TEXAS LIFE ONLY FINAL EXAM
QUESTIONS AND ANSWERS
If a contract of adhesion contains complicated language, to whom would the
interpretation be in favor of? - Answer-Insured
What type of insurance offers permanent life coverage with premiums that are payable
for life? - Answer-Whole life
An architecture firm would stand to lose a lot of money in the event of the death of its
project manager. Which type of policy should the firm purchase on its project manager?
- Answer-Key Person Life Policy
What is the purpose of a Policy Summary? - Answer-It highlights the critical parts of the
policy issued
A life policy with a death benefit and cash value that can fluctuate according to the
performance of its underlying investment portfolio is referred to as: - Answer-Variable
Life
Premature IRA distributions are assessed a penalty tax of - Answer-10%
An individual working part-time has an annual income of $25,000. If this individual has
an IRA, what is the maximum deductible IRA contribution allowable? - Answer-$6,000
The reason for backdating a policy is - Answer-to obtain a premium rate based on an
earlier age
Q applied for life insurance and submitted the initial premium on January 1. The policy
was issued February 1, but it was not delivered by the agent until February 7. Q is
dissatisfied and returns the policy February 13. How will the insurer handle this
situation? - Answer-Policy was returned within the free-look period, premium will be fully
refunded
Which of these characteristics is consistent with a Straight Life policy? - Answer-
Premiums are payable for as long as there is insurance coverage in force
Which of these life insurance riders allows the applicant to have excess coverage? -
Answer-Term Rider
A foreign insurance company conducting insurance business in Texas - Answer-was
formed under the laws of another state
With whom may an agent legally share commissions? - Answer-Another agent with the
same line of insurance
,Group life insurance policies are generally written as:
- term rider
- annually renewable term
- increasing term
- group whole life - Answer-annually renewable term
In Texas, an individual life insurance policy is REQUIRED to have a grace period of -
Answer-31 days
All of these statements about the Commissioner of Insurance are true EXCEPT -
Answer-The commissioner must be elected
Which action will a life insurance company most likely take if an insured dies and it is
discovered that the insured's age was misstated on the application? - Answer-Pay an
amount the premiums would have purchased at the insured's actual age
A license may be denied, suspended, or revoked if the license - Answer-is found guilty
of misrepresentation in obtaining license
A policyowner's rights are limited under which beneficiary designation? - Answer-
Irrevocable
C is trying to determine whether to convert her convertible term life policy to whole life
insurance using her original age or attained age. What factor would affect her decision
most? - Answer-The cost
During a sales presentation for a participating life insurance policy, an agent MUST -
Answer-make a prospect understand that dividends are NOT guaranteed
What is an organization that solicits insurance only to its members - Answer-Fraternal
benefit society
When an insurance application is taken by a producer, which of these statements is
true? - Answer-any changes made on the application require the applicant's initials
T and S are named co-primary beneficiaries on a $500,000 Accidental Death and
Dismemberment policy insuring their father. Their mother was named contingent
beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba
accident shortly afterwards. How much of the death benefit will the mother receive? -
Answer-$0
A domestic insurance company in Texas is considered a company that... - Answer-is
incorporated and formed in Texas
, Whole Life insurance is sometimes referred to as "Straight Life". What does the word
"Straight" indicate when using this phrase? - Answer-The duration of premium
payments
Which of the following are Equity Indexed annuities typically invested in? - Answer-S&P
500
Which of these is NOT an example of doing insurance business? - Answer-Selling
shares of stock
The advantage of reinstating an original life policy is - Answer-the premiums are based
on a younger age
In TX, which of these statements regarding the Suicide clause is TRUE? - Answer-An
insurer may not use suicide as a defense against payment after the second year
Which of the following is NOT included in a life insurance illustration?
Underwriting classification upon which the illustration is based
Insurer's name
Amount of death benefit
Company's mortality table - Answer-Company's mortality table
An employee is covered under a company group life plan with a $50,000 death benefit.
What is the MAXIMUM amount a spouse may be insured for under this program? -
Answer-$25,000
Which of these is an element of a Single Premium annuity? - Answer-Lump-sum
payment
What is the monetary penalty for willfully violating a cease-and-desist order?
- fine of up to $500
- fine of up to $250
- fine of up to $50
- fine of up to $100 - Answer-A fine of up to $500
A new general property and casualty licensee must complete at LEAST ____ hours of
continuing education within 24 months of initial licensure. - Answer-24
Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE?
- Answer-Evidence of insurability is required when the option is exercised
When a policyowner cash surrenders a Universal Life insurance policy in its early years,
this may be considered a red flag for an - Answer-Anti-Money Laundering violation
The phrase "transacting business" includes - Answer-collecting premiums
QUESTIONS AND ANSWERS
If a contract of adhesion contains complicated language, to whom would the
interpretation be in favor of? - Answer-Insured
What type of insurance offers permanent life coverage with premiums that are payable
for life? - Answer-Whole life
An architecture firm would stand to lose a lot of money in the event of the death of its
project manager. Which type of policy should the firm purchase on its project manager?
- Answer-Key Person Life Policy
What is the purpose of a Policy Summary? - Answer-It highlights the critical parts of the
policy issued
A life policy with a death benefit and cash value that can fluctuate according to the
performance of its underlying investment portfolio is referred to as: - Answer-Variable
Life
Premature IRA distributions are assessed a penalty tax of - Answer-10%
An individual working part-time has an annual income of $25,000. If this individual has
an IRA, what is the maximum deductible IRA contribution allowable? - Answer-$6,000
The reason for backdating a policy is - Answer-to obtain a premium rate based on an
earlier age
Q applied for life insurance and submitted the initial premium on January 1. The policy
was issued February 1, but it was not delivered by the agent until February 7. Q is
dissatisfied and returns the policy February 13. How will the insurer handle this
situation? - Answer-Policy was returned within the free-look period, premium will be fully
refunded
Which of these characteristics is consistent with a Straight Life policy? - Answer-
Premiums are payable for as long as there is insurance coverage in force
Which of these life insurance riders allows the applicant to have excess coverage? -
Answer-Term Rider
A foreign insurance company conducting insurance business in Texas - Answer-was
formed under the laws of another state
With whom may an agent legally share commissions? - Answer-Another agent with the
same line of insurance
,Group life insurance policies are generally written as:
- term rider
- annually renewable term
- increasing term
- group whole life - Answer-annually renewable term
In Texas, an individual life insurance policy is REQUIRED to have a grace period of -
Answer-31 days
All of these statements about the Commissioner of Insurance are true EXCEPT -
Answer-The commissioner must be elected
Which action will a life insurance company most likely take if an insured dies and it is
discovered that the insured's age was misstated on the application? - Answer-Pay an
amount the premiums would have purchased at the insured's actual age
A license may be denied, suspended, or revoked if the license - Answer-is found guilty
of misrepresentation in obtaining license
A policyowner's rights are limited under which beneficiary designation? - Answer-
Irrevocable
C is trying to determine whether to convert her convertible term life policy to whole life
insurance using her original age or attained age. What factor would affect her decision
most? - Answer-The cost
During a sales presentation for a participating life insurance policy, an agent MUST -
Answer-make a prospect understand that dividends are NOT guaranteed
What is an organization that solicits insurance only to its members - Answer-Fraternal
benefit society
When an insurance application is taken by a producer, which of these statements is
true? - Answer-any changes made on the application require the applicant's initials
T and S are named co-primary beneficiaries on a $500,000 Accidental Death and
Dismemberment policy insuring their father. Their mother was named contingent
beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba
accident shortly afterwards. How much of the death benefit will the mother receive? -
Answer-$0
A domestic insurance company in Texas is considered a company that... - Answer-is
incorporated and formed in Texas
, Whole Life insurance is sometimes referred to as "Straight Life". What does the word
"Straight" indicate when using this phrase? - Answer-The duration of premium
payments
Which of the following are Equity Indexed annuities typically invested in? - Answer-S&P
500
Which of these is NOT an example of doing insurance business? - Answer-Selling
shares of stock
The advantage of reinstating an original life policy is - Answer-the premiums are based
on a younger age
In TX, which of these statements regarding the Suicide clause is TRUE? - Answer-An
insurer may not use suicide as a defense against payment after the second year
Which of the following is NOT included in a life insurance illustration?
Underwriting classification upon which the illustration is based
Insurer's name
Amount of death benefit
Company's mortality table - Answer-Company's mortality table
An employee is covered under a company group life plan with a $50,000 death benefit.
What is the MAXIMUM amount a spouse may be insured for under this program? -
Answer-$25,000
Which of these is an element of a Single Premium annuity? - Answer-Lump-sum
payment
What is the monetary penalty for willfully violating a cease-and-desist order?
- fine of up to $500
- fine of up to $250
- fine of up to $50
- fine of up to $100 - Answer-A fine of up to $500
A new general property and casualty licensee must complete at LEAST ____ hours of
continuing education within 24 months of initial licensure. - Answer-24
Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE?
- Answer-Evidence of insurability is required when the option is exercised
When a policyowner cash surrenders a Universal Life insurance policy in its early years,
this may be considered a red flag for an - Answer-Anti-Money Laundering violation
The phrase "transacting business" includes - Answer-collecting premiums
