TEXAS LIFE INSURANCE EXAM REVIEW
Q&A
*claimant* - answer-a person who submits a claim for payment of benefits
Dividend - answer-a payment made by a policy (distribution of profits or returned of
unused funds)
Lapse - answer-policy termination due to a non payment of premium
Nonforfeiture values - answer-benefits in a life insurance policy that the policy owner
cannot lose even if the policy is surrendered or lapses
Nonguaranteed elements - answer-policy components that are not guaranteed in the
contract or that may fluctuate (e.g. Dividends, interest)
Policy proceeds - answer-in life insurance, the death benefit
Rescind - answer-to remove or cancel
Testimonials - answer-statements or endorsements made by clients based on their
experience with products or services
Is it illegal for an insurance company to advertise that it is the leader of the financial
industry and therefore pays the most claims each year?
A) no, as long as the advertisement has a disclaimer that all facts are misleading
B) no
C) yes; advertisements shall not mislead the public in terms of financial standing
D) yes, as long as no one can prove otherwise - answer-c) yes; advertisements shall
not mislead the public in terms of financial standing
If a policyowner surrenders his life insurance policy that has been in force for 5 years
within 60 days after the premium due date, what will the insurer be required to pay?
A) a paid-up nonforfeiture benefit
B) nothing
C) the death benefit
D) a cash surrender value - answer-d) a cash surrender value
A life insurance policy must ensure that upon surrender of the policy no later than 60
days after the due date of a premium payment, the company will pay a cash surrender
value (instead of a paid-up nonforfeiture benefit) if the premiums have been paid for at
least 3 full years for ordinary life insurance policies, or 5 years for industrial life
insurance.
, An individual covered under a group life insurance policy may convert the policy to any
of the following except
A) 20-pay life.
B) life paid up at age 65.
C) whole life.
D) 15-year level term. - answer-d) 15-year level term.
Individuals and dependents insured on a group life policy may convert to an individual
policy issued by the same insurer. They can convert to any individual policy except
term.
The regulations regarding replacement apply to which of the following?
A) group life
B) renewable term
C) replacement of existing policy by the same insurer
D) credit life - answer-b) renewable term
Replacement rules apply to all life insurance policies except group life policies, group
annuities, credit life or nonconvertible term which will expire in 5 years or less and
cannot be renewed. Purchasing additional coverage under the gir is not a replacement
of coverage, simply an addition of coverage.
Upon the submission of a death claim under a life insurance policy, when must the
insurer pay the policy benefit?
A) immediately after receiving written proof of loss
B) on the next anniversary of the policy
C) within 30 days
D) within 2 months - answer-d) within 2 months
Upon receipt of a written proof of death and the right of the claimant to the proceeds,
the insurer must pay death claims within 2 months.
Which of the following is true about credit life insurance?
A) creditor is the policyowner.
B) debtor is the annuitant.
C) creditor is the insured.
D) debtor is the policy beneficiary. - answer-a) creditor is the policyowner
In credit life insurance, the creditor is the policyowner and the beneficiary; the debtor is
the insured.
Q&A
*claimant* - answer-a person who submits a claim for payment of benefits
Dividend - answer-a payment made by a policy (distribution of profits or returned of
unused funds)
Lapse - answer-policy termination due to a non payment of premium
Nonforfeiture values - answer-benefits in a life insurance policy that the policy owner
cannot lose even if the policy is surrendered or lapses
Nonguaranteed elements - answer-policy components that are not guaranteed in the
contract or that may fluctuate (e.g. Dividends, interest)
Policy proceeds - answer-in life insurance, the death benefit
Rescind - answer-to remove or cancel
Testimonials - answer-statements or endorsements made by clients based on their
experience with products or services
Is it illegal for an insurance company to advertise that it is the leader of the financial
industry and therefore pays the most claims each year?
A) no, as long as the advertisement has a disclaimer that all facts are misleading
B) no
C) yes; advertisements shall not mislead the public in terms of financial standing
D) yes, as long as no one can prove otherwise - answer-c) yes; advertisements shall
not mislead the public in terms of financial standing
If a policyowner surrenders his life insurance policy that has been in force for 5 years
within 60 days after the premium due date, what will the insurer be required to pay?
A) a paid-up nonforfeiture benefit
B) nothing
C) the death benefit
D) a cash surrender value - answer-d) a cash surrender value
A life insurance policy must ensure that upon surrender of the policy no later than 60
days after the due date of a premium payment, the company will pay a cash surrender
value (instead of a paid-up nonforfeiture benefit) if the premiums have been paid for at
least 3 full years for ordinary life insurance policies, or 5 years for industrial life
insurance.
, An individual covered under a group life insurance policy may convert the policy to any
of the following except
A) 20-pay life.
B) life paid up at age 65.
C) whole life.
D) 15-year level term. - answer-d) 15-year level term.
Individuals and dependents insured on a group life policy may convert to an individual
policy issued by the same insurer. They can convert to any individual policy except
term.
The regulations regarding replacement apply to which of the following?
A) group life
B) renewable term
C) replacement of existing policy by the same insurer
D) credit life - answer-b) renewable term
Replacement rules apply to all life insurance policies except group life policies, group
annuities, credit life or nonconvertible term which will expire in 5 years or less and
cannot be renewed. Purchasing additional coverage under the gir is not a replacement
of coverage, simply an addition of coverage.
Upon the submission of a death claim under a life insurance policy, when must the
insurer pay the policy benefit?
A) immediately after receiving written proof of loss
B) on the next anniversary of the policy
C) within 30 days
D) within 2 months - answer-d) within 2 months
Upon receipt of a written proof of death and the right of the claimant to the proceeds,
the insurer must pay death claims within 2 months.
Which of the following is true about credit life insurance?
A) creditor is the policyowner.
B) debtor is the annuitant.
C) creditor is the insured.
D) debtor is the policy beneficiary. - answer-a) creditor is the policyowner
In credit life insurance, the creditor is the policyowner and the beneficiary; the debtor is
the insured.
