Texas General Lines - Life, accident and
health insurance PRACTICE EXAM||
LATEST UPDATE 2026
LIFE SECTION 1 -CORRECTANSWER LIFE SECTION 1
1) Sandra Timms, age 27, is advised by her producer to purchase Life insurance to
cover a 20-year-amortized $50,000 business-improvement loan. Which of the following
plans would adequately protect Ms. Timms at the minimum premium outlay?
A- $50,000 Whole Life policy
B- $50,000 Level Term policy for 20 years
C- $50,000 20 Pay Life policy
D- $50,000 Decreasing Term policy for 20 years -CORRECTANSWER D—A $50,000
Decreasing Term policy for 20 years
Explanation: The key here is "minimum premium". Term is the most inexpensive type of
coverage. Since Sandra's $50,000 loan will be paid off over 20 years and the loan
balance will decrease each year, Decreasing Term makes sense. Decreasing Term is
not renewable.
2) A 45-year old customer who is seeking to supplement his retirement income at age
65 would not buy a:
,A- Deferred Annuity
B- Equity Indexed Annuity
C- Variable Annuity
D- Immediate Annuity -CORRECTANSWER B- Equity Indexed Annuity
3) John Livingston owns a 30-Pay Life policy that he purchased at the age of 30. The
cash value will equal the face amount of the policy when he reaches the age of:
A- 60
B- 70
C- 100
D- 30 -CORRECTANSWER C- 100
Explanation: Limited Pay Life insurance policies such as Life Paid Up at 65 or 20-Pay
Life are simply variations of Whole Life policies. The cash value will equal face amount
of the policy (at least) at the maturity of the policy, which is always age 100 on Whole
Life policies. These limited-pay policies are designed so that the insured may pay his or
her premiums faster and be "paid up" at a certain age. However, just because the
premiums are paid up doesn't mean the policy has matured.
4) Which of the following is an example of a Limited-Pay Life policy?
A- Universal life
B- Whole Life
,C- Life Paid-Up at Age 65
D- Renewable Term to Age 70 -CORRECTANSWER C- Life Paid-Up at Age 65
5) Which of the following policies provides the greatest amount of protection for an
insured's premium dollar as well as some cash accumulation?
A- Annuity
B- Whole Life
C- Term
D- Limited-Pay Life -CORRECTANSWER B- Whole Life
If we had not mentioned cash accumulation, the CORRECTANSWER would have been
Term. However, Term has no cash value, so the CORRECTANSWER is Whole Life,
which is the most inexpensive type of permanent insurance and is required to have a
cash value after the third policy year. Although Limited Pay Life is a type of Whole Life,
it is incorrect since it is usually quite expensive due to the shortened pay-in period.
Annuities have no cash value except the money the annuitant paid in. Since there is no
death benefit, no protection is offered.
6) Which of the following individual policy conversions is usually permitted without any
evidence of insurability? -CORRECTANSWER C- Conversion from a Term policy to a
Whole Life policy
7) Which of the following is NOT correct regarding Ordinary Whole Life policies?
, A- The premiums payments are owed annually until you die or reach age 100
B- The cash value grows more quickly in the beginning years of the policy
C- Coverage lasts for your own life
D- Ordinary Whole Life is a type of permanent insurance -CORRECTANSWER D-
Ordinary Whole Life is a type of permanent insurance
8) Which of the following statements is true about the premium payment schedule for a
Whole Life policy?
A- Premiums are payable for a designated period of time only, after which coverage is
no longer provided
B- Premiums are payable until the insured's retirement only, after which coverage is
continued automatically until the insured's death
C- One premium, in the amount of the insured's choice, is payable at the time of
application, and the balance of the premiums is deducted from the face amount of the
policy at the time of the insured's death
D- Premiums are payable throughout the insured's lifetime, and coverage continues
until the insured's death -CORRECTANSWER D- Premiums are payable throughout the
insured's lifetime, and coverage continues until the insured's death
health insurance PRACTICE EXAM||
LATEST UPDATE 2026
LIFE SECTION 1 -CORRECTANSWER LIFE SECTION 1
1) Sandra Timms, age 27, is advised by her producer to purchase Life insurance to
cover a 20-year-amortized $50,000 business-improvement loan. Which of the following
plans would adequately protect Ms. Timms at the minimum premium outlay?
A- $50,000 Whole Life policy
B- $50,000 Level Term policy for 20 years
C- $50,000 20 Pay Life policy
D- $50,000 Decreasing Term policy for 20 years -CORRECTANSWER D—A $50,000
Decreasing Term policy for 20 years
Explanation: The key here is "minimum premium". Term is the most inexpensive type of
coverage. Since Sandra's $50,000 loan will be paid off over 20 years and the loan
balance will decrease each year, Decreasing Term makes sense. Decreasing Term is
not renewable.
2) A 45-year old customer who is seeking to supplement his retirement income at age
65 would not buy a:
,A- Deferred Annuity
B- Equity Indexed Annuity
C- Variable Annuity
D- Immediate Annuity -CORRECTANSWER B- Equity Indexed Annuity
3) John Livingston owns a 30-Pay Life policy that he purchased at the age of 30. The
cash value will equal the face amount of the policy when he reaches the age of:
A- 60
B- 70
C- 100
D- 30 -CORRECTANSWER C- 100
Explanation: Limited Pay Life insurance policies such as Life Paid Up at 65 or 20-Pay
Life are simply variations of Whole Life policies. The cash value will equal face amount
of the policy (at least) at the maturity of the policy, which is always age 100 on Whole
Life policies. These limited-pay policies are designed so that the insured may pay his or
her premiums faster and be "paid up" at a certain age. However, just because the
premiums are paid up doesn't mean the policy has matured.
4) Which of the following is an example of a Limited-Pay Life policy?
A- Universal life
B- Whole Life
,C- Life Paid-Up at Age 65
D- Renewable Term to Age 70 -CORRECTANSWER C- Life Paid-Up at Age 65
5) Which of the following policies provides the greatest amount of protection for an
insured's premium dollar as well as some cash accumulation?
A- Annuity
B- Whole Life
C- Term
D- Limited-Pay Life -CORRECTANSWER B- Whole Life
If we had not mentioned cash accumulation, the CORRECTANSWER would have been
Term. However, Term has no cash value, so the CORRECTANSWER is Whole Life,
which is the most inexpensive type of permanent insurance and is required to have a
cash value after the third policy year. Although Limited Pay Life is a type of Whole Life,
it is incorrect since it is usually quite expensive due to the shortened pay-in period.
Annuities have no cash value except the money the annuitant paid in. Since there is no
death benefit, no protection is offered.
6) Which of the following individual policy conversions is usually permitted without any
evidence of insurability? -CORRECTANSWER C- Conversion from a Term policy to a
Whole Life policy
7) Which of the following is NOT correct regarding Ordinary Whole Life policies?
, A- The premiums payments are owed annually until you die or reach age 100
B- The cash value grows more quickly in the beginning years of the policy
C- Coverage lasts for your own life
D- Ordinary Whole Life is a type of permanent insurance -CORRECTANSWER D-
Ordinary Whole Life is a type of permanent insurance
8) Which of the following statements is true about the premium payment schedule for a
Whole Life policy?
A- Premiums are payable for a designated period of time only, after which coverage is
no longer provided
B- Premiums are payable until the insured's retirement only, after which coverage is
continued automatically until the insured's death
C- One premium, in the amount of the insured's choice, is payable at the time of
application, and the balance of the premiums is deducted from the face amount of the
policy at the time of the insured's death
D- Premiums are payable throughout the insured's lifetime, and coverage continues
until the insured's death -CORRECTANSWER D- Premiums are payable throughout the
insured's lifetime, and coverage continues until the insured's death
