Texas Life & Health Insurance Exam – Complete Study Guide, Verified Questions
& Correct Answers (Updated 2025/2026 Edition)
What type of reinsurance contract involves two companies automatically sharing their
risk exposure? - correct answerTreaty
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 - correct answerreserves
When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have - correct answerinsurable interest
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called - correct answerrepresentations
The part of a life insurance policy guaranteed to be true is called a(n) - correct
answerwarranty
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent - correct answerPrincipal
The Consideration clause of an insurance contract includes - correct answerthe
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? -
correct answerIn this situation, the proceeds from E's life insurance policy will go to F.
Which term defines the legally enforceable promise in an insurance contract by the
insurer? - correct answerUnilateral
Insurance contracts are known as ____ because certain future conditions or acts must
occur before any claims can be paid. - correct answerconditional
Which of these require an offer, acceptance, and consideration? - correct
answerContract
Which of these is NOT considered to be an element of an insurance contract?
the offer
,acceptance
negotiating
consideration - correct answernegotiating
An agent is an individual that represents whom? - correct answerInsurer
Which policy requires an agent to register with the National Association of Securities
Dealers (NASD) before selling? - correct answerVariable Life
Which of the following actions require a policy owner to provide proof of insurability in
an Adjustable Life policy? - correct answerincrease face amount
When a policy owner exchanges a term policy for a whole life policy without providing
proof of good health, which of these apply? - correct answerConversion provision
What type of life insurance are credit policies issued as? - correct answerTerm
How long does the coverage normally remain on a limited-pay life policy? - correct
answerage 100
All of these statements about Equity Indexed Life Insurance are correct EXCEPT
- Cash value has a minimum rate of accumulation
- If the gain on the index goes beyond the policy's minimum rate of return, the cash
value will mirror that of the index
-The premiums can be lowered or raised, based on investment performance
-Tied to an equity index such as the S&P 500 - correct answerThe premiums can be
lowered or raised, based on investment performance
What type of life insurance incorporates flexible premiums and an adjustable death
benefit? - correct answerUniversal Life
What type of life policy covers 2 lives and pays the face amount after the first one dies?
- correct answerJoint Life Policy
Life insurance that covers an insured's whole life with level premiums paid over a limited
time is called - correct answerLimited-Pay Life
What kind of life insurance product covers children under their parent's policy? - correct
answerTerm rider
P is looking to purchase a life insurance policy that will pay a stated monthly income to
his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that
20 year period. What type of policy should P purchase? - correct answerFamily
Maintenance policy
Which of the following statements about a Variable Whole Life policy is CORRECT?
, -It provides a minimum guaranteed Death benefit
- It is a combination of a Limited Period Endowment and a Decreasing Term policy
- Its premiums and benefits are variable
- It has a guaranteed rate of return - correct answerIt provides a minimum guaranteed
Death benefit
Credit Life insurance is - correct answerissued in an amount not to exceed the amount
of the loan
When does Term Life expire? - correct answerAt the end of the policy period
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's
death? - correct answerFace amount plus the policy's cash value
A life policy with a death benefit that can fluctuate according to the performance of its
underlying investment portfolio is referred to as - correct answerVariable Life
What type of life policy covers two people and pays upon the death of the last insured? -
correct answerSurvivorship
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? - correct answerRenewable
F needs life insurance that provides coverage for only a limited amount of time with a
death benefit that changes regularly according to a schedule. What kind of policy is
needed? - correct answerDecreasing term policy
G purchased a Family Income policy at age 40, The policy has a 20-year rider period. If
G were to die at age 50, how long would G's family receive an income? - correct
answer10 years
The most important factor to consider when determining whether to convert term
insurance at the insured's attained age or the insured's original age is - correct
answerthe cost
When an insurer issues a policy that refuses to cover certain risks, this is referred to as
a(n) - correct answerexclusions
Which statement regarding the Misstatement of Age provision is considered to be true?
-Coverage will be adjusted to reflect the insured's true age if a misstatement of age is
discovered
-Requires that a new policy must be applied for if a misstatement of age is found on the
current policy
-Misstatement of Age provision is valid only during the contestable period
& Correct Answers (Updated 2025/2026 Edition)
What type of reinsurance contract involves two companies automatically sharing their
risk exposure? - correct answerTreaty
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 - correct answerreserves
When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have - correct answerinsurable interest
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called - correct answerrepresentations
The part of a life insurance policy guaranteed to be true is called a(n) - correct
answerwarranty
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent - correct answerPrincipal
The Consideration clause of an insurance contract includes - correct answerthe
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? -
correct answerIn this situation, the proceeds from E's life insurance policy will go to F.
Which term defines the legally enforceable promise in an insurance contract by the
insurer? - correct answerUnilateral
Insurance contracts are known as ____ because certain future conditions or acts must
occur before any claims can be paid. - correct answerconditional
Which of these require an offer, acceptance, and consideration? - correct
answerContract
Which of these is NOT considered to be an element of an insurance contract?
the offer
,acceptance
negotiating
consideration - correct answernegotiating
An agent is an individual that represents whom? - correct answerInsurer
Which policy requires an agent to register with the National Association of Securities
Dealers (NASD) before selling? - correct answerVariable Life
Which of the following actions require a policy owner to provide proof of insurability in
an Adjustable Life policy? - correct answerincrease face amount
When a policy owner exchanges a term policy for a whole life policy without providing
proof of good health, which of these apply? - correct answerConversion provision
What type of life insurance are credit policies issued as? - correct answerTerm
How long does the coverage normally remain on a limited-pay life policy? - correct
answerage 100
All of these statements about Equity Indexed Life Insurance are correct EXCEPT
- Cash value has a minimum rate of accumulation
- If the gain on the index goes beyond the policy's minimum rate of return, the cash
value will mirror that of the index
-The premiums can be lowered or raised, based on investment performance
-Tied to an equity index such as the S&P 500 - correct answerThe premiums can be
lowered or raised, based on investment performance
What type of life insurance incorporates flexible premiums and an adjustable death
benefit? - correct answerUniversal Life
What type of life policy covers 2 lives and pays the face amount after the first one dies?
- correct answerJoint Life Policy
Life insurance that covers an insured's whole life with level premiums paid over a limited
time is called - correct answerLimited-Pay Life
What kind of life insurance product covers children under their parent's policy? - correct
answerTerm rider
P is looking to purchase a life insurance policy that will pay a stated monthly income to
his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that
20 year period. What type of policy should P purchase? - correct answerFamily
Maintenance policy
Which of the following statements about a Variable Whole Life policy is CORRECT?
, -It provides a minimum guaranteed Death benefit
- It is a combination of a Limited Period Endowment and a Decreasing Term policy
- Its premiums and benefits are variable
- It has a guaranteed rate of return - correct answerIt provides a minimum guaranteed
Death benefit
Credit Life insurance is - correct answerissued in an amount not to exceed the amount
of the loan
When does Term Life expire? - correct answerAt the end of the policy period
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's
death? - correct answerFace amount plus the policy's cash value
A life policy with a death benefit that can fluctuate according to the performance of its
underlying investment portfolio is referred to as - correct answerVariable Life
What type of life policy covers two people and pays upon the death of the last insured? -
correct answerSurvivorship
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? - correct answerRenewable
F needs life insurance that provides coverage for only a limited amount of time with a
death benefit that changes regularly according to a schedule. What kind of policy is
needed? - correct answerDecreasing term policy
G purchased a Family Income policy at age 40, The policy has a 20-year rider period. If
G were to die at age 50, how long would G's family receive an income? - correct
answer10 years
The most important factor to consider when determining whether to convert term
insurance at the insured's attained age or the insured's original age is - correct
answerthe cost
When an insurer issues a policy that refuses to cover certain risks, this is referred to as
a(n) - correct answerexclusions
Which statement regarding the Misstatement of Age provision is considered to be true?
-Coverage will be adjusted to reflect the insured's true age if a misstatement of age is
discovered
-Requires that a new policy must be applied for if a misstatement of age is found on the
current policy
-Misstatement of Age provision is valid only during the contestable period
