Life Insurance Exam Question (Texas)
Questions and Correct Answers
Which of the following is considered a field underwriter? - correct answers:An agent
When must insurable interest exist in life insurance? - correct answers:Application or issues date
If no receipt is issued at the time application, a statement of good health is usually required at the time
of - correct answers:Policy Delivery
The Medical Information Bureau is - correct answers:A source of medical information to alert insurers to
adverse medical history
A substandard risk compared to a standard risk would pay - correct answers:A higher premium
Which of the following documents describes specific information about policy provisions and benefits? -
correct answers:Policy Summary
All the following may have an insurable interest in the insured EXCEPT - correct answers:Insured's best
friend
Which of the following would be the main source of underwriting information used by the company in
the risk selection process? - correct answers:Application
"90% information comes from the application"
An insured submits the full premium along with a completed application, and the policy is issued 10 days
later. When does the coverage begin? - correct answers:On the date of the application
What is the main responsibility of a company's underwriting unit? - correct answers:Risk selection and
classification( preferred, standard, substandard)
,Which of the following best describes the purpose of the USA PATRIOT Act with regards to the insurance,
what must the agent do? - correct answers:Inform the insurance company
If the agent feels that there could be misrepresentation on the part of the applicant for insurance, what
must the agent do? - correct answers:Inform the insurance company
Representations are statements made by the applicant that are - correct answers:Considered true to the
best of the applicant's knowledge
If an agent fails to obtain an applicant's signature on the insurance application, the agent must - correct
answers:Return the application to the applicant for a signature.
Which of the following includes information regarding a person's credit, character, reputation, and
habits? - correct answers:Consumers report
What is insurance? - correct answers:is a contract in which one party (the insurance company) agrees to
idemnify (make whole) the insured party against loss, damage or liability arising from an unknown event.
Representation are statements made by the applicant for insurance that are - correct answers:True to
the best of the applicant's knowledge.
Insurable interest must exist at the time of - correct answers:application
A warranty is an - correct answers:absolutely true statement
If an insurer issues a policy with unanswered questions on the application, the insurer has given up the
right to use the missing information in underwriting. - correct answers:True
The agent's report includes the agent's personal observation concerning the proposed insured. - correct
answers:True
,The primary purpose of an investigative consumer report is to assess an applicant's - correct
answers:Lifestyle and habits
In a life insurance policy, when must insurable interest exist? - correct answers:A valid insurable interest
may exist between the policyowners and the insured when they policy is insuring any of the following
1. policyowner's own life
2. the life of a family member (a spouse or a close blood relative)
3. The life of a business partner, key employees, or someone who has a financial obligation to the policy
owner (such as debtor to a creditor)
Insurance is the transfer of risk - correct answers:True
What type of receipt is given to the applicant who submits the application with the premium payment? -
correct answers:conditional
A document that provides information for underwriting purposes is the... - correct answers:Application
A person of average physical condition and lifestyles would receive which underwriting classification? -
correct answers:Standard
When the insured purchase a new home, he wanted to purchase a life insurance policy that would
protect his family against losing it should he die before the mortgage was paid. Which of the following
polices is best suitable for that need? - correct answers:Decreasing term
An annually renewable term policy - correct answers:maintains a level premium each year
Whose life expectancy is taken into consideration in an annuity? - correct answers:Annuitant
An individual inherited a large sum of money at age 40 and wanted to use it to provide a guaranteed
income after his retirement at age 60. Which of the following types of annuities would best meet this
need? - correct answers:Deferred
, Which of the following would be considered a disadvantage of term insurance? - correct answers:If the
insured dies after the end of the term, there is no death benefits to the beneficiary
The renewable provision allows the policyowner to renew the coverage at the expiration date. - correct
answers:Without evidence of insurability
Which type of life insurance policy generates immediate cash value? - correct answers:Single premium
The time period during which an annuitant contributes to an annuity is called - correct answers:The
accumulation period
Which of the following is an example of a limited- pay life policy? - correct answers:Life paid- up at age
65 (higher premium)
An individual owns a adjustable life policy. Sometimes in the future he wants to increase the death
benefit. Which of the following statement is correct regarding the death benefits increases? - correct
answers:It can be increased by providing evidence of insurability.
Which of the following statements is true regarding a universal life policy? - correct answers:It is issued
without a guaranteed interest rate
With a traditional whole life policy, the death benefit - correct answers:remains constant overtime
Whose life expectancy is taken into consideration in annuity? - correct answers:Annuitant
An insured receives a monthly summary of his life insurance policy. The cash value this month is
significantly lower than it was last month. What type of policy is it? - correct answers:Variable
Which of the following is true regarding a joint life policy ? - correct answers:Premium is based on the
average age of the insureds
Questions and Correct Answers
Which of the following is considered a field underwriter? - correct answers:An agent
When must insurable interest exist in life insurance? - correct answers:Application or issues date
If no receipt is issued at the time application, a statement of good health is usually required at the time
of - correct answers:Policy Delivery
The Medical Information Bureau is - correct answers:A source of medical information to alert insurers to
adverse medical history
A substandard risk compared to a standard risk would pay - correct answers:A higher premium
Which of the following documents describes specific information about policy provisions and benefits? -
correct answers:Policy Summary
All the following may have an insurable interest in the insured EXCEPT - correct answers:Insured's best
friend
Which of the following would be the main source of underwriting information used by the company in
the risk selection process? - correct answers:Application
"90% information comes from the application"
An insured submits the full premium along with a completed application, and the policy is issued 10 days
later. When does the coverage begin? - correct answers:On the date of the application
What is the main responsibility of a company's underwriting unit? - correct answers:Risk selection and
classification( preferred, standard, substandard)
,Which of the following best describes the purpose of the USA PATRIOT Act with regards to the insurance,
what must the agent do? - correct answers:Inform the insurance company
If the agent feels that there could be misrepresentation on the part of the applicant for insurance, what
must the agent do? - correct answers:Inform the insurance company
Representations are statements made by the applicant that are - correct answers:Considered true to the
best of the applicant's knowledge
If an agent fails to obtain an applicant's signature on the insurance application, the agent must - correct
answers:Return the application to the applicant for a signature.
Which of the following includes information regarding a person's credit, character, reputation, and
habits? - correct answers:Consumers report
What is insurance? - correct answers:is a contract in which one party (the insurance company) agrees to
idemnify (make whole) the insured party against loss, damage or liability arising from an unknown event.
Representation are statements made by the applicant for insurance that are - correct answers:True to
the best of the applicant's knowledge.
Insurable interest must exist at the time of - correct answers:application
A warranty is an - correct answers:absolutely true statement
If an insurer issues a policy with unanswered questions on the application, the insurer has given up the
right to use the missing information in underwriting. - correct answers:True
The agent's report includes the agent's personal observation concerning the proposed insured. - correct
answers:True
,The primary purpose of an investigative consumer report is to assess an applicant's - correct
answers:Lifestyle and habits
In a life insurance policy, when must insurable interest exist? - correct answers:A valid insurable interest
may exist between the policyowners and the insured when they policy is insuring any of the following
1. policyowner's own life
2. the life of a family member (a spouse or a close blood relative)
3. The life of a business partner, key employees, or someone who has a financial obligation to the policy
owner (such as debtor to a creditor)
Insurance is the transfer of risk - correct answers:True
What type of receipt is given to the applicant who submits the application with the premium payment? -
correct answers:conditional
A document that provides information for underwriting purposes is the... - correct answers:Application
A person of average physical condition and lifestyles would receive which underwriting classification? -
correct answers:Standard
When the insured purchase a new home, he wanted to purchase a life insurance policy that would
protect his family against losing it should he die before the mortgage was paid. Which of the following
polices is best suitable for that need? - correct answers:Decreasing term
An annually renewable term policy - correct answers:maintains a level premium each year
Whose life expectancy is taken into consideration in an annuity? - correct answers:Annuitant
An individual inherited a large sum of money at age 40 and wanted to use it to provide a guaranteed
income after his retirement at age 60. Which of the following types of annuities would best meet this
need? - correct answers:Deferred
, Which of the following would be considered a disadvantage of term insurance? - correct answers:If the
insured dies after the end of the term, there is no death benefits to the beneficiary
The renewable provision allows the policyowner to renew the coverage at the expiration date. - correct
answers:Without evidence of insurability
Which type of life insurance policy generates immediate cash value? - correct answers:Single premium
The time period during which an annuitant contributes to an annuity is called - correct answers:The
accumulation period
Which of the following is an example of a limited- pay life policy? - correct answers:Life paid- up at age
65 (higher premium)
An individual owns a adjustable life policy. Sometimes in the future he wants to increase the death
benefit. Which of the following statement is correct regarding the death benefits increases? - correct
answers:It can be increased by providing evidence of insurability.
Which of the following statements is true regarding a universal life policy? - correct answers:It is issued
without a guaranteed interest rate
With a traditional whole life policy, the death benefit - correct answers:remains constant overtime
Whose life expectancy is taken into consideration in annuity? - correct answers:Annuitant
An insured receives a monthly summary of his life insurance policy. The cash value this month is
significantly lower than it was last month. What type of policy is it? - correct answers:Variable
Which of the following is true regarding a joint life policy ? - correct answers:Premium is based on the
average age of the insureds
