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Texas Life Insurance Study Guide latest 2025
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Which of the following is considered a field underwriter? - ✔✔An agent When must insurable interest exist in life insurance? - ✔✔Application or issues date If no receipt is issued at the time application, a statement of good health is usually required at the time of - ✔✔Policy Delivery The Medical Information Bureau is - ✔✔A source of medical information to alert insurers to adverse medical history A substandard risk compared to a standard risk would pay - ✔✔A higher premium Which of the following documents describes specific information about policy provisions and benefits? - ✔✔Policy Summary All the following may have an insurable interest in the insured EXCEPT - ✔✔Insured's best friend Which of the following would be the main source of underwriting information used by the company in the risk selection process? - ✔✔Application "90% information comes from the application"
An insured submits the full premium along with a completed application, and the policy is issued 10 days later. When does the coverage begin? - ✔✔On the date of the application What is the main responsibility of a company's underwriting unit? - ✔✔Risk selection and classification( preferred, standard, substandard) Which of the following best describes the purpose of the USA PATRIOT Act with regards to the insurance, what must the agent do? - ✔✔Inform the insurance company If the agent feels that there could be misrepresentation on the part of the applicant for insurance, what must the agent do? - ✔✔Inform the insurance company Representations are statements made by the applicant that are - ✔✔Considered true to the best of the applicant's knowledge If an agent fails to obtain an applicant's signature on the insurance application, the agent must - ✔✔Return the application to the applicant for a signature. Which of the following includes information regarding a person's credit, character, reputation, and habits? - ✔✔Consumers report What is insurance? - ✔✔is a contract in which one party (the insurance company) agrees to idemnify (make whole) the insured party against loss, damage or liability arising from an unknown event. Representation are statements made by the applicant for insurance that are - ✔✔True to the best of the applicant's knowledge.
A document that provides information for underwriting purposes is the... - ✔✔Application A person of average physical condition and lifestyles would receive which underwriting classification? - ✔✔Standard When the insured purchase 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 polices is best suitable for that need? - ✔✔Decreasing term An annually renewable term policy - ✔✔maintains a level premium each year Whose life expectancy is taken into consideration in an annuity? - ✔✔Annuitant An individual inherited a large sum of money at age 40 and wanted to use it to provide a guaranteed income after his retirement at age 60. Which of the following types of annuities would best meet this need? - ✔✔Deferred Which of the following would be considered a disadvantage of term insurance? - ✔✔If the insured dies after the end of the term, there is no death benefits to the beneficiary The renewable provision allows the policyowner to renew the coverage at the expiration date. - ✔✔Without evidence of insurability Which type of life insurance policy generates immediate cash value? - ✔✔Single premium
The time period during which an annuitant contributes to an annuity is called - ✔✔The accumulation period Which of the following is an example of a limited- pay life policy? - ✔✔Life paid- up at age 65 (higher premium) An individual owns a adjustable life policy. Sometimes in the future he wants to increase the death benefit. Which of the following statement is correct regarding the death benefits increases? - ✔✔It can be increased by providing evidence of insurability. Which of the following statements is true regarding a universal life policy? - ✔✔It is issued without a guaranteed interest rate With a traditional whole life policy, the death benefit - ✔✔remains constant overtime Whose life expectancy is taken into consideration in annuity? - ✔✔Annuitant An insured receives a monthly summary of his life insurance policy. The cash value this month is significantly lower than it was last month. What type of policy is it? - ✔✔Variable Which of the following is true regarding a joint life policy? - ✔✔Premium is based on the average age of the insureds 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 options has the insured chosen? - ✔✔Reduction of premium All of the following are nonforfeiture options in life insurance policies EXCEPT - ✔✔Automatic premium loans Which of the following is true of the fixed- period and fixed amount settlement options? - ✔✔both guarantee that the principal and interest will be fully paid out (pay everything out ) Which of the following is NOT a standard exclusion in life insurance policies? - ✔✔Disability Under what circumstances will the contingent beneficiary receive the death benefit? - ✔✔if the primary beneficiary dies before the insured If a life insurance policy has an irrevocable beneficiary designation, - ✔✔The beneficiary can only be changed with written permission of the beneficiary. Because of an injury, an insured has been unable to work for 7 months. He wasn't able to pay his life insurance policy premium, yet the policy remained in force. The policy includes - ✔✔Wavier of premium rider All of the following are true regarding the guaranteed insurability rider EXCEPT - ✔✔it is available automatically, for no extra premium The primary source of underwriting information is the - ✔✔application
The medical information bureau (MIB) membership consists of - ✔✔insurers A conditional receipt guarantees that coverage will begin on the date of application - ✔✔False (after the first payment) Which law protects consumers against the circulation of inaccurate or obsolete information - ✔✔Fair Credit Reporting Act An insurer is required to obtain a signed disclosures authorization form when it intends to - ✔✔obtain a consumer report (credit report) Statements made by the insured on the application are considered - ✔✔representation The proceeds paid to the beneficiary of a life insurance policy are called the - ✔✔Death benefits Which nonprofit organization collects and maintains adverse medical data on insurance applicant? - ✔✔Medical Information Bureau A beneficiary must have a insurable interest in the insured - ✔✔False Example: Insured :Jane Smith Agent: Bob Policy : term life
Purchasing a surivorship life policy is less expensive than purchasing two individual policies. - ✔✔True The shorter the premium-paying period of a whole life policy, the the total annual cost. - ✔✔higher Term life insurance is referred to as - ✔✔Temporary protection Decreasing term graph, the line A that ""? - ✔✔Death benefits Decreasing term graph In the graphic below, what does line B represent? "---" - ✔✔Premium Whole life insurance only endows at age 100. - ✔✔True The death benefit in a Universal Life policy is always annually renewable term... - ✔✔True Upon the insured's death, the beneficiary of a whole life policy will receive the face amount and the cash value - ✔✔False What is the annuity accumulation period? - ✔✔The pay in period
Generally, the premium paid for personal life insurance is - ✔✔Not tax deductible Which of the following is NOT true regarding policy loans? - ✔✔Money burrowed from the cash value is taxable Which of the following is NOT a requirement of a qualified plan? - ✔✔It must be temporary. (a qualified plan is permanent) If a life policy does not pass the 7 - pay test, that policy - ✔✔Becomes a modified Endowment Contract The 10 % early withdrawal penalty from an IRA can be waived for - ✔✔catastrophic medical expenses The number of credits required to obtain a fully insured status to receives social security benefits is - ✔✔ 40 All of the following persons who do not have an employer-sponsored retirement plan would be eligible to set up contribution to a traditional IRA EXCEPT - ✔✔Arelene, age 70, a nurse (70 1/2) What is the requirement for a number of employees in a SIMPLE plan? - ✔✔No more than 100 The advantage of qualified plans to employers is - ✔✔Tax- deductible contributions
An insurer who deliberately makes a malicious statement about another insurance company is guilty of an illegal trade practice called - ✔✔defamation Who is considered a nonresident agent? - ✔✔an agent who resides in another state, but is licensed to write insurance in this state. The Commissioner of insurance issues a cease and desist order and immediately receives a request for the charges to be reviewed in a hearing. Within how many days must the hearing be held? - ✔✔10 days All of the following would be considered a insurance transaction EXPECT - ✔✔Obtaining an insurance license. The commissioner of insurance is responsible for all of the following actions EXCEPT - ✔✔setting premium rates Which of the following person is required to hold a producer license? - ✔✔a nonresident agent who negotiates insurance contracts What is the minimum required number of continuing education credits in ethics every licensing period? - ✔✔2 hours What is the main purpose of requiring licenses for persons who transact insurance? - ✔✔to protect the general public Which of the following is NOT an example of a company's location of incorporation? - ✔✔Authorized
Agents whose license has been revoked will not be able to receive another license in Texas for at least - ✔✔5 years How often must producers renew their licenses? - ✔✔every 2 years Which of the following is the beneficiary in credit life insurance? - ✔✔Creditor A printer has hired an advertising agency to design and edited advertisement brochures for an insurance company. Once the brochures are printed, who is responsible for the advertisement and their content? - ✔✔The insurance company What provisions in a life insurance policy extends coverage beyond the premium due date? - ✔✔Grace period (30 days) According to the limitations of lawsuit provision, how many years does a claimant have to take legal actions against the insurer? - ✔✔2 years What is the term for an insured who enters into a viatical settlement? - ✔✔Viator How long is the grace period in group life polices issued in this state? - ✔✔ 31 days In credit life insurance, who is responsible for paying the policy premium? - ✔✔Borrower
The receipt given to a life insurance applicant when the application is completed and the initial premium is received is called a(n) - ✔✔conditional receipt Statement in the application for insurance that are believed to be true to the best of the applicant's knowledge are called - ✔✔representations All of the following apply to the waiver of premium rider except - ✔✔There is not charge for this provision An annuity is considered fixed when it does all the following EXCEPT - ✔✔provides the annuitant with either the guaranteed or current interest rate, whichever is less. The most common type of whole life insurance where premiums are payable over the whole life of the insured to age 100 is called - ✔✔Continuous premium (straight) life A beneficiary who has a vested interest in the proceeds of a life insurance policy is the - ✔✔irrevocable beneficiary The insured died four months after a 100,000 life insurance policy was issued and delivered. At the time of the claim, the company noticed the original application was missing some key information. What will the company do? - ✔✔Pay the death claim because the insurer waived the right to obtain the missing information The policy and a copy of the application, along with any riders and amendments, is called the - ✔✔entire contact
At the age can a participant receive distribution from a qualified plan without incurring a 10% penalty? - ✔✔59 1/ Which settlement options guarantees an income for two or more recipients for as long as they live? - ✔✔Joint and Survivor Which type of policy allows the insured to change the amount of the death benefits, amount of premium, or the type of coverage as their needs change? - ✔✔Adjustable life (for their life needs) To prevent individuals from profiting from a loss, insurance companies must be certain that - ✔✔Insurable interest exist If a misstatement of age is discovered during the processing of a life insurance claim, what will the insurance company do? - ✔✔Adjust the death benefits based on the premium that were paid. Each of the following is a typical characteristics of group life insurance EXCEPT - ✔✔evidence of insurability is usually required. A life settlement options that pays out the death benefits incrementally, in a specified amount until all of the proceeds are exhausted is called. - ✔✔Fixed amount installment A life insurance death benefit paid in a lump sum to a beneficiary is - ✔✔Not subject to any taxes
The MIB is a nonprofit trade association that maintains - ✔✔Medical information on applicants for life and health insurance What does an annuity protect the contract owner against? - ✔✔outliving his or her money First insured dies: no death benefits Last insured dies: death benefits paid - ✔✔Survivorship life An immediate annuity has no accumulation period. - ✔✔True Limited pay Whole life line A stop " --- ' - ✔✔The policy is paid up A 20 pay whole life policy means that insured is covered - ✔✔until death or age 100 Variable whole life policies have premium - ✔✔fixed A single premium whole life policy has cash value immediately available for a policy loan - ✔✔True The insured is also the policyowners of a whole life policy. What age must the insured attain to receive the policy's face amount? - ✔✔ 100 A level term life policy has a level face amount and a level premium - ✔✔true
Which policy allows the policyowner to increase, decrease, or skip premium payments? - ✔✔Universal life Which of the following types of policies allows partial surrenders? - ✔✔universal life Universal life policies have premiums. - ✔✔flexible Which policy component decreases in a decreasing term insurance? - ✔✔Face amount Which annuities have interest rates tied to a fund like the S&P 500? - ✔✔Equity indexed Whole life insurance is referred to as - ✔✔Permanent protection Premiums for a variable life policy are deposited in the - ✔✔separate account what term policy feature allows the policyowners to change to permanent coverage without evidence of insurability? - ✔✔Convertible Which life policy is used to pay off a debt, like a home mortgage? - ✔✔Decreasing term What type of annuity does the image below represent? The premium paid in lump sum in 2014 and then the payment start in 2017. - ✔✔Single premium deferred annuity
