TEXAS PRENEED FUNERAL SALES AGENT LICENSING EXAM PRACTICE TEST QUESTIONS AND
CORRECT ANSWERS (VERIFIED ANSWERS) PLUS RATIONALES 2026 Q&A |STUDY GUIDE| INSTANT
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,CORE DOMAINS
Texas Finance Code Chapter 154 (Prepaid Funeral Services)
Texas Insurance Code provisions for funeral prearrangement life insurance
FTC Funeral Rule compliance and disclosure requirements
Contract funding mechanisms (insurance-funded vs. trust-funded)
Preneed sales ethics and professional standards
Consumer protection laws and regulatory enforcement
Contract cancellation, refunds, and transfer provisions
Recordkeeping and reporting requirements
*
INTRODUCTION
,This practice exam prepares candidates for the Texas Preneed Funeral Sales Agent Licensing Exam, which
certifies individuals to sell prepaid funeral benefits contracts in Texas. The exam assesses knowledge of state
regulations governing preneed funeral sales, including Finance Code Chapter 154 and relevant Insurance Code
provisions. Candidates will demonstrate competency in multiple-choice and scenario-based questions that
emphasize real-world application and decision-making. The test covers regulatory compliance, ethical sales
practices, contract funding requirements, mandatory disclosures, consumer protections, and professional
standards essential for protecting consumers during preneed funeral planning transactions.
*
SECTION ONE: QUESTIONS 1–100
Question 1
Under Texas Finance Code Chapter 154, what is the primary definition of "prepaid funeral benefits"?
A. Only funeral ceremony services performed after death
B. Prearranged or prepaid funeral/cemetery services or funeral merchandise including alternative containers,
caskets, or outer burial containers
C. Grave plots and tombstones sold separately from funeral services
D. Insurance policies purchased for general estate planning purposes
🟢 B. Prearranged or prepaid funeral/cemetery services or funeral merchandise including alternative
containers, caskets, or outer burial containers
🔴 RATIONALE: Section 154.002(9) explicitly defines "prepaid funeral benefits" as prearranged or prepaid
funeral or cemetery services or funeral merchandise, including alternative containers, caskets, or outer burial
containers, while excluding graves, markers, and tombstones unless sold in contemplation of trade for funeral
services.
, Question 2
Which agency has primary regulatory authority over prepaid funeral benefits contracts in Texas?
A. Texas Department of Insurance
B. Texas Funeral Service Commission
C. Texas Department of Banking
D. Texas Attorney General's Office
🟢 C. Texas Department of Banking
🔴 RATIONALE: Section 154.002(3) defines "Department" as the Texas Department of Banking, which has
regulatory authority over prepaid funeral benefits contracts under Finance Code Chapter 154.
Question 3
What license is required for an agent who sells only life insurance policies to secure funeral services under
prepaid funeral contracts?
A. General Lines Property and Casualty license
B. Funeral Prearrangement Life Insurance Agent license
C. Embalmer license
D. Funeral Director license only
🟢 B. Funeral Prearrangement Life Insurance Agent license
🔴 RATIONALE: Under Texas Insurance Code Subchapter D (Chapter 4054), a funeral prearrangement life
insurance agent is specifically licensed to write only life insurance policies and fixed annuity contracts to secure
funeral services under prepaid funeral contracts regulated by the Texas Department of Banking.
CORRECT ANSWERS (VERIFIED ANSWERS) PLUS RATIONALES 2026 Q&A |STUDY GUIDE| INSTANT
DOWNLOAD PDF
,CORE DOMAINS
Texas Finance Code Chapter 154 (Prepaid Funeral Services)
Texas Insurance Code provisions for funeral prearrangement life insurance
FTC Funeral Rule compliance and disclosure requirements
Contract funding mechanisms (insurance-funded vs. trust-funded)
Preneed sales ethics and professional standards
Consumer protection laws and regulatory enforcement
Contract cancellation, refunds, and transfer provisions
Recordkeeping and reporting requirements
*
INTRODUCTION
,This practice exam prepares candidates for the Texas Preneed Funeral Sales Agent Licensing Exam, which
certifies individuals to sell prepaid funeral benefits contracts in Texas. The exam assesses knowledge of state
regulations governing preneed funeral sales, including Finance Code Chapter 154 and relevant Insurance Code
provisions. Candidates will demonstrate competency in multiple-choice and scenario-based questions that
emphasize real-world application and decision-making. The test covers regulatory compliance, ethical sales
practices, contract funding requirements, mandatory disclosures, consumer protections, and professional
standards essential for protecting consumers during preneed funeral planning transactions.
*
SECTION ONE: QUESTIONS 1–100
Question 1
Under Texas Finance Code Chapter 154, what is the primary definition of "prepaid funeral benefits"?
A. Only funeral ceremony services performed after death
B. Prearranged or prepaid funeral/cemetery services or funeral merchandise including alternative containers,
caskets, or outer burial containers
C. Grave plots and tombstones sold separately from funeral services
D. Insurance policies purchased for general estate planning purposes
🟢 B. Prearranged or prepaid funeral/cemetery services or funeral merchandise including alternative
containers, caskets, or outer burial containers
🔴 RATIONALE: Section 154.002(9) explicitly defines "prepaid funeral benefits" as prearranged or prepaid
funeral or cemetery services or funeral merchandise, including alternative containers, caskets, or outer burial
containers, while excluding graves, markers, and tombstones unless sold in contemplation of trade for funeral
services.
, Question 2
Which agency has primary regulatory authority over prepaid funeral benefits contracts in Texas?
A. Texas Department of Insurance
B. Texas Funeral Service Commission
C. Texas Department of Banking
D. Texas Attorney General's Office
🟢 C. Texas Department of Banking
🔴 RATIONALE: Section 154.002(3) defines "Department" as the Texas Department of Banking, which has
regulatory authority over prepaid funeral benefits contracts under Finance Code Chapter 154.
Question 3
What license is required for an agent who sells only life insurance policies to secure funeral services under
prepaid funeral contracts?
A. General Lines Property and Casualty license
B. Funeral Prearrangement Life Insurance Agent license
C. Embalmer license
D. Funeral Director license only
🟢 B. Funeral Prearrangement Life Insurance Agent license
🔴 RATIONALE: Under Texas Insurance Code Subchapter D (Chapter 4054), a funeral prearrangement life
insurance agent is specifically licensed to write only life insurance policies and fixed annuity contracts to secure
funeral services under prepaid funeral contracts regulated by the Texas Department of Banking.
