Texas Life Insurance Exam TESTBANK [100% VERIFIED ANSWERS]

Texas Life Insurance Exam TESTBANK [100% VERIFIED ANSWERS] Texas Life Insurance Exam TESTBANK [100% VERIFIED ANSWERS] 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 When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have - Answer insurable interest 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 term defines the legally enforceable promise in an insurance contract by the insurer? - Answer Unilateral 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 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 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 What type of life insurance are credit policies issued as? - Answer Term How long does the coverage normally remain on a limited-pay life policy? - Answer age 100 All of these statements about Equity Indexed Life Insurance are correct EXCEPT - Cash value has a minimum rate of accumulation - If the gain on the index goes beyond the policy's minimum rate of return, the cash value will mirror that of the index -The premiums can be lowered or raised, based on investment performance -Tied to an equity index such as the S&P 500 - Answer The premiums can be lowered or raised, based on investment performance What type of life insurance incorporates flexible premiums and an adjustable death benefit? - Answer Universal Life What type of life policy covers 2 lives and pays the face amount after the first one dies? - Answer Joint Life Policy Life insurance that covers an insured's whole life with level premiums paid over a limited time is called - Answer Limited-Pay Life What kind of life insurance product covers children under their parent's policy? - Answer Term rider P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase? - Answer Family Maintenance policy Which of the following statements about a Variable Whole Life policy is CORRECT? -It provides a minimum guaranteed Death benefit - It is a combination of a Limited Period Endowment and a Decreasing Term policy - Its premiums and benefits are variable - It has a guaranteed rate of return - Answer It provides a minimum guaranteed Death benefit Credit Life insurance is - Answer issued in an amount not to exceed the amount of the loan When does Term Life expire? - Answer At the end of the policy period What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death? - Answer Face amount plus the policy's cash value A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as - Answer Variable Life Insurance (General concept) - Answer - transfers the risk of loss from an individual to an insurer - based on the principle of indemnity - based on the principle of risk (risk pooling) Agent/ Producer - Answer a legal representative of an insurance company; the classification of producers usually includes agents and brokers' agents are the agents of the insurer Applicant of proposed insured - Answer a person applying for insurance Beneficiary - Answer a person who receives the benefits of an insurance policy Broker - Answer an insurance producer who is not appointed by an insurance company and who represents the client Death benefits - Answer the amount paid upon death of the insured in a life insurance policy Estate - Answer a person's net worth