TEXAS LTC CERTIFICATION EVALUATION EXAM
2026 QUESTIONS WITH ANSWERS GRADED
A+
◉ Property vs Casualty: What is considered casualty? Answer: Non-
property losses. Legal liability to others. 3rd Party
◉ Risk. Answer: uncertainty of financial loss
◉ Pure Risk. Answer: Chance of Loss
◉ Speculative Risk. Answer: Chance of Loss or Gain (Gamble)
◉ Insurance (covers which type of risk?). Answer: Pure Risk Only
◉ How does the law of large numbers apply in insurance? Answer:
Actuaries use the law of large numbers to estimate claims
◉ What is the law of large numbers? Answer: as the number of a similar
loss exposure increases, the more accurate claims can be predicted from
the group.
,◉ What is a peril? Answer: cause of loss
◉ What is a hazard? Answer: things that increase the chance of a peril
happening
◉ Three types of hazards. Answer: Physical: visible characteristic (dead
tree)
Moral: Dishonest tendencies
Morale: Attitude of carelessness
◉ Proximate Cause. Answer: First cause in an unbroken chain of events
◉ Elements of a legal contract (CALC). Answer: C - Competent parties
(18/Right frame of mind)
A - Agreement (Both parties agree)
L - Legal Purpose (The risk is LEGAL)
C - Consideration (It has to be fair)
◉ What is representation? Answer: Information believed to be true.
◉ What is misrepresentation? Answer: Information that is not true. False
information.
, ◉ What is material misrepresentation? Answer: Information that is not
true but would have caused the insurer not to issue the policy. (4 prev
spd tix)
◉ What is fraud? Answer: An all out effort by one party to deceive and
cheat the other.
◉ What is warranty? Answer: Guarantee that an insured will or will not
do something
◉ What are the four major parts to an insurance policy structure?
(DICE). Answer: D - Declarations Page (First Page)
I - Insuring Agreement (Insurers promise to pay)
C - Conditions (Rules)
E - Exclusions (Not covered)
◉ What information is on the declarations page? (Remember 6 Ps).
Answer: Policy Number
Parties
Property Description/Location
Policy Term
Policy Limits/Deductibles
Premium
2026 QUESTIONS WITH ANSWERS GRADED
A+
◉ Property vs Casualty: What is considered casualty? Answer: Non-
property losses. Legal liability to others. 3rd Party
◉ Risk. Answer: uncertainty of financial loss
◉ Pure Risk. Answer: Chance of Loss
◉ Speculative Risk. Answer: Chance of Loss or Gain (Gamble)
◉ Insurance (covers which type of risk?). Answer: Pure Risk Only
◉ How does the law of large numbers apply in insurance? Answer:
Actuaries use the law of large numbers to estimate claims
◉ What is the law of large numbers? Answer: as the number of a similar
loss exposure increases, the more accurate claims can be predicted from
the group.
,◉ What is a peril? Answer: cause of loss
◉ What is a hazard? Answer: things that increase the chance of a peril
happening
◉ Three types of hazards. Answer: Physical: visible characteristic (dead
tree)
Moral: Dishonest tendencies
Morale: Attitude of carelessness
◉ Proximate Cause. Answer: First cause in an unbroken chain of events
◉ Elements of a legal contract (CALC). Answer: C - Competent parties
(18/Right frame of mind)
A - Agreement (Both parties agree)
L - Legal Purpose (The risk is LEGAL)
C - Consideration (It has to be fair)
◉ What is representation? Answer: Information believed to be true.
◉ What is misrepresentation? Answer: Information that is not true. False
information.
, ◉ What is material misrepresentation? Answer: Information that is not
true but would have caused the insurer not to issue the policy. (4 prev
spd tix)
◉ What is fraud? Answer: An all out effort by one party to deceive and
cheat the other.
◉ What is warranty? Answer: Guarantee that an insured will or will not
do something
◉ What are the four major parts to an insurance policy structure?
(DICE). Answer: D - Declarations Page (First Page)
I - Insuring Agreement (Insurers promise to pay)
C - Conditions (Rules)
E - Exclusions (Not covered)
◉ What information is on the declarations page? (Remember 6 Ps).
Answer: Policy Number
Parties
Property Description/Location
Policy Term
Policy Limits/Deductibles
Premium
