Texas Life and Health Insurance Exam Questions and Answers | Latest Version | 2025/2026 | Correct & Verified

Texas Life and Health Insurance Exam Questions and Answers | Latest Version | 2025/2026 | Correct & Verified What type of life insurance provides coverage for a specific period of time? Term life insurance. What type of life insurance builds cash value over the life of the policy? Whole life insurance. What does the face amount of a life insurance policy represent? The amount paid to the beneficiary upon the insured’s death. Who owns the life insurance policy? The policyowner. What is the role of a beneficiary in a life insurance contract? To receive policy proceeds upon the insured’s death. When must insurable interest exist in a life insurance policy in Texas? At the time the policy is issued. What happens during the free-look period? 2 The policy may be returned for a full refund. What is a premium in insurance terms? The amount paid to keep the policy in force. What does a waiver of premium rider do? Waives premium payments if the insured becomes disabled. What is a guaranteed insurability rider? A rider allowing future coverage increases without evidence of insurability. What does cash surrender value mean? The amount available if a cash-value policy is surrendered. What happens if a life insurance policy lapses? Coverage ends due to nonpayment of premium. What is the grace period in Texas life insurance policies? A period after the due date during which coverage remains active. What is the incontestability clause? A provision limiting the insurer’s ability to contest the policy after a set time. 3 What does misrepresentation mean in life insurance applications? Providing false or misleading information. What is the purpose of underwriting? To evaluate risk before issuing a policy. What is a rider in life insurance? An amendment that modifies policy coverage. What is accidental death coverage? A benefit that pays if death results from an accident. What is the purpose of health insurance? To help cover medical expenses due to illness or injury. What is a deductible in health insurance? The amount the insured pays before coverage begins. What is coinsurance? The percentage of costs shared between insurer and insured. 4 What is a copayment? A fixed amount paid for a healthcare service. What does out-of-pocket maximum mean? The most an insured must pay in a policy year. What is a pre-existing condition? A health condition existing before policy issuance. What does guaranteed renewable mean? The insurer cannot cancel coverage if premiums are paid. What is noncancelable health insurance? A policy that cannot be canceled or changed by the insurer. What does elimination period mean in disability insurance? The waiting period before benefits begin. What is disability income insurance? Insurance that replaces income during disability. What is a benefit period? 5 The length of time benefits are payable. What is a health maintenance organization (HMO)? A managed care plan requiring use of network providers. What is a preferred provider organization (PPO)? A plan offering flexibility with lower costs in-network. What is a point-of-service (POS) plan? A plan combining HMO and PPO