Exam FX Texas Life and Health
Insurance Questions and Answers |
Latest Version | 2025/2026 | Correct &
Verified
Who is the policyowner in a life insurance contract?
✔✔The person who owns and controls the policy.
Who must have insurable interest at policy issuance in Texas?
✔✔The policyowner.
What is the free-look period for life insurance policies in Texas?
✔✔A minimum of 10 days to review and cancel the policy.
What happens if a policy is canceled during the free-look period?
✔✔All premiums paid are refunded.
What is a beneficiary?
✔✔The person or entity designated to receive policy proceeds.
What is a contingent beneficiary?
✔✔A secondary recipient if the primary beneficiary cannot receive benefits.
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,What is the incontestability clause?
✔✔A provision limiting the insurer’s ability to void a policy after a set time.
How long is the incontestability period in Texas life insurance policies?
✔✔Two years from policy issue.
What does the suicide clause state?
✔✔No death benefit is paid if suicide occurs within a specified period.
How long is the suicide exclusion period in Texas?
✔✔Two years from policy issue.
What is cash value in a life insurance policy?
✔✔The savings component that accumulates over time.
Which type of life insurance builds cash value?
✔✔Permanent life insurance.
What is term life insurance?
✔✔Life insurance providing coverage for a specific period.
What happens at the end of a term life policy?
2
,✔✔Coverage expires unless renewed or converted.
What is conversion privilege?
✔✔The right to convert term insurance to permanent insurance.
What is a policy loan?
✔✔Money borrowed against the policy’s cash value.
What happens if a policy loan is unpaid at death?
✔✔The loan balance is deducted from the death benefit.
What is a grace period?
✔✔Time allowed to pay a premium after its due date.
What is the minimum grace period for life insurance in Texas?
✔✔31 days.
What happens if a policy lapses during the grace period?
✔✔Coverage remains in force.
What is nonforfeiture?
✔✔Protection of cash value if premiums stop.
3
, What is a reduced paid-up option?
✔✔A smaller fully paid policy using existing cash value.
What is extended term insurance?
✔✔Term coverage using cash value for a limited time.
What is whole life insurance?
✔✔Permanent insurance with fixed premiums and guaranteed benefits.
What is universal life insurance?
✔✔Flexible premium life insurance with adjustable benefits.
What is variable life insurance?
✔✔Life insurance with investment-based cash values.
Who regulates insurance in Texas?
✔✔The Texas Department of Insurance.
What is an insurance producer?
✔✔An individual licensed to sell insurance.
4
Insurance Questions and Answers |
Latest Version | 2025/2026 | Correct &
Verified
Who is the policyowner in a life insurance contract?
✔✔The person who owns and controls the policy.
Who must have insurable interest at policy issuance in Texas?
✔✔The policyowner.
What is the free-look period for life insurance policies in Texas?
✔✔A minimum of 10 days to review and cancel the policy.
What happens if a policy is canceled during the free-look period?
✔✔All premiums paid are refunded.
What is a beneficiary?
✔✔The person or entity designated to receive policy proceeds.
What is a contingent beneficiary?
✔✔A secondary recipient if the primary beneficiary cannot receive benefits.
1
,What is the incontestability clause?
✔✔A provision limiting the insurer’s ability to void a policy after a set time.
How long is the incontestability period in Texas life insurance policies?
✔✔Two years from policy issue.
What does the suicide clause state?
✔✔No death benefit is paid if suicide occurs within a specified period.
How long is the suicide exclusion period in Texas?
✔✔Two years from policy issue.
What is cash value in a life insurance policy?
✔✔The savings component that accumulates over time.
Which type of life insurance builds cash value?
✔✔Permanent life insurance.
What is term life insurance?
✔✔Life insurance providing coverage for a specific period.
What happens at the end of a term life policy?
2
,✔✔Coverage expires unless renewed or converted.
What is conversion privilege?
✔✔The right to convert term insurance to permanent insurance.
What is a policy loan?
✔✔Money borrowed against the policy’s cash value.
What happens if a policy loan is unpaid at death?
✔✔The loan balance is deducted from the death benefit.
What is a grace period?
✔✔Time allowed to pay a premium after its due date.
What is the minimum grace period for life insurance in Texas?
✔✔31 days.
What happens if a policy lapses during the grace period?
✔✔Coverage remains in force.
What is nonforfeiture?
✔✔Protection of cash value if premiums stop.
3
, What is a reduced paid-up option?
✔✔A smaller fully paid policy using existing cash value.
What is extended term insurance?
✔✔Term coverage using cash value for a limited time.
What is whole life insurance?
✔✔Permanent insurance with fixed premiums and guaranteed benefits.
What is universal life insurance?
✔✔Flexible premium life insurance with adjustable benefits.
What is variable life insurance?
✔✔Life insurance with investment-based cash values.
Who regulates insurance in Texas?
✔✔The Texas Department of Insurance.
What is an insurance producer?
✔✔An individual licensed to sell insurance.
4
