License Coach - Texas Life Insurance Final Exam Already Passed

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License Coach - Texas Life Insurance Final Exam Already Passed Which type of life policy would best suit someone who retires in good health with a large amount of cash, whose investment goals are c ... onservative? ✔✔Single premium whole life insurance All of the following are true regarding nonresident producer licensing, EXCEPT: ✔✔Nonresident licensees' home state must not have a reciprocal relationship with Texas. The fact that the application is part of the policy is stated in: ✔✔The entire contract The policyowner's obligation to pay the premium is the: ✔✔Consideration Clause What kind of contract pays an income to an insured until the insured dies? ✔✔Life annuity The manner in which the proceeds of a life policy are handled are specified in what provision? ✔✔Settlement options If an agent's appointment is terminated for cause, how much time does the agent have to inform the Commissioner? ✔✔Immediately Dylan tells the insurer to keep the dividend and apply it to his next premium. He is using which dividend option? ✔✔Reduction of premium Errors & Omissions are most likely to occur during: ✔✔A replacement Which of the following factors does not influence the amount that an individual receives as monthly income under Social Security? ✔✔Sex Dylan is looking at buying an equity-indexed life policy; it will likely be tied to: ✔✔Dow Jones Industrial Average Which of the following terms can be used in the advertising of life insurance policies in Texas? ✔✔Death The life insurance rider that pays the face amount plus the total premiums paid into the policy is known as: ✔✔Return of premium Which of the following statements is not true about the tax liabilities for individual life insurance policies? ✔✔Policy loans are taxable as income. Which of the following is not true about the granting of a temporary insurance license? ✔✔The license is valid for 6 months after date of issue and the license cannot be renewed more than twice in a 12 month period. The Commissioner can suspend a producer's license for all the following, EXCEPT: ✔✔Indictment for a felony The rider that you would pick if you want to be able to add coverage in the future, without having to show proof of insurability: ✔✔Guaranteed insurability Which of the following is NOT a nonforfeiture option that will protect the cash value of a permanent life insurance policy in the event of lapse? ✔✔Lengthened Benefit Period In a life policy, a statement of good health is needed when: ✔✔The application does not include the premium. The Commissioner must examine each insurer every: ✔✔5 years When Jason filled out his application his statements had to be ______________ to be considered legal. ✔✔Representations Jamie has a renewable term policy. Which of the following is not an incorrect statement about this type of policy. ✔✔Renewability is the insurer's option. Jennifer made an additional premium payment on her Adjustable Life policy. Which of the following is not a way that her policy is affected by this payment? ✔✔The value of nonforfeiture options may decrease. Which of the following statements regarding the misstatement of age provision is false? ✔✔The provision allows the policy to remain the same even if the insured's age is misstated on the policy application. Jeff has limited financial resources, but finds himself in a position where he needs a good deal of protection. A __________would probably best suit his needs at this time. ✔✔Term policy Alex's life policy lapsed, which Nonforfeiture option would the insurer send him the value of the policy? ✔✔Cash surrender What is the maximum reinstatement period for a life insurance policy in Texas? ✔✔3 years What are the two most common adjustments made during a month with a universal life insurance policy? ✔✔Cost of death protection deducted and current interest rate credited What type group plan requires 75% participation? ✔✔Contributory Which of the following could be used to prevent a lapse in the payment of life insurance premiums? ✔✔Automatic premium loan Does a loan on the cash value of a life insurance policy accrue interest, and if so, how is the interest handled? ✔✔Yes, the interest can be paid annually, or added to the loan. Phil and Sarah bought a life policy in which both are insured. Sarah dies before Phil. If the policy pays the death benefit after Phil dies, it is a: ✔✔Survivorship life What type policy would pay the death benefits after the first person dies, if it covers two or more lives? ✔✔Joint life An insurance application is not complete unless it has: ✔✔The signature of the insured (unless not an adult), and the agent. What is the maximum amount of time an insurance policy may be backdated? ✔✔6 months What is the advantage of a Waiver of Premium provision in a life policy? ✔✔Waive an insured's premiums if he/she becomes disabled. Over-funded life insurance policies where the proceeds are subject to taxation are called: ✔✔MECs Blake died 20 days after his group life insurance coverage was terminated. He did not apply for individual coverage. Which of the following is true? ✔✔His beneficiary will receive the full death benefit. To be allowed to convert a group life insurance policy to an individual policy, someone must have been employed for how much time? ✔✔5 years A variable whole life policy would be the most appropriate for: ✔✔A 34 year old executive with a lawyer wife and a child What must an insurer have before engaging in the insurance business? ✔✔Certificate of authority Sandra needs more protection than she can afford right now due to her limited financial resources. Her needs can be met by a: ✔✔Term policy Josh wants to provide income for his family for a designated period if he should die, and a lump sum benefit as well. He should purchase: ✔✔A family income rider The type policy agents buy to protect themselves if they give incorrect advice or didn't advise a client about an important issue is a: ✔✔E&O On December 6, an application for life insurance is submitted with the initial premium. On December 23 the insurer issues the policy. Due to it being Christmas, the agent doesn't deliver the policy until December 28. A conditional receipt was issued without a required medical exam. When is coverage effective? ✔✔December 6 Which contract pay an additional sum if the insured dies due to an accident? ✔✔AD&D (Accidental Death and Dismemberment) If an applicant is found guilty of material misrepresentation on an application, how long does the insurer have to contest the policy? ✔✔2 years from the effective date of the policy Which of the following is not true about variable universal life policies? ✔✔They have no provision for policy loans and withdrawals. All of the following acts are considered unfair trade practices, EXCEPT: ✔✔Replacement A Business Continuation Agreement is used to assure business ownership is transferred upon the death of an owner or partner. Another name for this is: ✔✔Buy and Sell Agreement. If Dylan wants a set minimum rate of return, what type annuity should he buy? ✔✔Fixed At what time during the application and approval process for life insurance must insurable interest exist? ✔✔When the application on a proposed insured is written. A guaranteed insurability rider allows the insured to protect against insurability risk. What is NOT protected? ✔✔Premiums Which of the following types of policy cannot be third-party ownership? ✔✔Modified life What would be best for someone who received a large lump sum from their company retirement and wants to be sure their basic living needs are always covered? ✔✔An immediate annuity purchased with a lump sum If an applicants statements on an application are guaranteed to be true, they are: ✔✔Warranties. Preston needs a life policy. He is just starting out as a doctor. In two years he will be making more money, and would like the option for a more permanent policy. What type policy should he buy? ✔✔Convertible term With what receipt is coverage assured, even if the person is later proved to be uninsurable, until the insurer formally rejects the application? ✔✔Binding Which of the following statements is true about the return of premium rider? ✔✔It is an increasing term rider that matches the total premium input. If the Commissioner has reason to believe an insurer or agent has been engaging in any violation of insurance regulations, the Commissioner must first: ✔✔Call for a hearing of the suspected violation Which of the following is not true about an increasing term policy? ✔✔The increases occur randomly. A credit life policy must contain all of the following, EXCEPT: ✔✔Name and address of the debtor What are the advantages of purchasing a straight life policy? ✔✔The face amount and the premiums are level, and payable over the life of the insured, up to 100 years of age, the cash value and death benefits are guaranteed by the insurer. and the premium can be lower than limited payment and single premium polices. Baxter tells the insurer to keep the dividend and apply it to the face value of his life policy. He is using which dividend option? ✔✔Paid-up addition All of the following policies are not interest-sensitive EXCEPT: ✔✔Universal life Marshall wants to reinstate his life policy and to do so he need not do which of the following? ✔✔Make a collateral assignment to the insurance company. An insurance producer inquired with what company an applicant had a Medicare Supplement policy. When she told him, the producer was silent. Concerned by his silence, the woman asked if the company was a reliable company. The producer asked, "Have you received any financial statements regarding their solvency?" This producer: ✔✔Was engaging in defamation What happens to a death benefit if it is determined that an applicant stated their age was younger than their actual age? ✔✔The death benefit would be lowered. After proof of death has been provided, how much time does a life insurance company have to pay the claim? ✔✔2 months What kind of term policy would a man with limited resources most likely purchase to make sure that his wife and children are secure in their home if he dies while the children are young and in school? ✔✔Decreasing term In a life insurance policy in Texas what provision describes the early payment of a death benefit? ✔✔Accelerated life benefit All of the following are true regarding nonresident producer licensing, EXCEPT: ✔✔Nonresident licensees' home state must not have a reciprocal relationship with Texas. When an insured dies, the settlement option provision: ✔✔Specifies how the proceeds are handled. This type annuity benefit payments start at a later date, greater than 12 months from of purchase: ✔✔Deferred What should someone buy who is concerned about being able to function independently without help when they become older? ✔✔A long-term care rider attached to a life insurance policy A person licensed to give advice regarding insurance policies in exchange for a fee includes all the following, EXCEPT: ✔✔Insurance broker A Lump Sum payment for life insurance is: ✔✔Not taxable Premium payment mode is: ✔✔Frequency of premium payments Which of the following is true about the Waiver of Premium provision in a life policy? ✔✔The disability must be total and permanent. Becky is a 31 years old and knows she needs to start a retirement plan. She currently works in a bakery and is worried about how inflation would affect her retirement plan. Which annuity would be a good fit for her needs? ✔✔Flexible premium deferred annuity In a life insurance policy, statements by the insured are considered: ✔✔Representations A decreasing term life policy would be the most appropriate for: ✔✔A 41 year old lawyer who wants a policy to pay his mortgage if he dies An agent's appointment remains in force: ✔✔Until terminated or surrendered A life insurance policy in Texas must contain all the following provisions, EXCEPT: ✔✔Settlement and/or Viatical Which of the following is true about the granting of a temporary insurance license? ✔✔None of the above What approach calculates the amount of money a family needs immediately upon the death of the insured to pay for their expenses and basic necessities? ✔✔Needs Which of the following is not a change that a policyowner can make to an adjustable life policy? ✔✔Change the named insured Noncontributory plans: ✔✔Must have 100% participation In which clause would the insurance company's promise to pay be included? ✔✔Insuring clause Jeremy, a producer, is proposing a life policy to a new client. When must he inform the client of their rights under the FCRA? ✔✔When he completes the application. The provision that determines who becomes the beneficiary if the insured and primary beneficiary both die in the same accident: ✔✔Common disaster The policy summary is usually given to the purchaser at the time of: ✔✔Delivery What is the grace period for life insurance policies in Texas? ✔✔31 Days For tax purposes, how are premiums from a group life policy treated for an employer? ✔✔Tax deductible Coverage becomes effective in a life policy when: ✔✔The initial premium is paid, and the policy is delivered. If a group life insurance policy is terminated, an individual policy can be issued within how many days? ✔✔31 Days Which of the following are commercial companies owned by policyholders? ✔✔Mutual insurers Which of the following is a difference between the level premium annuity and the flexible premium annuity? ✔✔The amount of the annuity benefit can be guaranteed. Transacting insurance does NOT include which of the following? ✔✔Adjudication If the word, variable, is in the name of an insurance plan or annuity, it means that: ✔✔Investment in securities is involved. The cash loan provision of a life insurance policy states that: ✔✔A policy loan in an amount up to the current cash value, less any existing indebtedness, may be made. This type annuity benefit payments start within a year of purchase: ✔✔Immediate All of the following are types of third-party ownership EXCEPT: ✔✔APL Which of the following is NOT a nonforfeiture option that will protect the cash value of a permanent life insurance policy in the event of lapse? ✔✔Waiver of Premium Angela is now 65 years old. The cash value of her 20-pay endowment at age 65 policy is equal to: ✔✔The face amount of the policy. All of the following statements are correct about representations EXCEPT: ✔✔They are not part of the contract. A life insurance policyowner may assign what amount of the policy? ✔✔All When Barbara's brother died, his policy paid an amount over the face value of the policy. He probably had: ✔✔An AD&D policy Miranda has stopped paying her premiums, but a provision in her policy provides for continuation of coverage. What is that provision called? ✔✔Nonforfeiture option How does an insurer verify the personal characteristics of an applicant? ✔✔The insurer gets an inspection report. What happens if there is a misstatement of age on a life insurance policy? ✔✔The policy pays according to what the premiums paid would have bought for the correct age. Preston tells the insurer to keep the dividend and use it to invest. He is using which dividend option? ✔✔Accumulate at interest Which of the following statements regarding annual renewal term (ART) policies is false? ✔✔ART is guaranteed renewable on an annual basis with proof of insurability. Which of the following is not a correct statement about equity-indexed annuities? ✔✔A securities license is required to sell EIAs. The highest total premium is a result of which premium payment mode? ✔✔Monthly For tax purposes, how are individual life premiums treated? ✔✔Not tax deductible [Show More]

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