Texas life and health Insurance Exam Prep Questions With Answers | 100% Verified

A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the - Policy Loan provision The Consideration clause in a life insurance contract contains what pertinent information? - Amount of premium payments and when they are due What does the insuring agreement in a Life insurance contract establish? - An insurer's basic promise A young, married teacher has two children and owns a Whole Life policy. If the teacher wants an increasing Death Benefit to protect against inflation, the teacher should select which of the following Dividend Options? - Paid-Up Additional Insurance Which of the following statements is CORRECT about accumulated interest earned on dividends from an insurance policy? - It is taxed as ordinary income When can a policyowner change a revocable beneficiary? - anytime K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? - daughter M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son? - revocable K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true? - Proceeds will be paid to P's estate Which statement regarding the Change of Beneficiary provision is true? - The policyowner can change the beneficiary A policyowner's rights are limited under which beneficiary designation? - Irrevocable What is the underlying concept regarding level premiums? - The early years are charged more than what is needed A level premium indicates - the premium is fixed for the entire duration of the contract On a life insurance policy, who is qualified to change the beneficiary designation? - Policyowner J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct? The gross premium is higher on a monthly payment mode as compared to being paid annually The gross premium is lower on a monthly payment mode as compared to being paid annually The cash value from a life policy paid on a monthly basis builds quicker than one paid on an annual basis The face amount of a life policy paid on a monthly basis is higher than one paid on an annual basis - The gross premium is higher on a monthly payment mode as compared to being paid annually An incomplete life insurance application submitted to an insurer will result in which of these actions? - Application will be returned to the writing agent At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid? - At the time of application Any changes made on an insurance application requires the initials of whom? - Applicant An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n) - exclusion for the medical condition In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and - the initial premium Why is an applicant's signature required on a life insurance application? - To attest that the statements on the application are accurate to the best of the applicant's knowledge Which of these factors do NOT play a role in the underwriting of a life insurance policy? Avocations Credit status Marital status Occupation - marital status Before a life insurance policy is issued, which of these components of the contract is required? - Applicant's signature on application An insurance company may NOT reject a prospective insured's life application on the basis of which of the following factors? Height Weight Gender Medical history - gender P completes an application for a $10,000 life policy, but does not give the producer the initial premium. P's coverage becomes effective when - P receives the policy and pays the premium What type of group plan involves employees sharing the cost? - contributory plan A noncontributory group term life plan is characterized by - the entire cost of the plan is paid for by the employer Under a trustee group life policy, who would be eligible for a certificate of coverage? - Employee Which provision is NOT a requirement in a group life policy? - Accidental If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have? - Contributory W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n) Flexible Premium Deferred annuity Variable annuity Immediate annuity Straight Life annuity - Immediate annuity T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this? - Life Annuity with Period Certain Which of these is an element of a Single Premium annuity? - Lump-sum payment The annuity that represents the largest possible monthly payment to an individual annuitant is a(n) - Straight Life annuity Which of these statements concerning an Individual Straight Life annuity is accurate? - Payments are made to an annuitant for life What is considered to be a characteristic of an immediate annuity? - Benefit payments start within one payment period of purchase Which type of contract liquidates an estate through recurrent payments? - Annuity P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase? - Deferred Which of the following annuities pays benefits based on units rather than specific dollar amounts? - A Variable annuity P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy? - An immediate annuity