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TEXAS GENERAL LINES LIFE, ACCIDENT AND
HEALTH INSURANCE 2 LATEST VERSIONS 2024-2025
ACTUAL EXAM COMPLETE 500 QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+
VERSION 1
1) Sandra Timms, age 27, is advised by her producer to purchase Life insurance to cover a 20-year-amortized $50,000 business- improvement loan. Which of the following plans would adequately protect Ms. Timms at the minimum premium outlay?
A- $50,000 Whole Life policy B- $50,000 Level Term policy for 20 years C- $50,000 20 Pay Life policy D- $50,000 Decreasing Term policy for 20 years - ANSWER- D—A $50,000 Decreasing Term policy for 20 years
Explanation: The key here is "minimum premium". Term is
the most inexpensive type of coverage. Since Sandra's $50,000 loan will be paid off over 20 years and the loan balance will decrease each year, Decreasing Term makes sense. Decreasing Term is not renewable. 1 / 4
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2) A 45-year old customer who is seeking to supplement his
retirement income at age 65 would not buy a:
A- Deferred Annuity B- Equity Indexed Annuity C- Variable Annuity D- Immediate Annuity - ANSWER- B- Equity Indexed Annuity
3) John Livingston owns a 30-Pay Life policy that he purchased at the age of 30. The cash value will equal the face amount of
the policy when he reaches the age of:
A- 60 B- 70
C- 100
D- 30 - ANSWER- C- 100
Explanation: Limited Pay Life insurance policies such as
Life Paid Up at 65 or 20-Pay Life are simply variations of Whole Life policies. The cash value will equal face amount of the policy (at least) at the maturity of the policy, which is always age 100 on Whole Life policies. These limited-pay policies are designed so that the insured may pay his or her premiums faster and be "paid up" at a certain age. 2 / 4
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However, just because the premiums are paid up doesn't mean the policy has matured.
4) Which of the following is an example of a Limited-Pay Life policy?A- Universal life B- Whole Life C- Life Paid-Up at Age 65 D- Renewable Term to Age 70 - ANSWER- C- Life Paid-Up at Age 65
5) Which of the following policies provides the greatest amount of protection for an insured's premium dollar as well as some cash accumulation?A- Annuity B- Whole Life C- Term D- Limited-Pay Life - ANSWER- B- Whole Life
If we had not mentioned cash accumulation, the answer would have been Term. However, Term has no cash value, so the answer is Whole Life, which is the most inexpensive type of permanent insurance and is required to have a cash value after the third policy year. Although Limited Pay Life 3 / 4
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is a type of Whole Life, it is incorrect since it is usually quite expensive due to the shortened pay-in period. Annuities have no cash value except the money the annuitant paid in. Since there is no death benefit, no protection is offered.
6) Which of the following individual policy conversions is usually permitted without any evidence of insurability? - ANSWER- C- Conversion from a Term policy to a Whole Life policy
7) Which of the following is NOT correct regarding Ordinary Whole Life policies?A- The premiums payments are owed annually until you die or reach age 100 B- The cash value grows more quickly in the beginning years of the policy C- Coverage lasts for your own life D- Ordinary Whole Life is a type of permanent insurance - ANSWER- D- Ordinary Whole Life is a type of permanent insurance
8) Which of the following statements is true about the premium payment schedule for a Whole Life policy?A- Premiums are payable for a designated period of time only, after which coverage is no longer provided
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