TEXAS GENERAL LINES LIFE ACCIDENT
HEALTH INSURANCE PRACTICE REVIEW
2026 UPDATED QUESTIONS AND
SOLUTIONS GRADED A+
⩥ 1) A plan under which the surviving partners of a partnership agree to
buy the interest of a deceased partner is known as a:.
Answer: A- Surviving Shareholder plan
B- Buy and Sell Agreement
C- Key Employee Life policy
D- Deferred Compensation plan
⩥ 2) Carl Burk, whose wife is his business partner, buys a Life insurance
policy on his wife's life. Because of this third-party ownership, the
beneficiary should be the:.
Answer: A- Policy owner's children
B- Policy owner's estate
C- Policy owner
D- Policy owner's wife
⩥ 3) When a company requires that their employees pay part of the
premium for the Group Life insurance coverage, it is known as a
___________ group:.
,Answer: A- Contributory
B- Nonparticipatory
C- Participatory
D- Noncontributory
⩥ 4) Albert Metz, who has $2,000 of Group Life insurance, has just
terminated his employment. Mr. Metz has how many days in which to
convert his group coverage to individual coverage?.
Answer: A- 28
B- 21
C- 15
D- 31
⩥ 5) Which of the following is not considered to be a 'qualified' plan?.
Answer: A- IRA
B- 403b Tax Sheltered Annuity
C- Split Dollar
D- Keogh
⩥ 6) Traditional IRAs have a premature distribution penalty for
distributions taken prior to age:.
Answer: A- 55
B- 70 1/2
,C- 59 1/2
D- 65
⩥ 7) Tim Watson wants to obtain a Life insurance policy on his
employee, Mike Carson, and to name Mike's wife, Deborah Carson, as
the beneficiary. Signatures of which of the following would be legally
required on the application?
I. Tim Watson
II. Mike Carson
III. Deborah Carson.
Answer: A- I and II
B- II and III
C- I, II, and III
D- I only
⩥ 8) An insurable interest must exist when:.
Answer: A- Cash values are borrowed
B- Death proceeds become payable
C- A life insurance policy is issued
D- A policy is surrendered for cash
, ⩥ 9) A client with a participating Life insurance policy receives both
interest and dividends. What are the tax implications?.
Answer: A- Neither are taxable
B- The interest is taxable, but the dividends are not
C- Both are taxable as ordinary income
D- The dividends are taxable, but the interest isn't
⩥ 10) A Life insurance policy of which the cash value is over-funded
according to IRS rules is known as:.
Answer: A- A Universal Life Contract
B- A Variable Life Contract
C- A Modified Endowment Contract
D- A Variable/Universal Life Contract
⩥ 11) The owner of a business is insured under a $100,000 Key
Employee Life policy that contains a Double Indemnity clause and a
Suicide clause. The business has paid the annual premium of $2,000. Six
months after the inception date of the policy, the insured commits
suicide. The insurance company's liability for payment is:.
Answer: A- $100,000
B- $200,000
C- $ -0-
D- $2,000
HEALTH INSURANCE PRACTICE REVIEW
2026 UPDATED QUESTIONS AND
SOLUTIONS GRADED A+
⩥ 1) A plan under which the surviving partners of a partnership agree to
buy the interest of a deceased partner is known as a:.
Answer: A- Surviving Shareholder plan
B- Buy and Sell Agreement
C- Key Employee Life policy
D- Deferred Compensation plan
⩥ 2) Carl Burk, whose wife is his business partner, buys a Life insurance
policy on his wife's life. Because of this third-party ownership, the
beneficiary should be the:.
Answer: A- Policy owner's children
B- Policy owner's estate
C- Policy owner
D- Policy owner's wife
⩥ 3) When a company requires that their employees pay part of the
premium for the Group Life insurance coverage, it is known as a
___________ group:.
,Answer: A- Contributory
B- Nonparticipatory
C- Participatory
D- Noncontributory
⩥ 4) Albert Metz, who has $2,000 of Group Life insurance, has just
terminated his employment. Mr. Metz has how many days in which to
convert his group coverage to individual coverage?.
Answer: A- 28
B- 21
C- 15
D- 31
⩥ 5) Which of the following is not considered to be a 'qualified' plan?.
Answer: A- IRA
B- 403b Tax Sheltered Annuity
C- Split Dollar
D- Keogh
⩥ 6) Traditional IRAs have a premature distribution penalty for
distributions taken prior to age:.
Answer: A- 55
B- 70 1/2
,C- 59 1/2
D- 65
⩥ 7) Tim Watson wants to obtain a Life insurance policy on his
employee, Mike Carson, and to name Mike's wife, Deborah Carson, as
the beneficiary. Signatures of which of the following would be legally
required on the application?
I. Tim Watson
II. Mike Carson
III. Deborah Carson.
Answer: A- I and II
B- II and III
C- I, II, and III
D- I only
⩥ 8) An insurable interest must exist when:.
Answer: A- Cash values are borrowed
B- Death proceeds become payable
C- A life insurance policy is issued
D- A policy is surrendered for cash
, ⩥ 9) A client with a participating Life insurance policy receives both
interest and dividends. What are the tax implications?.
Answer: A- Neither are taxable
B- The interest is taxable, but the dividends are not
C- Both are taxable as ordinary income
D- The dividends are taxable, but the interest isn't
⩥ 10) A Life insurance policy of which the cash value is over-funded
according to IRS rules is known as:.
Answer: A- A Universal Life Contract
B- A Variable Life Contract
C- A Modified Endowment Contract
D- A Variable/Universal Life Contract
⩥ 11) The owner of a business is insured under a $100,000 Key
Employee Life policy that contains a Double Indemnity clause and a
Suicide clause. The business has paid the annual premium of $2,000. Six
months after the inception date of the policy, the insured commits
suicide. The insurance company's liability for payment is:.
Answer: A- $100,000
B- $200,000
C- $ -0-
D- $2,000
