Page 1 of 220
TEXAS LIFE AND HEALTH INSUARANCE
EXAM 2026/2027 COMPLETE ACCURATE
TEST REAL QUESTIONS AND CORRECT
DETAILED ANSWERS (CORRECT VERIFIED
SOLUTIONS) A NEW UPDATED VERSION
|GUARANTEED PASS A+
1. The accounting measurement of an insurer‘s future
obligations to its policyholders is called:
A) Surplus
B) Reserves
C) Premiums
D) Dividends
Answer: B) Reserves
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2. Who elects the governing body (board of directors) of a
mutual insurance company?
A) Stockholders
B) Policyholders
C) The Texas Commissioner of Insurance
D) The company’s officers
Answer: B) Policyholders
3. Which of the following describes a participating life
insurance policy?
A) Policyowners are entitled to receive dividends
B) Policyowners pay assessments for company losses
C) Policyowners are not entitled to vote for board members
D) Policyowners cannot share in company earnings
Answer: A) Policyowners are entitled to receive dividends
4. In an insurance contract, the insurer is the only party who
makes a legally enforceable promise. What kind of contract is
this?
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A) Adhesion contract
B) Bilateral contract
C) Unilateral contract
D) Conditional contract
Answer: C) Unilateral contract
5. Statements made on an insurance application that are
believed to be true to the best of the applicant’s knowledge
are called:
A) Warranties
B) Representations
C) Conditions
D) Exclusions
Answer: B) Representations
6. The part of a life insurance policy that is guaranteed to be
true is called a(n):
A) Representation
B) Estoppel
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C) Waiver
D) Warranty
Answer: D) Warranty
7. Which of the following is NOT considered an element of an
insurance contract?
A) Offer
B) Acceptance
C) Negotiating
D) Consideration
Answer: C) Negotiating
8. A policy of adhesion can only be modified by whom?
A) The policyholder
B) The beneficiary
C) The insurance company
D) The state insurance department
Answer: C) The insurance company
TEXAS LIFE AND HEALTH INSUARANCE
EXAM 2026/2027 COMPLETE ACCURATE
TEST REAL QUESTIONS AND CORRECT
DETAILED ANSWERS (CORRECT VERIFIED
SOLUTIONS) A NEW UPDATED VERSION
|GUARANTEED PASS A+
1. The accounting measurement of an insurer‘s future
obligations to its policyholders is called:
A) Surplus
B) Reserves
C) Premiums
D) Dividends
Answer: B) Reserves
,Page 2 of 220
2. Who elects the governing body (board of directors) of a
mutual insurance company?
A) Stockholders
B) Policyholders
C) The Texas Commissioner of Insurance
D) The company’s officers
Answer: B) Policyholders
3. Which of the following describes a participating life
insurance policy?
A) Policyowners are entitled to receive dividends
B) Policyowners pay assessments for company losses
C) Policyowners are not entitled to vote for board members
D) Policyowners cannot share in company earnings
Answer: A) Policyowners are entitled to receive dividends
4. In an insurance contract, the insurer is the only party who
makes a legally enforceable promise. What kind of contract is
this?
,Page 3 of 220
A) Adhesion contract
B) Bilateral contract
C) Unilateral contract
D) Conditional contract
Answer: C) Unilateral contract
5. Statements made on an insurance application that are
believed to be true to the best of the applicant’s knowledge
are called:
A) Warranties
B) Representations
C) Conditions
D) Exclusions
Answer: B) Representations
6. The part of a life insurance policy that is guaranteed to be
true is called a(n):
A) Representation
B) Estoppel
, Page 4 of 220
C) Waiver
D) Warranty
Answer: D) Warranty
7. Which of the following is NOT considered an element of an
insurance contract?
A) Offer
B) Acceptance
C) Negotiating
D) Consideration
Answer: C) Negotiating
8. A policy of adhesion can only be modified by whom?
A) The policyholder
B) The beneficiary
C) The insurance company
D) The state insurance department
Answer: C) The insurance company
