Insurance Test
Boycott, coercion, and intimidation that result in the unreasonable restrain of trade are prohibited under the Texas Insurance Code covering
Unfair methods of competition
In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this?
Unilateral
What type of insurance incorporates flexible premiums and an adjustable death benefit?
Universal life
What action will an insurer take if an interest payment on a policy loan is not made on time?
automatically add the amount of interest due to the loan balance
A life insurance application must be signed by all of these, EXCEPT:
beneficiary
Which of the following does Social Security NOT provide benefits for?
Dismemberment
T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?
$50,000
Before holding a hearing regarding an agent unfair or deceptive practice, the insurance commissioner must give how many days notice?
30
Before holding a hearing regarding an agent's unfair or deceptive practice, the Insurance Commissioner MUST give how many days notice?
30
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
How long does an individual have to "rollover" funds from an IRA or qualified plan?
60 days
Which of the following statements about noncontributory employee group life insurance is FALSE?
A minimum number of employees is required to participate
What does the insuring agreement in a Life insurance contract establish?
An insurer basic promise
What is considered to be a characteristic of an immediate annuity?
Benefit payments start within one payment period of purchase
An agent who tells claimants that their rights may be impaired if they fail to complete a release form within a given period of time could be guilty of
Coercion
A life insurance illustration is NOT required to include the
Company mortality table
What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?
Conversion
Credit life insurance is typically issued with which of the following types of coverage?
Decreasing Term
How are surrender charges deducted in a life policy with a rear-end loaded provision?
Deducted when the policy is discontinued
An insurance company may be judged guilty of false advertising if it?
Exaggerates its dividends in a newspaper advertisement
Which of these statements describe a Modified Endowment Contract (MEC)?
Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract
Term insurance has which of the following characteristic?
Expires at the end of the policy period
What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?
Family Maintenance Policy
What is considered a valid reason for small businesses to insure tha lives of its major shareholders?
Fund a buy sell agreement
Variable life products require a producer to ?
Hold a life insurance license and a securities license
An agent must do which of the following during a sales presentation for a participating life insurance policy?
Include a statement that dividends are NOT guaranteed
Information obtained from a phone conversation to the proposed insured can be found in which of these reports ?
Inspection report
Which of the following Best Describes Credit Life insurance?
Insurance issued on a debtor to cover outstanding balances on installment loans
All of these statements about the Waiver of Premium provision are correct EXCEPT:
Insured must be eligible for social security disability claim to be accepted
All of these settlement option involve the systematic liquidation of the death proceeds in the event of the insured death, EXCEPT:
Interest only
Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE?
It is taxed as ordinary income
An agent who tells a client that dividends are guaranteed may be guilty of
Misrepresentation
A policyowner is allowed to pay premiums more than once a year under which provision?
Mode of Premium
All of these insurance products require an agent to have a proper FINRA securities registration in order to sell them, Except for:
Modified whole life
M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take?
Pay face amount minus the past due premium
Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied 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
On a life insurance policy, who is qualified to change the beneficiary designation?
Policyowner
Group life policies MUST include all of the following provisions EXCEPT
Right to Loan Proceeds
What is the Suicide provision designed to do?
Safeguard the insurer who is contemplating suicide
Which of the following statements is correct about an agent who is taking an insurance application?
The agent should have the applicant initial any changes made on the application
How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AS&D) policy?
The primary beneficiary dies before the insured
At what point does an informal contract become biding?
When one party makes an offer and the other party accepts that offer
The Misstatement of Age provision requires that if the age of the insured is misstated, then any amount payable is
an amount that the premiums paid would have purchased at the current age or ages
Group life insurance policies are generally written as:
annually renewable term
Under Texas insurance law, the term "transacting business" includes
collecting premiums
How are surrender charges deducted in a life policy with a rear end loaded provision?
deducted when the policy is discontinued
An underwriter determined that an applicants risk should be re-categorized due to a health issue. This policy may be issued with an:
exclusion for the medical condition
What kind of special need would a policy owner require with an Adjustable Life insurance policy?
flexible premiums
Which of these is Not considered to be an element of an insurance contract ?
negotiating
If, at the time of an insureds death, the insurance company discovers that the insured age was misstated on the application for life insurance, the company will most likely
pay the policy proceeds in the amount the premiums would have purchased actual age
If, at the time of an insured's death, the insurance company discovers that the insured's age was misstated on the application for life insurance, the company will most likelyWhat kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies
pay the policy proceeds in the amount the premiums would have purchased at the insured's actual age
A limited pay life policy has?
premium payments limited to a specified number of years
Consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine:
probability of making timely premium payments
Statements that made on an insurance application that are believed to be true to the best of the applicant knowledge are called:
representations
Which of the following is an example of rebating?
return a portion of a premium as inducement to purchase insurance
J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used?
revocable
A stock insurance company is owned by its
stockholders
The premiums paid by an employer for his employee's group life insurance are usually considered to be
tax-deductible to the employer
Which statement regarding a KEY EMPLOYEE LIFE policy is NOT true?
the BENEFICIARY IS NAMED BY THE KEY EMPLOYEE