General Insurance Concepts
Which principle ensures an insured is restored to their financial position prior to a loss, not allowed to profit from it?
Principle of Indemnity
This is the simplest and least expensive type of life insurance, covering you for a specific number of years with no cash value.
Term Life Insurance
This clause gives policyholders a short time after delivery to cancel for a full refund.
Free-look period
This financial product provides income payments, often used for retirement.
Annuity
What is the process insurers use to evaluate applicants and determine premium rates?
Underwriting
In Texas, this is the minimum age a person must be to sign a valid life insurance contract.
18 years old
This principle requires that an insurance contract must have an exchange of value, such as premiums paid for coverage.
Consideration
In Texas, this is the minimum number of days an insurance company has to either pay a claim or provide a reason for denial after receiving proof of loss.
15 days
This permanent life insurance provides guaranteed premiums, a death benefit, and a cash value that grows at a fixed rate.
Whole Life Insurance?
This rider pays an additional benefit if death is the result of an accident.
Accidental Death Benefit?
In this type of annuity, payments begin immediately after a lump-sum purchase.
Immediate Annuity
A person with excellent health and low-risk lifestyle is placed in this rating classification.
Preferred
This Texas agency regulates and enforces insurance laws.
Texas Department of Insurance
This principle states that only those who face a possible financial loss can buy insurance on a person or property.
Insurable Interest
What life insurance policy provides coverage for a set number of years and does not build cash value.
Term Insurance?
A flexible permanent policy in Texas that allows you to adjust your premiums, death benefit, and cash value growth based on current interest rates.
Universal Life Insurance
This rider allows the insured to buy more coverage at future dates without proving insurability.
Guaranteed Insurability Rider
This type of annuity grows tax-deferred and allows flexible premiums before payout begins later.
Deferred Annuity
This medical exam result can impact underwriting, often checking blood pressure, cholesterol, and nicotine.
paramedical exam
A life insurance policy in Texas cannot be backdated more than this many months.
Six months
This principle requires both the insurer and insured to act honestly and disclose all material facts.
Utmost Good Faith
In Texas, this clause allows policyholders a set period after receiving a policy to review and cancel it for a full refund.
Free-look period
This type of policy combines life insurance with investment options, allowing cash value to grow based on the performance of stock, bond, or mutual fund subaccounts.
Variable Life Insurance?
This rider waives premium payments if the insured becomes totally disabled.
Waiver of Premium Rider
A deferred annuity that guarantees a minimum interest rate regardless of market conditions
Fixed Annuity
Someone with a dangerous job, poor health history, or risky hobbies might be placed in this classification.
Substandard
What must be provided when a producer receives money from a client for insurance coverage.
premium receipt
This principle states that when a policy is unclear, it will be interpreted in favor of the insured since the insurer wrote the contract.
Principle of Adhesion
This type of life insurance rider allows the insured to purchase additional coverage in the future without proof of insurability.
Guaranteed insurability rider
In Texas, this hybrid policy offers both term and permanent coverage, letting you divide your protection between temporary needs and lifelong security.
Combination Life Insurance Policy
This provision prevents the insurer from voiding the policy due to misstatements after it has been in force for two years.
Incontestability Clause
A deferred annuity that offers investment options with returns based on the performance of chosen subaccounts.
Variable Annuity
Insurers use this federal law to protect consumers’ medical information during underwriting.
HIPPA
If an agent’s license expires, this is the number of days allowed to renew without retaking the exam
90 days
This principle prevents someone from collecting multiple insurance payouts greater than the actual loss.
Principle of Contribution