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Pearson Vue Texas State Life + Health Insurance
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Consist of 150 multichoice Questions with Answers
- P wants to name her husband as the beneficiary of her life policy. However, she wishes to retain all of the rights of ownership. P should have her husband named as the: a: irrevocable beneficiary b: revocable beneficiary c: secondary beneficiary Answer: B
- A contract that has as its basic function the systematic
2 / liquidation of accumulated assets through periodic payments is called an: A. indemnity contract B. investment contract C. endowment D. annuity Answer: D
- An insurance producer takes an application for a life insurance policy but does not collect the initial premium. On delivery of the policy to the proposed insured, the producer must collect the initial premium and which of the following? A. A copy of the MIB report B. The insured's signed statement of continued good health C. A copy of the conditional receipt D. A copy of the temporary insurance agreement that covered the period between the application date and the delivery date. Answer: B
- An employer can deduct premium payments as an ordinary business ex- pense for which of the following life coverages?
4 / B. Survivorship Life policy C. Joint Life policy D. Modified Life policy Answer: A
- Which of the following statements is CORRECT about Group Life conver- sion privileges? A. Under the COBRA law, a departing employee may elect to remain a member of the Group Life plan for a limited period of time. B. Death during the conversion period is covered even if the departing em- ployee chose not to convert the policy. C. A departing employee must individually pay the premium if the employee elects to be covered during the conversion period. D .If a departing employee elects to convert a life insurance policy, the insurer must offer Term insurance as one of the choices. Answer: B
- Which of the following policies is an interest-sensitive form of permanent protection? A. Universal Life B. Limited-Pay Life
5 / C. Graded Premium Whole Life D. Modified Whole Life Answer: A
- Reinstatement of a life insurance policy requires an insured to take all of the following actions EXCEPT: A. provide evidence of insurability B. make collateral assignment to the insurer C. pay back interest on any outstanding policy loan D. pay all past-due premiums Answer: B
- Which of the following statements about a Renewable Term policy is COR- RECT? A. It is renewable at the option of the insurer. B. It is renewable at the option of the insured. C. It is renewable at the option of the insurer, with proof of insurability. D. It is renewable at the option of the insured, with proof of insurability. Answer: B
7 / Protection Act) C. Equal Employment Opportunity Act D. Medicare Act Answer: B
- The PRIMARY reason for selecting a Variable Whole Life policy instead of a traditional Whole Life policy is that the Variable Whole Life policy: A. provides flexible premium payments B. allows the policyowner to borrow a larger percentage of the cash value C. has the potential to earn a higher rate of return on the cash value D. allows the policyowner more flexibility in naming and changing beneficia- ries Answer: C
- A policyowner names his wife as the primary beneficiary of his Universal Life policy on a revocable basis. He also names his three children as his secondary beneficiaries and his estate as his tertiary beneficiary. If the poli- cyowner's wife predeceases him, and then he dies, who will receive the policy proceeds?
8 / A. The children B. The policyowner's estate C. The primary beneficiary's estate D. The tertiary beneficiary Answer: A
- The Waiver of Premium provision of a life policy allows the insurer to take which of the following actions? A. Waive an insured's premiums if the insured becomes totally disabled before a certain age B. Waive an insured's premiums if the insured becomes partially disabled for a minimum time C. Increase an insured's coverage at an attained age without imposing a premium increase D. Reduce an insured's premiums if the insured pays them annually instead of monthly Answer: A
- Under the Social Security Retirement Benefits, all of the following factors will influence how much a retiring individual will receive as a monthly
10 / they are born Answer: C
- Which of the following statements is NOT correct about representations? A. They can be a part of the contract. B. They are true in every respect. C. They are assumed to be accurate. D. They influence the insurer's acceptance of the risk. Answer: B
- If an Adjustable Life policyowner makes an additional premium payment, the policy may be affected in all of the following ways EXCEPT the: A. premium paying period may decrease B. value of the Nonforfeiture Options may decrease C. face amount may increase D. length of coverage may increase Answer: B
- An insured owns a $10,000 policy with a $4,000 cash value and a 6 percent interest rate. On January 1, the insured borrows $500 and pays one year's interest in advance. During the year, the insured does not repay any part of the loan or interest. If the insured dies on December
11 / 31, the beneficiary will be entitled to a MAXIMUM of: A. $3, B. $6, C. $9, D. $9, Answer: D
13 / A. Modified Life B. Group Life C. Split-dollar Life D. Key Employee Life Answer: A
- In life insurance, insurable interest must exist at the time the A. producer delivers a policy B. proposed insured has a medical examination C. producer writes an application on a proposed insured D. beneficiary files a claim Answer: C
- A payor benefit rider provides one of the following benefits: A. A disability income benefit payable to the payor if the payor becomes disabled B. A permanent waiver of premium should the payor die C. A temporary waiver of premium should the payor die until the insured reaches a predetermined age D. A double indemnity Death benefit payable to the beneficiary upon the death of the payor Answer: C
- Two business partners own life insurance on each other. If one
14 / partner dies, which of the following contracts will allow the other partner to buy 100 percent of the business interest? A. Buy and Sell Agreement
16 / C. date of application D. date that the insurer issues the policy Answer: B
- A client needs a substantial amount of protection but has limited financial resources. Which of the following insurance policies would BEST meet the client's needs? A. Term Life B. Adjustable Life C. Whole Life D. Limited-Pay Life Answer: A
- A life policy is usually contestable due to material misrepresentation on the application for a period of: A. 30 days B. 6 months C. 2 years D. 5 years Answer: C
- Which of the following statements is CORRECT about the Paid-Up Addi- tions in a participating Whole Life policy? A. They are subject to underwriting approval.
17 / B. They do not generate dividends. C. They are considered Term policies. D. They are purchased on an attained age basis. Answer: D
19 / C. Modified Whole Life D. Annual Renewable Term Answer: C
- Federal income tax laws generally treat proceeds of life insurance policies as: A. graduated taxes B. deferred taxes C. nontaxable D. tax credits Answer: C
- Which of the following policy provisions states that the application is part of the policy? A. Entire contract B. Ownership clause C. Nonforfeiture option D. Assignment clause Answer: A
- A type of annuity in which the cash values are invested in securities is called: A. Variable B. Deferred
20 / C. Fixed D. Joint and survivorship Answer: A
