Texas General Lines - Life, accident and health insurance PRACTICE EXAM
LIFE SECTION 1 - AnswerLIFE SECTION 1
1) Sandra Timms, age 27, is advised by her producer to purchase Life insurance to cover a 20-year-
amortized $50,000 business-improvement loan. Which of the following plans would adequately protect
Ms. Timms at the minimum premium outlay? - AnswerA- $50,000 Whole Life policy
B- $50,000 Level Term policy for 20 years
C- $50,000 20 Pay Life policy
D- $50,000 Decreasing Term policy for 20 years
2) A 45-year old customer who is seeking to supplement his retirement income at age 65 would not buy
a: - AnswerA- Deferred Annuity
B- Equity Indexed Annuity
C- Variable Annuity
D- Immediate Annuity
3) John Livingston owns a 30-Pay Life policy that he purchased at the age of 30. The cash value will equal
the face amount of the policy when he reaches the age of: - AnswerA- 60
B- 70
C- 100
D- 30
4) Which of the following is an example of a Limited-Pay Life policy? - AnswerA- Universal life
B- Whole Life
C- Life Paid-Up at Age 65
D- Renewable Term to Age 70
5) Which of the following policies provides the greatest amount of protection for an insured's premium
dollar as well as some cash accumulation? - AnswerA- Annuity
,B- Whole Life
C- Term
D- Limited-Pay Life
6) Which of the following individual policy conversions is usually permitted without any evidence of
insurability? - AnswerA- Conversion to a lower-premium plan
B- Conversion from a Whole Life policy to a Term policy
C- Conversion from a Term policy to a Whole Life policy
D- Conversion to a larger amount of insurance
7) Which of the following is NOT correct regarding Ordinary Whole Life policies? - AnswerA- The
premiums payments are owed annually until you die or reach age 100
B- The cash value grows more quickly in the beginning years of the policy
C- Coverage lasts for your own life
D- Ordinary Whole Life is a type of permanent insurance
8) Which of the following statements is true about the premium payment schedule for a Whole Life
policy? - AnswerA- Premiums are payable for a designated period of time only, after which coverage is
no longer provided
B- Premiums are payable until the insured's retirement only, after which coverage is continued
automatically until the insured's death
C- One premium, in the amount of the insured's choice, is payable at the time of application, and the
balance of the premiums is deducted from the face amount of the policy at the time of the insured's
death
D- Premiums are payable throughout the insured's lifetime, and coverage continues until the insured's
death
9) A life insurance policy that covers two parties, but only pays when the last party dies is known as: -
AnswerA- Joint Life
,B- Contingent Life
C- Other insured Life
D- Survivorship Life
10) Which of the following contracts requires that a series of benefit payments be made at specified
intervals? - AnswerA- 20-Pay Life
B- Modified Whole Life
C- Annuity
D- Ordinary Whole Life
11) If a client wants cash value life insurance with a flexible premium and an adjustable death benefit
that will allow the policy owner a choice of various cash value investment options, he should buy: -
AnswerA- Variable Life
B- Universal Life
C- Adjustable Life
D- Variable/Universal Life
12) If a person wants to invest a lump sum in an annuity that may appreciate along with market and
economic conditions, they should buy a: - AnswerA- Flexible premium Annuity
B- Fixed Annuity
C- Deferred Annuity
D- Variable Annuity
13) You have a client that is a real estate agent. Which of the following types of permanent protection is
best for this type of client? - AnswerA- Variable life
B- Universal life
C- Survivorship life
D- Adjustable life
14) In order to sell variable life insurance you must be registered with which of the following? -
AnswerA- The SEC
, B- The State
C- The NYSE
D- The NASD
15) Which of the following is an example of a Limited-Pay Life policy: - AnswerA- Traditional Whole Life
B- Endowment at 65
C- 10 year Renewable Term Life
D- 20-Pay Life
16) An insurance producer selling a Variable Annuity whose cash value depends on the performance of
an underlying investment account must be registered with: - AnswerA- The National Association of
Insurance Commissioners
B- The National Association of Life Underwriters
C- The Chartered Life Underwriters
D- The Financial Industry Regulatory Authority (FINRA, formerly the NASD)
17) A business owner with a fluctuating income who wants a life insurance policy that can be changed to
suit economic conditions should buy: - AnswerA- Variable Life
B- Modified Whole Life
C- Adjustable Life
D- Interest-sensitive Whole Life
18) An Annuity is designed to provide which of the following financial features?
I. The liquidation of principal and interest
II. Favorable tax treatment
III. The creation of an estate - AnswerA- I, II, and III
B- I and II
C- I and III
D- II and III
LIFE SECTION 1 - AnswerLIFE SECTION 1
1) Sandra Timms, age 27, is advised by her producer to purchase Life insurance to cover a 20-year-
amortized $50,000 business-improvement loan. Which of the following plans would adequately protect
Ms. Timms at the minimum premium outlay? - AnswerA- $50,000 Whole Life policy
B- $50,000 Level Term policy for 20 years
C- $50,000 20 Pay Life policy
D- $50,000 Decreasing Term policy for 20 years
2) A 45-year old customer who is seeking to supplement his retirement income at age 65 would not buy
a: - AnswerA- Deferred Annuity
B- Equity Indexed Annuity
C- Variable Annuity
D- Immediate Annuity
3) John Livingston owns a 30-Pay Life policy that he purchased at the age of 30. The cash value will equal
the face amount of the policy when he reaches the age of: - AnswerA- 60
B- 70
C- 100
D- 30
4) Which of the following is an example of a Limited-Pay Life policy? - AnswerA- Universal life
B- Whole Life
C- Life Paid-Up at Age 65
D- Renewable Term to Age 70
5) Which of the following policies provides the greatest amount of protection for an insured's premium
dollar as well as some cash accumulation? - AnswerA- Annuity
,B- Whole Life
C- Term
D- Limited-Pay Life
6) Which of the following individual policy conversions is usually permitted without any evidence of
insurability? - AnswerA- Conversion to a lower-premium plan
B- Conversion from a Whole Life policy to a Term policy
C- Conversion from a Term policy to a Whole Life policy
D- Conversion to a larger amount of insurance
7) Which of the following is NOT correct regarding Ordinary Whole Life policies? - AnswerA- The
premiums payments are owed annually until you die or reach age 100
B- The cash value grows more quickly in the beginning years of the policy
C- Coverage lasts for your own life
D- Ordinary Whole Life is a type of permanent insurance
8) Which of the following statements is true about the premium payment schedule for a Whole Life
policy? - AnswerA- Premiums are payable for a designated period of time only, after which coverage is
no longer provided
B- Premiums are payable until the insured's retirement only, after which coverage is continued
automatically until the insured's death
C- One premium, in the amount of the insured's choice, is payable at the time of application, and the
balance of the premiums is deducted from the face amount of the policy at the time of the insured's
death
D- Premiums are payable throughout the insured's lifetime, and coverage continues until the insured's
death
9) A life insurance policy that covers two parties, but only pays when the last party dies is known as: -
AnswerA- Joint Life
,B- Contingent Life
C- Other insured Life
D- Survivorship Life
10) Which of the following contracts requires that a series of benefit payments be made at specified
intervals? - AnswerA- 20-Pay Life
B- Modified Whole Life
C- Annuity
D- Ordinary Whole Life
11) If a client wants cash value life insurance with a flexible premium and an adjustable death benefit
that will allow the policy owner a choice of various cash value investment options, he should buy: -
AnswerA- Variable Life
B- Universal Life
C- Adjustable Life
D- Variable/Universal Life
12) If a person wants to invest a lump sum in an annuity that may appreciate along with market and
economic conditions, they should buy a: - AnswerA- Flexible premium Annuity
B- Fixed Annuity
C- Deferred Annuity
D- Variable Annuity
13) You have a client that is a real estate agent. Which of the following types of permanent protection is
best for this type of client? - AnswerA- Variable life
B- Universal life
C- Survivorship life
D- Adjustable life
14) In order to sell variable life insurance you must be registered with which of the following? -
AnswerA- The SEC
, B- The State
C- The NYSE
D- The NASD
15) Which of the following is an example of a Limited-Pay Life policy: - AnswerA- Traditional Whole Life
B- Endowment at 65
C- 10 year Renewable Term Life
D- 20-Pay Life
16) An insurance producer selling a Variable Annuity whose cash value depends on the performance of
an underlying investment account must be registered with: - AnswerA- The National Association of
Insurance Commissioners
B- The National Association of Life Underwriters
C- The Chartered Life Underwriters
D- The Financial Industry Regulatory Authority (FINRA, formerly the NASD)
17) A business owner with a fluctuating income who wants a life insurance policy that can be changed to
suit economic conditions should buy: - AnswerA- Variable Life
B- Modified Whole Life
C- Adjustable Life
D- Interest-sensitive Whole Life
18) An Annuity is designed to provide which of the following financial features?
I. The liquidation of principal and interest
II. Favorable tax treatment
III. The creation of an estate - AnswerA- I, II, and III
B- I and II
C- I and III
D- II and III
