Texas Life Agent Practice Exam

When must a Buyer's Guide and a policy summary be delivered to a prospective life insurance purchaser?

1. After the initial premium is accepted

2. Prior to accepting an initial premium

3. Within 30 days after the policy is delivered

4. When the policy is reviewed for renewal

The correct answer is: Prior to accepting an initial premium

The requirement to deliver a Buyer's Guide and a policy summary prior to accepting an initial premium is rooted in the intention to ensure that prospective life insurance purchasers have access to essential information before they commit to a policy. This delivery allows consumers to make well-informed decisions about their insurance options, understanding the benefits, costs, and features associated with the policy they are considering. This timing is critical; delivering this documentation early in the process equips buyers with the knowledge necessary to assess their needs and compare different policies before they make a financial commitment. The objective is to promote transparency and help consumers avoid potential regrets after purchasing a policy. In contrast, waiting until after the premium is accepted or at a later stage in the transaction would undermine the purpose of providing these crucial materials, as it would deny consumers ample time to review and consider their options.