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Texas General Lines - Life, accident and health insurance PRACTICE EXAM
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Texas General Lines - Life, accident andhealth insurance PRACTICE EXAM
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? - correct answer-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
2) A 45-year old customer who is seeking to supplement his retirement income at age 65
would not buy a: - correct answer-A- Deferred Annuity
B- Equity Indexed Annuity
C- Variable Annuity
D- Immediate 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: - correct
answer-A- 60
B- 70
C- 100
D- 30
4) Which of the following is an example of a Limited-Pay Life policy? - correct answer-A-
Universal life
B- Whole Life
C- Life Paid-Up at Age 65
D- Renewable Term to Age 70
5) Which of the following policies provides the greatest amount of protection for an insured's
premium dollar as well as some cash accumulation? - correct answer-A- Annuity
B- Whole Life
C- Term
D- Limited-Pay Life
6) Which of the following individual policy conversions is usually permitted without any
evidence of insurability? - correct answer-A- Conversion to a lower-premium plan
B- Conversion from a Whole Life policy to a Term policy
C- Conversion from a Term policy to a Whole Life policy
D- Conversion to a larger amount of insurance
,7) Which of the following is NOT correct regarding Ordinary Whole Life policies? - correct
answer-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
8) Which of the following statements is true about the premium payment schedule for a
Whole Life policy? - correct answer-A- Premiums are payable for a designated period of time
only, after which coverage is no longer provided
B- Premiums are payable until the insured's retirement only, after which coverage is
continued automatically until the insured's death
C- One premium, in the amount of the insured's choice, is payable at the time of application,
and the balance of the premiums is deducted from the face amount of the policy at the time
of the insured's death
D- Premiums are payable throughout the insured's lifetime, and coverage continues until the
insured's death
9) A life insurance policy that covers two parties, but only pays when the last party dies is
known as: - correct answer-A- Joint Life
B- Contingent Life
C- Other insured Life
D- Survivorship Life
10) Which of the following contracts requires that a series of benefit payments be made at
specified intervals? - correct answer-A- 20-Pay Life
B- Modified Whole Life
C- Annuity
D- Ordinary Whole Life
11) If a client wants cash value life insurance with a flexible premium and an adjustable
death benefit that will allow the policy owner a choice of various cash value investment
options, he should buy: - correct answer-A- Variable Life
B- Universal Life
C- Adjustable Life
D- Variable/Universal Life
12) If a person wants to invest a lump sum in an annuity that may appreciate along with
market and economic conditions, they should buy a: - correct answer-A- Flexible premium
Annuity
B- Fixed Annuity
C- Deferred Annuity
D- Variable Annuity
13) You have a client that is a real estate agent. Which of the following types of permanent
protection is best for this type of client? - correct answer-A- Variable life
,B- Universal life
C- Survivorship life
D- Adjustable life
14) In order to sell variable life insurance you must be registered with which of the following?
- correct answer-A- The SEC
B- The State
C- The NYSE
D- The NASD
15) Which of the following is an example of a Limited-Pay Life policy: - correct answer-A-
Traditional Whole Life
B- Endowment at 65
C- 10 year Renewable Term Life
D- 20-Pay Life
16) An insurance producer selling a Variable Annuity whose cash value depends on the
performance of an underlying investment account must be registered with: - correct
answer-A- The National Association of Insurance Commissioners
B- The National Association of Life Underwriters
C- The Chartered Life Underwriters
D- The Financial Industry Regulatory Authority (FINRA, formerly the NASD)
17) A business owner with a fluctuating income who wants a life insurance policy that can be
changed to suit economic conditions should buy: - correct answer-A- Variable Life
B- Modified Whole Life
C- Adjustable Life
D- Interest-sensitive Whole Life
18) An Annuity is designed to provide which of the following financial features?
I. The liquidation of principal and interest
II. Favorable tax treatment
III. The creation of an estate - correct answer-A- I, II, and III
B- I and II
C- I and III
D- II and III
19) Which of the following statements about a Renewable Term policy is true? - correct
answer-A- It is renewable at the option of the insurance company
B- It is renewable at the option of the insured
C- It is renewable at the option of the insurance company, with proof of insurability
D- It is renewable at the option of the insured, with proof of insurability
20) Most Term Life insurance: - correct answer-A- Is convertible to permanent Whole Life
without a physical exam
B- Has a guaranteed cash value
C- Is renewable with evidence of insurability
, D- Is renewable to age 100
21) A life insurance policy whose cash value will fluctuate depending upon the performance
of a separate account is: - correct answer-A- Limited-pay Life
B- Universal Life
C- Ordinary Life
D- Variable Life
22) A life insurance policy that combines term insurance protection, a flexible premium, and
cash value accumulation is: - correct answer-A- Increasing Term Life
B- Variable/Universal Life
C- Universal Life
D- Variable Life
23) Which of the following types of insurance policies would provide the greatest amount of
protection for a temporary period during which an insured will have limited financial
resources? - correct answer-A- Term
B- Limited Pay policy
C- Whole Life
D- Annuity
24) At age 30, Tom Morris wishes to purchase a Whole Life policy. His producer explains
that he can pay for the policy in several ways. One method is called 20-Pay Life, and
another, Straight Life. Tom wishes to know which plan will accumulate cash value at a faster
rate in the early years of the policy. Which of the following would be the producer's most
appropriate response? - correct answer-A- "20-Pay Life will accumulate cash value faster."
B- "The rate of cash-value accumulation depends on the profitability of the insurance
company."
C- "Straight Life will accumulate cash value faster."
D- "Both plans will accumulate cash value at the same rate."
LIFE SECTION 2 - correct answer-LIFE SECTION 2
1) Which of the following statements about the Reinstatement provision is true? - correct
answer-A- It provides for reinstatement of a policy regardless of the insured's health
B- It requires the policy owner to pay, with interest, all premiums that are in arrears in order
for the policy to be reinstated
C- It permits reinstatement within 10 years after a policy has lapsed
D- It guarantees the reinstatement of a policy that has been surrendered for cash
2) The time period covered by the Free Look provision of a Life insurance contract starts: -
correct answer-A- When the insured receives the contract and a "right to look" receipt
B- When the contract is received in the agency office and given to the producer
C- When the insured receives the contract and makes the first premium payment, if needed
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