Life Insurance
/13. An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?
$50,000
An insured purchased a variable life insurance policy with a face amount of $50,000. Over the life of the policy, stock performance declined and the cash value fell to $10.000. If the insured dies, how much will be paid out?
$50,000
#5. The minimum number of credits required for partially insured status for Social Security disability benefits is
6 credits.
#11. According to the Entire Contract provision, a policy must contain
A copy of the original application for insurance.
Which of the following is NOT a possible penalty for a violation of the Insurance Code?
A fine up to $100,000
To which of the following situations does the Replacement Regulation apply?
A whole life policy reissued with reduction in cash value
All of the following statements about the continuing education requirement in this state are true EXCEPT
All licensed agents must comply by January 1 of even-numbered years.
#29. Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is licuidated?
Annuity certain
An individual licensed as an agent must notify the TexasDepartment of Insurance, on a monthly basis, of all of the following EXCEPT
Any change in business name.
#45. In classifying a risk, the Home Office underwriting department will look at all of the following EXCEPT
Apolicant's past income.
In Texas, the Commissioner of Insurance is
Appointed by the Governor.
Employer contributions made to a qualified plan
Are subject to vesting requirements.
#31. The full premium was suhmitted with the application for life insurancc, and the policy was issued two wecks later as requesled. When does the policy coverage becorne effective?
As of the application date
The accelerated benefits provision will provide for an carly payment of the dcath bencfit when the insured
Becomes terminally ill.
If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to
Charge a higher premium.
Representations are wrillen or oral statements made by the applicant that are
Considered true to the best of the applicant's knowledge.
The type of insurance sold to a debtor and designed to pay the amount due on a loan if the debtor dies beforethe loan is repaid is called
Credit life.
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 tothis situation?
Decreasing term
The owner of a small restaurant submits a claim to his insurer after a loss due to fire. The insurer's investigation finds a police report that shows that a fire may have been of suspicious origin. The insurer can do which of the following?
Delay an acceptance or rejection decision
All of the following statements concerning dividends are true EXCEPT
Dividend amounts are guaranteed in the policy.
When the insured selects the extended term nonforfeilure oplion, the cash value will be used lo purchase term insurance with what face amount?
Equal to the original policy for as long as tne cash values will purchase.
Items stipulated in the contract that the insurer will notprovide coverage for are found in the
Exclusions clause.
#58. Circulating deceptive sales material to the public is what type of Unfair Trade Practice?
False advertisingThis is considered to be false,
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.
How long must producer maintain records of continuing education course completion?
Four years
Which of the following would NOT be considered rebating?
Giving a clicnt a S25 pen with the insurer's logo curing the insurance apolication process
An individual is purchasing a permanent life insurance policy with a tace value ot $25,000. While this is all the insurance that he can afford at this time, he wants to besure that additional coverage will be available in the future. Which of the following options should be included in the policy?
Guaranteed insurability option
#62. An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?
Illegal under any circumstances
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years.What type of annuity products are they likely to use to provide these benefits?
Immediate annuity
#61. Which of the following occupations would NOT directly help to qualify someone for the office of Commissioner of Insurance?
Insurance agent
#36. Why is an equity indexed annuity considered to be a tixedannuity?
It has a guaranteed minimum interest rate.
Which of the following is correct regarding credit life insurance?
It insures the life of a debtor.
Which of the following statements is TRUE concerning the Accidental Death Rider?
It will pay double or triple the face amount.
An individual covered under a group life insurance policy may convert the policy to any of the following EXCEPT
Level term
#8. Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?
Life income with period certain
#16. The premium of a survivorship life policy compared with that of a joint life policy would be
Lower.
Death benefits payable to a beneficiary under a life insurance policy are generally
Not subject to income taxation by the Federal Government.
During replacement of life insurance, a replacing insurer must do which of the following?
Obtain a list of all life insurance policies that will be replaced
What is the major difference between a stock company and a mutual company?
Ownership
A participating insurance policy may do which of the following?
Pay dividends to the policyowner
#19. An insured purchased a life policy in 2010 and died in 2020. The insurance company discovers at that time that the insured had misstated information about her insurance history on the application. What will the insurer do?
Pay the death benefit
#18. Which of the following is another term for the accumulation period of an annuity?
Pay-in period
In which of the following instances would the premium be tax deductible?
Premiums paid by an employer on a $30,000 group term life insurance plan for emplovees
Another name for a substandard risk classification is
Rated.
#52. When an insured under a life insurance policy died. the designated beneficiary reccived the facc amount of the policy, as well as a refund of all of the premiums paid.Which rider is attached to the policy?
Return of premium
All of the following are considered unfair trade practices in the business of insurance EXCEPT
Sharing commissions.
#16. Upon policy delivery the producer may be required to obtain any of the following EXCEPT
Signed waiver of premium.
#17. Upon policy delivery, the producer may be required to obtain any of the following EXCEPT
Signed waiver of premium.
#57. 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
Which of the following is NOT a licensing requirement for a corporation in the state of Texas?
The business must he able to pay up to $50,000 in the event that it is proven to be negligent.
#2. The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
The death benefit can be increased by providing evidence of insurability.
Which of the following is NOT true regarding a VariableUniversal Life policy?
The death benefit is fixed.
#15. If an insured withdraws a portion of the face amount inthe form or accelerated benefits because of a terminal illness, now will that affect the payable death benefit from the policy?
The death benefit will be smaller.
#39. Who is the owner and who is the beneficiary on a KeyPerson Life Insurance policy?
The employer is the owner and beneficiary.
#24. If an insurer requires a medical examination of an applicant in connection with the application for life insurance. who is responsible for paying the cost of the cxamination?
The insurer
#37. Which of the following determines the cash value of a variable life policy?
The performance of the policy portfolio
If an insurcr issued a policy based on the application that had unanswered questions, which of the following will be TRUE?
The policy will be interpreted as if the insurer waived its right to have an answer on the application.
#ll. Which of the following best defines target premium in a universal life policy?
The recommended amount to keep the policy in force throughout its lifetime
Which of the following is the best reason to purchase lifeinsurance rather than an annuity?
To create an estate
#15. All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT
Upon conversion, the death benefit of the permanent
#10. All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT
Upon conversion, the death benefit of the permanent policy will be reduced by 50%.
Which of the following CANNOT be included along with illustrations used to sell life insurance?
Vanishing premium information
An agent and an applicent for a life insurance policy fill out and sign the application. However, the applicant docs not wish Lo give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?
When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health
If a policy includes a free-look period of at least 10 days, the Buver's Guide may be delivered to the applicant nolater than
With the policy.
#43. Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE?
Withdrawals are not taxable.