Final Exam - Texas Life and Health

N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?

30 pay life

S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?

Automatic Policy Loan

Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?

Business owner becoming disabled

Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?

Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company

Which of these types of policies may NOT have the automatic premium loan provision attached to it?

Decreasing Term

F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?

Decreasing term policy

Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require?

Each partner must own a policy on the other partners

Which of the following Nonforfeiture options offers the highest death benefit?

Extended term

K has a healthy policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered:

Guaranteed renewable

T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take?

Increase her policy's coverage amount

Which of the following situations does a critical illness plan cover?

Leukemia

K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?

Modified Whole Life

Which of the following statements is CORRECT about accelerated death benefits?

Must have a terminal illness to qualify

Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?

Reimbursement

Which of these provisions require proof of insurability after a policy has lapsed?

Reinstatement

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

Right to loan

A(n)_________ ___________ Life policy combines investment choices with a form of Term coverage

Variable Universal

Y purchased $100,000 worth of permanent protection on himself and $50,000 worth of 10-year Term coverage for his wife on the same policy. Which of these policies did Y purchase?

Whole life policy with an other insured rider

At what time must a policyowner have insurable interest on the insurered in order for the life policy to be valid?

at the time of application

A whole life insurance policyowner does NOT have the right to

change the grace period

The reason for a business having a Business Overhead Expense Disability Plan is to cover

fixed business expenses

T applied for a Disability Income policy and has a history of back injuries. The insurer issued the policy with a statement that excludes coverage for back injuries. This statement is called a(n)

impairment rider

An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the:

insurer dates the policy