TEXAS LIFE HEALTH INSURANCE Exam 2024-2025 Latest Version With 150+Questions And Correct, Exams of Nursing

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TEXAS LIFE HEALTH INSURANCE Exam 2024-2025 Latest

Version With 150+Questions And Correct Answers

The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders. - ANSWER>> Reserves At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? - ANSWER>> Upon the completion of the application Which of these describe a participating insurance policy?

• ANSWER>> Policyowners are entitled to receive dividends An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the: - ANSWER>> Fair Credit Reporting Act A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a: - ANSWER>> Risk Retention Group Dividends payable to a policyowner are - ANSWER>> Declared by the insurance company

What is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained? - ANSWER>> Fair Credit Reporting Act Who elects the governing body of a mutual insurance company? - ANSWER>> Policyholders What year was the McCarran-Ferguson Act enacted? - ANSWER>> 1945 A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as : - ANSWER>> A fraternal benefit society When a policy pays dividends to its policyholders, it is said to be : - ANSWER>> Participating What type of reinsurance contract involves two companies automatically sharing their risk exposure? - ANSWER>> Treaty Which of the following insurers to disclose when an applicant's consumer or credit history is being

investigated: - ANSWER>> 1970 - Fair Credit Reporting Act A policy of adhesion can only be modified by whom? - ANSWER>> The Insurance company Which of the following consists of an offer, acceptance, and consideration? - ANSWER>> Contract When must insurable interest exist for a life insurance contract to be valid? - ANSWER>> Inception of the contract A contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of - ANSWER>> Adhesion Who makes the legally enforceable promises in a unilateral insurance policy? - ANSWER>> Insurance Company When must insurable interest be present in order for a life insurance policy to be valid? - ANSWER>> When the application is made

Life and health insurance policies are: - ANSWER>> Unilateral Contracts 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, 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 3 children at the time of death, the primary beneficiary is still F. However, an insurance interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? - ANSWER>> F Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called : - ANSWER>> Representations Which of these is NOT a type of agent authority? - ANSWER>> Principal In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this? - ANSWER>> Unilateral

Insurance policies are offered on a "take it or leave it" basis, which make them: - ANSWER>> Contracts of Adhesion Which of the following BEST describes a warranty? - ANSWER>> Statement guaranteed to be true The part of a life insurance policy guaranteed to be true is called a(n) : - ANSWER>> Warranty Taking receipt of premiums and holding them for the insurance company is an example of: - ANSWER>> Fiduciary Responsibility A policy of adhesion can only be modified by whom? - ANSWER>> The Insurance Company Which of these arrangements allows one to bypass insurable interest laws? - ANSWER>> Investor Originated Life Insurance (IOLI) What is the consideration given by an insurer in the Consideration clause of a life policy? - ANSWER>> Promise to pay a death benefit to a named beneficiary

In regards to representations or warranties, which of these statements is TRUE? - ANSWER>> If material to the risk, false representations will void a policy Which of these is considered a statement that is assured to be true in every aspect? - ANSWER>> Warranty Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? - ANSWER>> Legal Purpose (Insurable Interest) A life insurance policy would be considered a wagering contract WITHOUT: - ANSWER>> Insurable Interest All of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT: - ANSWER>> Bilateral If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of? - ANSWER>> Insured Which of these require an offer, acceptance, and consideration? - ANSWER>> Contract

At what point does an informal agreement become a binding contract? - ANSWER>> When consideration is provided by one of the parties to the contract Insurance policies are considered aleatory contracts because - ANSWER>> performance is conditioned upon a future occurrence A life insurance arrangement which circumvents insurable interest statutes is called: - ANSWER>> Investor Originated Life Insurance (IOLI) Which of the following consists of an offer, acceptance, and consideration? - ANSWER>> Contract Insurance contracts are known as ___________ because certain future conditions or acts must occur before any claims can be paid. - ANSWER>> Conditional Which of these is NOT considered to be an element of an insurance contract? - ANSWER>> Negotiating When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have: - ANSWER>> Insurable interest in the proposed insured

Q purchases a $500,000 life insurance policy and pays $900 in 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? - ANSWER>> Aleatory Which of these would be considered a Limited-Pay Life policy? - ANSWER>> Life Paid-Up at Age 70 K is looking to purchase Renewable Term Insurance. Which of these types of Term insurance may be renewable? - ANSWER>> Level What type of life policy covers two people and pays upon the death of the last insured? - ANSWER>> Survivorship A universal life policy is sometimes referred to as an unbundled life policy because the owner can see the interest earned, expense charges, and the ____ __ _________ - ANSWER>> Cost of insurance N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at

retirement. Which of these should N purchase? - ANSWER>> 30 pay life Which of the following types of Term Life policies most likely contains a Renewability feature? - ANSWER>> 10 year convertible term Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit? - ANSWER>> Variable Life Which of these characteristics is consistent with a Straight Life policy? - ANSWER>> Premiums are payable for as long as there is insurance coverage in force What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years? - ANSWER>> Family Maintenance Policy Under an interest sensitive whole life policy - ANSWER>> Cash values are determined by interest rates Which of the following features of a group Term Life policy enables an individual to leave the group and

continue his or her insurance without providing evidence of insurability? - ANSWER>> Conversion Privilege G purchased a Family Income policy at age 40. The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income? - ANSWER>> 10 years K purchased a life insurance policy in 1986 which paid 10% interest in the early years of the policy. 20 years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a higher premium is paid because of the falling interest rates. This type of policy is known as a ______ policy. - ANSWER>> Universal Under a graded premium policy, the premiums - ANSWER>> Are lower during the policy's early years When is the face amount of a whole life policy paid? - ANSWER>> When the insured dies or at the policy's maturity date, whichever happens first Which of the following information is not required to be included in a whole life policy? - ANSWER>> Policy's guaranteed dividend table

Q is looking to buy a life insurance policy that will provide the greatest amount of protection for a temporary time period. Which of these policies should Q purchase? - ANSWER>> Term life What type of policy would offer a 40 - year old, the quickest accumulation of cash value? - ANSWER>> 20 - pay life The amount of coverage on a group credit life policy is limited to - ANSWER>> The insured's total loan value A company that owns a life insurance policy on one of its key employees may do all of the following except - ANSWER>> Change the policy's interest rate Under a renewable term policy, - ANSWER>> The renewal premium is calculated on the basis of the insured's attained age A life policy with a death benefit and cash value that can fluctuate according to the performance of its underlying investment portfolio is referred to as: - ANSWER>> Variable life

Which of these life products is not considered interest - sensitive? - ANSWER>> Modified whole life P is looking to purchase a life insurance policy that will pay 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 Stranger - owned life insurance is when a person purchases life insurance only to sell to a: - ANSWER>> Third-party with no insurable interest If a 10 year term life policy contains a renewability provision, the policy will renew - ANSWER>> Without evidence of insurability Who benefits in investor - originated life insurance, when the insured dies? - ANSWER>> Policyowner Credit life insurance is typically issued with which of the following types of coverage? - ANSWER>> Decreasing term What kind of life insurance product covers children under their parent's policy? - ANSWER>> Term rider

The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is: - ANSWER>> The cost Which statement about a whole life policy is true? - ANSWER>> Cash value may be borrowed against What type of life insurance incorporates flexible premiums and an adjustable death benefit? - ANSWER>> Universal life Which type of policy is considered to be overfunded as stated by IRS guidelines? - ANSWER>> Modified endowment contract The cash value in a ___________ life policy may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors. - ANSWER>> Universal What type of life policy covers two 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 A father who dies within three years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision? - ANSWER>> Payor Provision Which of the following actions require a policy owner to provide proof of insurability in an adjustable life policy? - ANSWER>> Increase face amount K pays on a $20,000.20 - year endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? - ANSWER>> $20,000 death benefit S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level or risk. Which product would be advised to purchase? - ANSWER>> Equity index insurance Y purchased $100,000 worth of permanent protection on himself and $50,000 worth of 10 year term coverage for

his wife on the same policy which of these policies did Y purchase? - ANSWER>> Whole life policy with an other insured rider When a life insurance policy exceeds certain IRS table values, the result would create which of the following? - ANSWER>> Modified endowment contract Which of these is an element of a variable life policy? - ANSWER>> A fixed, level premium All of these insurance products require an agent to have proper FINRA Securities registration in order to sell them, except for: - ANSWER>> Modified whole life P owns a $25,000 life policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70 what kind of policy does P own? - ANSWER>> Endowment at age 70 The combination of whole life and ________ term insurance is referred to as a family income policy - ANSWER>> Decreasing

A _________ term life policy is normally used when covering an insurance mortgage balance. - ANSWER>> Decreasing A term life insurance policy matures: - ANSWER>> Upon the insured's death during the term of the policy T has a term policy that allows him to continue the coverage after expiration of the initial policy. What type of term coverage is this? - ANSWER>> Renewable Additional coverage can be added to a whole life policy by adding a : - ANSWER>> Decreasing term rider Which of the following life insurance policies combine term insurance with an investment element? - ANSWER>> Universal life Term life policies that have the ability to be converted to permanent coverage may do so during a specific time period. This conversion period ________________ - ANSWER>> Varies according to the contract Which of the following types of permanent life insurance policies offers the highest initial cash value? - ANSWER>> Single premium

Which of the following is considered an element of a variable life policy? - ANSWER>> Underlying equity investment Credit life insurance is: - ANSWER>> Issued an amount not to exceed the amount of the loan Variable whole life insurance can be described as: - ANSWER>> Both an insurance and securities product Which of these types of life insurance allows the policy owner to have level premiums, and to also choose from a selection of investment options? - ANSWER>> Variable life Which is true concerning a variable universal life policy - ANSWER>> Policy owner controls where the investment will go and select the amount of the premium payment K is shopping for a permanent life insurance policy that will offer her the most protection per dollar of annual premium. Which of these policies best fits her needs? - ANSWER>> Straight life

A _________ life policy offers the owner investment and products, such as money - market funds, long - term bonds and equities. - ANSWER>> Variable Which statement is true regarding a variable whole life policy? - ANSWER>> A minimum guaranteed death benefit is provided A life insurance policy that provides a policy owner with cash value along with a level face amount is called: - ANSWER>> Whole life J is 35- years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value? - ANSWER>> 20 - pay Life All of these are characteristics of an adjustable life policy, except: - ANSWER>> Face amounts can be adjusted using policy dividends What type of life insurance gives the greatest amount of coverage for a limited period of time? - ANSWER>> Term life

What advantage does the renewability feature give to a term policy? - ANSWER>> The insured may extend the coverage period Which statement is correct regarding the premium payment schedule for whole life policies? - ANSWER>> Premiums are payable throughout the insured's lifetime/coverage less until the death of the insured A policy that becomes a modified endowment contract: - ANSWER>> Will lose many of its tax advantages At what point does a whole life insurance policy endow?

• ANSWER>> When the cash value equals the death benefit Term insurance has which of the following characteristics
• ANSWER>> Expires at the end of the policy period What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time? - ANSWER>> Decreasing term Which policy requires an agent to register with the national Association of security dealers before selling - ANSWER>> Variable life

How does a typical variable life policy investment account grow? - ANSWER>> Through mutual funds, stocks, and bonds Of personal life insurance premiums is usually deductible for federal income tax purposes. - ANSWER>> 0% Primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also named in the policy, which of the following will occur when the insured dies? - ANSWER>> Proceeds will go to the contingent beneficiary T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? - ANSWER>> $ Which type of life insurance beneficiary requires his/her consent when a change of beneficiary is attempted by the policy owner? - ANSWER>> Irrevocable beneficiary

Which statement is true regarding a minor beneficiary? - ANSWER>> Normally a guardian is required to be appointed in the beneficiary clause of the contract Tea is the policy owner for a life insurance policy with an irrevocable beneficiary designation. If he wishes to change, the beneficiary team must obtain permission from the _____________. - ANSWER>> Beneficiary P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to: - ANSWER>> P only When can a policy owner change a revocable beneficiary? - ANSWER>> Anytime On a life insurance policy, who is qualified to change the beneficiary designation? - ANSWER>> Policy owner C is trying to determine whether to convert her convertible term life policy to whole life insurance, using her original age or tamed. What factor would affect her decision the most? - ANSWER>> The cost

A policy owners rights are limited under which beneficiary designation? - ANSWER>> Irrevocable beneficiary designation Who has the right to change a revocable beneficiary? - ANSWER>> Policy owner A policy owner is allowed to pay premiums more than once a year, under which provision? - ANSWER>> Mode of premium Which of the following statements is correct regarding the tax treatment of a lump sum payment paid to a life insurance policy's primary beneficiary? - ANSWER>> All proceeds are income tax free in the year they are received Jay would like to maintain the right to change beneficiaries which beneficiary designation should be used? - ANSWER>> Revocable beneficiary designation M purchased an accidental death and dismemberment policy and named his son as beneficiary. M has the right to change the beneficiary designation at any time. What

type of beneficiary is his son? - ANSWER>> Revocable beneficiary designation Kay has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. And you're the common disaster clause if Kay and her husband are both killed and then automobile accident where would the death proceeds be directed? - ANSWER>> Daughter, the contingent beneficiary Quarterly premium payments increase the annual cost of insurance because - ANSWER>> Interest to the insurer is decreased while the administrative costs are increased If the insured and primary beneficiary are both killed in the same accident, and it cannot be determined who died first where are the death proceeds to be directed under the uniform simultaneous death act? - ANSWER>> Insured's contingent beneficiary T is covered by an accidental death and dismemberment policy that has an air vocable beneficiary. What action will the insurance company take if T requests a change of beneficiary? - ANSWER>> Request of the change will be refused

Which statement regarding the change of beneficiary provision is true? - ANSWER>> A policy owner may change a beneficiary at any time. However, consents may be needed by the current beneficiary if designated as irrevocable. J chooses a monthly premium payments mode on his whole life insurance policy which of these statements is correct? - ANSWER>> The gross premium is higher on a monthly payment mode as compared to being paid annually A __________ beneficiary may be changed by the policy owner without the consent of the beneficiary. - ANSWER>> Revocable A level premium indicates: - ANSWER>> The premium is fixed for the entire duration of the contract How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy? - ANSWER>> If the primary beneficiary dies before the insured A whole life insurance policy owner does not wish to continue making premium payments which of the

following enable the policy owner to sell the policy for more than its cash value? - ANSWER>> Life settlement contract Which premium schedule result in the lowest cost to the policy owner? - ANSWER>> Annual The common disaster clause provides that if both the insured and the soul named beneficiary were to die in a common accident, which of the following is true? - ANSWER>> This clause provides the payment of proceeds to the insured's estate Which of these is not an element of life insurance premiums? - ANSWER>> Morbidity rate Which of the statements is incorrect regarding the federal income tax treatment of life insurance? - ANSWER>> Entire cash surrender value is taxable What is the underlying concept regarding level premiums? - ANSWER>> The early years are charged more than what is needed Which of the following best describes a contingent beneficiary? - ANSWER>> Person designated by the