Texas Life Insurance Final Exam Questions and Answers 2024, Exams of Nursing

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Answers 2024

If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of? - correct answers✅✅ Insured What type of insurance offers permanent life coverage with premiums that are payable for life? - correct answers✅✅ Whole life An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager? - correct answers✅✅ Key Person Life Policy What is the purpose of a Policy Summary? - correct answers✅✅ It highlights the critical parts of the policy issued 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: - correct answers✅✅ Variable Life Premature IRA distributions are assessed a penalty tax of - correct answers✅✅ 10% An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable? - correct answers✅✅ $6,

Answers 2024

The reason for backdating a policy is - correct answers✅✅ to obtain a premium rate based on an earlier age Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation? - correct answers✅✅ Policy was returned within the free-look period, premium will be fully refunded Which of these characteristics is consistent with a Straight Life policy? - correct answers✅✅ Premiums are payable for as long as there is insurance coverage in force Which of these life insurance riders allows the applicant to have excess coverage? - correct answers✅✅ Term Rider A foreign insurance company conducting insurance business in Texas - correct answers✅✅ was formed under the laws of another state With whom may an agent legally share commissions? - correct answers✅✅ Another agent with the same line of insurance Group life insurance policies are generally written as:

• term rider

Answers 2024

attained age. What factor would affect her decision most? - correct answers✅✅ The cost During a sales presentation for a participating life insurance policy, an agent MUST - correct answers✅✅ make a prospect understand that dividends are NOT guaranteed What is an organization that solicits insurance only to its members - correct answers✅✅ Fraternal benefit society When an insurance application is taken by a producer, which of these statements is true? - correct answers✅✅ any changes made on the application require the applicant's initials T and S are named co-primary beneficiaries on a $500, 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? - correct answers✅✅ $ A domestic insurance company in Texas is considered a company that... - correct answers✅✅ is incorporated and formed in Texas Whole Life insurance is sometimes referred to as "Straight Life". What does the word "Straight" indicate when using this phrase? - correct answers✅✅ The duration of premium payments

Answers 2024

Which of the following are Equity Indexed annuities typically invested in? - correct answers✅✅ S&P 500 Which of these is NOT an example of doing insurance business? - correct answers✅✅ Selling shares of stock The advantage of reinstating an original life policy is - correct answers✅✅ the premiums are based on a younger age In TX, which of these statements regarding the Suicide clause is TRUE? - correct answers✅✅ An insurer may not use suicide as a defense against payment after the second year Which of the following is NOT included in a life insurance illustration? Underwriting classification upon which the illustration is based Insurer's name Amount of death benefit Company's mortality table - correct answers✅✅ Company's mortality table An employee is covered under a company group life plan with a $50,000 death benefit. What is the MAXIMUM amount a spouse

Answers 2024

The phrase "transacting business" includes - correct answers✅✅ collecting premiums What type of life insurance gives the greatest amount of coverage for a limited period of time? - correct answers✅✅ Term life The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called an - correct answers✅✅ Insuring agreement ABC Insurance Company is actively engaging in boycott, coercion, and intimidation that results in the unreasonable restraint of trade. ABC is committing a prohibited act under TX insurance laws covering - correct answers✅✅ unfair methods of competition J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions? - correct answers✅✅ Reinstatement provision Which of the following is NOT a required provision in group life policies? - correct answers✅✅ Right to loan The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and - correct answers✅✅ the initial premium

Answers 2024

Which of the following is a requirement for obtaining a TX insurance agent's license? - correct answers✅✅ Be honest, trustworthy, and reliable A certificate of _____ permits an insurance company to transact business in TX - correct answers✅✅ authority An example of false advertising would be - correct answers✅✅ an insurer exaggerating its dividends in a magazine advertisement 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? - correct answers✅✅ Straight Life An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager? - correct answers✅✅ Key Person insurance What kind of premium does a Whole Life policy have? - correct answers✅✅ level Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before

Answers 2024

The Automatic Premium Loan provision is designed to: - correct answers✅✅ avoid a policy lapse Taking receipt of premiums and holding them for the insurance company is an example of: - correct answers✅✅ fiduciary responsibility A ____ _____ Life policy combines investment choices with a form of Term coverage - correct answers✅✅ Variable universal An insured may assign up to ____ of policy ownership under an individual life insurance policy - correct answers✅✅ 100% A promotional advertising item is not considered a rebate unless it has a value equal to or less than what amount? - correct answers✅✅ $ P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability? - correct answers✅✅ P will still receive declared dividends What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan? - correct answers✅✅ 50%

Answers 2024

P purchases a $50,000 whole life insurance policy in 2005. One of the questions on the application asks if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba- related accident in 2011. What will the insurer pay to P's beneficiary? - correct answers✅✅ $50,000 minus any outstanding policy loans A non-contributory plan requires ____ participation of all eligible employees - correct answers✅✅ 100% Under a trustee group life policy, who would be eligible for a certificate of coverage? - correct answers✅✅ employee Which of these provisions is NOT required in life insurance policies? - correct answers✅✅ extended term A life policy that contains a monthly mortality charge as well as self-directed investment choices is called a(n) - correct answers✅✅ variable universal life policy How long can a cash surrender value payment be deferred by the insurance company under the Nonforfeiture Law? - correct answers✅✅ 6 months When will a hearing be held after a notice of hearing, alleging participation in an unfair or deceptive act, is served to a licensee

Answers 2024

• waiver of premium
• long term care
• accelerated death benefit
• accidental - correct answers✅✅ Long term care A pilot applies for Life insurance. the insurer approves the application with a $10 additional monthly premium modification due to the risk involved. The pilot declines the additional premium modification. The insurer will then likely issue the coverage with a(n) - correct answers✅✅ aviation exclusion Which of these is NOT considered to be an element of an insurance contract? the offer acceptance negotiating consideration - correct answers✅✅ negotiating How long does an insurance company appointment remain in force? - correct answers✅✅ until terminated A Cost of Living rider gives the insured - correct answers✅✅ additional death benefits

Answers 2024

If an insured's age was misstated on a life insurance contract, the Misstatement of Age provision requires that any death benefit payable would be - correct answers✅✅ an amount that the premiums paid would have purchased at the current age What does the insuring agreement in a Life insurance contract establish? - correct answers✅✅ an insurer's basic promise What is required for an agent whose license has been revoked? - correct answers✅✅ wait at least five years before applying for a new license Any changes made on an insurance application requires the initials of whom? - correct answers✅✅ applicant In a life insurance contract, an insurance company's promise to pay stated benefits is called the: - correct answers✅✅ insuring clause What is the consideration given by an insurer in the Consideration clause of a life policy? - correct answers✅✅ Promise to pay a death benefit to a named beneficiary An immediate annuity consists of a - correct answers✅✅ Single Premium

Answers 2024

Which of the following actions does the Commissioner of Insurance NOT have the power to conduct? - correct answers✅✅ activate insurance companies' financial reserves Credit Life insurance is - correct answers✅✅ insurance issued on a debtor to cover outstanding loan balances A whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value?

• cash surrender
• life settlement contract
• buy-sell arrangement
• 1031 exchange - correct answers✅✅ life settlement contract In a Key Employee life insurance policy, the third-party owner can be all of the following, EXCEPT: - correct answers✅✅ Insured A life insurance arrangement which circumvents insurable interest statutes is called: - correct answers✅✅ Investor-Originated Life Insurance A(n) _____ Life policy offers the owner investment in products such as money-market funds, long-term bonds and equities - correct answers✅✅ variable

Answers 2024

Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself?

• policy exclusion
• incontestable
• entire contract provision
• assignment - correct answers✅✅ entire contract provision Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees?
• portion of the premiums paid for by the employer may be a tax deduction
• portion of the premiums paid for by the employee may be a tax deduction
• portion of the death proceeds are taxable to the beneficiary
• portion of the death proceeds are taxable to the estate - correct answers✅✅ portion of the premiums paid for by the employer may be a tax deduction A policy of adhesion can only be modified by whom?
• agent
• applicant
• primary beneficiary

Answers 2024

• partial withdrawal features beyond a surrender charge period - correct answers✅✅ partial withdrawal features beyond a surrender charge period Which statement is true regarding a minor beneficiary?
• normally, death proceeds are required to be held in trust until the beneficiary reaches the age of 21
• normally, a guardian is required to be appointed in the beneficiary clause of the contract
• the minor must pay the debts of the insured's estate before receiving any of the proceeds
• the minor is entitled to receive the death proceeds immediately - correct answers✅✅ normally, a guardian is required to be appointed in the beneficiary clause of the contract All of these statements about the Waiver of Premium provision are correct EXCEPT:
• a waiting period must pass before becoming eligible for benefits
• waiver of premium is available on both permanent and term insurance policies
• insured must be eligible for social security disability for claim to be accepted
• insured must be totally disabled to qualify - correct answers✅✅ insured must be eligible for social security disability for claim to be accepted

Answers 2024

All of the following statements regarding a Tax Sheltered Annuity (TSA) are true EXCEPT:

• income derived from the TSA is received income tax-free
• TSA's are available to public school employees
• Contributions to the TSA are tax- deductible
• interest earned by TSA is tax deferred - correct answers✅✅ income derived from the TSA is received income tax- free 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?
• universal life
• variable life
• fixed annuity
• modified endowment contract - correct answers✅✅ variable life Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?
• revocable assignment
• beneficiary change
• irrevocable assignment
• collateral assignment - correct answers✅✅ collateral assignment