Texas General Lines – Life, Accident, Health & HMO
Insurance Agent License Exam (InsTX-LAH05) |
Comprehensive Study Guide & 147-Question Practice
Test 2026
Summary
The Texas General Lines (InsTX-LAH05) examination is the mandatory state
certification for individuals pursuing a career in the Texas Insurance Industry. This
license authorizes agents to solicit, negotiate, and sell Life
Insurance, Annuities, Health Insurance, Disability Income, and HMO plans within
the state. Administered by Pearson VUE, the exam tests a candidate's knowledge of
national insurance principles and the specific statutes of the Texas Insurance Code.
Knowledge Domains Covered
The exam tests your competency in three distinct areas:
1. General Insurance Principles: Basic contract law, the concept of risk, underwriting
processes, and Fair Credit Reporting Act compliance.
2. Product Knowledge: Technical differences between policies (e.g., why a client would
choose Universal Life over Whole Life) and how Social Security disability interacts with
private plans.
3. Texas-Specific Statutes: This is the most "trick-heavy" section. It covers the Texas
Insurance Code, the powers of the Texas Insurance Commissioner, licensing
maintenance (CE credits), and strict ethical marketing rules (Rebating, Twisting, and
Defamation).
1. Which of the following best describes the "Elimination Period" in a Disability
Income policy?
A) The time during which the insured must be under a doctor's care.
B) A period of time at the start of a disability during which no benefits are paid.
C) The time allowed for the insurer to investigate a claim.
, D) The period after which a policy cannot be cancelled.
Answer: B
Explanation: The Elimination Period acts as a "time deductible." It is the period
between the onset of a disability and the beginning of benefit payments. A longer
elimination period usually results in a lower premium. Texas Department of
Insurance (TDI)
2. In an HMO (Health Maintenance Organization), the individual who provides all
care and refers patients to specialists is known as the:
A) Gatekeeper
B) Broker
C) Adjudicator
D) Principal
Answer: A
Explanation: The Primary Care Physician (PCP) is often called the "Gatekeeper"
because they control the member's access to specialists and secondary care
within the HMO network. Pearson VUE TX Insurance
3. Under the Affordable Care Act (ACA), a dependent child can remain on their
parent's health insurance plan until they reach the age of:
A) 21
B) 23
C) 25
D) 26
Answer: D
Explanation: Federal law mandates that insurers offer coverage to dependent
children on a parent's plan until the child's 26th birthday, regardless of the child's
marital or student status.
4. A "Preferred Provider Organization" (PPO) differs from an HMO in that:
A) PPOs never require a deductible.
B) PPOs allow members to see out-of-network providers at a higher cost.
C) PPOs are only available to government employees.
D) PPOs do not cover emergency care.
Answer: B
Explanation: While HMOs generally require you to stay within the network, PPOs
, offer more flexibility by allowing "out-of-network" care, though the patient will
pay a higher percentage of the bill.
5. Which provision prevents an insurance company from paying for the same
medical expenses already covered by another group plan?
A) Coinsurance
B) Coordination of Benefits (COB)
C) Deductible
D) Stop-Loss
Answer: B
Explanation: The Coordination of Benefits provision ensures that the total
amount paid by all plans does not exceed 100% of the actual medical expenses,
preventing "profit" from insurance.
6. If an insured has a "Major Medical" policy with a $500 deductible and 80/20
coinsurance, how much will the insurer pay on a $2,500 claim?
A) $500
B) $1,600
C) $2,000
D) $2,500
Answer: B
Explanation: First, subtract the deductible ($2,500 - $500 = $2,000). Then, the
insurer pays 80% of the remainder ($2,000 x 0.80 = $1,600). The insured pays the
$500 deductible plus $400 in coinsurance.
7. A "Presumptive Disability" provision usually covers which of the following?
A) Total and permanent loss of sight or hearing.
B) A temporary back injury.
C) A mild concussion.
D) A broken leg that heals in 6 weeks.
Answer: A
Explanation: Presumptive Disability automatically qualifies the insured for total
disability benefits if they suffer a catastrophic loss, such as loss of two limbs,
total blindness, or total deafness.
8. In Texas, the "Notice of Claim" must typically be submitted to the insurer within
how many days of a loss?
A) 10 days
, B) 20 days
C) 30 days
D) 60 days
Answer: B
Explanation: According to standard Texas health insurance provisions, the
insured has 20 days to notify the insurer that a loss has occurred.
9. Medicare Part A covers which of the following expenses?
A) Physician services
B) Prescription drugs
C) Hospitalization
D) Outpatient lab tests
Answer: C
Explanation: Medicare Part A is "Hospital Insurance." Part B covers doctors, Part
C is Medicare Advantage, and Part D covers prescriptions. Official Medicare
Website
10. A "Non-cancellable" health policy means that the insurer:
A) Can cancel the policy at any time for any reason.
B) Can only cancel the policy if the insured reaches age 65.
C) Cannot cancel the policy or increase premiums as long as premiums are paid.
D) Can increase premiums but cannot cancel the policy.
Answer: C
Explanation: A Non-cancellable policy is the most protective for the consumer.
Unlike "Guaranteed Renewable" policies (where rates can go up by class), a Non-
cancellable policy locks in the rate.
11. In Texas, a "Small Employer" for health insurance purposes is defined as any
person, firm, or corporation that employed an average of how many eligible
employees during the preceding calendar year?
A) 1 to 25 employees
B) 2 to 50 employees
C) 5 to 100 employees
D) 10 to 50 employees
Answer: B
Insurance Agent License Exam (InsTX-LAH05) |
Comprehensive Study Guide & 147-Question Practice
Test 2026
Summary
The Texas General Lines (InsTX-LAH05) examination is the mandatory state
certification for individuals pursuing a career in the Texas Insurance Industry. This
license authorizes agents to solicit, negotiate, and sell Life
Insurance, Annuities, Health Insurance, Disability Income, and HMO plans within
the state. Administered by Pearson VUE, the exam tests a candidate's knowledge of
national insurance principles and the specific statutes of the Texas Insurance Code.
Knowledge Domains Covered
The exam tests your competency in three distinct areas:
1. General Insurance Principles: Basic contract law, the concept of risk, underwriting
processes, and Fair Credit Reporting Act compliance.
2. Product Knowledge: Technical differences between policies (e.g., why a client would
choose Universal Life over Whole Life) and how Social Security disability interacts with
private plans.
3. Texas-Specific Statutes: This is the most "trick-heavy" section. It covers the Texas
Insurance Code, the powers of the Texas Insurance Commissioner, licensing
maintenance (CE credits), and strict ethical marketing rules (Rebating, Twisting, and
Defamation).
1. Which of the following best describes the "Elimination Period" in a Disability
Income policy?
A) The time during which the insured must be under a doctor's care.
B) A period of time at the start of a disability during which no benefits are paid.
C) The time allowed for the insurer to investigate a claim.
, D) The period after which a policy cannot be cancelled.
Answer: B
Explanation: The Elimination Period acts as a "time deductible." It is the period
between the onset of a disability and the beginning of benefit payments. A longer
elimination period usually results in a lower premium. Texas Department of
Insurance (TDI)
2. In an HMO (Health Maintenance Organization), the individual who provides all
care and refers patients to specialists is known as the:
A) Gatekeeper
B) Broker
C) Adjudicator
D) Principal
Answer: A
Explanation: The Primary Care Physician (PCP) is often called the "Gatekeeper"
because they control the member's access to specialists and secondary care
within the HMO network. Pearson VUE TX Insurance
3. Under the Affordable Care Act (ACA), a dependent child can remain on their
parent's health insurance plan until they reach the age of:
A) 21
B) 23
C) 25
D) 26
Answer: D
Explanation: Federal law mandates that insurers offer coverage to dependent
children on a parent's plan until the child's 26th birthday, regardless of the child's
marital or student status.
4. A "Preferred Provider Organization" (PPO) differs from an HMO in that:
A) PPOs never require a deductible.
B) PPOs allow members to see out-of-network providers at a higher cost.
C) PPOs are only available to government employees.
D) PPOs do not cover emergency care.
Answer: B
Explanation: While HMOs generally require you to stay within the network, PPOs
, offer more flexibility by allowing "out-of-network" care, though the patient will
pay a higher percentage of the bill.
5. Which provision prevents an insurance company from paying for the same
medical expenses already covered by another group plan?
A) Coinsurance
B) Coordination of Benefits (COB)
C) Deductible
D) Stop-Loss
Answer: B
Explanation: The Coordination of Benefits provision ensures that the total
amount paid by all plans does not exceed 100% of the actual medical expenses,
preventing "profit" from insurance.
6. If an insured has a "Major Medical" policy with a $500 deductible and 80/20
coinsurance, how much will the insurer pay on a $2,500 claim?
A) $500
B) $1,600
C) $2,000
D) $2,500
Answer: B
Explanation: First, subtract the deductible ($2,500 - $500 = $2,000). Then, the
insurer pays 80% of the remainder ($2,000 x 0.80 = $1,600). The insured pays the
$500 deductible plus $400 in coinsurance.
7. A "Presumptive Disability" provision usually covers which of the following?
A) Total and permanent loss of sight or hearing.
B) A temporary back injury.
C) A mild concussion.
D) A broken leg that heals in 6 weeks.
Answer: A
Explanation: Presumptive Disability automatically qualifies the insured for total
disability benefits if they suffer a catastrophic loss, such as loss of two limbs,
total blindness, or total deafness.
8. In Texas, the "Notice of Claim" must typically be submitted to the insurer within
how many days of a loss?
A) 10 days
, B) 20 days
C) 30 days
D) 60 days
Answer: B
Explanation: According to standard Texas health insurance provisions, the
insured has 20 days to notify the insurer that a loss has occurred.
9. Medicare Part A covers which of the following expenses?
A) Physician services
B) Prescription drugs
C) Hospitalization
D) Outpatient lab tests
Answer: C
Explanation: Medicare Part A is "Hospital Insurance." Part B covers doctors, Part
C is Medicare Advantage, and Part D covers prescriptions. Official Medicare
Website
10. A "Non-cancellable" health policy means that the insurer:
A) Can cancel the policy at any time for any reason.
B) Can only cancel the policy if the insured reaches age 65.
C) Cannot cancel the policy or increase premiums as long as premiums are paid.
D) Can increase premiums but cannot cancel the policy.
Answer: C
Explanation: A Non-cancellable policy is the most protective for the consumer.
Unlike "Guaranteed Renewable" policies (where rates can go up by class), a Non-
cancellable policy locks in the rate.
11. In Texas, a "Small Employer" for health insurance purposes is defined as any
person, firm, or corporation that employed an average of how many eligible
employees during the preceding calendar year?
A) 1 to 25 employees
B) 2 to 50 employees
C) 5 to 100 employees
D) 10 to 50 employees
Answer: B
