TEXAS PRENEED FUNERAL SALES AGENT LICENSING EXAM – PRACTICE QUESTIONS AND
CORRECT ANSWERS (VERIFIED ANSWERS) PLUS RATIONALES 2026 Q&A | INSTANT
DOWNLOAD PDF
### Core Domains
Texas Insurance Code Section 4054.151 Requirements
Texas Finance Code Chapter 154 Prepaid Funeral Services
FTC Funeral Rule Compliance and Disclosure Requirements
Trust-Funded vs. Insurance-Funded Contract Distinctions
Contract Cancellation, Modification, and Refund Procedures
Ethics, Professional Standards, and Consumer Protection
Permit Requirements and Regulatory Administration
Cash Advance Items and Non-Guaranteed Merchandise Disclosure
Funeral Provider Responsibilities and Pre-Need to At-Need Reconciliation
Sales Agent Licensing Training and Examination Requirements
### Introduction
,This assessment prepares candidates for the Texas Preneed Funeral Sales Agent Licensing Exam by testing
essential knowledge required to legally sell prepaid funeral benefits contracts in Texas. The exam evaluates
understanding of Texas Insurance Code and Finance Code regulations, FTC Funeral Rule compliance,
contract funding mechanisms, disclosure requirements, and ethical professional standards. Questions are
presented in multiple-choice format with scenario-based scenarios that emphasize real-world application and
critical decision-making. Candidates will demonstrate competency in regulatory compliance, consumer
protection principles, contract administration, and proper sales practices. Success on this exam requires
mastery of both foundational theory and applied professional knowledge necessary for protecting purchasers
and ensuring funds remain available for prearranged funeral services.
Question 1
Under Texas Insurance Code Section 4054.151, what type of insurance does a funeral prearrangement life
insurance agent write exclusively?
A. Health insurance policies only
B. Life insurance policies and fixed annuity contracts to secure funeral services
C. Variable annuity contracts and equity-based investments
D. Property and casualty insurance for funeral homes
🟢 Correct answer: B
,🔴 RATIONALE: Section 4054.151 defines a funeral prearrangement life insurance agent as one who writes
only life insurance policies and fixed annuity contracts specifically to secure delivery of funeral services and
merchandise under prepaid funeral contracts regulated by the Texas Department of Banking.
Question 2
Which agency regulates prepaid funeral benefits contracts under Texas Finance Code Chapter 154?
A. Texas Department of Insurance
B. Texas Secretary of State
C. Texas Department of Banking
D. Texas Funeral Service Commission
🟢 Correct answer: C
🔴 RATIONALE: Texas Finance Code Chapter 154 explicitly states that prepaid funeral contracts are regulated
by the Texas Department of Banking, which administers the chapter and issues permits to sellers.
Question 3
, What is the minimum 5-hour training requirement for obtaining a funeral pre-arrangement life license in
Texas?
A. 2-hour online course
B. 5-hour training class through the appointing company
C. 10-hour in-person seminar
D. No training required if licensed in another state
🟢 Correct answer: B
🔴 RATIONALE: The Texas Department of Insurance requires applicants to take a 5-hour training class and
pass an exam through the funeral pre-arrangement life insurance company they will work for (appointing
company).
Question 4
According to Texas Finance Code Section 154.002, what does "cash advance item" mean?
A. Money paid directly to the funeral provider
B. Items with meaning assigned by 16 C.F.R. Section 453.1
C. The principal amount of an insurance policy
D. Trust fund earnings attributable to the contract
CORRECT ANSWERS (VERIFIED ANSWERS) PLUS RATIONALES 2026 Q&A | INSTANT
DOWNLOAD PDF
### Core Domains
Texas Insurance Code Section 4054.151 Requirements
Texas Finance Code Chapter 154 Prepaid Funeral Services
FTC Funeral Rule Compliance and Disclosure Requirements
Trust-Funded vs. Insurance-Funded Contract Distinctions
Contract Cancellation, Modification, and Refund Procedures
Ethics, Professional Standards, and Consumer Protection
Permit Requirements and Regulatory Administration
Cash Advance Items and Non-Guaranteed Merchandise Disclosure
Funeral Provider Responsibilities and Pre-Need to At-Need Reconciliation
Sales Agent Licensing Training and Examination Requirements
### Introduction
,This assessment prepares candidates for the Texas Preneed Funeral Sales Agent Licensing Exam by testing
essential knowledge required to legally sell prepaid funeral benefits contracts in Texas. The exam evaluates
understanding of Texas Insurance Code and Finance Code regulations, FTC Funeral Rule compliance,
contract funding mechanisms, disclosure requirements, and ethical professional standards. Questions are
presented in multiple-choice format with scenario-based scenarios that emphasize real-world application and
critical decision-making. Candidates will demonstrate competency in regulatory compliance, consumer
protection principles, contract administration, and proper sales practices. Success on this exam requires
mastery of both foundational theory and applied professional knowledge necessary for protecting purchasers
and ensuring funds remain available for prearranged funeral services.
Question 1
Under Texas Insurance Code Section 4054.151, what type of insurance does a funeral prearrangement life
insurance agent write exclusively?
A. Health insurance policies only
B. Life insurance policies and fixed annuity contracts to secure funeral services
C. Variable annuity contracts and equity-based investments
D. Property and casualty insurance for funeral homes
🟢 Correct answer: B
,🔴 RATIONALE: Section 4054.151 defines a funeral prearrangement life insurance agent as one who writes
only life insurance policies and fixed annuity contracts specifically to secure delivery of funeral services and
merchandise under prepaid funeral contracts regulated by the Texas Department of Banking.
Question 2
Which agency regulates prepaid funeral benefits contracts under Texas Finance Code Chapter 154?
A. Texas Department of Insurance
B. Texas Secretary of State
C. Texas Department of Banking
D. Texas Funeral Service Commission
🟢 Correct answer: C
🔴 RATIONALE: Texas Finance Code Chapter 154 explicitly states that prepaid funeral contracts are regulated
by the Texas Department of Banking, which administers the chapter and issues permits to sellers.
Question 3
, What is the minimum 5-hour training requirement for obtaining a funeral pre-arrangement life license in
Texas?
A. 2-hour online course
B. 5-hour training class through the appointing company
C. 10-hour in-person seminar
D. No training required if licensed in another state
🟢 Correct answer: B
🔴 RATIONALE: The Texas Department of Insurance requires applicants to take a 5-hour training class and
pass an exam through the funeral pre-arrangement life insurance company they will work for (appointing
company).
Question 4
According to Texas Finance Code Section 154.002, what does "cash advance item" mean?
A. Money paid directly to the funeral provider
B. Items with meaning assigned by 16 C.F.R. Section 453.1
C. The principal amount of an insurance policy
D. Trust fund earnings attributable to the contract
