Texas General Lines Life, Accident & Health Insurance Exam
Practice Questions and Answers Updated 2026 | Complete Texas
Life & Health Insurance Licensing Study Guide with Verified
Questions, Detailed Rationales, Life Insurance Policies, Health
Insurance Plans, Annuities, Disability Income Coverage, Policy
Riders, Underwriting Principles, Texas Insurance Laws, Ethics &
TDI State Licensing Exam Prep
Question 1: Under Texas insurance law, what is the minimum age at which an
individual may apply for a life insurance producer license?
A. 18 years old
B. 21 years old
C. 25 years old
D. 16 years old with parental consent
CORRECT ANSWER: A. 18 years old
Rationale: Texas Insurance Code §4005.102 specifies that an individual must be at least
18 years of age to be eligible for an insurance producer license. This age requirement
ensures applicants have the legal capacity to enter into contracts and fulfill producer
responsibilities.
Question 2: Which of the following policy provisions allows a policyowner to
reinstate a lapsed life insurance policy within a specified time period?
A. Incontestability clause
B. Reinstatement provision
C. Grace period provision
D. Nonforfeiture option
CORRECT ANSWER: B. Reinstatement provision
Rationale: The reinstatement provision permits a policyowner to restore a lapsed policy
by paying overdue premiums plus interest and providing evidence of insurability,
typically within three to five years of lapse, as required by Texas insurance regulations.
Question 3: In Texas, which entity is responsible for regulating and enforcing
insurance laws?
A. Texas Department of Banking
B. Texas Securities Board
C. Texas Department of Insurance
D. Texas Attorney General's Office
CORRECT ANSWER: C. Texas Department of Insurance
,Rationale: The Texas Department of Insurance (TDI) is the state agency charged with
regulating the insurance industry, enforcing insurance laws, protecting consumers, and
ensuring insurer solvency under the Texas Insurance Code.
Question 4: What is the primary purpose of the grace period in a life insurance
policy?
A. To allow the insurer to investigate a claim
B. To provide time for the policyowner to pay a late premium without policy lapse
C. To enable the policyowner to change beneficiaries
D. To permit the insurer to adjust premium rates
CORRECT ANSWER: B. To provide time for the policyowner to pay a late premium
without policy lapse
Rationale: The grace period, typically 30 or 31 days in Texas, protects policyowners by
allowing late premium payments while keeping the policy in force, preventing
unintentional lapses due to administrative delays.
Question 5: Which type of life insurance policy builds cash value that the
policyowner may borrow against?
A. Term life insurance
B. Group life insurance
C. Whole life insurance
D. Accidental death insurance
CORRECT ANSWER: C. Whole life insurance
Rationale: Whole life insurance is a form of permanent life insurance that accumulates
cash value over time, which policyowners may access via policy loans or withdrawals,
subject to policy terms and Texas insurance regulations.
Question 6: Under Texas law, what must a producer disclose when replacing an
existing life insurance policy?
A. Only the new policy's premium amount
B. A completed Replacement Notice form comparing benefits and costs
C. The producer's commission structure
D. The insurer's financial rating only
CORRECT ANSWER: B. A completed Replacement Notice form comparing benefits
and costs
Rationale: Texas Administrative Code §21.3 requires producers to provide a detailed
Replacement Notice that compares existing and proposed policies, ensuring
consumers make informed decisions and preventing unsuitable replacements.
Question 7: Which rider allows a life insurance policyowner to purchase additional
coverage at specified future dates without evidence of insurability?
,A. Waiver of premium rider
B. Guaranteed insurability rider
C. Accidental death benefit rider
D. Family income rider
CORRECT ANSWER: B. Guaranteed insurability rider
Rationale: The guaranteed insurability rider permits policyowners to increase coverage
at predetermined intervals or life events without proving insurability, providing flexibility
while managing future risk exposure.
Question 8: What is the maximum contestability period for a life insurance policy in
Texas?
A. One year
B. Two years
C. Three years
D. Five years
CORRECT ANSWER: B. Two years
Rationale: Texas Insurance Code §1106.003 establishes a two-year contestability
period during which insurers may investigate and potentially deny claims based on
material misrepresentations in the application.
Question 9: Which of the following best describes a "nonforfeiture option" in a life
insurance policy?
A. The right to convert term insurance to permanent insurance
B. The policyowner's entitlement to cash value benefits upon policy lapse
C. The insurer's right to cancel the policy for nonpayment
D. The beneficiary's right to receive death benefits tax-free
CORRECT ANSWER: B. The policyowner's entitlement to cash value benefits upon
policy lapse
Rationale: Nonforfeiture options, required by Texas law for policies with cash value,
ensure policyowners receive value upon lapse through cash surrender, reduced paid-up
insurance, or extended term insurance.
Question 10: In Texas, how long must insurance producers retain records of
insurance transactions?
A. 2 years
B. 3 years
C. 5 years
D. 7 years
CORRECT ANSWER: C. 5 years
, Rationale: Texas Administrative Code §21.2 requires producers to maintain records of
insurance transactions for at least five years from the date of the transaction to ensure
regulatory compliance and facilitate audits.
Question 11: Which health insurance provision requires the insurer to pay claims
promptly after receiving proper proof of loss?
A. Time of payment of claims provision
B. Payment of claims provision
C. Legal actions provision
D. Change of beneficiary provision
CORRECT ANSWER: A. Time of payment of claims provision
Rationale: The time of payment of claims provision, mandated in Texas health insurance
policies, requires insurers to pay valid claims within specified timeframes (typically 30-
45 days) after receiving complete documentation.
Question 12: What is the primary function of the "entire contract" provision in an
insurance policy?
A. To allow the insurer to modify terms unilaterally
B. To specify that the policy and application constitute the complete agreement
C. To permit oral modifications to the policy
D. To limit the policy's coverage to specific states
CORRECT ANSWER: B. To specify that the policy and application constitute the
complete agreement
Rationale: The entire contract provision prevents disputes by establishing that only the
written policy and attached application form the binding agreement, protecting both
insurer and policyowner under Texas contract law.
Question 13: Which of the following is NOT a required provision in Texas individual
accident and health insurance policies?
A. Grace period provision
B. Reinstatement provision
C. Free look provision
D. Automatic premium loan provision
CORRECT ANSWER: D. Automatic premium loan provision
Rationale: While common in life insurance, the automatic premium loan provision is not
required in Texas accident and health policies. Required provisions include grace
period, reinstatement, and free look per Texas Insurance Code Chapter 1201.
Question 14: Under Texas law, what is the minimum "free look" period for individual
life insurance policies?
Practice Questions and Answers Updated 2026 | Complete Texas
Life & Health Insurance Licensing Study Guide with Verified
Questions, Detailed Rationales, Life Insurance Policies, Health
Insurance Plans, Annuities, Disability Income Coverage, Policy
Riders, Underwriting Principles, Texas Insurance Laws, Ethics &
TDI State Licensing Exam Prep
Question 1: Under Texas insurance law, what is the minimum age at which an
individual may apply for a life insurance producer license?
A. 18 years old
B. 21 years old
C. 25 years old
D. 16 years old with parental consent
CORRECT ANSWER: A. 18 years old
Rationale: Texas Insurance Code §4005.102 specifies that an individual must be at least
18 years of age to be eligible for an insurance producer license. This age requirement
ensures applicants have the legal capacity to enter into contracts and fulfill producer
responsibilities.
Question 2: Which of the following policy provisions allows a policyowner to
reinstate a lapsed life insurance policy within a specified time period?
A. Incontestability clause
B. Reinstatement provision
C. Grace period provision
D. Nonforfeiture option
CORRECT ANSWER: B. Reinstatement provision
Rationale: The reinstatement provision permits a policyowner to restore a lapsed policy
by paying overdue premiums plus interest and providing evidence of insurability,
typically within three to five years of lapse, as required by Texas insurance regulations.
Question 3: In Texas, which entity is responsible for regulating and enforcing
insurance laws?
A. Texas Department of Banking
B. Texas Securities Board
C. Texas Department of Insurance
D. Texas Attorney General's Office
CORRECT ANSWER: C. Texas Department of Insurance
,Rationale: The Texas Department of Insurance (TDI) is the state agency charged with
regulating the insurance industry, enforcing insurance laws, protecting consumers, and
ensuring insurer solvency under the Texas Insurance Code.
Question 4: What is the primary purpose of the grace period in a life insurance
policy?
A. To allow the insurer to investigate a claim
B. To provide time for the policyowner to pay a late premium without policy lapse
C. To enable the policyowner to change beneficiaries
D. To permit the insurer to adjust premium rates
CORRECT ANSWER: B. To provide time for the policyowner to pay a late premium
without policy lapse
Rationale: The grace period, typically 30 or 31 days in Texas, protects policyowners by
allowing late premium payments while keeping the policy in force, preventing
unintentional lapses due to administrative delays.
Question 5: Which type of life insurance policy builds cash value that the
policyowner may borrow against?
A. Term life insurance
B. Group life insurance
C. Whole life insurance
D. Accidental death insurance
CORRECT ANSWER: C. Whole life insurance
Rationale: Whole life insurance is a form of permanent life insurance that accumulates
cash value over time, which policyowners may access via policy loans or withdrawals,
subject to policy terms and Texas insurance regulations.
Question 6: Under Texas law, what must a producer disclose when replacing an
existing life insurance policy?
A. Only the new policy's premium amount
B. A completed Replacement Notice form comparing benefits and costs
C. The producer's commission structure
D. The insurer's financial rating only
CORRECT ANSWER: B. A completed Replacement Notice form comparing benefits
and costs
Rationale: Texas Administrative Code §21.3 requires producers to provide a detailed
Replacement Notice that compares existing and proposed policies, ensuring
consumers make informed decisions and preventing unsuitable replacements.
Question 7: Which rider allows a life insurance policyowner to purchase additional
coverage at specified future dates without evidence of insurability?
,A. Waiver of premium rider
B. Guaranteed insurability rider
C. Accidental death benefit rider
D. Family income rider
CORRECT ANSWER: B. Guaranteed insurability rider
Rationale: The guaranteed insurability rider permits policyowners to increase coverage
at predetermined intervals or life events without proving insurability, providing flexibility
while managing future risk exposure.
Question 8: What is the maximum contestability period for a life insurance policy in
Texas?
A. One year
B. Two years
C. Three years
D. Five years
CORRECT ANSWER: B. Two years
Rationale: Texas Insurance Code §1106.003 establishes a two-year contestability
period during which insurers may investigate and potentially deny claims based on
material misrepresentations in the application.
Question 9: Which of the following best describes a "nonforfeiture option" in a life
insurance policy?
A. The right to convert term insurance to permanent insurance
B. The policyowner's entitlement to cash value benefits upon policy lapse
C. The insurer's right to cancel the policy for nonpayment
D. The beneficiary's right to receive death benefits tax-free
CORRECT ANSWER: B. The policyowner's entitlement to cash value benefits upon
policy lapse
Rationale: Nonforfeiture options, required by Texas law for policies with cash value,
ensure policyowners receive value upon lapse through cash surrender, reduced paid-up
insurance, or extended term insurance.
Question 10: In Texas, how long must insurance producers retain records of
insurance transactions?
A. 2 years
B. 3 years
C. 5 years
D. 7 years
CORRECT ANSWER: C. 5 years
, Rationale: Texas Administrative Code §21.2 requires producers to maintain records of
insurance transactions for at least five years from the date of the transaction to ensure
regulatory compliance and facilitate audits.
Question 11: Which health insurance provision requires the insurer to pay claims
promptly after receiving proper proof of loss?
A. Time of payment of claims provision
B. Payment of claims provision
C. Legal actions provision
D. Change of beneficiary provision
CORRECT ANSWER: A. Time of payment of claims provision
Rationale: The time of payment of claims provision, mandated in Texas health insurance
policies, requires insurers to pay valid claims within specified timeframes (typically 30-
45 days) after receiving complete documentation.
Question 12: What is the primary function of the "entire contract" provision in an
insurance policy?
A. To allow the insurer to modify terms unilaterally
B. To specify that the policy and application constitute the complete agreement
C. To permit oral modifications to the policy
D. To limit the policy's coverage to specific states
CORRECT ANSWER: B. To specify that the policy and application constitute the
complete agreement
Rationale: The entire contract provision prevents disputes by establishing that only the
written policy and attached application form the binding agreement, protecting both
insurer and policyowner under Texas contract law.
Question 13: Which of the following is NOT a required provision in Texas individual
accident and health insurance policies?
A. Grace period provision
B. Reinstatement provision
C. Free look provision
D. Automatic premium loan provision
CORRECT ANSWER: D. Automatic premium loan provision
Rationale: While common in life insurance, the automatic premium loan provision is not
required in Texas accident and health policies. Required provisions include grace
period, reinstatement, and free look per Texas Insurance Code Chapter 1201.
Question 14: Under Texas law, what is the minimum "free look" period for individual
life insurance policies?
