TEXAS LIFE INSURANCE EXAM
QUESTIONS WITH COMPLETE
ANSWERS
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 - Answer-P receives the policy
and pays the premium
A potential client, age 40, would like to purchase a Whole Life policy that will
accumulate cash value at a faster rate in the early years of the policy. Which of these
statements made by the producer would be carrer? - Answer-20-Pay Life accumulates
cash value faster than Straight Life
How does an indexed annuity differ from a fixed annuity ? - Answer-Indexed annuity
owners receive credited interest tied to the fluctuations of the linked index
During a sales presentation for a participating life insurance policy, an agent MUST -
Answer-make a prospect understand that dividends are NOT guaranteed
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an
irrevocable eneficiary. What action will the insurance company take if I requests a
change of beneficiary? - Answer-request of the change will be refused
Which provision allows the policyowner to change a term life policy to a permanent one
without providing proof of good health? - Answer-conversion
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? - Answer-renewable
Which of the following is NOT a required provision in group life policies? - Answer-Right
to loan
The Insurance Commissioner must give how many days notice prior to holding a
hearing regarding an agent's unfair or deceptive practice? - Answer-30
The Accelerated Death Benefit provision in a life insurance policy is also known as
a(n) ) - Answer-Living Benefit
In Texas, an individual life insurance policy is required to have a grace period of -
Answer-31 days
Which statement is correct regarding the premium payment schedule for whole life
policies? - Answer-Premiums are payable throughout the insured's lifetime/ coverage
lasts until death of the insured
, Company Z has a Cross Purchase Buy-Sell Agreement in place among its three
founding partners. If the agreement is funded with individual life insurance, what would it
require? - Answer-Each partner must own a policy on the other partners
Why would the Insurance Commissioner examine the records of an insurance
company? - Answer-To determine the solvency of the company
Which of the following features of a group Term Life policy enables an individual to
leave the group and continue his or her insurance without providing evidence of
insurability? - Answer-Conversion privilege
Taking receipt of premiums and holding them for the insurance company is an example
of: - Answer-fiduciary responsibility
K buys a policy where the premium stays fixed for the first 5 years. The premium then
increases in year 6 and stays level thereafter, all the while the death benefit remains the
same. What kind of policy is this? - Answer-Modified Whole Life
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's
death? - Answer-Face amount plus the policy's cash value
In regards to representations or warranties, which of these statements is TRUE? -
Answer-If material to the risk, false representations will void a policy
What provision in a life insurance policy states that the application is considered part of
the contract? - Answer-Entire Contract provision
J is 35-years old and looking to purchase a whole life insurance policy. Which of the
following types of policies will provide the most rapid growth of cash value? - Answer-
20-pay life
Which of the following statements about accumulated interest eared on dividends from
an insurance policy is TRUE? - Answer-It is taxed as ordinary income
A life insurance policy which ensures that the premium will be paid if the insured
becomes disabled has what kind of rider attached? - Answer-Waiver of Premium
Which of the following is a requirement for obtaining a Texas insurance agent's license?
- Answer-Be honest, trustworthy, and reliable
Which of the following groups may NOT be insured by a group life insurance policy? -
Answer-Individuals who are related by blood
The amount of coverage on a group credit life policy is limited to - Answer-the insured's
total loan value
QUESTIONS WITH COMPLETE
ANSWERS
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 - Answer-P receives the policy
and pays the premium
A potential client, age 40, would like to purchase a Whole Life policy that will
accumulate cash value at a faster rate in the early years of the policy. Which of these
statements made by the producer would be carrer? - Answer-20-Pay Life accumulates
cash value faster than Straight Life
How does an indexed annuity differ from a fixed annuity ? - Answer-Indexed annuity
owners receive credited interest tied to the fluctuations of the linked index
During a sales presentation for a participating life insurance policy, an agent MUST -
Answer-make a prospect understand that dividends are NOT guaranteed
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an
irrevocable eneficiary. What action will the insurance company take if I requests a
change of beneficiary? - Answer-request of the change will be refused
Which provision allows the policyowner to change a term life policy to a permanent one
without providing proof of good health? - Answer-conversion
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? - Answer-renewable
Which of the following is NOT a required provision in group life policies? - Answer-Right
to loan
The Insurance Commissioner must give how many days notice prior to holding a
hearing regarding an agent's unfair or deceptive practice? - Answer-30
The Accelerated Death Benefit provision in a life insurance policy is also known as
a(n) ) - Answer-Living Benefit
In Texas, an individual life insurance policy is required to have a grace period of -
Answer-31 days
Which statement is correct regarding the premium payment schedule for whole life
policies? - Answer-Premiums are payable throughout the insured's lifetime/ coverage
lasts until death of the insured
, Company Z has a Cross Purchase Buy-Sell Agreement in place among its three
founding partners. If the agreement is funded with individual life insurance, what would it
require? - Answer-Each partner must own a policy on the other partners
Why would the Insurance Commissioner examine the records of an insurance
company? - Answer-To determine the solvency of the company
Which of the following features of a group Term Life policy enables an individual to
leave the group and continue his or her insurance without providing evidence of
insurability? - Answer-Conversion privilege
Taking receipt of premiums and holding them for the insurance company is an example
of: - Answer-fiduciary responsibility
K buys a policy where the premium stays fixed for the first 5 years. The premium then
increases in year 6 and stays level thereafter, all the while the death benefit remains the
same. What kind of policy is this? - Answer-Modified Whole Life
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's
death? - Answer-Face amount plus the policy's cash value
In regards to representations or warranties, which of these statements is TRUE? -
Answer-If material to the risk, false representations will void a policy
What provision in a life insurance policy states that the application is considered part of
the contract? - Answer-Entire Contract provision
J is 35-years old and looking to purchase a whole life insurance policy. Which of the
following types of policies will provide the most rapid growth of cash value? - Answer-
20-pay life
Which of the following statements about accumulated interest eared on dividends from
an insurance policy is TRUE? - Answer-It is taxed as ordinary income
A life insurance policy which ensures that the premium will be paid if the insured
becomes disabled has what kind of rider attached? - Answer-Waiver of Premium
Which of the following is a requirement for obtaining a Texas insurance agent's license?
- Answer-Be honest, trustworthy, and reliable
Which of the following groups may NOT be insured by a group life insurance policy? -
Answer-Individuals who are related by blood
The amount of coverage on a group credit life policy is limited to - Answer-the insured's
total loan value
