TEXAS LIFE AND HEALTH UPDATED FINAL PAPER
QUESTIONS AND ANSWERS GRADED A+
✔✔All of these statements about Equity Indexed Life Insurance are correct EXCEPT
- Cash value has a minimum rate of accumulation
- If the gain on the index goes beyond the policy's minimum rate of return, the cash
value will mirror that of the index
-The premiums can be lowered or raised, based on investment performance
-Tied to an equity index such as the S&P 500 - ✔✔The premiums can be lowered or
raised, based on investment performance
✔✔What type of life insurance incorporates flexible premiums and an adjustable death
benefit? - ✔✔Universal Life
✔✔What type of life policy covers 2 lives and pays the face amount after the first one
dies? - ✔✔Joint Life Policy
✔✔Life insurance that covers an insured's whole life with level premiums paid over a
limited time is called - ✔✔Limited-Pay Life
✔✔What kind of life insurance product covers children under their parent's policy? -
✔✔Term rider
✔✔P is looking to purchase a life insurance policy that will pay a stated monthly income
to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of
that 20 year period. What type of policy should P purchase? - ✔✔Family Maintenance
policy
✔✔Which of the following statements about a Variable Whole Life policy is CORRECT?
-It provides a minimum guaranteed Death benefit
- It is a combination of a Limited Period Endowment and a Decreasing Term policy
- Its premiums and benefits are variable
- It has a guaranteed rate of return - ✔✔It provides a minimum guaranteed Death
benefit
✔✔Credit Life insurance is - ✔✔issued in an amount not to exceed the amount of the
loan
✔✔When does Term Life expire? - ✔✔At the end of the policy period
✔✔What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's
death? - ✔✔Face amount plus the policy's cash value
, ✔✔A life policy with a death benefit that can fluctuate according to the performance of
its underlying investment portfolio is referred to as - ✔✔Variable Life
✔✔What type of life policy covers two people and pays upon the death of the last
insured? - ✔✔Survivorship
✔✔T has a term policy that allows him to continue the coverage after expiration of the
initial policy period. What type of term coverage is this? - ✔✔Renewable
✔✔F needs life insurance that provides coverage for only a limited amount of time with
a death benefit that changes regularly according to a schedule. What kind of policy is
needed? - ✔✔Decreasing term policy
✔✔G purchased a Family Income policy at age 40, The policy has a 20-year rider
period. If G were to die at age 50, how long would G's family receive an income? -
✔✔10 years
✔✔The most important factor to consider when determining whether to convert term
insurance at the insured's attained age or the insured's original age is - ✔✔the cost
✔✔When an insurer issues a policy that refuses to cover certain risks, this is referred to
as a(n) - ✔✔exclusions
✔✔Which statement regarding the Misstatement of Age provision is considered to be
true?
-Coverage will be adjusted to reflect the insured's true age if a misstatement of age is
discovered
-Requires that a new policy must be applied for if a misstatement of age is found on the
current policy
-Misstatement of Age provision is valid only during the contestable period
-Insurer may void the policy if a misstatement of age is discovered - ✔✔Coverage will
be adjusted to reflect the insured's true age if a misstatement of age is discovered
✔✔J let her life insurance policy lapse 8 months ago due to nonpayment. She can
reestablish coverage under which of the following provisions? - ✔✔Reinstatement
provision
✔✔T took out a $50,000 life insurance policy with an Accidental Death and
Dismemberment rider. Five years later, T commits suicide. How much will the insurer
pay? - ✔✔50,000
QUESTIONS AND ANSWERS GRADED A+
✔✔All of these statements about Equity Indexed Life Insurance are correct EXCEPT
- Cash value has a minimum rate of accumulation
- If the gain on the index goes beyond the policy's minimum rate of return, the cash
value will mirror that of the index
-The premiums can be lowered or raised, based on investment performance
-Tied to an equity index such as the S&P 500 - ✔✔The premiums can be lowered or
raised, based on investment performance
✔✔What type of life insurance incorporates flexible premiums and an adjustable death
benefit? - ✔✔Universal Life
✔✔What type of life policy covers 2 lives and pays the face amount after the first one
dies? - ✔✔Joint Life Policy
✔✔Life insurance that covers an insured's whole life with level premiums paid over a
limited time is called - ✔✔Limited-Pay Life
✔✔What kind of life insurance product covers children under their parent's policy? -
✔✔Term rider
✔✔P is looking to purchase a life insurance policy that will pay a stated monthly income
to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of
that 20 year period. What type of policy should P purchase? - ✔✔Family Maintenance
policy
✔✔Which of the following statements about a Variable Whole Life policy is CORRECT?
-It provides a minimum guaranteed Death benefit
- It is a combination of a Limited Period Endowment and a Decreasing Term policy
- Its premiums and benefits are variable
- It has a guaranteed rate of return - ✔✔It provides a minimum guaranteed Death
benefit
✔✔Credit Life insurance is - ✔✔issued in an amount not to exceed the amount of the
loan
✔✔When does Term Life expire? - ✔✔At the end of the policy period
✔✔What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's
death? - ✔✔Face amount plus the policy's cash value
, ✔✔A life policy with a death benefit that can fluctuate according to the performance of
its underlying investment portfolio is referred to as - ✔✔Variable Life
✔✔What type of life policy covers two people and pays upon the death of the last
insured? - ✔✔Survivorship
✔✔T has a term policy that allows him to continue the coverage after expiration of the
initial policy period. What type of term coverage is this? - ✔✔Renewable
✔✔F needs life insurance that provides coverage for only a limited amount of time with
a death benefit that changes regularly according to a schedule. What kind of policy is
needed? - ✔✔Decreasing term policy
✔✔G purchased a Family Income policy at age 40, The policy has a 20-year rider
period. If G were to die at age 50, how long would G's family receive an income? -
✔✔10 years
✔✔The most important factor to consider when determining whether to convert term
insurance at the insured's attained age or the insured's original age is - ✔✔the cost
✔✔When an insurer issues a policy that refuses to cover certain risks, this is referred to
as a(n) - ✔✔exclusions
✔✔Which statement regarding the Misstatement of Age provision is considered to be
true?
-Coverage will be adjusted to reflect the insured's true age if a misstatement of age is
discovered
-Requires that a new policy must be applied for if a misstatement of age is found on the
current policy
-Misstatement of Age provision is valid only during the contestable period
-Insurer may void the policy if a misstatement of age is discovered - ✔✔Coverage will
be adjusted to reflect the insured's true age if a misstatement of age is discovered
✔✔J let her life insurance policy lapse 8 months ago due to nonpayment. She can
reestablish coverage under which of the following provisions? - ✔✔Reinstatement
provision
✔✔T took out a $50,000 life insurance policy with an Accidental Death and
Dismemberment rider. Five years later, T commits suicide. How much will the insurer
pay? - ✔✔50,000
