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SIMULATOR TEXAS LIFE AND HEALTH EXAM REVIEW QUESTIONS WITH COMPLETE ANSWERS
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SIMULATOR TEXAS LIFE AND HEALTH EXAM REVIEW QUESTIONS WITH COMPLETE ANSWERS
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SIMULATOR TEXAS LIFE AND HEALTHEXAM REVIEW QUESTIONS WITH
COMPLETE ANSWERS
A 42-year-old executive wants to purchase life insurance that will allow for increases or
decreases to coverage as his/her needs change. Which of the following policies will
best meet this need?
-Endowment at Age 75
-Universal Life
-Graded Benefit Whole Life
- Modified Whole Life - Answer-Universal Life
A policy of adhesion can only be modified by whom?
-The agent
-The applicant
-The primary beneficiary
-The insurance company - Answer-The insurance company
S is close to retiring and would like to purchase a policy that will yield greater gains than
bonds, but will still protect the principal with a minimum level or risk. Which product
would S be advised to purchase?
- Equity index insurance
- Endowment
- Graded whole life policy
-Return of premium policy - Answer-Equity index insurance
An insurance company may NOT reject a prospective insured's life application on the
basis of which of the following factors?
-Hobbies
-Weight
-Gender
-Medical history - Answer-Gender
Boycott, coercion, and intimidation that result in the unreasonable restraint of trade are
prohibited under the Texas Insurance Code covering
-rebating
-false advertising
-discrimination
-unfair methods of competition - Answer-unfair methods of competition
,An insurance company must do which of the following to terminate an agent's
appointment?
- Send notice of the termination to the Texas Department of Insurance
- Request that the Texas Department of Insurance cancel the agent's license
-Notify the agent of the termination at least 30 days before the effective date of
termination
-Request a hearing before the Commissioner of Insurance - Answer-Send notice of the
termination to the Texas Department of Insurance
Which of the following correctly explains the actions an agent should take if a customer
wants to apply for an insurance policy?
- Have the customer sign a blank application, then take the application back to his office
to complete prior to sending it off to the insurance company
-Complete the application over the phone with the customer, sign the application for the
customer, then send the application off to the insurance company
-Complete the application and review the information with the customer prior to
obtaining the customer's signature, then send the application off to the insurance
company
- Have the customer fill out the application and send it to his office for him to sign, then
send it off to the insurance company - Answer-Complete the application and review the
information with the customer prior to obtaining the customer's signature, then send the
application off to the insurance company
What year was the McCarran-Ferguson Act enacted?
1944
1945
1946
1947 - Answer-1945
Who makes the legally enforceable promises in unilateral insurance policy?
- Beneficiary
-Insurance company
-Insured
-Applicant - Answer-Insurance company
Which of these is an element of a Variable Life policy?
- A fixed, level premium
- Insurer assumes the investment risk
-No investment risk to the policyowner
-Rate of returns are guaranteed - Answer-A fixed, level premium
J chooses a monthly premium payment mode on his Whole Life insurance policy. Which
of these statements is correct? - Answer-The gross premium is higher on a monthly
payment mode as compared to being paid annually
, Under the Texas insurance code, an insurance company must pay death benefits for
suicide if the policy has been in force for a MINIMUM of - Answer-2 years
Any changes made on an insurance application requires the initials of whom? - Answer-
Applicant
An insurer receives proof of loss for an acceptable medical expense claim under an
Individual Health Insurance Policy. Under the Time of Payment of Claims provision, the
insurer MUST pay the benefits - Answer-immediately
When an employee is required to pay a portion of the premium for an
employer/employee group health plan, the employee is covered under which of the
following plans? - Answer-Contributory
Which of these types of life insurance allows the policyowner to have level premiums
and to also choose from a selection of investment options? - Answer-Variable Life
Which of these types of policies may NOT have the Automatic Premium Loan provision
attached to it?
Modified Whole Life
20-Pay Life
Decreasing Term
Endowment - Answer-Decreasing Term
A provision in a life insurance policy that pays the policyowner an amount that does not
surpass the guaranteed cash value is called the - Answer-Policy Loan provision
Which Federal law allows an insurer to obtain an inspection report on a potential
insured? - Answer-Fair Credit Reporting Act
Which of these is NOT a reason for purchasing life insurance on the life of a minor?
-If both parents were to die, it would provide death benefits to the child
- Provides funds for final expenses if the child were to die
- Provides living benefits for the child's college education
-Provides child with insurance now, in case the child becomes uninsurable later -
Answer-If both parents were to die, it would provide death benefits to the child
Which of the following statements is CORRECT regarding the tax treatment of a lump-
sum payment paid to a life insurance policy's primary beneficiary? - Answer-All
proceeds are income tax free in the year they are received
Which of the following statements is CORRECT about accelerated death benefits? -
Answer-Must have a terminal illness to qualify
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