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TEXAS GENERAL LINES LIFE ACCIDENT AND HEALTH INSURANCE EXAM
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TEXAS GENERAL LINES LIFE ACCIDENT AND HEALTH INSURANCE EXAM
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TEXAS GENERAL LINES LIFE ACCIDENT ANDHEALTH INSURANCE EXAM
LIFE SECTION 1 - 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? - 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: - 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: -
ANSWER A- 60
B- 70
C- 100
D- 30
4) Which of the following is an example of a Limited-Pay Life policy? - 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? - 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? - 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? -
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? - 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: - 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? - 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: - 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: - 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? - 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? - 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: - 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: -
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: - 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 - 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? -
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: - 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: - 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: - 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? - 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? - 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 - ANSWER LIFE SECTION 2
1) Which of the following statements about the Reinstatement provision is true? -
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: - 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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