Texas Life Insurance Exam Questions and Answers with

Texas Life Insurance Exam Questions and Answers with complete solutions 2023/2024 Insurance (General concept) - Correct Answer - transfers the risk of loss from an individual to an insurer

• based on the principle of indemnity
• based on the principle of risk (risk pooling)

insurable interest (General Concept) - Correct Answer - must exist at the time of the application

• insuring one's own life, family member, or a business partner

Solicitation and sales presentation - Correct Answer - illustration- presentation of nonguaranteed elements

• buyer's guide is generic information about life polices which must be provided at the

time of application

• policy summary is a description of features and benefits of the policy being issued and

must be provided when the policy is delivered.Underwriting (Field underwriting (by agent) - Correct Answer - application completed and signed

• agent's report: agent's observation about the application that can assist in underwriting

-premiums with application and conditional receipts underwriting ( company underwriting) - Correct Answer - multiple sources of information: applications, consumer reports, MIB (Medical Information Burea)

• Risk Classification: 3 types of risk : standard, substandard, preferred

Underwriting (Federal Regulation) - Correct Answer - Fair Credit Reporting Act: protect consumers against circulations of inaccurate or obsolete information

• USE PATRIOT Act/ Anti-money Laundering and Suspicious Activity Reports Rules

Premium Determination - Correct Answer - 3 key Factors for life insurance: mortality, interest, and expense

- Mode: the more frequently premium is paid, the higher the premium

Policy Issue and Delivery - Correct Answer Effective date of coverage - if the premium is not paid with the application, the agent must obtain the premium and a statement of continued good health at the time of the policy delivery Agent/ Producer - Correct Answer a legal representative of an insurance company; the classification of producers usually includes agents and brokers' agents are the agents of the insurer Applicant of proposed insured - Correct Answer a person applying for insurance 1 / 2

Beneficiary - Correct Answer a person who receives the benefits of an insurance policy Broker - Correct Answer an insurance producer who is not appointed by an insurance company and who represents the client Death benefits - Correct Answer the amount paid upon death of the insured in a life insurance policy Estate - Correct Answer a person's net worth Insurance policy - Correct Answer a contact between a policyowner (and/or insured) and an insurance company which agrees to pay insured or the beneficiary for loss caused by specific events.Insured - Correct Answer a person covered by the insurance policy; may or may not be the policyowner insurer (principal) - Correct Answer the company who issues an insurance policy Lapse - Correct Answer policy termination due to nonpayment of premium Life insurance - Correct Answer coverage on human lives Policyowner - Correct Answer the person entitled to exercise the rights and privileges in the policy Premium - Correct Answer the money paid to the insurance company for the insurance policy Underwriting - Correct Answer is the risk selection and classification process Attained age - Correct Answer the insured's age at the time the policy is issued or renewed cash value - Correct Answer a policy's saving element or living benefit Face amount - Correct Answer the amount of benefits stated in the life insurance policy Fixed life insurance - Correct Answer contracts that offer guaranteed minimum or fixed benefits Deferred - Correct Answer withheld or postponed until a specified time or event in the future

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