Texas Life and Health Insurance Exam Questions and Answers (Verified Solutions)
Question 1: What type of reinsurance contract involves two
companies automatically sharing their risk exposure?
CORRECT ANSWER : Treaty
Question 2: 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 3: When third-party ownership is involved,
applicants who also happen to be the stated primary beneficiary are required to have
CORRECT ANSWER : insurable interest
Question 4: 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 5: The part of a life insurance policy guaranteed to
be true is called a(n)
CORRECT ANSWER : warranty
Question 6: Which of these is NOT a type of agent authority?
Express Implied Principal Apparent
CORRECT ANSWER : Principal
Question 7: The Consideration clause of an insurance contract
includes
CORRECT ANSWER : the schedule and amount of
premium payments
Question 8: 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 9: Which term defines the legally enforceable
promise in an insurance contract by the insurer?
CORRECT ANSWER : Unilateral
Question 10: Insurance contracts are known as ____ because
certain future conditions or acts must occur before any claims can be paid.
CORRECT ANSWER : conditional
Question 11: Which of these require an offer, acceptance, and
consideration?
CORRECT ANSWER : Contract
Question 12: Which of these is NOT considered to be an
element of an insurance contract?the offer acceptance negotiating consideration
CORRECT ANSWER : negotiating
Question 13: An agent is an individual that represents whom?
CORRECT ANSWER : Insurer
Question 14: Which policy requires an agent to register with
the National Association of Securities Dealers (NASD) before selling?