Texas Life and Health Insurance Exam Questions with 100% Correct Answers

What type of reinsurance contract involves two companies automatically sharing their risk exposure? Correct Answer Treaty The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called Correct Answer reserves When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have Correct Answer insurable interest Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called Correct Answer representations The part of a life insurance policy guaranteed to be true is called a(n) Correct Answer warranty Which of these is NOT a type of agent authority? Express Implied Principal Apparent Correct Answer Principal The Consideration clause of an insurance contract includes Correct Answer the schedule and amount of premium payments E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? Correct Answer In this situation, the proceeds from E's life insurance policy will go to F. Which term defines the legally enforceable promise in an insurance contract by the insurer? Correct Answer Unilateral Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid. Correct Answer conditional Which of these require an offer, acceptance, and consideration? Correct Answer Contract Which of these is NOT considered to be an element of an insurance contract?