Texas General Lines - Life, accident and health insurance PRACTICE EXAM Question and answers already passed 2023

Texas General Lines - Life, accident and health insurance PRACTICE EXAM Question and answers already passed 2023 LIFE SECTION 1 - correct answer LIFE SECTION 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 - correct 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. 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 - correct 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 - correct 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