Texas Funeral Prearrangement License Actual Exam 2026/2027: Questions With Correct Answers (100% VERIFIED) for Funeral Service Success – Pass Guaranteed - A+ Graded

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Texas Funeral Prearrangement License Actual Exam
2026/2027: Questions With Correct Answers (100%
VERIFIED) for Funeral Service Success – Pass
Guaranteed - A+ Graded

Section 1: Texas Pre-Need Funeral Contract Act (12 questions)
Q1: Under Chapter 154 of the Texas Finance Code, which state agency has primary regulatory
authority over pre-need funeral contracts in Texas?
• A. Texas Funeral Service Commission (TFSC) exclusively

• B. Texas Department of Insurance (TDI) exclusively

• C. Texas Department of Banking (DOB) for contract administration and trust funding;
TFSC for funeral directing aspects

• D. Texas Attorney General's Office exclusively
Correct Answer: C

Rationale: The Texas Pre-Need Funeral Contract Act (Chapter 154, Texas Finance Code) grants
the Texas Department of Banking (DOB) primary authority over pre-need contract
administration, trust funding, and consumer protection. The Texas Funeral Service Commission
(TFSC) regulates funeral directing and embalming under Chapter 651, Texas Occupations Code.
Option A and B incorrectly suggest exclusive authority. Option D has no regulatory role in pre-
need contracts.



Q2: According to 7 TAC Chapter 23, what is the primary purpose of the Texas Pre-Need Funeral
Contract Act?

• A. To maximize profits for funeral homes

• B. To protect consumers who prearrange and prepay funeral services and ensure funds are
available when needed

• C. To regulate funeral service pricing statewide

• D. To eliminate competition among funeral homes
Correct Answer: B

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Rationale: The primary purpose of Chapter 154 is consumer protection—ensuring that
consumers who prepay for funeral services and merchandise are protected, funds are safeguarded
in trust or insurance, and services will be available when needed. Option A contradicts the Act's
purpose. Option C describes a different regulatory function. Option D is anticompetitive and
contrary to the Act.



Q3: Under Texas Finance Code §154.002, which of the following is included in the definition of
a "pre-need funeral contract"?

• A. A contract for at-need funeral services arranged after death has occurred
• B. An agreement to furnish funeral services or merchandise in the future, in consideration
of payment made prior to death

• C. A life insurance policy sold separately from any funeral arrangements
• D. A family arrangement made without payment

Correct Answer: B

Rationale: Texas Finance Code §154.002(4) defines a pre-need funeral contract as any
agreement to furnish funeral services or merchandise in the future, where payment is made prior
to the death of the beneficiary. Option A describes at-need services. Option C describes insurance
alone without funeral contract. Option D lacks the essential element of prepayment.


Q4: Which entity is exempt from regulation under the Texas Pre-Need Funeral Contract Act
according to §154.003?
• A. All for-profit funeral homes
• B. Certain religious organizations and family arrangements meeting specific criteria

• C. All cemeteries

• D. No exemptions exist under the Act

Correct Answer: B

Rationale: Texas Finance Code §154.003 provides limited exemptions for certain religious
organizations that provide funeral services exclusively to their members and family arrangements
that meet specific statutory criteria (non-commercial, informal arrangements). Option A is
incorrect—for-profit funeral homes are regulated. Option C is incorrect—cemeteries are
regulated when selling pre-need. Option D is false—exemptions exist.

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Q5: Under 7 TAC §23.3, what is the definition of a "seller" under the Texas Pre-Need Funeral
Contract Act?

• A. Only the funeral director handling the arrangements

• B. Any person, firm, or corporation that sells or offers to sell pre-need funeral contracts

• C. Only licensed insurance agents

• D. Only the trustee holding pre-need funds

Correct Answer: B
Rationale: 7 TAC §23.3 defines "seller" broadly as any person, firm, partnership, corporation, or
other entity that sells, offers to sell, or negotiates pre-need funeral contracts. This includes
funeral homes, cemeteries, and pre-need sales agents. Option A is too narrow. Option C describes
only insurance-funded contracts. Option D describes trustees, not sellers.



Q6: According to Texas Finance Code §154.101, what is the maximum administrative fee that
may be charged on a pre-need funeral contract?

• A. No administrative fee is permitted

• B. $25 or the amount specified by rule, whichever is less
• C. 10% of the contract value

• D. $100 per contract

Correct Answer: B

Rationale: Texas Finance Code §154.101 and 7 TAC §23.41 permit sellers to charge an
administrative fee not to exceed $25 or the amount specified by DOB rule, whichever is less.
This fee is deducted from funds placed in trust. Options A, C, and D exceed or contradict
statutory limits.


Q7: Under 7 TAC §23.5, which of the following is considered a prohibited practice in pre-need
funeral contract sales?
• A. Providing a copy of the contract to the purchaser

• B. Misrepresenting or making false statements about contract terms, funding, or benefits

• C. Depositing funds into a qualified trust account within 30 days
• D. Offering guaranteed price contracts