Life Agent License
An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?
$100,000
The commissioner of insurance issues a cease and desist order and immediately receives a request for the charges to be reviewed in a hearing. Within what number of days must the hearing be held?
10
An insurer must acknowledge receipt of a Notice or Claim within how many days?
15
How long is the incontestable period in a group life insurance policies issued in Texas?
2 years
If an agent has completed 35 hours of continuing education in one renewal period, how many CE hours will the agent have to complete in the next renewal period?
24
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
If an agent suspects that insurance fraud is being committed, within how many days must the agent notify the Insurance Fraud Unit of the Department of Insurance?
30 days
How long must producer maintain records of continuing education course completion?
4 years
The insurance commissioner may examine the affairs of any insurer as often as necessary, but not less frequently than once every
5 years
A Straight Life policy has what type of premium?
A level annual premium for the life of the insured
Which of the following persons is required to hold a producer license
A person who negotiates insurance contracts
An individual has been diagnosed with Alzheimer's diseases. He is insured under a life insurance policy with the accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefits?
A portion of the benefit up to a limit is tax free; the rest is taxable income.
The term "illustration" in a life insurance policy refers to
A presentation of nonguaranteed elements of a policy.
In Texas, the Commissioner of Insurance is
Appointed by the governor
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
As of the application date
A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?
Automatic premium loan
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claim. The company is guilt of
Misrepresentation
Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?
Making comparisons between different policies
Social Security was created to provide all of the following benefits EXCEPT
Unemployment income
Variable Whole Life insurance is based on what type of premium?
Level fixed
Which of the following is an example of a limited-pay life policy?
Life Paid-up at Age 65
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Cash option
What does "liquidity" refer to in a life insurance policy?
Cash values can be borrowed at any time
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated
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.
Which of the following is NOT allowed in credit life insurance?
Creditor requiring that a debtor buys insurance from a certain insurer
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
Which of the following terms describe making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance?
Defamation
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?
Depreciation period
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?
Equal to the original policy for as long as the cash values will purchase.
If a change needs to be made to the application for insurance, the agent may do all of the following EXCEPT
Erase the incorrect answer and record the correct answer.
When an employee offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called a(n)
Executive bonus
An agent selling variable annuities must be registered with
FINRA
Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?
Family term rider
When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?
Fixed amount settlement
All of the following are dividend options EXCEPT
Fixed period installments
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid
For 20 years or until death, whichever occurs first.
Which of the following insurance providers must be nonprofit and sell insurance only to its members?
Fraternal
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
To become a Texas insurance agent, an individual must
Have passed a licensing exam within the 12 months before applying.
Which of the following must be included in all life insurance advertisements?
Identity of the actual insurer
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
Which of the following is a TRUE statement about a temporary license issued by the state?
It can only be issued once in any 6-month period.
Which of the following is true about the mandatory free look in a Life insurance policy?
It commences when the policy is delivered
Which of the following is TRUE of a qualified plan?
It has a tax benefit for both employer and employee.
What is the purpose of a conditional receipt?
It is intended to provide coverage on a date earlier than the date of the issuance of the policy.
Which of the following best describes annually renewable term insurance?
It is level term insurance
In which of the following situations is it legal to limit coverage based on marital status?
It is never legal to limit coverage based on marital status
Which of the following is NOT true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity.
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
Which of the following documents must be provided to the policyowner or applicant during policy replacement?
Notice Regarding Replacement
A participating insurance policy may do which of the following?
Pay dividends to the policyowner
A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will
Pay the policy proceeds only if it would have issued the policy.
All of the following are mandatory life insurance policy provisions EXCEPT
Policy backdating
What describes the specific information about a policy?
Policy summary
Who can request changes in premium payments, face value, loans, and policy plans?
Policyowner
Which of the following will be included in a policy summary?
Premium amounts and surrender values
All of the following are requirements for an individual to be licensed EXCEPT
Provide a financial statement
All of the following are true regarding rebates EXCEPT
Rebates are allowed if it's in the best interest of the client.
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
If an agent fails to obtain the applicant's signature on the application, the agent must
Return the application to the applicant for a signature.
Which of the following best details the underwriting process for life insurance?
Selection, classification, and rating of risks
An insurance application cannot ask about which of the following information about an applicant?
Sexual Orientation
An IRA purchased by a small employer to cover employees is known as a
Simplified Employee Pension Plan
Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?
Size of each installment
A license may NOT be denied, suspended, or revoked if the licensee
Submits an unsigned insurance policy application.
Nonforfeiture values guarantee which of the following for the policyowner?
That the cash value will not be lost.
The initial amount of credit life insurance may NOT exceed
The amount to be repaid under the contract
Which of the following is NOT true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner.
Which of the following would qualify as a competent party in a insurance contract?
The applicant had a prior felony conviction.
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?
The date of medical exam
If an applicant for a life insurance policy and the potential insured are two different people, what would be the underwriter's main concern?
The existence of insurable interest between the applicant and the insured
A life insurance policy does not have a war clause. If the insured is killed during a time of war, what will the beneficiary receive from the policy?
The full death benefit
An employee is insured under her employer's group life plan. If she terminated her group coverage, which of the following statements is INCORRECT?
The insured may choose to convert to term or permanent individual coverage.
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?
The insured may renew the policy for another 10 years, but at a higher premium rate.
An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?
The insurer will pay the full Death Benefit to the beneficiary.
What is the advantage of reinstating a policy instead of applying for a new one?
The original age is used for premium determination
If an insured continually uses the automatic premium loan option to pay the policy premium,
The policy will terminate when the cash value is reduced to nothing
Which is true about spouse term riders?
The rider is usually level term insurance.
All of the following statements apply to temporary license EXCEPT
They may be renewed.
All of the following are requirements for life insurance illustrations EXCEPT
They must be part of the contract.
All of the following are true regarding the guaranteed insurability rider EXCEPT
This rider is available to all insureds with no additional premium.
What is the main purpose of the regulation on life insurance policy illustrations?
To help customers make educated decisions in buying life insurance
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
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
An applicant properly notifies her insurer of a straightforward claim, but the insurer waits an exceedingly long time to process it. Which of the below terms best describes the behavior of the insurer?
Unfair claim settlement practice
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?
Universal Life - Option A
Which of the following CANNOT be included along with illustrations used to sell life insurance?
Vanishing premium information
What is the name of the insured who enters into a viatical settlement?
Viator
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
When transacting business in this state an insurer formed under the laws of another country is known as a/an
alien insurer
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be
authorized
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?
conditional
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT
conditions
All of the following statements are true regarding tax-qualified annuities EXCEPT
employer contributions are not tax deductible
An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?
illegal
What is the major difference between a stock company and a mutual company?
ownership
An absolute assignment is a
transfer of all ownership rights in a policy
Upon the submission of a death claim under a life insurance policy, when should the insurer pay the policy benefit?
within 2 months