Texas Life and Health Insurance Exam 2023 Questions And Answers with complete solution (Graded A+)

At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? - CORRECT ANS Upon completion of the application Who elects the governing body of a mutual insurance company? - CORRECT ANS policyholders An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the - CORRECT ANS Fair Credit Reporting Act What type of reinsurance contract involves two companies automatically sharing their risk exposure? - CORRECT ANS 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 ANS reserves Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated - CORRECT ANS 1970 - Fair Credit Reporting Act What is the consideration given by an insurer in the Consideration clause of a life policy? - CORRECT ANS Promise to pay a death benefit When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have - CORRECT ANS insurable interest in the proposed insured Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called - CORRECT ANS representations The part of a life insurance policy guaranteed to be true is called a(n) - CORRECT ANS warranty Which of these is NOT a type of agent authority? Express Implied Principal Apparent - CORRECT ANS Principal The Consideration clause of an insurance contract includes - CORRECT ANS 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 ANS In this situation, the proceeds from E's life insurance policy will go to F. Which of the following terms defines the legally enforceable promise in an insurance contract by the insurer? - CORRECT ANS Unilateral When must insurable interest exist for a life insurance contract to be valid? - CORRECT ANS Inception of the contract Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid. - CORRECT ANS conditional Texas