Primerica

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2,500

No one whose license has been revoked can receive another license in Texas for

5 years.

To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?

6 credits

Which of the following is NOT a possible penalty for a violation of the Insurance Code?

A fine up to $100,000

What provision in a life or health insurance policy extends coverage beyond the premium due date?

Grace period

When would a misrepresentation on the insurance application be considered fraud?

If it is intentional and material

Which of the following policy components contains the company's promise to pay?

Insuring clause

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

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.

All of the following are true regarding rebates EXCEPT

Rebates are allowed if it is in the best interest of the client.

The Federal Fair Credit Reporting Act

Regulates consumer reports.

Which of the following riders is often used in business life insurance policies when the policyowner needs to change the insured under the policy?

Substitute insured rider

All of the following are true regarding the guaranteed insurability rider EXCEPT

This rider is available to all insureds with no additional premium.

The two types of assignments are

absolute and collateral

For how long is an insurance company allowed to defer policy loan requests?

6 months

Who can make a fully deductible contribution to a traditional IRA?

An individual not covered by an employer-sponsored plan who has earned income

Which of the following must an insurer obtain in order to transact insurance within a given state?

Certificate of authority

The type of insurance sold to a debtor and designed to pay the amount due on a loan if the debtor dies before the loan is repaid is called

Credit life.

Which of the following is TRUE about credit life insurance?

Creditor is the policyowner.

What is a definition of a unilateral contract?

One-sided: only one party makes an enforceable promise.

Which of the following riders would NOT cause the Death Benefit to increase?

Payor Benefit Rider

The Ownership provision entitles the policyowner to do all of the following EXCEPT

Set premium rates.

Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe?

Adhesion

Which of the following is another term for an authorized insurer?

Admitted

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 father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

If the father is disabled for more than 6 months

Which of the following is true of a children's rider added to an insured's permanent life insurance policy?

It is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age.

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

Mutual

An agent's license will terminate within how many days from the due date of obligatory fees and continuing education requirements?

90

In Texas, the Commissioner of Insurance is

Appointed by the Governor.

Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?

Joint Life

When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit?

The insured's contingent beneficiary

Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be

Adjusted to the insured's age at the time of renewal.

Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?

Aleatory

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an

Authorized insurer.

An insurance professional advises a client regarding the benefits of her life insurance policy, in exchange for a fee. Which of the following terms best describes this type of insurance professional?

Counselor

An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)

Equity Indexed Annuity.

What provision in an insurance policy extends coverage beyond the premium due date?

Grace period

When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will

Issue the policy anyway and pay the face value to the beneficiary.

Which of the following is NOT true regarding a Certificate of Authority?

It is issued to group insurance participants.

Which of the following is an example of a limited-pay life policy?

Life Paid-up at Age 65

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?

Life expectancy

If a person is compensated for a testimonial in an advertisement, which of the following statements should be included in the advertisement?

Paid endorsement

Which nonforfeiture option provides coverage for the longest period of time?

Reduced paid-up

Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?

Replacement rule

To sell variable life insurance policies, an agent must receive all of the following EXCEPT

SEC registration.

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT

The interest is not taxable since it remains inside the insurance policy.

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

Upon the submission of a death claim under a life insurance policy, when must the insurer pay the policy benefit?

Within 2 months

An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?

Limited-pay Life

All of the following would be different between qualified and nonqualified retirement plans EXCEPT

Taxation on accumulation

Which is NOT true about beneficiary designations?

The beneficiary must have insurable interest in the insured.

All of the following benefits are available under Social Security EXCEPT

Welfare benefits.

Which of the following information about the applicant is NOT included in the General Information section of the application for insurance?

Medical background

If the policyowner, the insured, and the beneficiary under a life insurance policy are three different people, who has the ownership rights?

Policyowner

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 TRUE regarding the accumulation period of an annuity?

It is a period during which the payments into the annuity grow tax deferred.

Which of the following best describes the unfair trade practice of defamation?

Making derogatory oral statements about another insurer's financial condition

All of the following are true regarding a decreasing term policy EXCEPT

The payable premium amount steadily declines throughout the duration of the contract.

To become a Texas insurance agent, an individual must

Have passed a licensing exam within the 12 months before applying.

The regulations regarding replacement apply to which of the following?

Renewable term