Life Insurance Exam Question (Texas)
Questions and Answers | Latest
Version | 2025/2026 | Correct & Verified
What happens if premiums are not paid on time?
✔✔The policy may lapse after the grace period.
What is the grace period in Texas life insurance policies?
✔✔A period allowing late premium payment without policy lapse.
What is term life insurance?
✔✔Coverage for a specified period with no cash value.
What happens if a term policy expires?
✔✔Coverage ends with no payout unless renewed or converted.
What is whole life insurance?
✔✔Permanent coverage with a guaranteed cash value.
What is universal life insurance?
✔✔Flexible premium permanent life insurance.
What is cash value?
1
,✔✔The savings component of certain life insurance policies.
When can a policyowner access cash value?
✔✔Through loans or withdrawals while the policy is active.
What is a policy loan?
✔✔Money borrowed against the policy’s cash value.
What happens if a policy loan is unpaid at death?
✔✔It is deducted from the death benefit.
What is a beneficiary designation?
✔✔The naming of who will receive policy proceeds.
What is a primary beneficiary?
✔✔The first person entitled to the death benefit.
What is a contingent beneficiary?
✔✔The backup beneficiary if the primary cannot receive benefits.
What is revocable beneficiary status?
✔✔The policyowner can change the beneficiary at any time.
2
,What is irrevocable beneficiary status?
✔✔The beneficiary must consent to changes affecting their interest.
What is the contestability period in Texas life insurance?
✔✔The first two years of the policy.
Who is the policyowner in a life insurance contract?
✔✔The person who owns and controls the policy.
Who is the insured?
✔✔The individual whose life is covered by the policy.
Who is the beneficiary?
✔✔The person or entity that receives the death benefit.
What is insurable interest in life insurance?
✔✔A lawful financial or emotional interest in the insured’s life.
When must insurable interest exist in Texas life insurance?
✔✔At the time the policy is issued.
3
, What is the face amount of a life insurance policy?
✔✔The amount paid to beneficiaries at death.
What is a premium?
✔✔The payment made to keep a life insurance policy in force.
What can insurers contest during the contestability period?
✔✔Material misrepresentations in the application.
What is a misrepresentation?
✔✔Providing false or incomplete information on an application.
What is fraud in life insurance?
✔✔Intentional deception for financial gain.
What is the suicide clause?
✔✔A provision limiting payout if suicide occurs early in the policy.
How long is the suicide exclusion period in Texas?
✔✔Two years from policy issue.
What is an incontestability clause?
4
Questions and Answers | Latest
Version | 2025/2026 | Correct & Verified
What happens if premiums are not paid on time?
✔✔The policy may lapse after the grace period.
What is the grace period in Texas life insurance policies?
✔✔A period allowing late premium payment without policy lapse.
What is term life insurance?
✔✔Coverage for a specified period with no cash value.
What happens if a term policy expires?
✔✔Coverage ends with no payout unless renewed or converted.
What is whole life insurance?
✔✔Permanent coverage with a guaranteed cash value.
What is universal life insurance?
✔✔Flexible premium permanent life insurance.
What is cash value?
1
,✔✔The savings component of certain life insurance policies.
When can a policyowner access cash value?
✔✔Through loans or withdrawals while the policy is active.
What is a policy loan?
✔✔Money borrowed against the policy’s cash value.
What happens if a policy loan is unpaid at death?
✔✔It is deducted from the death benefit.
What is a beneficiary designation?
✔✔The naming of who will receive policy proceeds.
What is a primary beneficiary?
✔✔The first person entitled to the death benefit.
What is a contingent beneficiary?
✔✔The backup beneficiary if the primary cannot receive benefits.
What is revocable beneficiary status?
✔✔The policyowner can change the beneficiary at any time.
2
,What is irrevocable beneficiary status?
✔✔The beneficiary must consent to changes affecting their interest.
What is the contestability period in Texas life insurance?
✔✔The first two years of the policy.
Who is the policyowner in a life insurance contract?
✔✔The person who owns and controls the policy.
Who is the insured?
✔✔The individual whose life is covered by the policy.
Who is the beneficiary?
✔✔The person or entity that receives the death benefit.
What is insurable interest in life insurance?
✔✔A lawful financial or emotional interest in the insured’s life.
When must insurable interest exist in Texas life insurance?
✔✔At the time the policy is issued.
3
, What is the face amount of a life insurance policy?
✔✔The amount paid to beneficiaries at death.
What is a premium?
✔✔The payment made to keep a life insurance policy in force.
What can insurers contest during the contestability period?
✔✔Material misrepresentations in the application.
What is a misrepresentation?
✔✔Providing false or incomplete information on an application.
What is fraud in life insurance?
✔✔Intentional deception for financial gain.
What is the suicide clause?
✔✔A provision limiting payout if suicide occurs early in the policy.
How long is the suicide exclusion period in Texas?
✔✔Two years from policy issue.
What is an incontestability clause?
4
