Insurance license practice XCEL solutions FINAL EXAM #12 - Texas life only

Question 29 Under the USA Patriot act, insurers are required to report receipt of cash payments in excess of?

$10,000

Question 35 Employee is covered under a 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

Question 23 Employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a?

$25,000 individual whole life policy

Question 41 Insured may assign up to ____ of the policy ownership under an individual life insurance policy

100%

Question 21 In Texas how long must a policy be in force before an insurance company must pay death benefits for suicide

2 years

Question 2 A new agent must complete at least _____ hours of continuing education within 24 months of initial license?

24 hours

Question 59 the Insurance Commissioner must give how many days notice prior to holding a hearing regarding an agent's unfair or deceptive practice?

30 days

Question 12 in Texas an individual life insurance policy is REQUIRED to have a grace period of?

31 days

Question 69 one becomes eligible for social security disability benefits after having been disabled for?

5 months

Question 73 how long can a cash surrender value payment be deferred by the insurance company under the nonforfeiture law?

6 months

Question 45 A temporary agents license issued by the commissioner of Insurance is valid for up to ____ days

90 day

Question 13 Which statement is TRUE regarding a variable whole life policy?

A minimum guaranteed death benefit is provided

Question 19 Which of the following statements about non-contributory employee group life insurance is FALSE?

A minimum number of employees is required to participate

Question 72 Q would like to purchase a $100,000 a permanent protection on his wife in 50,000 of term coverage on himself and it's the same policy. what kind of policy should Q purchase?

A whole life policy with other insured rider

Question 84 P is blinded in an accident. which provision of his life insurance policy will pay a stated benefit amount?

Accidental death and dismemberment clause

Question 93 which of the following actions does the Commissioner of Insurance not have the power to conduct?

Activate insurance companies' financial reserve

Question 3 L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L has understated range on the application. Under the misstatement of age provision the insurer will?

Adjust the death benefits to a reduced amount

Question 63 The consideration clause in a life insurance contract contains what pertinent information?

Amount of premium payments and when they're due

Question 33 an insurer is NOT required to provide information on fraudulent claims if requested by?

An insured

Question 4 An example of false advertising would be?

And insurer exaggerating in dividends in a magazine advertisement

Question 57 Group life insurance policies are generally written as?

Annually renewable term

Question 5 With whom an agent legally share commissions?

Another agent with the same line of insurance

Question 65 Traditional individual retirement annuity (IRA) distributions must start by?

April 1st of the year following the year the participant attains age 70 ½

Question 87 at what time must a policy owner have insurable interest on the insured in order for the life policy to be valid?

At the time of application

Question 82 It certificate of ____ commence an insurance company to transact business in Texas

Authority

Question 96 What is considered to be a characteristic of an immediate annuity?

Benefit payments start with one payment per purchase period

Question 55 An insurance company may NOT reject a prospective insured life application on the basis of which of the following factors?

Gender or Marital status

Question 42 Which of these is NOT a reason for purchasing life insurance on the life of a minor?

If both parents were to die, it would provide death benefits that the child

Question 48 the type of annuity that can be purchased with one monetary deposit is called a(n)?

Immediate annuity

Question 9 How does an indexed annuity differ from a fixed annuity?

Indexed annuity owners receive crediting interest time to the fluctuation of the linked index

Question 37 Which of these retirement plans can be started by an employee, even if another plan is in existence?

Individual retirement account (IRA)

Question 66 Which of the following groups may NOT be insured by a group life insurance policy?

Individuals who are related by blood

Question 47 A policy owner would like to change the beneficiary on a Life insurance policy and make the change permanent. Which type of designation would fill this need?

Irrevocable

Questions 68 A license may be denied, suspended, or revoked if the license

Is found guilty of misrepresentation in obtaining the license

Question 18 A domestic insurance company in Texas is considered a company that?

Is incorporated and formed in Texas

Question 24 What type of life policy covers 2 lives and pays the face amount after the first one dies?

Joint life policy

Question 46 L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They purchase a family policy that covers L's spouse at age 65. A death benefit will NOT be paid in which of the following?

L's spouse dies at age 66

Question 79 When advertising, Insurance company must use it's?

Legal corporate name

Question 62 Which of the following may NOT charge fees for insurance advice?

Legal reserve agent's

Question 1 Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?

Life income

Question 99 During a sales presentation for a participating life insurance policy, an agent MUST?

Make a prospect understand that dividends are not guaranteed

Question 70 which of these factors do NOT play a role in the underwriting of a life insurance policy?

Marital status

Question 97 a policy owner is allowed to pay premiums more than once a year under which provision?

Mode of premium

Question 98 M purchases a $70,000 life insurance policy with a premium payments of $550 a year for the first five years at the beginning of the 60 or the premium will increase to $800 per year but will remain level thereafter the face amount will remain $70,000 throughout the life of the policy. The type of policy that M has purchased is?

Modified premium life

Question 15 which of these is NOT considered to be an element of an insurance contract?

Negotiating

Question 17 All these statements concerning Settlement Options are true, EXCEPT?

Only the beneficiary may select

Question 6 Insurance agent as a fiduciary responsibility to all of the following EXCEPT?

Other agents

Question 89 In a life insurance policy, which provision States who may select policy options,designate and name a beneficiary and be the recipient of any financial benefits from the policy?

Owner's rights

Question 77 which action will a life insurance company most likely tank if an insured dies and it is discovered the insured's age was misstated on the application?

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

Question 36 which life insurance rider typically appears on a Juvenile life insurance policy

Payor benefit rider

Question 71 if father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision?

Payor provision

Question 28 M has an insurance policy that also has an outstanding policy loan at a time of M's death. The insurer will deduct the outstanding loan balance from the?

Policy proceeds

Question 67 Q applied for life insurance and submitted the initial premium on January 1. Policy was issued February 1, but it was not delivered by the agent until February 7. Q is disqualified and returns the policy February 13. How will the insurer handle this situation?

Policy was returned within the free look period, premium will be fully refunded

Question 80 on a life insurance policy who is qualified to change the beneficiary designation?

Policyowner

Question 76 a primary beneficiary has died before the insured in a life policy a contingent beneficiary is also named in the policy which of the following will occur when the insured dies?

Proceeds will go to the contingent beneficiary

Question 78 An example of rebating would be

Returning a portion of the premium as an inducement to purchase insurance

Question 88 which of the following is not required provision in group life policies?

Right to loan

Question 16 What does a 401(k) plan generally provide its participants?

Salary-deferral contributions

Question 7 Which of these is not an example of doing insurance business?

Selling shares of stock

Question 50 What type of life insurance are credit issued as?

Term

Question 64 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 and the company

Question 53 All of these statements about the Commissioner of Insurance are true EXCEPT?

The commissioner must be elected

Question 94 Annuity is terminated prior to beginning of the income payment period, the contract receives

The contract surrender value at that time

Question 40 In a key employee life insurance policy the third-party owner can be all the following EXCEPT

The insured

Question 75 Why would the Insurance Commissioner examine the records of an insurance company?

To determine the solvency of the company

Question 14 in an insurance contract the insurer is the only party who makes a

Unilateral

Question 85 Life and health insurance policies are?

Unilateral contracts

Question 11 How long does an insurance company appointment remain in force?

Until terminated

Question 10 which of the following policies combines investment choices with a form of Term coverage?

Variable universal life

Question 100 which type of life policy contains a monthly mortality charge as well as a self-directed investment choices?

Variable universal life

Question 54 a life insurance policy that provides a policy owner with cash value along with face value amount is called?

Whole life

Question 43 A policy that becomes a modified endowment contract

Will lose many of its tax advantages

Question 26 If you 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

Question 81 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

Question 95 a life insurance application must be signed by all of these, EXCEPT?

beneficiary

Question 30 Credit life insurance is?

insurance issued on a debtor to cover outstanding loan balance

Question 22 All these statements about the waiver of premium provision are correct EXCEPT?

insured must be eligible for Social Security disability for claim to be accepted

Question 51 Which of the following best describes a contingent beneficiary?

person designated by the insurance receive policy proceeds in the event that the primary beneficiary dies before the insured

Question 49 An example of an unfair claims settlement practice is?

turn down a claim without providing the basis of denial

Question 20 when a misrepresentation on a life insurance policy application is discovered what action may an insurance company take?

void the policy only if it is discovered during the contestable period and proven to be material

Question 60 S is covered by a whole life policy. Which insurance products can cover his children?

Child term Rider

Question 86 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

Question 58 On August 6, Submitted an application for a $50,000 life insurance policy and did not pay the initial premium. On August 18, D went to the doctor complaining of chest pain, and some tests were given by the doctor. the life policy was delivered by the producer on August 20th and they explained what had taken place with the doctor. What action should the producer then take?

Collect initial premium along with a signed health statement

Question 31 The phrase "transacting business" includes

Collecting premiums

Question 34 Which of the following is Not included in a life insurance illustration?

Companies mortality table

Question 61 Insurance policies are offered on a take-it-or-leave-it basis, which make them?

Contracts of adhesion

Question 39 which statement regarding the Misstatement of Age provision is considered to be true?

Coverage will be adjusted to reflect the insurance true age if misstatement of age is discovered

Question 32 What is the purpose of the USA Patriot act?

Detect and deter terrorism

Question 92 Two partners own equal shares in a business where the total $1,000,000. if they both commit to the purchase of the life insurance policy that will fund a Buy-sell Agreement, which of the following is TRUE?

Each partner owns a $500,000 policy on their partner's life

Question 90 which of these statements is INCORRECT regarding the federal income tax treatment of Life Insurance?

Entire cast surrender value is taxable

Question 27 what provision in a life insurance policy states that the application is considered part of the contract?

Entire contract provision

Question 74 which provision prevents an insurer from changing the terms of the contract with the policy owner by referring to documents not found within the policy itself?

Entire contract provision

Question 56 How often must an insurance agent license normally be renewed?

Every two years

Question 91 N is a student pilot with a large life insurance policy. which of these features would limit the insurers obligation in the event N was killed while flying as a student pilot?

Exclusion

Question 44 An underwriter determines that an applicant's risk should be recognized due to a health issue. This policy may be issued with a(n)?

Exclusion for the medical condition

Question 25 Which of these provisions is not required in life insurance policies?

Extended term

Question 38 What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years?

Family maintenance policy

Question 8 taking receipt of premiums and holding them for the insurance company is an example of?

Fiduciary responsibility

Question 83 an insurance company organized under New York laws and licensed to do business in Texas is considered a(n)?

Foreign company

Question 52 What is an organization that solicits insurance only to its members?

Fraternal benefit society