PEARSON VUE TEXAS LIFE & HEALTH INSURANCE
ACTUAL EXAM 2026/2027 | 150 Verified Questions &
Correct Answers | State Licensing Prep | Pass
Guaranteed - A+ Graded
Question 1. Which of the following is the primary purpose of life insurance?
A. To provide retirement income
B. To protect against the financial loss caused by premature death
C. To provide disability income
D. To cover medical expenses
Correct Answer: B
Rationale:
The primary purpose of life insurance is to protect against the financial loss caused by
premature death. It provides a death benefit to named beneficiaries to help replace lost
income, pay debts, and cover final expenses. Retirement income (A) is a goal of
annuities. Disability income (C) is covered by disability insurance. Medical expenses (D)
are covered by health insurance.
Question 2. In life insurance, what is the "premium"?
A. The death benefit paid to beneficiaries
B. The amount paid to purchase and maintain the policy
C. The cash value accumulated in the policy
D. The dividend paid to policyholders
Correct Answer: B
Rationale:
The premium is the amount paid to the insurance company to purchase and maintain
the policy. It is the cost of insurance. The death benefit (A) is the amount paid upon the
insured's death. Cash value (C) is accumulated in permanent policies. Dividends (D) are
paid by mutual companies.
Question 3. What is the "face amount" of a life insurance policy?
,A. The premium amount
B. The death benefit stated in the policy
C. The cash value of the policy
D. The loan value of the policy
Correct Answer: B
Rationale:
The face amount (or face value) is the death benefit stated in the policy, which is paid to
beneficiaries upon the insured's death. Premium (A) is the cost. Cash value (C) is the
accumulation in permanent policies. Loan value (D) is the amount that can be borrowed
against cash value.
Question 4. Which of the following is NOT a type of life insurance?
A. Term life
B. Whole life
C. Universal life
D. Health insurance
Correct Answer: D
Rationale:
Health insurance is a separate category of insurance. Term (A), whole life (B), and
universal life (C) are all types of life insurance.
Question 5. What is term life insurance?
A. Life insurance that provides coverage for a specific period of time
B. Life insurance that provides coverage for the entire lifetime
C. Life insurance that accumulates cash value
D. Life insurance that pays dividends
Correct Answer: A
Rationale:
Term life insurance provides protection for a specific period (term), such as 10, 20, or 30
years. If the insured dies during the term, the death benefit is paid. If the insured
survives the term, no benefit is paid, and coverage expires. Whole life (B) provides
lifetime coverage. Permanent policies (C, D) accumulate cash value and may pay
dividends.
,Question 6. What happens to term life insurance if the insured outlives the policy
term?
A. The policy automatically renews
B. The death benefit is paid to the insured
C. The coverage expires with no benefit paid
D. The policy converts to whole life
Correct Answer: C
Rationale:
Term life insurance provides coverage for a specified period. If the insured survives the
term, the coverage expires, and no benefit is paid. Renewal (A) may be possible but is
not automatic. The death benefit is not paid to the insured (B). Conversion (D) may be
an option but is not automatic.
Question 7. What is whole life insurance?
A. Life insurance that provides coverage for a specific period
B. Life insurance that provides permanent coverage and accumulates cash value
C. Life insurance that only covers accidental death
D. Life insurance that is renewable
Correct Answer: B
Rationale:
Whole life insurance provides permanent coverage for the insured's entire lifetime and
accumulates cash value. It also pays dividends in participating policies. Term (A) is
temporary. Accidental death (C) is a type of rider or limited policy. Renewable term (D) is
a type of term insurance.
Question 8. Which of the following is a characteristic of whole life insurance?
A. Cash value accumulation
B. Fixed premiums
C. Guaranteed death benefit
D. All of the above
Correct Answer: D
Rationale:
Whole life insurance features cash value accumulation (A), fixed premiums (B), and a
guaranteed death benefit (C). Therefore, all of the above are correct.
, Question 9. What is universal life insurance?
A. A type of term insurance
B. A flexible premium permanent policy with adjustable death benefit and cash value
C. A policy that only provides accidental death coverage
D. A policy with no cash value
Correct Answer: B
Rationale:
Universal life insurance is a flexible premium permanent policy that allows adjustments
to the premium and death benefit. It has a cash value component that earns interest. It
is not term (A), accidental only (C), or without cash value (D).
Question 10. What is the primary difference between whole life and universal life
insurance?
A. Whole life has fixed premiums; universal life has flexible premiums
B. Whole life has cash value; universal life does not
C. Whole life is term; universal life is permanent
D. Whole life is cheaper than universal life
Correct Answer: A
Rationale:
The primary difference is that whole life has fixed premiums, while universal life has
flexible premiums. Both have cash value (B is incorrect). Both are permanent (C is
incorrect). Cost varies based on factors (D is not always true).
Question 11. What is a variable life insurance policy?
A. A permanent policy where cash value is invested in subaccounts
B. A term policy
C. A policy with no death benefit
D. A policy with fixed premiums only
Correct Answer: A
Rationale:
Variable life insurance is a permanent policy where the cash value is invested in
subaccounts (similar to mutual funds), and the death benefit may vary based on
investment performance. It is not term (B), without death benefit (C), or fixed premium
only (D).
ACTUAL EXAM 2026/2027 | 150 Verified Questions &
Correct Answers | State Licensing Prep | Pass
Guaranteed - A+ Graded
Question 1. Which of the following is the primary purpose of life insurance?
A. To provide retirement income
B. To protect against the financial loss caused by premature death
C. To provide disability income
D. To cover medical expenses
Correct Answer: B
Rationale:
The primary purpose of life insurance is to protect against the financial loss caused by
premature death. It provides a death benefit to named beneficiaries to help replace lost
income, pay debts, and cover final expenses. Retirement income (A) is a goal of
annuities. Disability income (C) is covered by disability insurance. Medical expenses (D)
are covered by health insurance.
Question 2. In life insurance, what is the "premium"?
A. The death benefit paid to beneficiaries
B. The amount paid to purchase and maintain the policy
C. The cash value accumulated in the policy
D. The dividend paid to policyholders
Correct Answer: B
Rationale:
The premium is the amount paid to the insurance company to purchase and maintain
the policy. It is the cost of insurance. The death benefit (A) is the amount paid upon the
insured's death. Cash value (C) is accumulated in permanent policies. Dividends (D) are
paid by mutual companies.
Question 3. What is the "face amount" of a life insurance policy?
,A. The premium amount
B. The death benefit stated in the policy
C. The cash value of the policy
D. The loan value of the policy
Correct Answer: B
Rationale:
The face amount (or face value) is the death benefit stated in the policy, which is paid to
beneficiaries upon the insured's death. Premium (A) is the cost. Cash value (C) is the
accumulation in permanent policies. Loan value (D) is the amount that can be borrowed
against cash value.
Question 4. Which of the following is NOT a type of life insurance?
A. Term life
B. Whole life
C. Universal life
D. Health insurance
Correct Answer: D
Rationale:
Health insurance is a separate category of insurance. Term (A), whole life (B), and
universal life (C) are all types of life insurance.
Question 5. What is term life insurance?
A. Life insurance that provides coverage for a specific period of time
B. Life insurance that provides coverage for the entire lifetime
C. Life insurance that accumulates cash value
D. Life insurance that pays dividends
Correct Answer: A
Rationale:
Term life insurance provides protection for a specific period (term), such as 10, 20, or 30
years. If the insured dies during the term, the death benefit is paid. If the insured
survives the term, no benefit is paid, and coverage expires. Whole life (B) provides
lifetime coverage. Permanent policies (C, D) accumulate cash value and may pay
dividends.
,Question 6. What happens to term life insurance if the insured outlives the policy
term?
A. The policy automatically renews
B. The death benefit is paid to the insured
C. The coverage expires with no benefit paid
D. The policy converts to whole life
Correct Answer: C
Rationale:
Term life insurance provides coverage for a specified period. If the insured survives the
term, the coverage expires, and no benefit is paid. Renewal (A) may be possible but is
not automatic. The death benefit is not paid to the insured (B). Conversion (D) may be
an option but is not automatic.
Question 7. What is whole life insurance?
A. Life insurance that provides coverage for a specific period
B. Life insurance that provides permanent coverage and accumulates cash value
C. Life insurance that only covers accidental death
D. Life insurance that is renewable
Correct Answer: B
Rationale:
Whole life insurance provides permanent coverage for the insured's entire lifetime and
accumulates cash value. It also pays dividends in participating policies. Term (A) is
temporary. Accidental death (C) is a type of rider or limited policy. Renewable term (D) is
a type of term insurance.
Question 8. Which of the following is a characteristic of whole life insurance?
A. Cash value accumulation
B. Fixed premiums
C. Guaranteed death benefit
D. All of the above
Correct Answer: D
Rationale:
Whole life insurance features cash value accumulation (A), fixed premiums (B), and a
guaranteed death benefit (C). Therefore, all of the above are correct.
, Question 9. What is universal life insurance?
A. A type of term insurance
B. A flexible premium permanent policy with adjustable death benefit and cash value
C. A policy that only provides accidental death coverage
D. A policy with no cash value
Correct Answer: B
Rationale:
Universal life insurance is a flexible premium permanent policy that allows adjustments
to the premium and death benefit. It has a cash value component that earns interest. It
is not term (A), accidental only (C), or without cash value (D).
Question 10. What is the primary difference between whole life and universal life
insurance?
A. Whole life has fixed premiums; universal life has flexible premiums
B. Whole life has cash value; universal life does not
C. Whole life is term; universal life is permanent
D. Whole life is cheaper than universal life
Correct Answer: A
Rationale:
The primary difference is that whole life has fixed premiums, while universal life has
flexible premiums. Both have cash value (B is incorrect). Both are permanent (C is
incorrect). Cost varies based on factors (D is not always true).
Question 11. What is a variable life insurance policy?
A. A permanent policy where cash value is invested in subaccounts
B. A term policy
C. A policy with no death benefit
D. A policy with fixed premiums only
Correct Answer: A
Rationale:
Variable life insurance is a permanent policy where the cash value is invested in
subaccounts (similar to mutual funds), and the death benefit may vary based on
investment performance. It is not term (B), without death benefit (C), or fixed premium
only (D).
