Texas Life Insurance Agent Exam Flashcards (Set 1: 1–50)

A set of flashcards covering key concepts for the Texas Life Insurance Agent Exam, focusing on types of life insurance and contract details.

What is the main distinguishing feature between term life and permanent life insurance?

Term life provides temporary coverage for a set period; permanent life provides lifetime coverage with a cash value component.

How does a “renewable term” policy differ from a standard term policy?

It allows renewal without evidence of insurability at the end of each term, usually at a higher premium.

What is the purpose of the “convertibility” option in term life?

It allows the policyholder to convert to a permanent policy without proof of insurability.

In Texas, what is the maximum free-look period for life insurance?

10 days (20 days for replacement policies).

What is the “consideration” in a life insurance contract?

The policyowner’s premium payment and the insurer’s promise to pay benefits.

Define “insurable interest.”

A legitimate financial or emotional relationship that would cause loss upon the insured’s death; must exist at policy inception.

What happens if a life insurance applicant makes a material misrepresentation?

The insurer may void the contract if discovered within the contestability period (usually 2 years).

What is the primary advantage of a whole life policy over term life?

Guaranteed cash value accumulation and lifelong protection.

How does a “limited-pay whole life” policy work?

Premiums are paid for a limited time (e.g., 20 years or to age 65), but coverage lasts a lifetime.

What does “universal life” insurance allow that whole life does not?

Flexible premiums and adjustable death benefits.