TEXAS LIFE & HEALTH INSURANCE
ACTUAL EXAM QUESTIONS AND
DETAILED ANSWERS| GUARANTEED
PASS
At what point does an informal contract become binding?
Correct Answer When one party makes an offer and the other
accepts
when must insurable interest be present in order for a life
insurance policy to be valid? Correct Answer when the
application is made
Which is the following BEST describes a warranty? Correct
Answer Statement guaranteed to be true
A life insurance arrangement which circumvents insurable
interest statutes is called... Correct Answer Investor Originated
Life Insurance (IOLI)
in regards to representations or warranties, which of these
statements is true? Correct Answer If material to the risk, false
representations will void a policy
The part of a life insurance policy guaranteed to be true is
called a... Correct Answer Warranty
NOT a type of agent authority! Correct Answer principal
Life and health insurance policies are... Correct Answer
Unilateral Contract
In an insurance contract, the insurer is the only party who
makes legally enforceable promise. What kind of contract is
this? Correct Answer unliateral
,NOT a typical characteristic of the nature of an insurance
contract... Correct Answer bilateral
what is the consideration given by an insurer in the
Consideration clause of life policy? Correct Answer Promise to
pay a death benefit to a named beneficiary
which of these require an offer, acceptance, and consideration?
Correct Answer contract
Q purchases a $500,000 life insurance policy and premiums
over the first six months. Q dies suddenly and the beneficiary is
paid $500,000. This exchange of unequal values reflects which
of the following insurance contract features? Correct Answer
Aleatory Contract
A life insurance policy would be considered a wagering contract
WITHOUT: Correct Answer Insurable Interest
Insurance policies are offered on a "take it or leave it" basis,
which makes them... Correct Answer Contracts of Adhesion
Which of the following statements are CORRECT about
accelerated death benefits? Correct Answer Must have a
terminal illness to qualify
The option that provides an additional death benefit for a limited
amount of time at the lowest possible cost is called... Correct
Answer Accidental death and dismemberment rider (AD&D)
an insured's inability to preform two or more activities of daily
living may trigger which type of life policy rider? Correct Answer
Long term care
, an option that is a method of distributing a life insurance
policy's death benefit OTHER than a lump sum payment.
Correct Answer settlement
P is blinded in an industrial accident . which provision of his life
insurance policy will pay a stated benefit amount? Correct
Answer Accidental death or dismemberment clause
What action can a policyowner take if an application for a bank
loan requires collateral? Correct Answer Assign policy
ownership to the bank
Which type of life policy contains a monthly mortality charge as
well as self-directed investment choices? Correct Answer
Variable Universal Life
P is the insured on a participating life policy. Which statement is
true if P's premiums are waived due to disability? Correct
Answer P will still receive declared dividends
What benefit does the payor clause on a juvenile life policy
provide? Correct Answer Premiums are waived if the payor
becomes disabled
Which provision requires proof of insurability after a policy has
lapsed? Correct Answer Reinstatement
A life insurance policyowner would like to take out a policy loan
against the cash value in his Whole life policy. The interest rate
applied to this loan may vary over time.. what rate loan is this?
Correct Answer Variable rate loan
What provision in a life insurance policy states that the
application is considered part of the contract? Correct Answer
Entire Contact provision
ACTUAL EXAM QUESTIONS AND
DETAILED ANSWERS| GUARANTEED
PASS
At what point does an informal contract become binding?
Correct Answer When one party makes an offer and the other
accepts
when must insurable interest be present in order for a life
insurance policy to be valid? Correct Answer when the
application is made
Which is the following BEST describes a warranty? Correct
Answer Statement guaranteed to be true
A life insurance arrangement which circumvents insurable
interest statutes is called... Correct Answer Investor Originated
Life Insurance (IOLI)
in regards to representations or warranties, which of these
statements is true? Correct Answer If material to the risk, false
representations will void a policy
The part of a life insurance policy guaranteed to be true is
called a... Correct Answer Warranty
NOT a type of agent authority! Correct Answer principal
Life and health insurance policies are... Correct Answer
Unilateral Contract
In an insurance contract, the insurer is the only party who
makes legally enforceable promise. What kind of contract is
this? Correct Answer unliateral
,NOT a typical characteristic of the nature of an insurance
contract... Correct Answer bilateral
what is the consideration given by an insurer in the
Consideration clause of life policy? Correct Answer Promise to
pay a death benefit to a named beneficiary
which of these require an offer, acceptance, and consideration?
Correct Answer contract
Q purchases a $500,000 life insurance policy and premiums
over the first six months. Q dies suddenly and the beneficiary is
paid $500,000. This exchange of unequal values reflects which
of the following insurance contract features? Correct Answer
Aleatory Contract
A life insurance policy would be considered a wagering contract
WITHOUT: Correct Answer Insurable Interest
Insurance policies are offered on a "take it or leave it" basis,
which makes them... Correct Answer Contracts of Adhesion
Which of the following statements are CORRECT about
accelerated death benefits? Correct Answer Must have a
terminal illness to qualify
The option that provides an additional death benefit for a limited
amount of time at the lowest possible cost is called... Correct
Answer Accidental death and dismemberment rider (AD&D)
an insured's inability to preform two or more activities of daily
living may trigger which type of life policy rider? Correct Answer
Long term care
, an option that is a method of distributing a life insurance
policy's death benefit OTHER than a lump sum payment.
Correct Answer settlement
P is blinded in an industrial accident . which provision of his life
insurance policy will pay a stated benefit amount? Correct
Answer Accidental death or dismemberment clause
What action can a policyowner take if an application for a bank
loan requires collateral? Correct Answer Assign policy
ownership to the bank
Which type of life policy contains a monthly mortality charge as
well as self-directed investment choices? Correct Answer
Variable Universal Life
P is the insured on a participating life policy. Which statement is
true if P's premiums are waived due to disability? Correct
Answer P will still receive declared dividends
What benefit does the payor clause on a juvenile life policy
provide? Correct Answer Premiums are waived if the payor
becomes disabled
Which provision requires proof of insurability after a policy has
lapsed? Correct Answer Reinstatement
A life insurance policyowner would like to take out a policy loan
against the cash value in his Whole life policy. The interest rate
applied to this loan may vary over time.. what rate loan is this?
Correct Answer Variable rate loan
What provision in a life insurance policy states that the
application is considered part of the contract? Correct Answer
Entire Contact provision
