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TEXAS INSURANCE LICENSE EXAM 3 LATEST VERSIONS (VERSION
A, B AND C) EXAM NEWEST 2026 ACTUAL EXAM WITH COMPLETE
QUESTIONS AND CORRECT DETAILED ANSWERS (100% VERIFIED
ANSWERS) |ALREADY GRADED A+| ||PROFESSOR VERIFIED||
Risk ________________ is the process of analyzing exposures
that create risk and designing programs to handle them. -
ANSWER-management
What type of risk involves the potential for loss with no possibility
for gain? - ANSWER-Pure risk
Which of the following can be defined as the potential for loss? -
ANSWER-Risk
Which of these statements regarding insurance is false? -
ANSWER-As the number of insured units increases, the number
of losses decreases
A condition that increases the possibility of financial loss is called
a(n) - ANSWER-Hazard
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A hold-harmless clause is an example of risk - ANSWER-transfer
ABC company is attempting to minimize the severity of potential
losses within its company. The company is engaged in risk -
ANSWER-reduction
Which of the following consists of an offer, acceptance, and
consideration? - ANSWER-Contract
Which of these is NOT considered to be an element of an
insurance contract? - ANSWER-Negotiating
An insurance contract is considered a policy of adhesion. This
means that the contract can only be modified by
________________. - ANSWER-The insurer
If a contract of adhesion contains complicated language, to whom
would the interpretation be in favor of? - ANSWER-Insured
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Taking receipt of premiums and holding them for the insurance
company is an example of: - ANSWER-Fiduciary responsibility
Which of the following BEST describes a warranty? - ANSWER-
Statement guaranteed to be true
A life insurance policy would be considered a wagering contract
WITHOUT: - ANSWER-Insurable interest
All of the following are considered to be typical characteristics
describing the nature of an insurance contract, EXCEPT: -
ANSWER-Bilateral
Q purchases a $500,000 life insurance policy and pays $900 in
premiums over the first six months. Q dies suddenly and the
beneficiary is paid $500,000. The exchange of unequal values
reflects which of the following insurance contract features? -
ANSWER-Aleatory
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In regard to representations or warranties, which of these
statements is TRUE? - ANSWER-If material to the risk, false
representations will void a policy
What type of insurance offers permanent life coverage with
premiums that are payable for life? - ANSWER-Whole Life
What type of life policy has a death benefit that adjusts
periodically and is written for a specific period of time? -
ANSWER-Decreasing term
Which of these would be considered a Limited Pay Life Policy? -
ANSWER-Life Paid-Up to Age 70
A(n) _________________ term life policy is normally used when
covering an insured's mortgage balance. - ANSWER-decreasing
Which type of policy is considered to be overfunded, as stated by
IRS guidelines? - ANSWER-Modified Endowment Contract
TEXAS INSURANCE LICENSE EXAM 3 LATEST VERSIONS (VERSION
A, B AND C) EXAM NEWEST 2026 ACTUAL EXAM WITH COMPLETE
QUESTIONS AND CORRECT DETAILED ANSWERS (100% VERIFIED
ANSWERS) |ALREADY GRADED A+| ||PROFESSOR VERIFIED||
Risk ________________ is the process of analyzing exposures
that create risk and designing programs to handle them. -
ANSWER-management
What type of risk involves the potential for loss with no possibility
for gain? - ANSWER-Pure risk
Which of the following can be defined as the potential for loss? -
ANSWER-Risk
Which of these statements regarding insurance is false? -
ANSWER-As the number of insured units increases, the number
of losses decreases
A condition that increases the possibility of financial loss is called
a(n) - ANSWER-Hazard
,2|Page
A hold-harmless clause is an example of risk - ANSWER-transfer
ABC company is attempting to minimize the severity of potential
losses within its company. The company is engaged in risk -
ANSWER-reduction
Which of the following consists of an offer, acceptance, and
consideration? - ANSWER-Contract
Which of these is NOT considered to be an element of an
insurance contract? - ANSWER-Negotiating
An insurance contract is considered a policy of adhesion. This
means that the contract can only be modified by
________________. - ANSWER-The insurer
If a contract of adhesion contains complicated language, to whom
would the interpretation be in favor of? - ANSWER-Insured
,3|Page
Taking receipt of premiums and holding them for the insurance
company is an example of: - ANSWER-Fiduciary responsibility
Which of the following BEST describes a warranty? - ANSWER-
Statement guaranteed to be true
A life insurance policy would be considered a wagering contract
WITHOUT: - ANSWER-Insurable interest
All of the following are considered to be typical characteristics
describing the nature of an insurance contract, EXCEPT: -
ANSWER-Bilateral
Q purchases a $500,000 life insurance policy and pays $900 in
premiums over the first six months. Q dies suddenly and the
beneficiary is paid $500,000. The exchange of unequal values
reflects which of the following insurance contract features? -
ANSWER-Aleatory
, 4|Page
In regard to representations or warranties, which of these
statements is TRUE? - ANSWER-If material to the risk, false
representations will void a policy
What type of insurance offers permanent life coverage with
premiums that are payable for life? - ANSWER-Whole Life
What type of life policy has a death benefit that adjusts
periodically and is written for a specific period of time? -
ANSWER-Decreasing term
Which of these would be considered a Limited Pay Life Policy? -
ANSWER-Life Paid-Up to Age 70
A(n) _________________ term life policy is normally used when
covering an insured's mortgage balance. - ANSWER-decreasing
Which type of policy is considered to be overfunded, as stated by
IRS guidelines? - ANSWER-Modified Endowment Contract
