TEXAS LIFE AND HEALTH INSURANCE
PRACTICE TEST QUESTIONS AND
CORRECT ANSWERS 2026/2027 GRADED A+
60 Questions with Answers and Detailed Rationales
100 PERCENT GUARANTEED PASS
INSTANT DOWNLOAD ANSWERS INCLUDED
IMPORTANCE OF THIS DOCUMENT
This comprehensive examination preparation guide has been meticulously developed to help you succeed in the
TEXAS LIFE AND HEALTH INSURANCE PRACTICE TEST QUESTIONS AND CORRECT ANSWERS
2026/2027 GRADED A+. It contains 60 carefully selected questions that reflect the most current exam content
and testing strategies. Each question is accompanied by a correct answer and a detailed rationale that explains
the underlying pathophysiology, pharmacology, or clinical reasoning.
Self-Assessment – Test your knowledge and Exam Preparation – Familiarize yourself with the
identify areas requiring further question format and content
study areas
Concept Reinforcement – Deepen your Confidence Building – Develop test-taking
understanding through strategies and reduce
evidence-based exam anxiety
rationales
Time Management – Practice answering
questions under simulated
exam conditions
Review Summary 60 Questions
Foundations - Application - Texas LIFE AND Health Insurance AND Correct 2026/2027 A Texas LIFE AND
Health Insurance AND Correct 2026/2027 A University
All answers with rationales
,Table of Contents
Content Area Questions Key Topics
Texas LIFE Insurance 1-10 Texas, Policy, Insured, Insurer, Death
Regulations
Texas Health Insurance 11-20 Policy, Texas, Insurance, Provision, Insurer
Regulations
LIFE Insurance Policies AND 21-30 Texas, Insurance, Policy, Provision, Insurer
Contracts
Health Insurance Policies 31-40 Texas, Insurance, Policy, Health, Rider
AND Contracts
Annuities AND Retirement 41-50 Insurance, Texas, Policy, Insured, Health
Plans
Group LIFE AND Health 51-60 Texas, Insurance, Policy, Health, Insured
Insurance
TOTAL 60 All questions include answers and detailed rationales
,Section A - Texas LIFE Insurance Regulations
Q1.
An insurer in Texas issues a life policy and the applicant pays the initial premium. The
insurer later discovers a material misrepresentation that would have led to a different
underwriting decision. Under Texas law, what is the maximum contestability period, and
what is the insurer's burden of proof?
A. Two years; the insurer must prove the B. One year; the insurer must prove the
misrepresentation was intentional and misrepresentation was material and that the
material. insured had no insurable interest.
C. Two years; the insurer must prove the D. Three years; the insurer must prove the
misrepresentation was material and that it misrepresentation was made with intent to
would have refused the policy or issued it on defraud.
different terms.
Correct: C - Two years; the insurer must prove the misrepresentation was material and
that it would have refused the policy or issued it on different terms.
Rationale:Under Texas Insurance Code §705.051, life policies are incontestable after two
years from issuance. During the contestable period, the insurer may rescind if it proves the
misrepresentation was material and that it would have declined the policy or issued it on
different terms. Intent to defraud is not required for rescission, though it may be relevant in
other contexts.
Why the other answers are wrong:
A. Intent is not required; materiality and different underwriting decision suffice.
B. The contestable period is two years, not one, and insurable interest is unrelated to
misrepresentation.
D. The period is two years, not three, and intent to defraud is not the statutory standard.
Reference: Texas Insurance Code §705.051; Life and Health Insurance Guaranty Association materials.
Q2.
A Texas life insurer issues a policy with a suicide exclusion. The insured dies by suicide
18 months after policy issuance. The beneficiary claims the death benefit. Which of the
following statements is correct under Texas law?
A. The insurer must pay the full death B. The insurer must pay the death benefit
benefit because the suicide exclusion is because the policy is incontestable on the
unenforceable after one year. suicide issue after one year.
C. The insurer may deny the claim and must D. The insurer may deny the claim and must
refund only the premiums paid, without refund the premiums paid, but may deduct
interest. any outstanding policy loans.
Correct: D - The insurer may deny the claim and must refund the premiums paid, but may
Page 3
, Section A - Texas LIFE Insurance Regulations
deduct any outstanding policy loans.
Rationale:Texas law requires a suicide exclusion to be limited to two years from policy
issuance. If suicide occurs within that period, the insurer may deny the death benefit but must
return the premiums paid, minus any outstanding loans or indebtedness. The one-year period
is a common misconception; Texas sets the limit at two years.
Why the other answers are wrong:
A. The exclusion is enforceable for two years, not one.
B. Incontestability does not override a valid suicide exclusion.
C. The insurer must refund premiums, but may deduct loans; interest is not required.
Reference: Texas Insurance Code §1103.051; Standard Provision for Suicide.
Q3.
A Texas employer sponsors a group health plan with 50 employees. An employee's
dependent child is diagnosed with a congenital condition. The plan has a pre-existing
condition exclusion. Under Texas and federal law, which of the following is correct?
A. The plan may impose a 12-month B. The plan may not impose any
pre-existing condition exclusion for the child, pre-existing condition exclusion on a child
but only if the child had no prior creditable under age 19, regardless of prior coverage.
coverage.
C. The plan may impose a pre-existing D. The plan may exclude coverage for the
condition exclusion, but must credit prior congenital condition permanently if it was
coverage if there was no gap of more than diagnosed before enrollment.
63 days.
Correct: B - The plan may not impose any pre-existing condition exclusion on a child
under age 19, regardless of prior coverage.
Rationale:Under the Affordable Care Act, group health plans cannot impose pre-existing
condition exclusions on individuals under age 19. This applies to all plans, regardless of
grandfathered status. For adults, the exclusion is prohibited entirely as of 2014, but for
children this prohibition has been in effect since 2010.
Why the other answers are wrong:
A. The ACA prohibits pre-existing condition exclusions for children under 19 entirely.
C. Creditable coverage rules are irrelevant because exclusion is prohibited.
D. Permanent exclusion is not allowed; the ACA bans such exclusions for children.
Reference: Affordable Care Act §2704; 45 CFR §147.108.
Q4.
A Texas life insurance policy has a cash value of $25,000 and a death benefit of $100,000.
The insured takes a policy loan of $10,000 and does not repay it. If the insured dies, what
amount will the beneficiary receive?
Page 4
PRACTICE TEST QUESTIONS AND
CORRECT ANSWERS 2026/2027 GRADED A+
60 Questions with Answers and Detailed Rationales
100 PERCENT GUARANTEED PASS
INSTANT DOWNLOAD ANSWERS INCLUDED
IMPORTANCE OF THIS DOCUMENT
This comprehensive examination preparation guide has been meticulously developed to help you succeed in the
TEXAS LIFE AND HEALTH INSURANCE PRACTICE TEST QUESTIONS AND CORRECT ANSWERS
2026/2027 GRADED A+. It contains 60 carefully selected questions that reflect the most current exam content
and testing strategies. Each question is accompanied by a correct answer and a detailed rationale that explains
the underlying pathophysiology, pharmacology, or clinical reasoning.
Self-Assessment – Test your knowledge and Exam Preparation – Familiarize yourself with the
identify areas requiring further question format and content
study areas
Concept Reinforcement – Deepen your Confidence Building – Develop test-taking
understanding through strategies and reduce
evidence-based exam anxiety
rationales
Time Management – Practice answering
questions under simulated
exam conditions
Review Summary 60 Questions
Foundations - Application - Texas LIFE AND Health Insurance AND Correct 2026/2027 A Texas LIFE AND
Health Insurance AND Correct 2026/2027 A University
All answers with rationales
,Table of Contents
Content Area Questions Key Topics
Texas LIFE Insurance 1-10 Texas, Policy, Insured, Insurer, Death
Regulations
Texas Health Insurance 11-20 Policy, Texas, Insurance, Provision, Insurer
Regulations
LIFE Insurance Policies AND 21-30 Texas, Insurance, Policy, Provision, Insurer
Contracts
Health Insurance Policies 31-40 Texas, Insurance, Policy, Health, Rider
AND Contracts
Annuities AND Retirement 41-50 Insurance, Texas, Policy, Insured, Health
Plans
Group LIFE AND Health 51-60 Texas, Insurance, Policy, Health, Insured
Insurance
TOTAL 60 All questions include answers and detailed rationales
,Section A - Texas LIFE Insurance Regulations
Q1.
An insurer in Texas issues a life policy and the applicant pays the initial premium. The
insurer later discovers a material misrepresentation that would have led to a different
underwriting decision. Under Texas law, what is the maximum contestability period, and
what is the insurer's burden of proof?
A. Two years; the insurer must prove the B. One year; the insurer must prove the
misrepresentation was intentional and misrepresentation was material and that the
material. insured had no insurable interest.
C. Two years; the insurer must prove the D. Three years; the insurer must prove the
misrepresentation was material and that it misrepresentation was made with intent to
would have refused the policy or issued it on defraud.
different terms.
Correct: C - Two years; the insurer must prove the misrepresentation was material and
that it would have refused the policy or issued it on different terms.
Rationale:Under Texas Insurance Code §705.051, life policies are incontestable after two
years from issuance. During the contestable period, the insurer may rescind if it proves the
misrepresentation was material and that it would have declined the policy or issued it on
different terms. Intent to defraud is not required for rescission, though it may be relevant in
other contexts.
Why the other answers are wrong:
A. Intent is not required; materiality and different underwriting decision suffice.
B. The contestable period is two years, not one, and insurable interest is unrelated to
misrepresentation.
D. The period is two years, not three, and intent to defraud is not the statutory standard.
Reference: Texas Insurance Code §705.051; Life and Health Insurance Guaranty Association materials.
Q2.
A Texas life insurer issues a policy with a suicide exclusion. The insured dies by suicide
18 months after policy issuance. The beneficiary claims the death benefit. Which of the
following statements is correct under Texas law?
A. The insurer must pay the full death B. The insurer must pay the death benefit
benefit because the suicide exclusion is because the policy is incontestable on the
unenforceable after one year. suicide issue after one year.
C. The insurer may deny the claim and must D. The insurer may deny the claim and must
refund only the premiums paid, without refund the premiums paid, but may deduct
interest. any outstanding policy loans.
Correct: D - The insurer may deny the claim and must refund the premiums paid, but may
Page 3
, Section A - Texas LIFE Insurance Regulations
deduct any outstanding policy loans.
Rationale:Texas law requires a suicide exclusion to be limited to two years from policy
issuance. If suicide occurs within that period, the insurer may deny the death benefit but must
return the premiums paid, minus any outstanding loans or indebtedness. The one-year period
is a common misconception; Texas sets the limit at two years.
Why the other answers are wrong:
A. The exclusion is enforceable for two years, not one.
B. Incontestability does not override a valid suicide exclusion.
C. The insurer must refund premiums, but may deduct loans; interest is not required.
Reference: Texas Insurance Code §1103.051; Standard Provision for Suicide.
Q3.
A Texas employer sponsors a group health plan with 50 employees. An employee's
dependent child is diagnosed with a congenital condition. The plan has a pre-existing
condition exclusion. Under Texas and federal law, which of the following is correct?
A. The plan may impose a 12-month B. The plan may not impose any
pre-existing condition exclusion for the child, pre-existing condition exclusion on a child
but only if the child had no prior creditable under age 19, regardless of prior coverage.
coverage.
C. The plan may impose a pre-existing D. The plan may exclude coverage for the
condition exclusion, but must credit prior congenital condition permanently if it was
coverage if there was no gap of more than diagnosed before enrollment.
63 days.
Correct: B - The plan may not impose any pre-existing condition exclusion on a child
under age 19, regardless of prior coverage.
Rationale:Under the Affordable Care Act, group health plans cannot impose pre-existing
condition exclusions on individuals under age 19. This applies to all plans, regardless of
grandfathered status. For adults, the exclusion is prohibited entirely as of 2014, but for
children this prohibition has been in effect since 2010.
Why the other answers are wrong:
A. The ACA prohibits pre-existing condition exclusions for children under 19 entirely.
C. Creditable coverage rules are irrelevant because exclusion is prohibited.
D. Permanent exclusion is not allowed; the ACA bans such exclusions for children.
Reference: Affordable Care Act §2704; 45 CFR §147.108.
Q4.
A Texas life insurance policy has a cash value of $25,000 and a death benefit of $100,000.
The insured takes a policy loan of $10,000 and does not repay it. If the insured dies, what
amount will the beneficiary receive?
Page 4
