Life Insurance Policy Provisions and Regulations, Exams of Personal Health

Download Life Insurance Policy Provisions and Regulations and more Exams Personal Health in PDF only on Docsity! Texas Life Insurance exam Latest Update year 2024/2025 A key-person insurance policy benefit will pay for... - ✔✔Cost of training a replacement A life agent's license must be renewed.. - ✔✔Every 2 years on the anniversary date of issuance A life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specific period of time is known as the.. - ✔✔Incontestability clause A spouse receives $5,000 a month until the principle and interest on her husband"s life insurance policy have been paid out. Which settlement option did this beneficiary choose? - ✔✔Fixed amount A substandard risk compared to a standard risk would pay? - ✔✔a higher premium A temporary license is normally valid for.. - ✔✔90 Days Adjustable Life - ✔✔Life insurance that permits changes in the face amount, premium amount, period of protection, and the premium payment period Agents whose license has been revoked will not be able to receive another license in Texas for at least.. - ✔✔5 Years Alien insurer - ✔✔and insurance company that is incorporated outside the united states An agent who offers a cash reward to a prospect for buying a policy is guilty of.. - ✔✔Rebating An annually renewable term policy? - ✔✔Renews each year with an increased premium An employee quits his job and converts his group insurance to individual policy. On which of the following will premium for the individual policy be based? - ✔✔Insured's attained age An example of limited-pay life policy? - ✔✔Life paid-up at the age 65 An individual inherited a large sum of money at age 40 and wanted to use it to provide a guarantee income after his retirement at age 60. Decreasing Term - ✔✔A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy Dividends - ✔✔Paid only on participating polices. A return of excess premiums Not taxable Are not Guaranteed Does not have an insurable interest? - ✔✔Insured's best friend Domestic Insurer - ✔✔an insurance company that is incorporated in this state Entire Contract - ✔✔Stipulates that the policy and a copy of the application, along with any rider or amendments Equity-Indexed Life - ✔✔(indexed whole life) main future is that the cash value is dependent upon the performance of the equity index, such as S&P 500, although there is a guaranteed minimum interest rate Fair Credit Reporting Act - ✔✔Established procedures that consumer- reporting agencies must follow in order to ensure that records are confidential, accurate, relevant and properly used. Fair Credit Reporting Act 2 - ✔✔Protects consumers against circulation of inaccurate or obsolete information Fixed annuity - ✔✔An annuity that offers fixed payments and guarantees a minimum rate of interest to be credited to the purchase payment or payments. Foreign Insurer - ✔✔an insurance company that is incorporated in another state or territorial possession(such as Puerto Rico, Guam, or American Samoa Generally, the premium paid for personal life insurance is? - ✔✔Not tax deductible Higher Frequency = Higher Premiums - ✔✔Monthly> Quarterly> Semi- Annual> Annual How often must producers renew their licenses? - ✔✔Every 2 Years If a life insurance policy has irrevocable beneficiary designation, - ✔✔The beneficiary can only be changed with written permission of the beneficiary If a life policy does not pass the 7-pay test, that policy... - ✔✔Becomes a Modified Endowment Contract If an agent fails to obtain an applicants signature on the insurance application, the agent must? - ✔✔Return the application to the applicant for signature If no receipt is issued at the time of application, a statement of good health is usually required at the time of? - ✔✔Policy delivery If the agent feels that could misrepresentation on the part of the applicant for insurance, what must the agent do? - ✔✔Inform the insurance comapny In an insurance transaction, which of the following does a licensed agent represent? - ✔✔Insurer In group life policies, individual certificates are given to.. - ✔✔Each insured person Increasing Term - ✔✔Level premiums and a death benefit that increases each year over the duration of the policy term Payor Benefit Rider - ✔✔Found in juvenile polices which waivers the premiums if the person paying them (often the parent) is disabled or dies while the child is still a minor Policy Replacement - ✔✔Present to the applicant a NOTICE REGARDING REPLACEMNT that is signed by both the applicant and producer Policy Summary - ✔✔Written statement describing the FEATURES and ELEMENTS of the policy being issued Premium Payment (MODE) - ✔✔Refers to the frequency the policy owner pays the premium Renewable Term - ✔✔Insurance which can, at the election of the policy owner be renewed at the end of a term without evidence of insurability Representations - ✔✔Statement made by the applicant on the insurance application that are BELIEVED to be true, but are not guaranteed to be true Representations are statements made by the applicant that are? - ✔✔Considered true to the best of the applicant's knowledge Single premium - ✔✔Designed to provide a level death benefit to the insured's age 100 for a one-time, lump sum payment Social Security benefits - ✔✔Retirement, disability, and survivors Stock Companies - ✔✔Owned by the stockholders who provide the capital necessary to establish and operate the insurance company who share in any profits or losses Straight Life - ✔✔(Continuous Premiums) the basic whole life policy Term Insurance - ✔✔Temporary protection because it only provides coverage for a specific period of time. Also know as (pure Life insurance). Provides for the greatest amount of coverage for the lowest premium compared to other forms of protection The 10% early withdrawal penalty from an IRA can be waived for... - ✔✔Catastrophic medical expenses The advantage of qualified plans to employers is - ✔✔Tax-deductible contributions The application consist of? - ✔✔2 Parts 1. General Information 2. Medical Information The Basic types of Term insurance are? - ✔✔Level, Increasing, Decreasing The Commissioner of Insurance is NOT responsible for? - ✔✔Setting premium rates The Commissioner of Insurance issues a Cease and Desist Order and immediately revceives a request for the charges to be reviewed in a hearing. Within how many days must the hearing be held? - ✔✔10 Days The insured is also the policyowner of a whole life policy. What age must the insured attain in order to receive the policy's face amount? - ✔✔100 The insured usually pays $1,200 annually for her life insurance premium. This year, she has accumulated $175 in dividends, and applied that to her next premium, reducing it to $1,025. What dividend option has the insured chosen? - ✔✔Reduction of premium The Medical Information Bureau is?(MIB) - ✔✔a source of medical information to alert insurers to adverse medical history What is NOT a requirement of a qualified plan? - ✔✔it must be temporary What is NOT a standard exclusion in life insurance policies? - ✔✔Disability What is NOT an example of a company's location of incorporation? - ✔✔Authorized What is not consider an insurance transaction? - ✔✔Obtaining an insurance license What is not TRUE about the guaranteed insurability rider? - ✔✔it is available automatically, for no extra premium What is NOT true regarding policy loans? - ✔✔Money borrowed from the cash value is taxable. What is the main purpose of requiring license for persons who transact insurance? - ✔✔To protect insurance companies from incompetent producers What is the main responsibility of a company's underwriting unit? - ✔✔Risk selection and classification What is the main source of underwriting information used by the company in the risk selection process? - ✔✔Application What is the minimum required number of continuing education credits in the ethics every licensing period? - ✔✔2 Hours What is the requirement for a number of employees in a SIMPLE plan - ✔✔No more than 100 What is true about the free-look period in a life insurance policy? - ✔✔It commences when the policy is delivered What is true regarding a joint life policy? - ✔✔Premium is based on the average age of the insureds What is true regarding a universal life policy? - ✔✔The premiums can be decreased by the insured What kind of person would not be eligible to set up contribution to a traditional IRA? - ✔✔Age 72, a nurse What person is required to a producer license? - ✔✔A nonresident agent who negotiates insurance contracts What provision of a life insurance policy states the application is part of the contract? - ✔✔Entire contract What term refers to the transfer of some or all of the ownership of some or all of the ownership rights of a life insurance policy from one individual to another? - ✔✔Assignment What would be considered a disadvantage of term insurance? - ✔✔If the insured dies after the end of the term, there is no death benefit to the beneficiary When a death claim is submitted, the insurer discovered that the insured understated her age on the application for a life policy. What will the insurer take? - ✔✔Pay a reduced death benefit based on the insured's actual age When must insurable interest exist in life insurance? - ✔✔Application or issue date When the insured purchased a new home, he wanted to purchase a life insurance policy that would protect his family against losing it should he die before the mortgage was paid. Which of the following policies is best suitable for that need? - ✔✔Decreasing term