TEXAS LIFE AND HEALTH
INSURANCE EXAM QUESTIONS WITH
THE LATEST SCORE.
At what point must a life insurance applicant be informed of their rights
that fall under the Fair Credit Reporting Act? -- Answer ✔✔ Upon
completion of the application
Who elects the governing body of a mutual insurance company? --
Answer ✔✔ policyholders
An insurance applicant MUST be informed of an investigation regarding
his/her reputation and character according to the -- Answer ✔✔ Fair
Credit Reporting Act
What type of reinsurance contract involves two companies
automatically sharing their risk exposure? -- Answer ✔✔ Treaty
The stated amount or percent of liquid assets that an insurer must
have on hand that will satisfy future obligations to its policyholders is
called -- Answer ✔✔ reserves
Which of the following requires insurers to disclose when an applicant's
consumer or credit history is being investigated -- Answer ✔✔ 1970 -
Fair Credit Reporting Act
What is the consideration given by an insurer in the Consideration
clause of a life policy? -- Answer ✔✔ Promise to pay a death benefit
When third-party ownership is involved, applicants who also happen to
be the stated primary beneficiary are required to have -- Answer ✔✔
insurable interest in the proposed insured
,Statements made on an insurance application that are believed to be
true to the best of the applicant's knowledge are called -- Answer ✔✔
representations
The part of a life insurance policy guaranteed to be true is called a(n) --
Answer ✔✔ warranty
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent -- Answer ✔✔ Principal
The Consideration clause of an insurance contract includes -- Answer
✔✔ the schedule and amount of premium payments
E and F are business partners. Each takes out a $500,000 life
insurance policy on the other, naming himself as primary beneficiary. E
and F eventually terminate their business, and four months later E
dies. Although E was married with three children at the time of death,
the primary beneficiary is still F. However, an insurable interest no
longer exists. Where will the proceeds from E's life insurance policy be
directed to? -- Answer ✔✔ In this situation, the proceeds from E's life
insurance policy will go to F.
Which of the following terms defines the legally enforceable promise in
an insurance contract by the insurer? -- Answer ✔✔ Unilateral
When must insurable interest exist for a life insurance contract to be
valid? -- Answer ✔✔ Inception of the contract
Insurance contracts are known as ____ because certain future
conditions or acts must occur before any claims can be paid. -- Answer
✔✔ conditional
, Which of these require an offer, acceptance, and consideration? --
Answer ✔✔ Contract
Which of these arrangements allows one to bypass insurable interest
laws? -- Answer ✔✔ Investor-Originated Life Insurance
Investor-originated life insurance (or IOLI), sometimes called stranger-
originated life insurance (or STOLI) is used to circumvent state
insurable interest statutes. This is done when an investor (or stranger)
persuades an individual to take out life insurance specifically for the
purpose of selling the policy to the investor. The investor compensates
the insured and makes the premiums, then collects the death benefit
when the insured dies.
Which of these is NOT considered to be an element of an insurance
contract?
the offer
acceptance
negotiating
consideration -- Answer ✔✔ negotiating
An agent is an individual that represents whom? -- Answer ✔✔ Insurer
Insurable interest must exist at what time? -- Answer ✔✔ at the time of
application
Which policy requires an agent to register with the National Association
of Securities Dealers (NASD) before selling? -- Answer ✔✔ Variable Life
Which of the following actions require a policy owner to provide proof
of insurability in an Adjustable Life policy? -- Answer ✔✔ increase face
amount
When a policy owner exchanges a term policy for a whole life policy
without providing proof of good health, which of these apply? -- Answer
✔✔ Conversion provision
INSURANCE EXAM QUESTIONS WITH
THE LATEST SCORE.
At what point must a life insurance applicant be informed of their rights
that fall under the Fair Credit Reporting Act? -- Answer ✔✔ Upon
completion of the application
Who elects the governing body of a mutual insurance company? --
Answer ✔✔ policyholders
An insurance applicant MUST be informed of an investigation regarding
his/her reputation and character according to the -- Answer ✔✔ Fair
Credit Reporting Act
What type of reinsurance contract involves two companies
automatically sharing their risk exposure? -- Answer ✔✔ Treaty
The stated amount or percent of liquid assets that an insurer must
have on hand that will satisfy future obligations to its policyholders is
called -- Answer ✔✔ reserves
Which of the following requires insurers to disclose when an applicant's
consumer or credit history is being investigated -- Answer ✔✔ 1970 -
Fair Credit Reporting Act
What is the consideration given by an insurer in the Consideration
clause of a life policy? -- Answer ✔✔ Promise to pay a death benefit
When third-party ownership is involved, applicants who also happen to
be the stated primary beneficiary are required to have -- Answer ✔✔
insurable interest in the proposed insured
,Statements made on an insurance application that are believed to be
true to the best of the applicant's knowledge are called -- Answer ✔✔
representations
The part of a life insurance policy guaranteed to be true is called a(n) --
Answer ✔✔ warranty
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent -- Answer ✔✔ Principal
The Consideration clause of an insurance contract includes -- Answer
✔✔ the schedule and amount of premium payments
E and F are business partners. Each takes out a $500,000 life
insurance policy on the other, naming himself as primary beneficiary. E
and F eventually terminate their business, and four months later E
dies. Although E was married with three children at the time of death,
the primary beneficiary is still F. However, an insurable interest no
longer exists. Where will the proceeds from E's life insurance policy be
directed to? -- Answer ✔✔ In this situation, the proceeds from E's life
insurance policy will go to F.
Which of the following terms defines the legally enforceable promise in
an insurance contract by the insurer? -- Answer ✔✔ Unilateral
When must insurable interest exist for a life insurance contract to be
valid? -- Answer ✔✔ Inception of the contract
Insurance contracts are known as ____ because certain future
conditions or acts must occur before any claims can be paid. -- Answer
✔✔ conditional
, Which of these require an offer, acceptance, and consideration? --
Answer ✔✔ Contract
Which of these arrangements allows one to bypass insurable interest
laws? -- Answer ✔✔ Investor-Originated Life Insurance
Investor-originated life insurance (or IOLI), sometimes called stranger-
originated life insurance (or STOLI) is used to circumvent state
insurable interest statutes. This is done when an investor (or stranger)
persuades an individual to take out life insurance specifically for the
purpose of selling the policy to the investor. The investor compensates
the insured and makes the premiums, then collects the death benefit
when the insured dies.
Which of these is NOT considered to be an element of an insurance
contract?
the offer
acceptance
negotiating
consideration -- Answer ✔✔ negotiating
An agent is an individual that represents whom? -- Answer ✔✔ Insurer
Insurable interest must exist at what time? -- Answer ✔✔ at the time of
application
Which policy requires an agent to register with the National Association
of Securities Dealers (NASD) before selling? -- Answer ✔✔ Variable Life
Which of the following actions require a policy owner to provide proof
of insurability in an Adjustable Life policy? -- Answer ✔✔ increase face
amount
When a policy owner exchanges a term policy for a whole life policy
without providing proof of good health, which of these apply? -- Answer
✔✔ Conversion provision
