Texas life insurance guide
if an insured commits suicide when a suicide clause is in effect, an insurance company will take which of the fllowing actions with a beneficiary's claim?
Deny the claim and return the premiums paid
the accelerated death benifit in a life insurance contract can be accessed by which of the following methods?
Having an authorized physician diagnose a terminal illness to the carrier with prognosis of less than one-year life expectancy
a life insurance policyowner may transfer the policyowner's legal rihts and benifits under the policy through either collateral assignment or:
an absolute assignment
all of the following provisions are required ina group life policy EXCEPT
an accidental death and dismemberment provision
which of the following features of a life policy is used to restrict coverage?
an exclusion
If a forty-five year old individual bought an annuity to provide income for life beginning at age sixty-five, the insured did NOT buy
an immediate annnuity
a benificiary who must consent to a change in the beneficiary designation in a life insurance policy is reffered as
an irrevocable benificiary
an application for a life insurance policy that is submitted with the initial premium is legally consider to be
an offer
the primium mode that results in the lowest premiu outlay is
annually
if an insured purchases an annuity from which income is recived, the insured is the
annuitant
An agent may legally share commissions only with
another agent who is licensed in the same line of insurance
What MUST an insurance company use in its advertising?
its true corparated name
able construction company wants to tae out an insurance policy on its president if the president to offset the cost of the replacing president if the president should die prematurely. The type of plicy the company shoild buy is called
key employee
a life insurance agent who is not a life insurance counselor may use which of the following titles in an insurance advertisement
life insurance agent
an accelerated death benifit of a life insurance policy is also known as
living benefit
On May 8, a prospect filled out an application for a life insurance policy but paid no premium. The insurance company approved the application on May 14 and issued the policy on May 15. The producer delivered the policy on May 26 and collected the first premium. The coverage became effective on:
may 26
a policy is overfunded, according to the IRS, the table is classified as which of the following types of policies
modified endowment contract
an insurance company accepts an application containing several unanswered questions and issues the policy. in this situation, the company
must honor the policy issued
an insured, age 30, wants to purchase a whole life policy that will accumulate cash value at a faster rate in the early years of the policy. which of the following statements would be the producer's most appropiate response
"20-pay life will accumute cash value faster"
under the internal revenue code, a portion of the employer-paid premiums of group term life insurance is taxable for an employee whose coverage exceeds what minimum amount?
$50,000
A Credit life policy solid In texas may be issued for MAXIMUM of how many years?
10
in Texas, an annuity contract MUST contain a
15-day grace period provision
a group life insurance policy issued to an employer requires that a MINIMUM of how may empoyees be covered
2
a 30-year-ild prospective insured is considering the purchase of a life insuranc policy. if all the following olicies have the same face amount, which would require the largest annual premium
20-pay-life
j, a 30 year old proposed insured , plansto retire at age 60 and ants to purchase life insurance that offers levrl premiums and life-long protection. If jalso wants the policy to be paid up when j retires, J should buy
30- pay life
AT LEAST what percentage of all continuing education hours must be completed in either a classroom setting or a classroom-equivalent setting per reporting period
50
trditional individual retirement account (IRA) withdrawls are gennerally subject to a tax penalty if they are made before the insured reaches what minimum age?
59 1/2
Under the Nonforfeiture Law, a cash surrender value payment may be deferred by the insurance company for NO LONGER than how many months?
6
in order for a company to make contributory group life life insurance plan avilabe to its employees, what minimum parcantage of the elegible employees must participate in the plan
75%
the commisioner of insurance my issue a temporary agenś license for maximum of how many days?
90
L has a $100,000 life insurance policy with a $10,000 loan outsanding, if L dies prior to paying back the loan, what benifit will L's benificiary receive?
90,000
which of the following parts of a policy is guarenteed to be correct?
A warranty
in a life insurance contract, the consideration given by the applicant in exchange for the promises of the insurance company consist of the insured's stament in the application and which of the followin items?
A written promise to pay all premiums when due
which of the following provison of a life insurance policy will pay a stated amount to an insured if the insured is blinded in an accident?
Accidental death and dismemberent clause
which of the following statements is CORRECT abpout a policy loan against a life insurance contract?
Interest on a loan which is not paid when due is added to the total debt
which of the following policy features permits an insured to pay premiums MORE than once every year
Mode of Premium Provision
when an employer provides noncontributory group term life insurance, which of the following statement is correct
The employer pays the entire cost of the plan
which of the floowing licensees may charge a fee for advising a prospect about a life insurance policy?
a life insurance counselor
which of the following contarcts is purchased with a lump sum and pays a guaranteed income
a single premium annity
when replacing existing life insurance, an agent MUST submit which of the following documents to the replacing insurance company?
a statement signed by the applicant indicating that existing insurance will be replaced
which of the following provisions could double the face amount of insurance if an insued's death occured as the result of an unintended and unforseen event?
accidental death and disemberment (AD&D) provision
the commisioner of insurance is empowerd to perform all of the following duties EXCEPT
act as a public prosecutor of violators of the insurance code
which of the following options is NOT included under the nonforfeiture provison
commisions paid
which of the following is a requiremnet for licensed is renewal if an agent fails to complete continuing education (CE) within the current term
complete CE and pay a $50 per hour fine up to $500 for any deficit contuining education hours
R's life insurance policy lapsed because R did not pay the premium after 60 days. in order to put the policy back in force, R should take which of the following actions
complete an application for reinstatement and submit all back premiums due
an agent recives an usolicited call from a prospective client who wants to purchase a large single premium life policy.
contact the life insurance compay compliance officer to report a red flag concerning possible money laundering
on january 3, an insured accepts delivery of a whole life policy that has an effective date of december 22 of the previous year. The policy contains a six month waiver of premium proviosion. If the insured becomes disabled on january 6 as the result of an accident, and the disability contanious beyond july 6, the insurance company will
continue the coverage and refund the premiums paid during the period of disability
for each transaction, a licensed is required to matain records concerning all of the following types of information EXPECT the
contract issues
which of the following features of a group term life policy enables an individual to leave the groups and continue his or her insurance without providing evidence of insurability
conversion privilage
Life Insurnace on the life of debtor in connection with a loan is reffered to as
credit life
in Insurance, the term "commingling" includes the act of
depositing premiums in a personal account
the commisioner of insurance may examine the records of an insurance company in order to:
determine the solvecy of the company
a client should know that the indexed annuity differs from the fixed annuity in that the index
does not have a fixed interest amount
an insurance company incorpated in Texas is reffered to as a
domestic company
which of thw following sections of a life insurance contract states that the the application is part of the contract
entire the contract provision
an annuity that allow an individual to chooose the annual premium payment amount is
flexible premium
an adjustable life policyowner may take all of the following actions without providing proof of isurability EXCEPT:
increse the face amount
which of the following is NOT an example of insurance fraud?
initiating changes on a policy application
one of the basic concepts of insurance underwriting is that life insurance poliyowner must be insured, a blood relative of the insured, or somene wh would suffer an economic loss if the insured died. This concept is kwnown as:
insurable interest
which of the following statements about a settlement option provision in a life insurance policy is correct
it desbribes various various methods of distributing death benifits to beneficiaries
which of the following is CORRECT regarding variable whle life insurance
it is insurance and securities product
M understates her age in application for a life insurance policy. at m's death the comapny will MOSTLY lekely
pa an ammount based on whats m's premium payments would have purchase if m had given her true age
an insured must take which of the following actions to contaniue q renewable
pay the renewal premium
dividens paid on a life insurance policy are
projected but not guaranteed
the primary purpose of including a suicide provision on a life insurance policy is to:
protec the insurer against the purchase of a policy of contemplation of suicide
a purpose pf the life insurance and annuity replacement rule is to
protect the interest of policyowner
The texas life and Health insirance guaranty association was established to
protect the public from insurance cmpay insolvency
a guranteed insurability provision is best described as a
provision that allows the issuance of additional coverage
al of the following options are examples of nonforfeiture options EXCEPT
renewability
which of the following actions by an insurance company is consider an unfair claims settlement practice?
requiring an insured to give a statement under oath
which of the following is an example of rebatating?
returning a portion of a premium as inducement to purchase insurance
an insurer's underwriter uses medical information obtained on an applicant to determine
risk classificaton
The U.S.A patriot act was assigned into law in response to
september 11, 2001 attack
a stockinsurance company is owned by its
stockholders
which of the following policies insures two individual and is designed to pay a benifit at the second death?
survivorship life
If an insured sustains a loss on a policy sold by an agent through an insurance company that is not authorized to do business in Texas, which of the following would be liable?
the agent and the company
in a third-party ownership arragement which of the following individuals is a party to the contract?
the applicant
which of the following statement is correct about the amount of the life death benifit that the beneficiary must report for federal income tax purpose?
the beneficiary does not need to report any amount
Under a unilateral life insurance policy, which of the following parties makes the legally enforceable promises?
the insurance comany
which of the following fetures is typical of term insurance
the policy expires at the end of the policy period
which of the following persons has the right to change the beficifiary designation on a life insurance policy
the policyowner
which of the folowing statement is correct about a whole life policy?
the policyowner amy borrow against the cash value of the policy
if an insured dies during the contestable period of a life insurance policy, the insurance company will NOT pay the policy proceeds in which of the following situations?
there was a material mispresentation in the application
which of the following staement is CORRECT about statements a proposed insured makes on a life insurance application
they are representations and deemed true to the best of the applicants knowledge
on termination of a group life policy, persons isured on the date of termination are entitled to an individual life policy if which of the following is CORRECT
thye have been insured for at least 5 years
the applicant's signature is required on alife insurance apllication for which of the following reason
to represent that the statements of te application are true to the best of the applicants knowldge
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
the renewal of an insurance license is typically valid for how long
two years
an insurance company that charges different premiums for persons of the same risk class may be found guilty of
unfair discrimination
which of the following types of policies offers the owner investment in money market funds, long-term bonds, or equities
variable life
s and w are businesspartners. each take out a $100,000 life insurance policy on the other, namimg himself
w
An agent whose license has been revoked is required to
wait at least five years before appliying for a new license
an applicant life insurance must be informed of their rigta under the fair credit reporting act at which of the followig timws
when the producer completes the insureds application
licensed insurance agents must notify the Texas Department of insurance of all the following EXCEPT
written premiums