Life Insurance Test 2023
L has a $100,000 life insurance policy with a $10,000 loan outstanding. If L dies prior to paying back the loan, what benefit will L's beneficiary receive?
$90,000
Before holding a hearing regarding an agent's unfair or deceptive practice, the commissioner of insurance MUST give the agent how many days' notice ?
10
Under an individual life insurance policy, an insured may assign a MAXIMUM of what percentage of policy ownership?
100%
An insurance agent candidate who has passed the licensing exam has how many months from when the candidate passed to apply for license?
12
The commissioner of insurance may issue a temporary agents license for a MAXIMUM of how many days
180
A credit life policy sold in Texas may be issued for a MAXIMUM of how many years?
20
To renew a general lines, life, accident and health agent's license, the texas department of insurance requires the agent to complete a MINIMUM of how many hours of continuing education per renewal period
24
A retirement plan that may be established by an employee, regardless of any other retirement plan is called a(n)
401(k) plan
replacing insurance company MUST notify the existing company within how many business days after receipt of notification
5
After an agent's license has been revoked, the agent must wait to file another application for a license a minimum of
5 years
An insurance company has the right to defer a policy loan after the loan request for a period to exceed
6 months
What minimum percentage of eligible employees must participate for a company to offer a contributory group life insurance plan?
75
Which of the following annuities ensures level income for the lifetime of two annuitants?
A joint and survivor life annuity
An agent may share commissions with which of the following individuals?
A licensed agent
An insurance company may charge a higher total premium to an insured who pays a policy quarterly rather than annually because the quarterly payment results in
A reduction in the companies interest earnings and an increase in administrative express
An immediate annuity will have
A single premium
Which of the following annuities pays benefits based on units rather than specific dollar amounts?
A variable annuity
A student airplane pilot may buy life insurance at a regular price if the policy that is purchased contains
An aviation exclusion
Which of the following features of a life policy is used to redirect coverage?
An others insurance riders
A customer surrenders a recently issued whole life policy and requests proceeds be made payable to an undivided third party. This would be a red flag potential victim of the
Anti-money laundering rules
Which of the following conditions must be met for a corporation to be granted an agency license ?
At least one officer of the corporation must have an individual agents license for the same line of authority as the agency
In a life policy, insurable interest MUST exist at which of the following times?
At the time of the insured's death
Defamation is BEST described as publishing or circulating which of the following
Brochures maliciously criticizing the financial condition of an insurance company
A payor benefit clause is generally added to a life policy that insures the life of a
Child
A loan officer at a savings and loan association indicated to customers that the officer would look at the loan application more favorably if the customer purchases a mortgage insurance policy from the officer. In this state, such action is considered
Coercion
If the initial premium does not accompany an application for insurance, the producers MUST take which of the following actions when delivering the policy?
Collect the initial premium and complete the inspection report
Which of the following options is NOT included under the nonforfeiture provisions?
Commissions paid
A life insurance illustration is NOT required to include the
Company's mortality table 51%
A life insurer that accepts an incomplete application and issues a policy is obligated to
Complete the application within the constable period
The signed document that starts the free look period is the
Conditional receipt
Which of the following is a contract in which the performance of one or both parties is contingent upon the ... of a particular event?
Conditions
Changing a beneficiary is a right reserved for the
Contract owner
Because life insurance policies are offered on a "take it or leave it" they are referred to as which of the following types of contracts?
Contracts of adhesion
Which of the following statements is CORRECT about the federal income tax law in relation to $100,00 worth of group term life insurance coverage through an employee sponsored plan?
Death benefits are income tax free to named beneficiaries
The purpose of the USA PATRIOT Act is to
Detect criminal activity
The commissioner of insurance may examine the records of an insurance company in order to
Determine the solvency of the company
Two partners in a business worth 100,000 purchase Buy and Sell agreement. Which of the following would most benefit their needs?
Each partner purchases a $100,000 policy on the other
Which of the following actions by an insurance company is considered an unfair claims practice
Failing to acknowledge a claim promptly
An organization that solicits insurance only among its members is known as a(n)
Fraternal benefit society
A policyowner returned a newly issued policy one week after the policy was delivered by the producer and initiated a refund of all premiums paid. Which of the following policy covers the situation described?
Free look period
A policy summary
Highlights the critical parts of the policy issued and describes the coverage, riders, and exclusions
Which of the following statements about a five year old whole life policy is correct?
If extra premiums were charged for special risks, cash, and nonforfeiture option values increased accordingly
Which of the following is NOT an example of insurance fraud?
Initiating changes on a policy application
The waiver of premium provision in a life policy guarantees that the
Insurance company will waive premiums whenever the policy's cash value is sufficient to cover its cost
Which of the following best described credit life insurance
Insurance purchased by a borrower to cover the outstanding balance on an installment loan
The primary purpose of limited pay life policy is to allow an
Insured to pay premiums for a predetermined period of time
R is an insured under a life policy in which R's spouse is the designated beneficiary. Both are involved in a car accident that results in R's death. R's spouse survives ten days and then dies. Under the common disaster provision in the policy the benefit will be paid to the
Insured's estate
Which of the following beneficiary designations may limit a policyowners rights?
Irrevocable
In texas, a domestic company is defined as a company that
Is incorporated and formed in texas
Which of the following statements is CORRECT about the death benefit of a life insurance policy?
It can be assigned by the policyowner.
An example of limited-pay life policy?
Life Paid-up at Age 65
Which of the following requires that an insurance application state that
Medical Information Bureau (MIB) authorization
Insurance records maintained by a licensee must include all of the following information EXCEPT the
Names of the referrals
In general, what amount of personal life insurance premiums is deductible for federal income tax purpose
None
In a life insurance policy, the promise by the insurer to pay certain benefits is the
Nonforfeiture option provision
W applies for life insurance on W's five-year-old child and starts the initial annual premium. The producer....and says that coverage will be effective immediately if the application is approved, because no medical examination is required. Which of the following types of ... did the producer issue?
Nonmedical
Which of the following types of group term life insurance plans does a corporation offer, if the employee — the premium cost?
Nonparticipating
When replacing a life insurance policy an agent MUST provide the applicant with which of the following forms
Notice regarding replacement of life insurance
If an initial premium is not collected when a life insurance application in is written, the insurance becomes effective
On delivery of the policy to the insured and payment of the initial premium to the producer
An insurance agent does NOT have fiduciary responsibilities to:
Other agent
A life insurance policyholder dies of heart failure shortly after the tenth policy anniversary. The insured failed to disclose the condition and medical conditions on the application. In this situation, the insurer will most likely
Pay the face amount
In a life insurance policy, the consideration clause states that the policyowners consideration consists of completing the application and
Paying the initial premium
An immediate annuity can be recognized by which of the following __
Payout begins one payment period after purchase
Consideration paid for individual policies, including policy fees, can be described as
Premiums
The purpose of the Texas Life and Health Insurance guaranty association is to
Provide funds for the payment of claims against an insolvent insurance company
Replacement of life insurance and annuity policies is regulated to protect of the
Purchaser
Which of the following term policies guarantees the insured the right to continue term coverage after expiration of the initial policy period?
Renewable
Group life policies MUST include all of the following provisions EXCEPT
Right to loan proceeds
An underwriter's evaluation of information on a life insurance application is also known as
Risk classification
A producer who discovers that answers to a series of questions on a life insurance application were.. Should take which of the following actions?
Schedule another appointment with the applicant to complete the unanswered questions
All of the following are defined as doing insurance business EXCEPT:
Selling mutual funds
An insurance company must do which of the following to terminate an agent's appointment?
Send notice of the termination to the texas department of insurance
Which of the following policy provisions is designed to protect the insurance company from adverse selection by certain high risk applicant
Settlement options
P is both the policyowner and the insured under a $100,000 whole life policy. The beneficiary is P's mother. When P marries, ownership of the policy is transferred to P's spouse. If P dies without making any changes , the policy proceeds will be payable to P's
Spouse only
Which of the following annuities provides the highest monthly payout?
Straight life annuity
A prospect with limited federal resources, wants to purchase a policy with the highest amount of protection for a temporary period. The producer should advise the prospect to purchase which of the following types of policies?
Term life
A convertible term policy offers which of the following advantages
The insured does not have to provide evidence of insurability when requesting a conversion
Which of the following statements is correct about a renewable term policy?
The insured must provide evidence of insurability only on the first renewal.
Which of the following statements is CORRECT about a limited pay whole life policy?
The premium payment period is shorter than for a straight life policy and more of each premium payment is credited to the policy's cash value.
Which of the following statements is CORRECT about conversion of group term life insurance on termination of employment?
The terminated employee may convert an amount of coverage up to five times the group coverage
Which of the following is TRUE of life settlements?
They involve a change of owner and beneficiary
A policy becomes a modified endowment contract (MWC)M when
Too much premium is paid in the initial policy's years
Under the texas insurance code, an insurance company must pay death benefits for suicide if the policy has been in force for a MINIMUM of
Two years
An insurance company that charges different premiums for persons of the same risk class may be found guilty of
Unfair discrimination
Boycott, coercion, and intimidation that results in the unreasonable restraint of trade are prohibited under the texas insurance code covering
Unfair methods of competition
Which of the following policies allows the policyowner to select where the cash values are invested?
Variable life
Y wants to purchase a policy that allows Y to increase or decrease the premium payment, the premium payment period, and the death benefit of the policy. Which of the following policies offers the flexibility that Y wants?
Variable universal life
Which of the following types of policies provides permanent protection at the lowest annual premium
Whole life
The Z company takes out a key employee policy on its director of operations. Several years later, the employee leaves Z company, Joins A company and is killed in an automobile accident while the Key employee policy is still in force. In this situation, the insurance company will pay the proceeds to which of the following
Z company
A stock insurance company is owned by its
stockholders