LIFE INSURANCE EXAM (TEXAS) NEW AND UPDATED
2026 |WITH VERIFIED QUESTIONS AND ANSWERS!!!
Insurance
(General concept)
- transfers the risk of loss from an individual to an insurer
- based on the principle of indemnity
- based on the principle of risk (risk pooling)
insurable interest
(General Concept)
- must exist at the time of the application
- insuring one's own life, family member, or a business partner
Solicitation and sales presentation
- illustration- presentation of nonguaranteed elements
- buyer's guide is generic information about life polices which must be provided at
the time of application
- policy summary is a description of features and benefits of the policy being
issued and must be provided when the policy is delivered.
Underwriting (Field underwriting (by agent)
- application completed and signed
- agent's report: agent's observation about the application that can assist in
underwriting
-premiums with application and conditional receipts
underwriting ( company underwriting)
,- multiple sources of information: applications, consumer reports, MIB (Medical
Information Burea)
- Risk Classification: 3 types of risk : standard, substandard, preferred
Underwriting (Federal Regulation)
- Fair Credit Reporting Act: protect consumers against circulations of inaccurate or
obsolete information
- USE PATRIOT Act/ Anti-money Laundering and Suspicious Activity Reports Rules
Premium Determination
- 3 key Factors for life insurance: mortality, interest, and expense
- Mode: the more frequently premium is paid, the higher the premium
Policy Issue and Delivery
Effective date of coverage - if the premium is not paid with the application, the
agent must obtain the premium and a statement of continued good health at the
time of the policy delivery
Agent/ Producer
a legal representative of an insurance company; the classification of producers
usually includes agents and brokers' agents are the agents of the insurer
Applicant of proposed insured
a person applying for insurance
Beneficiary
a person who receives the benefits of an insurance policy
Broker
an insurance producer who is not appointed by an insurance company and who
represents the client
Death benefits
the amount paid upon death of the insured in a life insurance policy
, General characteristics (Term life)
- pure protection
- lasts for specific term
- no cash value
Level premium Term (Term life)
level death benefit and level premium
Annually Renewable Term (Term life)
- renews each year without proof of insurability
- premiums increase due to attained age
Decreasing Term (Term life)
coverage gradually decrease at predetermined times; best used when the need
for protection declines from year to year
Increasing Term (Term life)
coverage increase each year
Features of term policies (term life)
- renewable: renew the policy without evidence of insurability
- convertible: right to convert a term policy to a permanent policy without
evidence of insurability
General characteristics (whole life)
- permanent protection
- guaranteed elements (face amount, premium, and cash value) until death or age
100
- level premium
- cash value and other living benefits
Straight life (whole life) (continuous premium)
2026 |WITH VERIFIED QUESTIONS AND ANSWERS!!!
Insurance
(General concept)
- transfers the risk of loss from an individual to an insurer
- based on the principle of indemnity
- based on the principle of risk (risk pooling)
insurable interest
(General Concept)
- must exist at the time of the application
- insuring one's own life, family member, or a business partner
Solicitation and sales presentation
- illustration- presentation of nonguaranteed elements
- buyer's guide is generic information about life polices which must be provided at
the time of application
- policy summary is a description of features and benefits of the policy being
issued and must be provided when the policy is delivered.
Underwriting (Field underwriting (by agent)
- application completed and signed
- agent's report: agent's observation about the application that can assist in
underwriting
-premiums with application and conditional receipts
underwriting ( company underwriting)
,- multiple sources of information: applications, consumer reports, MIB (Medical
Information Burea)
- Risk Classification: 3 types of risk : standard, substandard, preferred
Underwriting (Federal Regulation)
- Fair Credit Reporting Act: protect consumers against circulations of inaccurate or
obsolete information
- USE PATRIOT Act/ Anti-money Laundering and Suspicious Activity Reports Rules
Premium Determination
- 3 key Factors for life insurance: mortality, interest, and expense
- Mode: the more frequently premium is paid, the higher the premium
Policy Issue and Delivery
Effective date of coverage - if the premium is not paid with the application, the
agent must obtain the premium and a statement of continued good health at the
time of the policy delivery
Agent/ Producer
a legal representative of an insurance company; the classification of producers
usually includes agents and brokers' agents are the agents of the insurer
Applicant of proposed insured
a person applying for insurance
Beneficiary
a person who receives the benefits of an insurance policy
Broker
an insurance producer who is not appointed by an insurance company and who
represents the client
Death benefits
the amount paid upon death of the insured in a life insurance policy
, General characteristics (Term life)
- pure protection
- lasts for specific term
- no cash value
Level premium Term (Term life)
level death benefit and level premium
Annually Renewable Term (Term life)
- renews each year without proof of insurability
- premiums increase due to attained age
Decreasing Term (Term life)
coverage gradually decrease at predetermined times; best used when the need
for protection declines from year to year
Increasing Term (Term life)
coverage increase each year
Features of term policies (term life)
- renewable: renew the policy without evidence of insurability
- convertible: right to convert a term policy to a permanent policy without
evidence of insurability
General characteristics (whole life)
- permanent protection
- guaranteed elements (face amount, premium, and cash value) until death or age
100
- level premium
- cash value and other living benefits
Straight life (whole life) (continuous premium)
