TEXAS STATE LIFE AND HEALTH INSURANCE EXAM
SIMULATOR 2025-2026 ACTUAL EXAM 300
QUESTIONS AND CORRECT DETAILED ANSWERS
|ALREADY GRADED A+||BRAND NEW!!
Overview:
This 2025–2026 edition offers a realistic exam experience with questions reflecting the current
Texas state licensing exam format. Detailed explanations accompany each question to strengthen
understanding, decision-making, and practical application of insurance principles.
Key Features:
300 exam-style questions with verified correct answers.
Detailed rationales for each question to enhance comprehension.
Covers life insurance, health insurance, policy provisions, state regulations, and ethical
practices.
Fully aligned with Texas Department of Insurance standards.
Verified A+ quality for accuracy and reliability.
Purpose:
Prepare candidates thoroughly for the Texas Life and Health Insurance licensing exam.
Identify knowledge gaps and reinforce understanding of insurance concepts.
Provide a realistic, practice-driven simulation for exam readiness.
Recommended For:
Prospective life and health insurance agents in Texas.
Learners seeking comprehensive practice with detailed explanations.
Instructors and trainers preparing students for licensing success.
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit
Reporting Act? - ANSWER-Upon completion of the application
Who elects the governing body of a mutual insurance company? - ANSWER-policyholders
An insurance applicant MUST be informed of an investigation regarding his/her reputation and character
according to the - ANSWER-Fair Credit Reporting Act
,What type of reinsurance contract involves two companies automatically sharing their risk exposure? -
ANSWER-Treaty
The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future
obligations to its policyholders is called - ANSWER-reserves
Which of the following requires insurers to disclose when an applicant's consumer or credit history is
being investigated - ANSWER-1970 - Fair Credit Reporting Act
What is the consideration given by an insurer in the Consideration clause of a life policy? -
ANSWERPromise to pay a death benefit
When third-party ownership is involved, applicants who also happen to be the stated primary
beneficiary are required to have - ANSWER-insurable interest in the proposed insured
Statements made on an insurance application that are believed to be true to the best of the applicant's
knowledge are called - ANSWER-representations
The part of a life insurance policy guaranteed to be true is called a(n) - ANSWER-warranty
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent - ANSWER-Principal
The Consideration clause of an insurance contract includes - ANSWER-the schedule and amount of
premium payments
E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming
himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies.
, Although E was married with three children at the time of death, the primary beneficiary is still F.
However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy
be directed to? - ANSWER-In this situation, the proceeds from E's life insurance policy will go to F.
Which of the following terms defines the legally enforceable promise in an insurance contract by the
insurer? - ANSWER-Unilateral
When must insurable interest exist for a life insurance contract to be valid? - ANSWER-Inception of the
contract
Insurance contracts are known as ____ because certain future conditions or acts must occur before any
claims can be paid. - ANSWER-conditional
Which of these require an offer, acceptance, and consideration? - ANSWER-Contract
Which of these arrangements allows one to bypass insurable interest laws? - ANSWER-
InvestorOriginated Life Insurance
Investor-originated life insurance (or IOLI), sometimes called stranger-originated life insurance (or STOLI)
is used to circumvent state insurable interest statutes. This is done when an investor (or stranger)
persuades an individual to take out life insurance specifically for the purpose of selling the policy to the
investor. The investor compensates the insured and makes the premiums, then collects the death
benefit when the insured dies.
Which of these is NOT considered to be an element of an insurance contract?
the offer
acceptance negotiating
consideration - ANSWER-negotiating
An agent is an individual that represents whom? - ANSWER-Insurer
Insurable interest must exist at what time? - ANSWER-at the time of application
SIMULATOR 2025-2026 ACTUAL EXAM 300
QUESTIONS AND CORRECT DETAILED ANSWERS
|ALREADY GRADED A+||BRAND NEW!!
Overview:
This 2025–2026 edition offers a realistic exam experience with questions reflecting the current
Texas state licensing exam format. Detailed explanations accompany each question to strengthen
understanding, decision-making, and practical application of insurance principles.
Key Features:
300 exam-style questions with verified correct answers.
Detailed rationales for each question to enhance comprehension.
Covers life insurance, health insurance, policy provisions, state regulations, and ethical
practices.
Fully aligned with Texas Department of Insurance standards.
Verified A+ quality for accuracy and reliability.
Purpose:
Prepare candidates thoroughly for the Texas Life and Health Insurance licensing exam.
Identify knowledge gaps and reinforce understanding of insurance concepts.
Provide a realistic, practice-driven simulation for exam readiness.
Recommended For:
Prospective life and health insurance agents in Texas.
Learners seeking comprehensive practice with detailed explanations.
Instructors and trainers preparing students for licensing success.
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit
Reporting Act? - ANSWER-Upon completion of the application
Who elects the governing body of a mutual insurance company? - ANSWER-policyholders
An insurance applicant MUST be informed of an investigation regarding his/her reputation and character
according to the - ANSWER-Fair Credit Reporting Act
,What type of reinsurance contract involves two companies automatically sharing their risk exposure? -
ANSWER-Treaty
The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future
obligations to its policyholders is called - ANSWER-reserves
Which of the following requires insurers to disclose when an applicant's consumer or credit history is
being investigated - ANSWER-1970 - Fair Credit Reporting Act
What is the consideration given by an insurer in the Consideration clause of a life policy? -
ANSWERPromise to pay a death benefit
When third-party ownership is involved, applicants who also happen to be the stated primary
beneficiary are required to have - ANSWER-insurable interest in the proposed insured
Statements made on an insurance application that are believed to be true to the best of the applicant's
knowledge are called - ANSWER-representations
The part of a life insurance policy guaranteed to be true is called a(n) - ANSWER-warranty
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent - ANSWER-Principal
The Consideration clause of an insurance contract includes - ANSWER-the schedule and amount of
premium payments
E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming
himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies.
, Although E was married with three children at the time of death, the primary beneficiary is still F.
However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy
be directed to? - ANSWER-In this situation, the proceeds from E's life insurance policy will go to F.
Which of the following terms defines the legally enforceable promise in an insurance contract by the
insurer? - ANSWER-Unilateral
When must insurable interest exist for a life insurance contract to be valid? - ANSWER-Inception of the
contract
Insurance contracts are known as ____ because certain future conditions or acts must occur before any
claims can be paid. - ANSWER-conditional
Which of these require an offer, acceptance, and consideration? - ANSWER-Contract
Which of these arrangements allows one to bypass insurable interest laws? - ANSWER-
InvestorOriginated Life Insurance
Investor-originated life insurance (or IOLI), sometimes called stranger-originated life insurance (or STOLI)
is used to circumvent state insurable interest statutes. This is done when an investor (or stranger)
persuades an individual to take out life insurance specifically for the purpose of selling the policy to the
investor. The investor compensates the insured and makes the premiums, then collects the death
benefit when the insured dies.
Which of these is NOT considered to be an element of an insurance contract?
the offer
acceptance negotiating
consideration - ANSWER-negotiating
An agent is an individual that represents whom? - ANSWER-Insurer
Insurable interest must exist at what time? - ANSWER-at the time of application
