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PEARSON VUE TEXAS STATE LIFE AND HEALTH INSURANCE EXAM
(LATEST ) TESTED QUESTIONS WITH REVISED CORRECT
ANSWERS, (A+ GUARANTEE)
1.
Which Texas state agency has the authority to regulate insurance companies,
issue agent licenses, and enforce insurance laws within the state?
A. Department of Commerce
B. Texas Department of Insurance
C. Texas Licensing Board
D. Insurance Regulation Commission
Answer: B
Explanation: The Texas Department of Insurance (TDI) oversees insurers, agents,
and enforcement of state insurance statutes.
2.
Under Texas law, after how many years does a life insurance policy become
incontestable, except in cases of fraud or nonpayment of premiums?
A. 1 year
B. 2 years
C. 3 years
D. 4 years
Answer: B
Explanation: Life insurance policies in Texas become incontestable after two
years from the issue date.
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3.
The “free-look” period allows the policyowner to examine the new policy and,
if dissatisfied, return it for a full refund within a specified time. What is
the minimum free-look period required by Texas law?
A. 7 days
B. 10 days
C. 14 days
D. 30 days
Answer: B
Explanation: Texas mandates a minimum 10-day free-look period for individual
life and health policies.
4.
If an insured becomes totally disabled and unable to work, which rider ensures
that premium payments are waived while coverage continues in force?
A. Accidental Death Rider
B. Waiver of Premium Rider
C. Guaranteed Insurability Rider
D. Family Term Rider
Answer: B
Explanation: The Waiver of Premium Rider suspends premium obligations during
total disability as defined in the policy.
5.
Which type of life insurance provides protection for a specified term only,
does not accumulate cash value, and terminates at the end of the coverage period?
A. Whole Life Insurance
B. Term Life Insurance
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C. Universal Life Insurance
D. Variable Life Insurance
Answer: B
Explanation: Term life insurance offers temporary protection without a savings
component.
6.
The clause that states the policy and attached application together represent
the complete agreement between the insurer and the policyowner is called the:
A. Insuring Clause
B. Entire Contract Clause
C. Consideration Clause
D. Reinstatement Clause
Answer: B
Explanation: The Entire Contract Clause prevents either party from altering terms
outside the written agreement.
7.
When an insurance agent receives premiums or funds from clients, what fiduciary
responsibility must the agent observe in handling those funds?
A. Maintain them in a separate trust account
B. Forward them directly to the beneficiary
C. Deposit them into the agency’s business account
D. Send them to the insurer only once per year
Answer: A
Explanation: Agents must keep client funds in a separate fiduciary account to
prevent commingling or misuse.
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8.
What is the minimum grace period required by Texas law for a life insurance
policy before the insurer may terminate coverage for nonpayment of premium?
A. 15 days
B. 21 days
C. 30 days
D. 31 days
Answer: D
Explanation: Texas requires a minimum 31-day grace period before lapse for
nonpayment of premium.
9.
In life insurance, what is the primary purpose of the “incontestability clause”?
A. It prevents the insurer from raising premiums after two years.
B. It allows the policyholder to change coverage without approval.
C. It limits the insurer’s right to void coverage after a certain time.
D. It guarantees the insured’s right to reinstatement after lapse.
Answer: C
Explanation: After the incontestability period, the insurer cannot deny a claim for
misstatements (except fraud).
10.
Which of the following riders allows an insured to purchase additional life
insurance coverage at specified intervals without providing evidence of
insurability?
A. Accidental Death Rider
B. Guaranteed Insurability Rider
C. Cost of Living Adjustment Rider
D. Waiver of Premium Rider
PEARSON VUE TEXAS STATE LIFE AND HEALTH INSURANCE EXAM
(LATEST ) TESTED QUESTIONS WITH REVISED CORRECT
ANSWERS, (A+ GUARANTEE)
1.
Which Texas state agency has the authority to regulate insurance companies,
issue agent licenses, and enforce insurance laws within the state?
A. Department of Commerce
B. Texas Department of Insurance
C. Texas Licensing Board
D. Insurance Regulation Commission
Answer: B
Explanation: The Texas Department of Insurance (TDI) oversees insurers, agents,
and enforcement of state insurance statutes.
2.
Under Texas law, after how many years does a life insurance policy become
incontestable, except in cases of fraud or nonpayment of premiums?
A. 1 year
B. 2 years
C. 3 years
D. 4 years
Answer: B
Explanation: Life insurance policies in Texas become incontestable after two
years from the issue date.
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3.
The “free-look” period allows the policyowner to examine the new policy and,
if dissatisfied, return it for a full refund within a specified time. What is
the minimum free-look period required by Texas law?
A. 7 days
B. 10 days
C. 14 days
D. 30 days
Answer: B
Explanation: Texas mandates a minimum 10-day free-look period for individual
life and health policies.
4.
If an insured becomes totally disabled and unable to work, which rider ensures
that premium payments are waived while coverage continues in force?
A. Accidental Death Rider
B. Waiver of Premium Rider
C. Guaranteed Insurability Rider
D. Family Term Rider
Answer: B
Explanation: The Waiver of Premium Rider suspends premium obligations during
total disability as defined in the policy.
5.
Which type of life insurance provides protection for a specified term only,
does not accumulate cash value, and terminates at the end of the coverage period?
A. Whole Life Insurance
B. Term Life Insurance
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C. Universal Life Insurance
D. Variable Life Insurance
Answer: B
Explanation: Term life insurance offers temporary protection without a savings
component.
6.
The clause that states the policy and attached application together represent
the complete agreement between the insurer and the policyowner is called the:
A. Insuring Clause
B. Entire Contract Clause
C. Consideration Clause
D. Reinstatement Clause
Answer: B
Explanation: The Entire Contract Clause prevents either party from altering terms
outside the written agreement.
7.
When an insurance agent receives premiums or funds from clients, what fiduciary
responsibility must the agent observe in handling those funds?
A. Maintain them in a separate trust account
B. Forward them directly to the beneficiary
C. Deposit them into the agency’s business account
D. Send them to the insurer only once per year
Answer: A
Explanation: Agents must keep client funds in a separate fiduciary account to
prevent commingling or misuse.
, 4 | Page
8.
What is the minimum grace period required by Texas law for a life insurance
policy before the insurer may terminate coverage for nonpayment of premium?
A. 15 days
B. 21 days
C. 30 days
D. 31 days
Answer: D
Explanation: Texas requires a minimum 31-day grace period before lapse for
nonpayment of premium.
9.
In life insurance, what is the primary purpose of the “incontestability clause”?
A. It prevents the insurer from raising premiums after two years.
B. It allows the policyholder to change coverage without approval.
C. It limits the insurer’s right to void coverage after a certain time.
D. It guarantees the insured’s right to reinstatement after lapse.
Answer: C
Explanation: After the incontestability period, the insurer cannot deny a claim for
misstatements (except fraud).
10.
Which of the following riders allows an insured to purchase additional life
insurance coverage at specified intervals without providing evidence of
insurability?
A. Accidental Death Rider
B. Guaranteed Insurability Rider
C. Cost of Living Adjustment Rider
D. Waiver of Premium Rider
