate within how many days from the due date of obligatory fees and containing education requirements
90
If a policyowner surrenders his life insurance policy that has been in force for 5 years within 60 days after the premium due date, what will the insurer be required to pay?
A cash surrender value
Which of the following is the basic source of information used by the company in the risk room process
Application
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?
Authorized or admitted
Which of the following is used to compare the cost of one life insurance policy against another in order to guide prospective purchasers to policies that are competitively priced?
Cost comparison methods
Which of the following is TRUE regarding the insurance amount in a credit life policy?
Creditor can only insure the debtor for the amount owed.
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?
Fixed Period (Under the fixed-period installments option (also called period certain), a specified period of years is selected, and equal installments are paid to the recipient. The payments will continue for the specified period even if the recipient dies before the end of that period.)
As a field underwriter, a producer is responsible for all of the following tasks except
Issue the policy that is requested
Which of the following best describes annually term insurance?
It is level term insurance
Upon the submission of a death claim under a life insurance policy, when must the insurer pay the policy benefit?
Within 2 months
The term "illustration" in a life insurance policy refers to
A presentation of nonguaranteed elements of a policy.
What is a material misrepresentation
A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company
All of the following statements about the continuing education requirements in this state are true except
All licensed agents must comply by January 1 of even-numbered years
An individual just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
Decreasing term
All of the following are dividend options EXCEPT
Fixed period installments
Which of the following statements about the reinstatement provision is true?
It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.
Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?
Life income with period certain
The following are all clauses for the insurance commissioner to suspend or impose conditions upon the continuance of agent's license except
The applicant has been shown to be a poor personal risk
A corporation is the owner and the beneficiary of the key person life policy. If the corporation collects the policy benefit, then
The benefit is received tax free
Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?
the employer is the owner and beneficiary
All of the following would be considered an insurance transaction EXCEPT
Obtaining an insurance license
If a person is compensated for a testimonial in an advertisement, which of the following statements should be included in the advertisement?
Paid endorsement
An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of
Rebating. When producers give or promise anything of value that is not specified in the policy, they are guilty of rebating.
All of the following would be eligible to establish a Keogh retirement plan except
The president and employee of one's family's corporation.
A man purchased a $90,000 annuity with a single premium, and began receiving payments 2 months after that. What type of annuity is it?
immediate
All of the following would be considered rebating except
An agent misrepresents policy benefits to convince a policyowner to replace policies
All of the following statements are correct regarding credit life insurance except
Benefits are paid to the borrower's beneficiary.
Methods used to pay the death benefits to a beneficiary upon the insured's death are called
Settlement options
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of
misrepresentation
All of the following are true regarding insurance policy loans EXCEPT
Policy loans can be made on policies that do not accumulate cash value
All of the following are true regarding insurance policy loans except
Policy loans can be made on policies that do not accumulate cash value
Which of the following is the basic source of information used by the company in the risk selection process
application
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be
authorized
Which of the following is the best reason to purchase life insurance rather than annuities?
to create an estate
All of the following are nonforfeiture options except
Automatic Premium Loan Option, Interest Only and Pay-up additions
Traditional IRA contributions are tax deductible based on which of the following
Owner's Income
A participating insurance policy may do which of the following?
Pay dividends to the policyowner
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT
conditions
Which entity has the authority to grant a temporary life insurance agent's license?
Commissioner of Insurance only
Under the fair credit reporting act individuals rejected for insurance due to information contained in a consumer report
Must be informed of the source of the report
A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the
Revocable beneficiary
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.
Circulating deceptive sales material to the public is what type of Unfair Trade Practice?
false advertising
All the following information must be disclosed to the viator prior to the execution of a viatacal settlement contract except
Availability of stranger-originated life insurance (STOLI)
Within how many years must an agent renew an insurance license?
2 years An agent's license must be renewed every 2 years on their birthday in either even or odd numbered years depending on when the license was issued. As long as the renewal requirements are met, the license will continue in effect until refused, revoked or suspended by the Commissioner.
Which entity has the authority to grant a temporary life insurance agent's license?
Commissioner of insurance only
In Texas, the state's continuing education requirement
Consists of completing 24 hours of CE each biennium
Which of the following is not required on an illustration used in the sale of a life insurance policy?
The name of the primary and secondary beneficiaries
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained
3 days
Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy?
Premiums are not tax deductible as a business expense.
An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it?
deferred
All of the following statements are true regarding tax-qualified annuities EXCEPT
employer contributions are not tax deductible
Which option for Universal Life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B. Under option B the death benefit included the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases. At any point in time, the total death benefit will always be equal to the face amount of the policy plus the currency amount of cash value.
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?
Pay a reduced death benefit The incontestability clause prevents an insurer from denying a claim due to statements in an application after the policy has been in force for 2 years. However, it does not apply to statements relating to age, sex and identity.
According to the state nonforfeiture law for life insurance policies, insurers must offer at least one of the following nonforfeiture options EXCEPT
Reduction of premium
All of the following would be different between qualified and non qualified retirements plans except
Taxation on accumulation
All of the following statements concerning an employer sponsored nonqualified retirement plan are true EXCEPT
The employer can receive a current tax deduction for any contributions made to the plan
An agent receives an Emergency Cease and Desist Order for chronically misrepresenting his insurance policies. The agent knows that he did not commit the violations stated in the Emergency Cease and Desist Order. He wants to contest the charges in a court hearing. Which of the following is true?
The hearing must be held within 10 days of receiving a request, unless both parties agree to a later date.
The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insureds death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following except
The insured's age at death
All of the following are requirements for life insurance illustrations except
They must be part of the contract.
