TexasGeneralLines-Life,accidentand healthinsurancePRACTICEEXAM LIFESECTION1-correctanswer-LIFESECTION1 1)SandraTimms,age27,isadvisedbyherproducertopurchaseLifeinsurancetocovera 20-year-amortized$50,000business-improvementloan.Whichofthefollowingplanswould adequatelyprotectMs.Timmsattheminimumpremiumoutlay?-correctanswer-A-$50,000 WholeLifepolicy B-$50,000LevelTermpolicyfor20years C-$50,00020PayLifepolicy D-$50,000DecreasingTermpolicyfor20years 2)A45-yearoldcustomerwhoisseekingtosupplementhisretirementincomeatage65
wouldnotbuya:-correctanswer-A-DeferredAnnuity
B-EquityIndexedAnnuity C-VariableAnnuity D-ImmediateAnnuity 3)JohnLivingstonownsa30-PayLifepolicythathepurchasedattheageof30.Thecash
valuewillequalthefaceamountofthepolicywhenhereachestheageof:-correct
answer-A-60 B-70 C-100 D-30 4)WhichofthefollowingisanexampleofaLimited-PayLifepolicy?-correctanswer-A- Universallife B-WholeLife C-LifePaid-UpatAge65 D-RenewableTermtoAge70 5)Whichofthefollowingpoliciesprovidesthegreatestamountofprotectionforaninsured's premiumdollaraswellassomecashaccumulation?-correctanswer-A-Annuity B-WholeLife C-Term D-Limited-PayLife 6)Whichofthefollowingindividualpolicyconversionsisusuallypermittedwithoutany evidenceofinsurability?-correctanswer-A-Conversiontoalower-premiumplan B-ConversionfromaWholeLifepolicytoaTermpolicy C-ConversionfromaTermpolicytoaWholeLifepolicy D-Conversiontoalargeramountofinsurance 1 / 4 Download at gaviki.comDownload at gaviki.com
7)WhichofthefollowingisNOTcorrectregardingOrdinaryWholeLifepolicies?-correct answer-A-Thepremiumspaymentsareowedannuallyuntilyoudieorreachage100 B-Thecashvaluegrowsmorequicklyinthebeginningyearsofthepolicy C-Coveragelastsforyourownlife D-OrdinaryWholeLifeisatypeofpermanentinsurance 8)Whichofthefollowingstatementsistrueaboutthepremiumpaymentschedulefora WholeLifepolicy?-correctanswer-A-Premiumsarepayableforadesignatedperiodoftime only,afterwhichcoverageisnolongerprovided B-Premiumsarepayableuntiltheinsured'sretirementonly,afterwhichcoverageis continuedautomaticallyuntiltheinsured'sdeath C-Onepremium,intheamountoftheinsured'schoice,ispayableatthetimeofapplication, andthebalanceofthepremiumsisdeductedfromthefaceamountofthepolicyatthetime oftheinsured'sdeath D-Premiumsarepayablethroughouttheinsured'slifetime,andcoveragecontinuesuntilthe insured'sdeath 9)Alifeinsurancepolicythatcoverstwoparties,butonlypayswhenthelastpartydiesis
knownas:-correctanswer-A-JointLife
B-ContingentLife C-OtherinsuredLife D-SurvivorshipLife 10)Whichofthefollowingcontractsrequiresthataseriesofbenefitpaymentsbemadeat specifiedintervals?-correctanswer-A-20-PayLife B-ModifiedWholeLife C-Annuity D-OrdinaryWholeLife 11)Ifaclientwantscashvaluelifeinsurancewithaflexiblepremiumandanadjustable deathbenefitthatwillallowthepolicyownerachoiceofvariouscashvalueinvestment
options,heshouldbuy:-correctanswer-A-VariableLife
B-UniversalLife C-AdjustableLife D-Variable/UniversalLife 12)Ifapersonwantstoinvestalumpsuminanannuitythatmayappreciatealongwith
marketandeconomicconditions,theyshouldbuya:-correctanswer-A-Flexiblepremium
Annuity B-FixedAnnuity C-DeferredAnnuity D-VariableAnnuity 13)Youhaveaclientthatisarealestateagent.Whichofthefollowingtypesofpermanent protectionisbestforthistypeofclient?-correctanswer-A-Variablelife 2 / 4 Download at gaviki.comDownload at gaviki.com
B-Universallife C-Survivorshiplife D-Adjustablelife 14)Inordertosellvariablelifeinsuranceyoumustberegisteredwithwhichofthefollowing?-correctanswer-A-TheSEC B-TheState C-TheNYSE D-TheNASD
15)WhichofthefollowingisanexampleofaLimited-PayLifepolicy:-correctanswer-A-
TraditionalWholeLife B-Endowmentat65 C-10yearRenewableTermLife D-20-PayLife 16)AninsuranceproducersellingaVariableAnnuitywhosecashvaluedependsonthe
performanceofanunderlyinginvestmentaccountmustberegisteredwith:-correct
answer-A-TheNationalAssociationofInsuranceCommissioners B-TheNationalAssociationofLifeUnderwriters C-TheCharteredLifeUnderwriters D-TheFinancialIndustryRegulatoryAuthority(FINRA,formerlytheNASD) 17)Abusinessownerwithafluctuatingincomewhowantsalifeinsurancepolicythatcanbe
changedtosuiteconomicconditionsshouldbuy:-correctanswer-A-VariableLife
B-ModifiedWholeLife C-AdjustableLife D-Interest-sensitiveWholeLife 18)AnAnnuityisdesignedtoprovidewhichofthefollowingfinancialfeatures?I.Theliquidationofprincipalandinterest II.Favorabletaxtreatment III.Thecreationofanestate-correctanswer-A-I,II,andIII B-IandII C-IandIII D-IIandIII 19)WhichofthefollowingstatementsaboutaRenewableTermpolicyistrue?-correct answer-A-Itisrenewableattheoptionoftheinsurancecompany B-Itisrenewableattheoptionoftheinsured C-Itisrenewableattheoptionoftheinsurancecompany,withproofofinsurability D-Itisrenewableattheoptionoftheinsured,withproofofinsurability
20)MostTermLifeinsurance:-correctanswer-A-IsconvertibletopermanentWholeLife
withoutaphysicalexam B-Hasaguaranteedcashvalue C-Isrenewablewithevidenceofinsurability 3 / 4 Download at gaviki.comDownload at gaviki.com
D-Isrenewabletoage100 21)Alifeinsurancepolicywhosecashvaluewillfluctuatedependingupontheperformance
ofaseparateaccountis:-correctanswer-A-Limited-payLife
B-UniversalLife C-OrdinaryLife D-VariableLife 22)Alifeinsurancepolicythatcombinesterminsuranceprotection,aflexiblepremium,and
cashvalueaccumulationis:-correctanswer-A-IncreasingTermLife
B-Variable/UniversalLife C-UniversalLife D-VariableLife 23)Whichofthefollowingtypesofinsurancepolicieswouldprovidethegreatestamountof protectionforatemporaryperiodduringwhichaninsuredwillhavelimitedfinancial resources?-correctanswer-A-Term B-LimitedPaypolicy C-WholeLife D-Annuity 24)Atage30,TomMorriswishestopurchaseaWholeLifepolicy.Hisproducerexplains thathecanpayforthepolicyinseveralways.Onemethodiscalled20-PayLife,and another,StraightLife.Tomwishestoknowwhichplanwillaccumulatecashvalueatafaster rateintheearlyyearsofthepolicy.Whichofthefollowingwouldbetheproducer'smost appropriateresponse?-correctanswer-A-"20-PayLifewillaccumulatecashvaluefaster." B-"Therateofcash-valueaccumulationdependsontheprofitabilityoftheinsurance company." C-"StraightLifewillaccumulatecashvaluefaster." D-"Bothplanswillaccumulatecashvalueatthesamerate." LIFESECTION2-correctanswer-LIFESECTION2 1)WhichofthefollowingstatementsabouttheReinstatementprovisionistrue?-correct answer-A-Itprovidesforreinstatementofapolicyregardlessoftheinsured'shealth B-Itrequiresthepolicyownertopay,withinterest,allpremiumsthatareinarrearsinorder forthepolicytobereinstated C-Itpermitsreinstatementwithin10yearsafterapolicyhaslapsed D-Itguaranteesthereinstatementofapolicythathasbeensurrenderedforcash
2)ThetimeperiodcoveredbytheFreeLookprovisionofaLifeinsurancecontractstarts:-
correctanswer-A-Whentheinsuredreceivesthecontractanda"righttolook"receipt B-Whenthecontractisreceivedintheagencyofficeandgiventotheproducer C-Whentheinsuredreceivesthecontractandmakesthefirstpremiumpayment,ifneeded
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