Question 2015 of 287 · Texas Life, Accident and Health Agent Exam

A policy loan from a whole life policy

Exactly one answer is correct.

Amust be repaid within 12 months or the policy is cancelled
Bis made against the cash value, with interest charged and unpaid loans reducing the death benefit
Cis reported as taxable income in the year it is made, for every kind of policy, unless the applicant requests otherwise in writing
Dcan be taken only after the insured reaches age 65

Show solution

Correct answer to question 2015

B: is made against the cash value, with interest charged and unpaid loans reducing the death benefit

Explanation

Loans are secured by the cash value, so no credit check is needed. If the insured dies with a loan outstanding, the insurer subtracts the loan and interest from the death benefit.

2016Which nonforfeiture option provides a paid-up policy of the same type as the original, with a reduced face amount?
2017Under the extended term nonforfeiture option, the policy
2018Which dividend option uses dividends to buy small amounts of fully paid-up additional insurance?
2019A policyowner who chooses to leave dividends with the insurer to earn interest has selected
2020Dividends on a participating whole life policy are generally treated for tax purposes as
2021The incontestability clause in an individual life policy in Texas generally prevents the insurer from contesting the policy on grounds of misstatement after

A policy loan from a whole life policy

Correct answer to question 2015

Explanation

More questions: Life: Riders, Provisions, Options and Exclusions