Life Insurance Practice Exam

The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called

Joint and Survivor

Variable Whole Life insurance is based on what type of premium?

Level Fixed

Which of the following documents must be provided to the policyowner or applicant during policy replacement?

Notice Regarding Replacement

What is the other term for the cash payment settlement option?

Lump Sum

No one whose license has been revoked can receive another license in Texas for

5 years

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?

A policy Summary

In Texas, the state's continuing education requirement

Consists of completing 24 hours of CE each biennium.

Which of the following includes information regarding a person's credit, character, reputation, and habits?

Consumer Report

What is the official name for the Social Security program?

Old Age Survivors Disability Insurance

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?

Paid-up Option

Who might receive dividends from a mutual insurer?

Policyholders

After filing a claim, an insured tells the insurer that there is more than one insurance policy in force. That insurer sets aside the claim until it hears what the other company will pay. The insurer's action will be classified as

Unfair

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of premium

All of the following statements concerning dividends are true EXCEPT

Dividend amounts are guaranteed in the policy

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

Guaranteed insurability rider

Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?

Insuring Clause

An individual has 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

If an insured worker has earned 40 quarters of coverage, the worker's status under Social Security disability is

Fully Insured

Which of the following would NOT be considered rebating?

Giving a client a $25 pen with the insurer's logo during the insurance application process

At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called

Guaranteed insurability

What is the purpose of a conditional receipt?

It is intended to provide coverage on a date prior to the policy issue.

Viatical settlements may be rescinding within what time period after the viator receives the proceeds?

15 days

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

An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan.

The LEAST expensive first-year premium is found in which of the following policies?

Annually Renewable Term

Which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization?

Fraternal benefit society

Which statement is NOT true regarding a Straight Life policy?

Its premium steadily decreases over time, in response to its growing cash value.

A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?

Joint Life Policy

All of the following are mandatory life insurance policy provisions EXCEPT

Policy backdating

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to

Purchase a single premium policy for a reduced face amount

A domestic insurer issuing variable contracts must establish one or more

Separate Accounts

A license may NOT be denied, suspended, or revoked if the licensee

Submits an unsigned insurance policy application.

Which of the following is an example of a producer being involved in an unfair trade practice of rebating?

Telling a client that his first premium will be waived if he purchases the insurance policy today

Children's riders attached to whole life policies are usually issued as what type of insurance?

Term

The initial amount of credit life insurance may NOT exceed

The amount to be repaid under the contract.

Which of the following is TRUE regarding the insurance amount in a credit life policy?

The creditor can only insure the debtor for the amount owed.

Which of the following best describes what the annuity period is?

The period of time during which accumulated money is converted into income payments

An agent explains the details of a life insurance policy to a client. The agent does not realize, however, that the state has recently rewritten two of the provisions. As a result, the agent inadvertently misrepresents the policy, making it more attractive than it really is. What best describes this situation?

There is no misconduct

All of the following statements apply to temporary licenses EXCEPT

They may be renewed

An insurance agent wants for a client to replace her current annuities plan with another one. He presents the new one in an incomplete and dishonest way, which makes the new contract seem far more appealing than the original one. The policyowner ends up surrendering her original contract and replacing it with the new one. Which term best describes what the agent did?

Twisting

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Unilateral