TEXAS LIFE INSURANCE EXAM
QUESTIONS AND ANSWERS (VERIFIED
AND UPDATED)
P completes an application for a $10,000 life policy, but does not give the producer the initial
premium. P's coverage becomes effective when - ANS P receives the policy and pays the
premium
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash
value at a faster rate in the early years of the policy. Which of these statements made by the
producer would be carrer? - ANS 20-Pay Life accumulates cash value faster than Straight Life
How does an indexed annuity differ from a fixed annuity ? - ANS Indexed annuity owners
receive credited interest tied to the fluctuations of the linked index
During a sales presentation for a participating life insurance policy, an agent MUST -
ANS make a prospect understand that dividends are NOT guaranteed
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable
eneficiary. What action will the insurance company take if I requests a change of beneficiary? -
ANS request of the change will be refused
Which provision allows the policyowner to change a term life policy to a permanent one
without providing proof of good health? - ANS conversion
@2026/2027 ALLRIGHTS RESERVED.
, T has a term policy that allows him to continue the coverage after expiration of the initial policy
period What type of term coverage is this? - ANS renewable
Which of the following is NOT a required provision in group life policies? - ANS Right to loan
The Insurance Commissioner must give how many days notice prior to holding a hearing
regarding an agent's unfair or deceptive practice? - ANS 30
The Accelerated Death Benefit provision in a life insurance policy is also known as a(n) ) -
ANS Living Benefit
In Texas, an individual life insurance policy is required to have a grace period of - ANS 31 days
Which statement is correct regarding the premium payment schedule for whole life policies? -
ANS Premiums are payable throughout the insured's lifetime/ coverage lasts until death of
the insured
Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding
partners. If the agreement is funded with individual life insurance, what would it require? -
ANS Each partner must own a policy on the other partners
Why would the Insurance Commissioner examine the records of an insurance company? -
ANS To determine the solvency of the company
Which of the following features of a group Term Life policy enables an individual to leave the
group and continue his or her insurance without providing evidence of insurability? -
ANS Conversion privilege
Taking receipt of premiums and holding them for the insurance company is an example of: -
ANS fiduciary responsibility
@2026/2027 ALLRIGHTS RESERVED.
QUESTIONS AND ANSWERS (VERIFIED
AND UPDATED)
P completes an application for a $10,000 life policy, but does not give the producer the initial
premium. P's coverage becomes effective when - ANS P receives the policy and pays the
premium
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash
value at a faster rate in the early years of the policy. Which of these statements made by the
producer would be carrer? - ANS 20-Pay Life accumulates cash value faster than Straight Life
How does an indexed annuity differ from a fixed annuity ? - ANS Indexed annuity owners
receive credited interest tied to the fluctuations of the linked index
During a sales presentation for a participating life insurance policy, an agent MUST -
ANS make a prospect understand that dividends are NOT guaranteed
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable
eneficiary. What action will the insurance company take if I requests a change of beneficiary? -
ANS request of the change will be refused
Which provision allows the policyowner to change a term life policy to a permanent one
without providing proof of good health? - ANS conversion
@2026/2027 ALLRIGHTS RESERVED.
, T has a term policy that allows him to continue the coverage after expiration of the initial policy
period What type of term coverage is this? - ANS renewable
Which of the following is NOT a required provision in group life policies? - ANS Right to loan
The Insurance Commissioner must give how many days notice prior to holding a hearing
regarding an agent's unfair or deceptive practice? - ANS 30
The Accelerated Death Benefit provision in a life insurance policy is also known as a(n) ) -
ANS Living Benefit
In Texas, an individual life insurance policy is required to have a grace period of - ANS 31 days
Which statement is correct regarding the premium payment schedule for whole life policies? -
ANS Premiums are payable throughout the insured's lifetime/ coverage lasts until death of
the insured
Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding
partners. If the agreement is funded with individual life insurance, what would it require? -
ANS Each partner must own a policy on the other partners
Why would the Insurance Commissioner examine the records of an insurance company? -
ANS To determine the solvency of the company
Which of the following features of a group Term Life policy enables an individual to leave the
group and continue his or her insurance without providing evidence of insurability? -
ANS Conversion privilege
Taking receipt of premiums and holding them for the insurance company is an example of: -
ANS fiduciary responsibility
@2026/2027 ALLRIGHTS RESERVED.
