TX-LAH05 LIFE, ACCIDENT & HEALTH
INSURANCE EXAM 2026–2027 | (145
UNIQUE QUESTIONS AND CORRECT
ANSWERS) | 100% VERIFIED
Introduction
This exam guide contains 145 unique, expert-aligned questions covering Life, Accident, and
Health insurance. Each question is distinct, focusing on core principles, Texas-specific codes,
and federal regulations.
1. At what point must insurable interest exist in a life insurance contract?
A. At the time of application
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: In life insurance, insurable interest is required only at the inception of the
policy, not at the time of claim.
2. Which type of term life insurance has a level premium but a face amount that
reduces each year?
A. Decreasing Term
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: Decreasing term is commonly used for mortgage protection, matching a
reducing debt.
3. A 'Straight Life' policy is also known as:
A. Continuous Premium Whole Life
,B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: Premiums are paid throughout the insured's life until death or age 100.
4. Which policy allows the owner to skip premium payments as long as there is
enough cash value to cover expenses?
A. Universal Life
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: Universal life is known for its 'flexible premium' and 'unbundled' structure.
5. 'Variable' life insurance products are regulated by which entity in addition to the
state?
A. FINRA/SEC
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: Because variable products involve investment risk, they are considered
securities.
6. An 'Equity Indexed' life policy base its interest credits on:
A. The performance of a stock market index (e.g., S&P 500)
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
,Rationale: It offers a guaranteed minimum interest rate with potential for higher returns
based on an index.
7. What is 'Adverse Selection'?
A. The tendency for higher-risk individuals to seek insurance more often than lower-
risk ones
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: Insurers use underwriting to mitigate this risk.
8. In a Life Insurance application, the 'Agent's Report' is:
A. Never seen by the applicant
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: It contains the agent's personal observations of the applicant and is not part of
the contract.
9. What is the primary purpose of the 'Medical Information Bureau' (MIB)?
A. To share medical information between insurance companies to prevent fraud
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: It helps insurers identify inconsistencies or undisclosed conditions.
10. A 'Key Person' life insurance policy's death benefit is paid to:
, A. The business/employer
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: It compensates a business for the financial loss of a vital employee.
11. Which settlement option is the default if the owner does not choose one?
A. Lump Sum
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: Most policies pay the full face amount in a single cash payment unless otherwise
directed.
12. The 'Waiver of Premium' rider usually requires a waiting period of:
A. 6 months
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: The insured must be totally disabled for 6 months before premiums are waived
retroactively.
13. The 'Automatic Premium Loan' (APL) provision is intended to:
A. Prevent accidental policy lapse
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
INSURANCE EXAM 2026–2027 | (145
UNIQUE QUESTIONS AND CORRECT
ANSWERS) | 100% VERIFIED
Introduction
This exam guide contains 145 unique, expert-aligned questions covering Life, Accident, and
Health insurance. Each question is distinct, focusing on core principles, Texas-specific codes,
and federal regulations.
1. At what point must insurable interest exist in a life insurance contract?
A. At the time of application
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: In life insurance, insurable interest is required only at the inception of the
policy, not at the time of claim.
2. Which type of term life insurance has a level premium but a face amount that
reduces each year?
A. Decreasing Term
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: Decreasing term is commonly used for mortgage protection, matching a
reducing debt.
3. A 'Straight Life' policy is also known as:
A. Continuous Premium Whole Life
,B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: Premiums are paid throughout the insured's life until death or age 100.
4. Which policy allows the owner to skip premium payments as long as there is
enough cash value to cover expenses?
A. Universal Life
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: Universal life is known for its 'flexible premium' and 'unbundled' structure.
5. 'Variable' life insurance products are regulated by which entity in addition to the
state?
A. FINRA/SEC
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: Because variable products involve investment risk, they are considered
securities.
6. An 'Equity Indexed' life policy base its interest credits on:
A. The performance of a stock market index (e.g., S&P 500)
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
,Rationale: It offers a guaranteed minimum interest rate with potential for higher returns
based on an index.
7. What is 'Adverse Selection'?
A. The tendency for higher-risk individuals to seek insurance more often than lower-
risk ones
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: Insurers use underwriting to mitigate this risk.
8. In a Life Insurance application, the 'Agent's Report' is:
A. Never seen by the applicant
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: It contains the agent's personal observations of the applicant and is not part of
the contract.
9. What is the primary purpose of the 'Medical Information Bureau' (MIB)?
A. To share medical information between insurance companies to prevent fraud
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: It helps insurers identify inconsistencies or undisclosed conditions.
10. A 'Key Person' life insurance policy's death benefit is paid to:
, A. The business/employer
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: It compensates a business for the financial loss of a vital employee.
11. Which settlement option is the default if the owner does not choose one?
A. Lump Sum
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: Most policies pay the full face amount in a single cash payment unless otherwise
directed.
12. The 'Waiver of Premium' rider usually requires a waiting period of:
A. 6 months
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
Rationale: The insured must be totally disabled for 6 months before premiums are waived
retroactively.
13. The 'Automatic Premium Loan' (APL) provision is intended to:
A. Prevent accidental policy lapse
B. Information remains confidential until a court order is issued
C. The Commissioner determines the outcome
D. It is a standard provision for all Texas residents
