Texas General Lines - Life,
accident and health insurance
PRACTICE EXAM QUESTIONS
AND ANSWERS 100% PASS
LIFE SECTION 1 - CORRECT ANSWER-LIFE SECTION 1
1) Sandra Timms, age 27, is advised by her producer to purchase Life insurance to
cover a 20-year-amortized $50,000 business-improvement loan. Which of the
following plans would adequately protect Ms. Timms at the minimum premium
outlay?
A- $50,000 Whole Life policy
B- $50,000 Level Term policy for 20 years
C- $50,000 20 Pay Life policy
D- $50,000 Decreasing Term policy for 20 years - CORRECT ANSWER-D—A
$50,000 Decreasing Term policy for 20 years
,Explanation: The key here is "minimum premium". Term is the most inexpensive
type of coverage. Since Sandra's $50,000 loan will be paid off over 20 years and the
loan balance will decrease each year, Decreasing Term makes sense. Decreasing
Term is not renewable.
2) A 45-year old customer who is seeking to supplement his retirement income at
age 65 would not buy a:
A- Deferred Annuity
B- Equity Indexed Annuity
C- Variable Annuity
D- Immediate Annuity - CORRECT ANSWER-B- Equity Indexed Annuity
3) John Livingston owns a 30-Pay Life policy that he purchased at the age of 30.
The cash value will equal the face amount of the policy when he reaches the age of:
A- 60
B- 70
C- 100
D- 30 - CORRECT ANSWER-C- 100
COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED
,Explanation: Limited Pay Life insurance policies such as Life Paid Up at 65 or 20-
Pay Life are simply variations of Whole Life policies. The cash value will equal face
amount of the policy (at least) at the maturity of the policy, which is always age 100
on Whole Life policies. These limited-pay policies are designed so that the insured
may pay his or her premiums faster and be "paid up" at a certain age. However,
just because the premiums are paid up doesn't mean the policy has matured.
4) Which of the following is an example of a Limited-Pay Life policy?
A- Universal life
B- Whole Life
C- Life Paid-Up at Age 65
D- Renewable Term to Age 70 - CORRECT ANSWER-C- Life Paid-Up at Age 65
5) Which of the following policies provides the greatest amount of protection for
an insured's premium dollar as well as some cash accumulation?
A- Annuity
B- Whole Life
C- Term
D- Limited-Pay Life - CORRECT ANSWER-B- Whole Life
, If we had not mentioned cash accumulation, the answer would have been Term.
However, Term has no cash value, so the answer is Whole Life, which is the most
inexpensive type of permanent insurance and is required to have a cash value after
the third policy year. Although Limited Pay Life is a type of Whole Life, it is
incorrect since it is usually quite expensive due to the shortened pay-in period.
Annuities have no cash value except the money the annuitant paid in. Since there is
no death benefit, no protection is offered.
6) Which of the following individual policy conversions is usually permitted
without any evidence of insurability? - CORRECT ANSWER-C- Conversion from
a Term policy to a Whole Life policy
7) Which of the following is NOT correct regarding Ordinary Whole Life policies?
A- The premiums payments are owed annually until you die or reach age 100
B- The cash value grows more quickly in the beginning years of the policy
C- Coverage lasts for your own life
D- Ordinary Whole Life is a type of permanent insurance - CORRECT
ANSWER-D- Ordinary Whole Life is a type of permanent insurance
8) Which of the following statements is true about the premium payment schedule
for a Whole Life policy?
COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED
accident and health insurance
PRACTICE EXAM QUESTIONS
AND ANSWERS 100% PASS
LIFE SECTION 1 - CORRECT ANSWER-LIFE SECTION 1
1) Sandra Timms, age 27, is advised by her producer to purchase Life insurance to
cover a 20-year-amortized $50,000 business-improvement loan. Which of the
following plans would adequately protect Ms. Timms at the minimum premium
outlay?
A- $50,000 Whole Life policy
B- $50,000 Level Term policy for 20 years
C- $50,000 20 Pay Life policy
D- $50,000 Decreasing Term policy for 20 years - CORRECT ANSWER-D—A
$50,000 Decreasing Term policy for 20 years
,Explanation: The key here is "minimum premium". Term is the most inexpensive
type of coverage. Since Sandra's $50,000 loan will be paid off over 20 years and the
loan balance will decrease each year, Decreasing Term makes sense. Decreasing
Term is not renewable.
2) A 45-year old customer who is seeking to supplement his retirement income at
age 65 would not buy a:
A- Deferred Annuity
B- Equity Indexed Annuity
C- Variable Annuity
D- Immediate Annuity - CORRECT ANSWER-B- Equity Indexed Annuity
3) John Livingston owns a 30-Pay Life policy that he purchased at the age of 30.
The cash value will equal the face amount of the policy when he reaches the age of:
A- 60
B- 70
C- 100
D- 30 - CORRECT ANSWER-C- 100
COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED
,Explanation: Limited Pay Life insurance policies such as Life Paid Up at 65 or 20-
Pay Life are simply variations of Whole Life policies. The cash value will equal face
amount of the policy (at least) at the maturity of the policy, which is always age 100
on Whole Life policies. These limited-pay policies are designed so that the insured
may pay his or her premiums faster and be "paid up" at a certain age. However,
just because the premiums are paid up doesn't mean the policy has matured.
4) Which of the following is an example of a Limited-Pay Life policy?
A- Universal life
B- Whole Life
C- Life Paid-Up at Age 65
D- Renewable Term to Age 70 - CORRECT ANSWER-C- Life Paid-Up at Age 65
5) Which of the following policies provides the greatest amount of protection for
an insured's premium dollar as well as some cash accumulation?
A- Annuity
B- Whole Life
C- Term
D- Limited-Pay Life - CORRECT ANSWER-B- Whole Life
, If we had not mentioned cash accumulation, the answer would have been Term.
However, Term has no cash value, so the answer is Whole Life, which is the most
inexpensive type of permanent insurance and is required to have a cash value after
the third policy year. Although Limited Pay Life is a type of Whole Life, it is
incorrect since it is usually quite expensive due to the shortened pay-in period.
Annuities have no cash value except the money the annuitant paid in. Since there is
no death benefit, no protection is offered.
6) Which of the following individual policy conversions is usually permitted
without any evidence of insurability? - CORRECT ANSWER-C- Conversion from
a Term policy to a Whole Life policy
7) Which of the following is NOT correct regarding Ordinary Whole Life policies?
A- The premiums payments are owed annually until you die or reach age 100
B- The cash value grows more quickly in the beginning years of the policy
C- Coverage lasts for your own life
D- Ordinary Whole Life is a type of permanent insurance - CORRECT
ANSWER-D- Ordinary Whole Life is a type of permanent insurance
8) Which of the following statements is true about the premium payment schedule
for a Whole Life policy?
COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED
