Texas Life Agent Practice Exam

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Prepare for the Texas Life Agent Exam. Study with flashcards and multiple-choice questions, each with hints and explanations. Get ready for your career as a licensed life insurance agent in Texas!

Practice this question and more.

What is a key benefit of Credit Life insurance to borrowers?

It provides cash value accumulation
It secures the loan in case of death
It offers lower interest rates on loans
It assists in building equity

The correct answer is: It secures the loan in case of death

Credit Life insurance is specifically designed to protect borrowers by paying off the outstanding balance of a loan if the borrower passes away. This feature is crucial because it ensures that the borrower's family or estate is not burdened with debt at a difficult time. By covering the loan amount, Credit Life insurance brings peace of mind to borrowers, knowing that their loved ones will not have to worry about financial obligations related to the loan if they are no longer around to manage them. This primary purpose is what distinguishes Credit Life insurance from other types of insurance products, which may focus on cash value accumulation, lower interest rates, or equity building.