TEXAS LIFE AND HEALTH END OF COURSE 2025/2026
QUESTIONS AND SOLUTIONS GRADED A+
✔✔When beneficiary receives payments consisting of both principal and interest
portions, which parts are taxable as income? - ✔✔Interest only
✔✔Which of the following is true regarding taxation of dividends in participating
policies? - ✔✔Dividends are not taxable
✔✔Which of the following terms means a result of calculation based on the average
number of months the insured is projected to live due to medical history and mortality
factors? - ✔✔Life expectancy
✔✔What does liquidity refer to in a a life insurance policy? - ✔✔Cash values can be
borrowed at any time.
✔✔In a life settlement contract, whom does the life settlement broker represent? -
✔✔The owner
✔✔Who is a third-party owner? - ✔✔A policyowner who is not the insured
✔✔All of the following are examples of third party ownership of a life insurance policy
EXCEPT - ✔✔An insured borrows money from the banking makes a collateral
assignment of a part of the death benefit to secure the loan.
✔✔Which of the following types of insurance policies would preform the function of cash
accumulation? - ✔✔Whole Life
✔✔A life insurance policy used to fund an agreement that contractually establishes the
intent of someone to purchase a business upon the insured business owner's death is a
a - ✔✔Buy-sell agreement
✔✔Which of the following is correct concerning the taxation of premiums in a key-
person life insurance policy? - ✔✔Premiums are not tax deductible as a business
expense
✔✔An agent is ready to deliver a policy to an applicant bus has not yet received
payment. Upon delivery, the agent collects the applicant's premium check, answers any
questions the applicant may have, and then leaves. What did he forget to do? - ✔✔Ask
her to sign a statement of good health
✔✔What is the term used for an applicant's written request to an insurer for the
company to issue a contract, based on the information provided? - ✔✔Application
, ✔✔Which is true regarding obtaining underwriting sources? - ✔✔The applicant must be
informed of the sources contacted an how the information is being gathered
✔✔To comply with Fair Credit Reporting Act, when must a a producer notify an
applicant that a credit report may be requested? - ✔✔At the time of application
✔✔Which of the following entities can legally bind coverage? - ✔✔Insurer
✔✔IN a relative value system of determining coverage for a given procedure, what term
describes the total amount payable per point? - ✔✔Conversion Factor
✔✔Insurers usually do not reimburse claimants for 100% of income lost do to disability.
What is the reason for insurer limitation on coverage amounts? - ✔✔To provide an
incentive for the insured to return to work
✔✔Which of the following is a feature of a disability buyout plan? - ✔✔a lim-sum benefit
payment option
✔✔All of the following statements concerning accidental death and dismemberment
coverage are correct except - ✔✔Death benefits are paid only if death occurs within 24
hours of an accident
✔✔Bethany studies in England for a semester she is in a train accident while she is
there and is disable. If Bethany owns a general disability policy, what will be the extent
of benefits that she receives? - ✔✔NONE
✔✔A typical accidental death and dismemberment policy covers all of the following
losses except - ✔✔Income
✔✔Which of the following is true regarding elimination periods and the cost of
coverage? - ✔✔The longer the elimination period, the lower the cost of coverage
✔✔Which provision concerns the insured's duty to provide the insurer with reasonable
notice in the event of a loss? - ✔✔Notice of Claim
✔✔Which of the following is NOT a feature of a noncancellable policy? - ✔✔The insurer
may terminate the contract only at renewal for certain conditions.
✔✔Under the mandatory uniform provision Notice of Claim, the first notice of injury or
sickness covered under an accident and health policy must contain - ✔✔A statement
that is sufficiently clear to identify the insured and the nature of the claim.
QUESTIONS AND SOLUTIONS GRADED A+
✔✔When beneficiary receives payments consisting of both principal and interest
portions, which parts are taxable as income? - ✔✔Interest only
✔✔Which of the following is true regarding taxation of dividends in participating
policies? - ✔✔Dividends are not taxable
✔✔Which of the following terms means a result of calculation based on the average
number of months the insured is projected to live due to medical history and mortality
factors? - ✔✔Life expectancy
✔✔What does liquidity refer to in a a life insurance policy? - ✔✔Cash values can be
borrowed at any time.
✔✔In a life settlement contract, whom does the life settlement broker represent? -
✔✔The owner
✔✔Who is a third-party owner? - ✔✔A policyowner who is not the insured
✔✔All of the following are examples of third party ownership of a life insurance policy
EXCEPT - ✔✔An insured borrows money from the banking makes a collateral
assignment of a part of the death benefit to secure the loan.
✔✔Which of the following types of insurance policies would preform the function of cash
accumulation? - ✔✔Whole Life
✔✔A life insurance policy used to fund an agreement that contractually establishes the
intent of someone to purchase a business upon the insured business owner's death is a
a - ✔✔Buy-sell agreement
✔✔Which of the following is correct concerning the taxation of premiums in a key-
person life insurance policy? - ✔✔Premiums are not tax deductible as a business
expense
✔✔An agent is ready to deliver a policy to an applicant bus has not yet received
payment. Upon delivery, the agent collects the applicant's premium check, answers any
questions the applicant may have, and then leaves. What did he forget to do? - ✔✔Ask
her to sign a statement of good health
✔✔What is the term used for an applicant's written request to an insurer for the
company to issue a contract, based on the information provided? - ✔✔Application
, ✔✔Which is true regarding obtaining underwriting sources? - ✔✔The applicant must be
informed of the sources contacted an how the information is being gathered
✔✔To comply with Fair Credit Reporting Act, when must a a producer notify an
applicant that a credit report may be requested? - ✔✔At the time of application
✔✔Which of the following entities can legally bind coverage? - ✔✔Insurer
✔✔IN a relative value system of determining coverage for a given procedure, what term
describes the total amount payable per point? - ✔✔Conversion Factor
✔✔Insurers usually do not reimburse claimants for 100% of income lost do to disability.
What is the reason for insurer limitation on coverage amounts? - ✔✔To provide an
incentive for the insured to return to work
✔✔Which of the following is a feature of a disability buyout plan? - ✔✔a lim-sum benefit
payment option
✔✔All of the following statements concerning accidental death and dismemberment
coverage are correct except - ✔✔Death benefits are paid only if death occurs within 24
hours of an accident
✔✔Bethany studies in England for a semester she is in a train accident while she is
there and is disable. If Bethany owns a general disability policy, what will be the extent
of benefits that she receives? - ✔✔NONE
✔✔A typical accidental death and dismemberment policy covers all of the following
losses except - ✔✔Income
✔✔Which of the following is true regarding elimination periods and the cost of
coverage? - ✔✔The longer the elimination period, the lower the cost of coverage
✔✔Which provision concerns the insured's duty to provide the insurer with reasonable
notice in the event of a loss? - ✔✔Notice of Claim
✔✔Which of the following is NOT a feature of a noncancellable policy? - ✔✔The insurer
may terminate the contract only at renewal for certain conditions.
✔✔Under the mandatory uniform provision Notice of Claim, the first notice of injury or
sickness covered under an accident and health policy must contain - ✔✔A statement
that is sufficiently clear to identify the insured and the nature of the claim.
