Texas Funeral Prearrangement License Exam 2026 | Latest
Update | Exam Prep Questions & Answers | Graded A+
1. If an annuity has a guaranteed minimum interest rate, this means
the interest rate will never drop below the guaranteed minimum
the interest rate will not fluctuate
the interest rate will never raise above the guaranteed minimum
there is no interest rate
2. Why is it important to designate a beneficiary on a life insurance policy
application?
It helps in calculating the premiums for the policy.
Designating a beneficiary ensures that the proceeds are paid to the
intended recipient upon the policyholder's death.
It allows the insurance company to determine the policy's value.
It is required for the agent's commission.
3. Describe the significance of the guaranteed cash surrender value in a limited
payment whole life policy.
The guaranteed cash surrender value represents the amount the
policyholder can receive if they decide to surrender the policy after
the limited payment period.
The guaranteed cash surrender value is the total premiums paid by the
policyholder.
The guaranteed cash surrender value is the same as the death benefit.
The guaranteed cash surrender value is only applicable if the
policyholder continues to pay premiums.
,4. If an annuitant passes away before the deferral period ends, what happens to
the funds in a deferred annuity?
The funds are returned to the annuitant's estate.
The funds are distributed among all policyholders.
The funds are forfeited to the insurance company.
The funds are paid to the beneficiary according to the terms of the
contract.
5. What is the time frame within which an insurance agent must report a
fraudulent insurance act upon discovery?
90 days
60 days
15 days
30 days
6. If an insurance company mismanages the assets in its general account, what
potential impact could this have on annuity holders?
It would increase the interest rates on the annuities offered.
It would only affect the company's stockholders, not the annuity
holders.
It could jeopardize the ability to pay out benefits to annuity holders.
It would have no impact as the assets are independently managed.
7. Allen buys an annuity with a single, lump-sum payment, which grows in the
contract until he accesses the funds or the contract annuitizes. No additional
premium payments are accepted. What type of annuity has Allen bought?
, fixed premium deferred annuity
single-premium immediate annuity
single-premium deferred annuity
flexible premium deferred annuity
8. An insurance company has how many years to challenge the validity of a life
insurance contract
One
2
3
4
9. What does the FTC Funeral Rule prohibit funeral providers from requiring
during the arrangement process?
The payment of a deposit before services are rendered.
The purchase of a casket for direct cremation.
The selection of a specific burial plot.
The purchase of a headstone.
10. What is the definition of insurable interest in the context of life insurance?
A type of insurance policy.
A financial interest in the life of the insured.
A legal requirement for policy issuance.
A government regulation.
, 11. What is the purpose of the Federal Waiver of Cancellation Form in the
context of funeral prearrangement contracts?
To provide a refund for the contract if canceled.
To disclose the maximum death benefit of the policy.
To waive the right to cancel the contract within a specified period.
To confirm the purchase of a life insurance policy.
12. If a consumer purchases a funeral prearrangement contract without the
Federal Waiver of Cancellation Form, what potential implications could arise
for the funeral home and the agent?
The funeral home will automatically issue a refund to the consumer.
The agent will be penalized for not providing the form.
The contract will be considered void and unenforceable.
The consumer may retain the right to cancel the contract, which
could lead to financial implications for the funeral home and the
agent.
13. A limited pay life policy:
requires level premium payment for the entire life of the insured.
requires premium payments for a specified number of years.
cannot be purchased any longer due to tax restrictions.
is available only for small face amounts
14. Why is it important for annuity advertisements to specify the period for
which the interest rate is guaranteed?
It allows agents to sell more policies without disclosing risks.
Update | Exam Prep Questions & Answers | Graded A+
1. If an annuity has a guaranteed minimum interest rate, this means
the interest rate will never drop below the guaranteed minimum
the interest rate will not fluctuate
the interest rate will never raise above the guaranteed minimum
there is no interest rate
2. Why is it important to designate a beneficiary on a life insurance policy
application?
It helps in calculating the premiums for the policy.
Designating a beneficiary ensures that the proceeds are paid to the
intended recipient upon the policyholder's death.
It allows the insurance company to determine the policy's value.
It is required for the agent's commission.
3. Describe the significance of the guaranteed cash surrender value in a limited
payment whole life policy.
The guaranteed cash surrender value represents the amount the
policyholder can receive if they decide to surrender the policy after
the limited payment period.
The guaranteed cash surrender value is the total premiums paid by the
policyholder.
The guaranteed cash surrender value is the same as the death benefit.
The guaranteed cash surrender value is only applicable if the
policyholder continues to pay premiums.
,4. If an annuitant passes away before the deferral period ends, what happens to
the funds in a deferred annuity?
The funds are returned to the annuitant's estate.
The funds are distributed among all policyholders.
The funds are forfeited to the insurance company.
The funds are paid to the beneficiary according to the terms of the
contract.
5. What is the time frame within which an insurance agent must report a
fraudulent insurance act upon discovery?
90 days
60 days
15 days
30 days
6. If an insurance company mismanages the assets in its general account, what
potential impact could this have on annuity holders?
It would increase the interest rates on the annuities offered.
It would only affect the company's stockholders, not the annuity
holders.
It could jeopardize the ability to pay out benefits to annuity holders.
It would have no impact as the assets are independently managed.
7. Allen buys an annuity with a single, lump-sum payment, which grows in the
contract until he accesses the funds or the contract annuitizes. No additional
premium payments are accepted. What type of annuity has Allen bought?
, fixed premium deferred annuity
single-premium immediate annuity
single-premium deferred annuity
flexible premium deferred annuity
8. An insurance company has how many years to challenge the validity of a life
insurance contract
One
2
3
4
9. What does the FTC Funeral Rule prohibit funeral providers from requiring
during the arrangement process?
The payment of a deposit before services are rendered.
The purchase of a casket for direct cremation.
The selection of a specific burial plot.
The purchase of a headstone.
10. What is the definition of insurable interest in the context of life insurance?
A type of insurance policy.
A financial interest in the life of the insured.
A legal requirement for policy issuance.
A government regulation.
, 11. What is the purpose of the Federal Waiver of Cancellation Form in the
context of funeral prearrangement contracts?
To provide a refund for the contract if canceled.
To disclose the maximum death benefit of the policy.
To waive the right to cancel the contract within a specified period.
To confirm the purchase of a life insurance policy.
12. If a consumer purchases a funeral prearrangement contract without the
Federal Waiver of Cancellation Form, what potential implications could arise
for the funeral home and the agent?
The funeral home will automatically issue a refund to the consumer.
The agent will be penalized for not providing the form.
The contract will be considered void and unenforceable.
The consumer may retain the right to cancel the contract, which
could lead to financial implications for the funeral home and the
agent.
13. A limited pay life policy:
requires level premium payment for the entire life of the insured.
requires premium payments for a specified number of years.
cannot be purchased any longer due to tax restrictions.
is available only for small face amounts
14. Why is it important for annuity advertisements to specify the period for
which the interest rate is guaranteed?
It allows agents to sell more policies without disclosing risks.
