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LIFE INSURANCE EXAM QUESTION (TEXAS) AND ANSWERS
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LIFE INSURANCE EXAM QUESTION (TEXAS) AND ANSWERS
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LIFE INSURANCE EXAM QUESTION(TEXAS) AND ANSWERS
Which of the following is considered a field underwriter? - Answer-An agent
When must insurable interest exist in life insurance? - Answer-Application or issues
date
If no receipt is issued at the time application, a statement of good health is usually
required at the time of - Answer-Policy Delivery
The Medical Information Bureau is - Answer-A source of medical information to alert
insurers to adverse medical history
A substandard risk compared to a standard risk would pay - Answer-A higher premium
Which of the following documents describes specific information about policy provisions
and benefits? - Answer-Policy Summary
All the following may have an insurable interest in the insured EXCEPT - Answer-
Insured's best friend
Which of the following would be the main source of underwriting information used by the
company in the risk selection process? - Answer-Application
"90% information comes from the application"
An insured submits the full premium along with a completed application, and the policy
is issued 10 days later. When does the coverage begin? - Answer-On the date of the
application
What is the main responsibility of a company's underwriting unit? - Answer-Risk
selection and classification( preferred, standard, substandard)
Which of the following best describes the purpose of the USA PATRIOT Act with
regards to the insurance, what must the agent do? - Answer-Inform the insurance
company
If the agent feels that there could be misrepresentation on the part of the applicant for
insurance, what must the agent do? - Answer-Inform the insurance company
Representations are statements made by the applicant that are - Answer-Considered
true to the best of the applicant's knowledge
,If an agent fails to obtain an applicant's signature on the insurance application, the
agent must - Answer-Return the application to the applicant for a signature.
Which of the following includes information regarding a person's credit, character,
reputation, and habits? - Answer-Consumers report
What is insurance? - Answer-is a contract in which one party (the insurance company)
agrees to idemnify (make whole) the insured party against loss, damage or liability
arising from an unknown event.
Representation are statements made by the applicant for insurance that are - Answer-
True to the best of the applicant's knowledge.
Insurable interest must exist at the time of - Answer-application
A warranty is an - Answer-absolutely true statement
If an insurer issues a policy with unanswered questions on the application, the insurer
has given up the right to use the missing information in underwriting. - Answer-True
The agent's report includes the agent's personal observation concerning the proposed
insured. - Answer-True
The primary purpose of an investigative consumer report is to assess an applicant's -
Answer-Lifestyle and habits
In a life insurance policy, when must insurable interest exist? - Answer-A valid insurable
interest may exist between the policyowners and the insured when they policy is
insuring any of the following
1. policyowner's own life
2. the life of a family member (a spouse or a close blood relative)
3. The life of a business partner, key employees, or someone who has a financial
obligation to the policy owner (such as debtor to a creditor)
Insurance is the transfer of risk - Answer-True
What type of receipt is given to the applicant who submits the application with the
premium payment? - Answer-conditional
A document that provides information for underwriting purposes is the... - Answer-
Application
A person of average physical condition and lifestyles would receive which underwriting
classification? - Answer-Standard
, When the insured purchase a new home, he wanted to purchase a life insurance policy
that would protect his family against losing it should he die before the mortgage was
paid. Which of the following polices is best suitable for that need? - Answer-Decreasing
term
An annually renewable term policy - Answer-maintains a level premium each year
Whose life expectancy is taken into consideration in an annuity? - Answer-Annuitant
An individual inherited a large sum of money at age 40 and wanted to use it to provide a
guaranteed income after his retirement at age 60. Which of the following types of
annuities would best meet this need? - Answer-Deferred
Which of the following would be considered a disadvantage of term insurance? -
Answer-If the insured dies after the end of the term, there is no death benefits to the
beneficiary
The renewable provision allows the policyowner to renew the coverage at the expiration
date. - Answer-Without evidence of insurability
Which type of life insurance policy generates immediate cash value? - Answer-Single
premium
The time period during which an annuitant contributes to an annuity is called - Answer-
The accumulation period
Which of the following is an example of a limited- pay life policy? - Answer-Life paid- up
at age 65 (higher premium)
An individual owns a adjustable life policy. Sometimes in the future he wants to increase
the death benefit. Which of the following statement is correct regarding the death
benefits increases? - Answer-It can be increased by providing evidence of insurability.
Which of the following statements is true regarding a universal life policy? - Answer-It is
issued without a guaranteed interest rate
With a traditional whole life policy, the death benefit - Answer-remains constant
overtime
Whose life expectancy is taken into consideration in annuity? - Answer-Annuitant
An insured receives a monthly summary of his life insurance policy. The cash value this
month is significantly lower than it was last month. What type of policy is it? - Answer-
Variable
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