Texas Insurance License Quiz | 150 Questions with 100% Correct Answers | Verified | Latest Update
Question : At what point must a life insurance applicant be
informed of their rights that fall under the Fair Credit Reporting Act?
Correct answer: Upon completion of the application
Question : Who elects the governing body of a mutual
insurance company?
Correct answer: policyholders
Question : An insurance applicant MUST be informed of an
investigation regarding his/her reputation and character according to the
Correct answer: Fair Credit Reporting Act
Question : What type of reinsurance contract involves two
companies automatically sharing their risk exposure?
Correct answer: Treaty
Question : The stated amount or percent of liquid assets that
an insurer must have on hand that will satisfy future obligations to its policyholders is called
Correct answer: reserves
Question : Which of the following requires insurers to
disclose when an applicant's consumer or credit history is being investigated
Correct answer: 1970 - Fair Credit Reporting Act
Question : What is the consideration given by an insurer in
the Consideration clause of a life policy?
Correct answer: Promise to pay a death benefit
Question : When third-party ownership is involved, applicants
who also happen to be the stated primary beneficiary are required to have
Correct answer: insurable interest in the proposed insured
Question : Statements made on an insurance application that
are believed to be true to the best of the applicant's knowledge are called
Correct answer: representations
Question : The part of a life insurance policy guaranteed to be
true is called a
Correct answer: warranty
Question : Which of these is NOT a type of agent authority?
Express/ Implied/ Principal/ Apparent.
Correct answer: Principal
Question : The Consideration clause of an insurance contract
includes
Correct answer: the schedule and amount of premium
payments
Question : E and F are business partners. Each takes out a
$500,000 life insurance policy on the other, naming himself
as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to?
Correct answer: In this situation, the proceeds from E's life
insurance policy will go to F.
Question : Which of the following terms defines the legally
enforceable promise in an insurance contract by the insurer?
Correct answer: Unilateral
Question : When must insurable interest exist for a life
insurance contract to be valid?
Correct answer: Inception of the contract
Question : Insurance contracts are known as ____ because
certain future conditions or acts must occur before any claims can be paid.