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
a a a a a a a a a a a a a a a a a
Fair Credit Reporting Act? -- Answer ✔✔ Upon completion of the application
a a a a a a a a a a a
Who elects the governing body of a mutual insurance company? -- Answer ✔✔
a a a a a a a a a a a a a
policyholders
An insurance applicant MUST be informed of an investigation regarding his/her reputation
a a a a a a a a a a a a
and character according to the -- Answer ✔✔ Fair Credit Reporting Act
a a a a a a a a a a a
What type of reinsurance contract involves two companies automatically sharing their
a a a a a a a a a a a
risk exposure? -- Answer ✔✔ Treaty
a a a a a
The stated amount or percent of liquid assets that an insurer must have on hand that will
a a a a a a a a a a a a a a a a a
satisfy future obligations to its policyholders is called -- Answer ✔✔ reserves
a a a a a a a a a a a
Which of the following requires insurers to disclose when an applicant's consumer or
a a a a a a a a a a a a a
credit history is being investigated -- Answer ✔✔ 1970 - Fair Credit Reporting Act
a a a a a a a a a a a a a
What is the consideration given by an insurer in the Consideration clause of a life policy? -
a a a a a a a a a a a a a a a a
- Answer ✔✔ Promise to pay a death benefit
a a a a a a a a
When third-party ownership is involved, applicants who also happen to be the stated
a a a a a a a a a a a a a
primary beneficiary are required to have -- Answer ✔✔ insurable interest in the proposed
a a a a a a a a a a a a a
insured
a
Statements made on an insurance application that are believed to be true to the best of
a a a a a a a a a a a a a a a a
the applicant's knowledge are called -- Answer ✔✔ representations
a a a a a a a a
,The part of a life insurance policy guaranteed to be true is called a(n) -- Answer ✔✔
a a a a a a a a a a a a a a a a a
warranty
Which of these is NOT a type of agent authority?
a a a a a a a a a
Express
a
Implied
a
Principal
a
Apparent -- Answer ✔✔ Principal
a a a a a
The Consideration clause of an insurance contract includes -- Answer ✔✔ the schedule
a a a a a a a a a a a a a
and amount of premium payments
a a a a
E and F are business partners. Each takes out a $500,000 life insurance policy on the
a a a a a a a a a a a a a a a a
other, naming himself as primary beneficiary. E and F eventually terminate their business,
a a a a a a a a a a a a a
and four months later E dies. Although E was married with three children at the time of
a a a a a a a a a a a a a a a a a
death, the primary beneficiary is still F. However, an insurable interest no longer exists.
a a a a a a a a a a a a a a
Where will the proceeds from E's life insurance policy be directed to? -- Answer ✔✔ In
a a a a a a a a a a a a a a a a
this situation, the proceeds from E's life insurance policy will go to F.
a a a a a a a a a a a a
Which of the following terms defines the legally enforceable promise in an insurance
a a a a a a a a a a a a a
contract by the insurer? -- Answer ✔✔ Unilateral
a a a a a a a
When must insurable interest exist for a life insurance contract to be valid? -- Answer
a a a a a a a a a a a a a a a
✔✔ Inception of the contract
a a a a
Insurance contracts are known as ____ because certain future conditions or acts must
a a a a a a a a a a a a a
occur before any claims can be paid. -- Answer ✔✔ conditional
a a a a a a a a a a
Which of these require an offer, acceptance, and consideration? -- Answer ✔✔ Contract
a a a a a a a a a a a a
Which of these arrangements allows one to bypass insurable interest laws? -- Answer ✔✔
a a a a a a a a a a a a a
Investor-Originated Life Insurance
a a a
Investor-originated life insurance (or IOLI), sometimes called stranger-originated life a a a a a a a a a
insurance (or STOLI) is used to circumvent state insurable interest statutes. This is done
a a a a a a a a a a a a a a
when an investor (or stranger) persuades an individual to take out life insurance
a a a a a a a a a a a a a
, specifically for the purpose of selling the policy to the investor. The investor compensates
a a a a a a a a a a a a a a
the insured and makes the premiums, then collects the death benefit when the insured
a a a a a a a a a a a a a a
dies.
Which of these is NOT considered to be an element of an insurance contract?
a a a a a a a a a a a a a
the offer
a a
acceptance
a
negotiating
a
consideration -- Answer ✔✔ negotiating
a a a a a
An agent is an individual that represents whom? -- Answer ✔✔ Insurer
a a a a a a a a a a a
Insurable interest must exist at what time? -- Answer ✔✔ at the time of application
a a a a a a a a a a a a a a
Which policy requires an agent to register with the National Association of Securities
a a a a a a a a a a a a a
Dealers (NASD) before selling? -- Answer ✔✔ Variable Life
a a a a a a a a
Which of the following actions require a policy owner to provide proof of insurability in
a a a a a a a a a a a a a a a
an Adjustable Life policy? -- Answer ✔✔ increase face amount
a a a a a a a a a
When a policy owner exchanges a term policy for a whole life policy without providing
a a a a a a a a a a a a a a a
proof of good health, which of these apply? -- Answer ✔✔ Conversion provision
a a a a a a a a a a a a
What type of life insurance are credit policies issued as? -- Answer ✔✔ Term
a a a a a a a a a a a a a
How long does the coverage normally remain on a limited-pay life policy? -- Answer ✔✔
a a a a a a a a a a a a a a a
age 100 a
All of these statements about Equity Indexed Life Insurance are correct EXCEPT
a a a a a a a a a a a
aCash value has a minimum rate of accumulation
a a a a a a a
aIf the gain on the index goes beyond the policy's minimum rate of return, the cash value
a a a a a a a a a a a a a a a a a
will mirror that of the index
a a a a a
aThe premiums can be lowered or raised, based on investment performance
a a a a a a a a a a
aTied to an equity index such as the S&P 500 -- Answer ✔✔ The premiums can be
a a a a a a a a a a a a a a a a a
lowered or raised, based on investment performance a a a a a a
THE LATEST SCORE.
At what point must a life insurance applicant be informed of their rights that fall under the
a a a a a a a a a a a a a a a a a
Fair Credit Reporting Act? -- Answer ✔✔ Upon completion of the application
a a a a a a a a a a a
Who elects the governing body of a mutual insurance company? -- Answer ✔✔
a a a a a a a a a a a a a
policyholders
An insurance applicant MUST be informed of an investigation regarding his/her reputation
a a a a a a a a a a a a
and character according to the -- Answer ✔✔ Fair Credit Reporting Act
a a a a a a a a a a a
What type of reinsurance contract involves two companies automatically sharing their
a a a a a a a a a a a
risk exposure? -- Answer ✔✔ Treaty
a a a a a
The stated amount or percent of liquid assets that an insurer must have on hand that will
a a a a a a a a a a a a a a a a a
satisfy future obligations to its policyholders is called -- Answer ✔✔ reserves
a a a a a a a a a a a
Which of the following requires insurers to disclose when an applicant's consumer or
a a a a a a a a a a a a a
credit history is being investigated -- Answer ✔✔ 1970 - Fair Credit Reporting Act
a a a a a a a a a a a a a
What is the consideration given by an insurer in the Consideration clause of a life policy? -
a a a a a a a a a a a a a a a a
- Answer ✔✔ Promise to pay a death benefit
a a a a a a a a
When third-party ownership is involved, applicants who also happen to be the stated
a a a a a a a a a a a a a
primary beneficiary are required to have -- Answer ✔✔ insurable interest in the proposed
a a a a a a a a a a a a a
insured
a
Statements made on an insurance application that are believed to be true to the best of
a a a a a a a a a a a a a a a a
the applicant's knowledge are called -- Answer ✔✔ representations
a a a a a a a a
,The part of a life insurance policy guaranteed to be true is called a(n) -- Answer ✔✔
a a a a a a a a a a a a a a a a a
warranty
Which of these is NOT a type of agent authority?
a a a a a a a a a
Express
a
Implied
a
Principal
a
Apparent -- Answer ✔✔ Principal
a a a a a
The Consideration clause of an insurance contract includes -- Answer ✔✔ the schedule
a a a a a a a a a a a a a
and amount of premium payments
a a a a
E and F are business partners. Each takes out a $500,000 life insurance policy on the
a a a a a a a a a a a a a a a a
other, naming himself as primary beneficiary. E and F eventually terminate their business,
a a a a a a a a a a a a a
and four months later E dies. Although E was married with three children at the time of
a a a a a a a a a a a a a a a a a
death, the primary beneficiary is still F. However, an insurable interest no longer exists.
a a a a a a a a a a a a a a
Where will the proceeds from E's life insurance policy be directed to? -- Answer ✔✔ In
a a a a a a a a a a a a a a a a
this situation, the proceeds from E's life insurance policy will go to F.
a a a a a a a a a a a a
Which of the following terms defines the legally enforceable promise in an insurance
a a a a a a a a a a a a a
contract by the insurer? -- Answer ✔✔ Unilateral
a a a a a a a
When must insurable interest exist for a life insurance contract to be valid? -- Answer
a a a a a a a a a a a a a a a
✔✔ Inception of the contract
a a a a
Insurance contracts are known as ____ because certain future conditions or acts must
a a a a a a a a a a a a a
occur before any claims can be paid. -- Answer ✔✔ conditional
a a a a a a a a a a
Which of these require an offer, acceptance, and consideration? -- Answer ✔✔ Contract
a a a a a a a a a a a a
Which of these arrangements allows one to bypass insurable interest laws? -- Answer ✔✔
a a a a a a a a a a a a a
Investor-Originated Life Insurance
a a a
Investor-originated life insurance (or IOLI), sometimes called stranger-originated life a a a a a a a a a
insurance (or STOLI) is used to circumvent state insurable interest statutes. This is done
a a a a a a a a a a a a a a
when an investor (or stranger) persuades an individual to take out life insurance
a a a a a a a a a a a a a
, specifically for the purpose of selling the policy to the investor. The investor compensates
a a a a a a a a a a a a a a
the insured and makes the premiums, then collects the death benefit when the insured
a a a a a a a a a a a a a a
dies.
Which of these is NOT considered to be an element of an insurance contract?
a a a a a a a a a a a a a
the offer
a a
acceptance
a
negotiating
a
consideration -- Answer ✔✔ negotiating
a a a a a
An agent is an individual that represents whom? -- Answer ✔✔ Insurer
a a a a a a a a a a a
Insurable interest must exist at what time? -- Answer ✔✔ at the time of application
a a a a a a a a a a a a a a
Which policy requires an agent to register with the National Association of Securities
a a a a a a a a a a a a a
Dealers (NASD) before selling? -- Answer ✔✔ Variable Life
a a a a a a a a
Which of the following actions require a policy owner to provide proof of insurability in
a a a a a a a a a a a a a a a
an Adjustable Life policy? -- Answer ✔✔ increase face amount
a a a a a a a a a
When a policy owner exchanges a term policy for a whole life policy without providing
a a a a a a a a a a a a a a a
proof of good health, which of these apply? -- Answer ✔✔ Conversion provision
a a a a a a a a a a a a
What type of life insurance are credit policies issued as? -- Answer ✔✔ Term
a a a a a a a a a a a a a
How long does the coverage normally remain on a limited-pay life policy? -- Answer ✔✔
a a a a a a a a a a a a a a a
age 100 a
All of these statements about Equity Indexed Life Insurance are correct EXCEPT
a a a a a a a a a a a
aCash value has a minimum rate of accumulation
a a a a a a a
aIf the gain on the index goes beyond the policy's minimum rate of return, the cash value
a a a a a a a a a a a a a a a a a
will mirror that of the index
a a a a a
aThe premiums can be lowered or raised, based on investment performance
a a a a a a a a a a
aTied to an equity index such as the S&P 500 -- Answer ✔✔ The premiums can be
a a a a a a a a a a a a a a a a a
lowered or raised, based on investment performance a a a a a a
