TEXAS LIFE AND HEALTH INSURANCE EXAM |
2026/2027 Edition | Real Exam Questions with 100%
Verified Correct Answers
Texas Department of Insurance (TDI) General Lines Agent | Expert-Verified Q&A | Certification-Ready Format
Introduction
This document presents the Texas Life and Health Insurance actual exam focusing on the critical integration of
general insurance concepts, life insurance policies, health insurance provisions, annuities, retirement plans, and
Texas-specific state laws, regulations, and producer licensing requirements to ensure compliance and professional
competency. All 145 questions are expert-verified with 100% correct answers, designed for accurate evaluation
and pass-level readiness in accordance with the 2026/2027 Texas Department of Insurance (TDI) and Pearson
VUE examination blueprint.
Content Area Overview
Content Area Questions Key Topics Weight
General Insurance 44 Risk, insurable interest, 30%
Concepts & Life policy provisions, life
Insurance Policies insurance types
Health Insurance, 43 Health policy provisions, 30%
Disability, and disability income,
Medicare/Medicaid Medicare, Medicaid
Annuities, Retirement 22 Annuity types, qualified 15%
Plans & Taxation plans, taxation of benefits
Texas State Laws, 36 TDI regulations, producer 25%
Regulations, Licensing & licensing, unfair
Ethics practices, ethics
Total 145 100%
Examination Questions
Domain: General Insurance Concepts & Life Insurance Policies
1. What is the primary purpose of insurance?
A. To eliminate risk
B. To transfer risk from the insured to the insurer
C. To increase risk
D. To guarantee profit
Correct Answer: B
Rationale: Insurance transfers the financial risk from the individual to the insurance company.
Why Wrong: A is impossible. C is the opposite. D is not the purpose of insurance.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
2. Which principle requires that the insured have a financial interest in the subject of insurance?
A. Utmost good faith
B. Insurable interest
C. Indemnity
D. Subrogation
Correct Answer: B
, Rationale: Insurable interest requires the insured to have a financial stake in the insured item or person.
Why Wrong: A is the duty to disclose. C is restoring to original position. D is the right to recover from third
parties.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
3. What type of life insurance provides coverage for a specified period and pays a benefit only if
death occurs during that period?
A. Whole life
B. Universal life
C. Term life
D. Variable life
Correct Answer: C
Rationale: Term life provides pure death protection for a specific period.
Why Wrong: A builds cash value. B is flexible premium. D has investment options.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
4. Which life insurance policy builds cash value over time?
A. Term life
B. Whole life
C. Decreasing term
D. Level term
Correct Answer: B
Rationale: Whole life insurance accumulates cash value as premiums are paid.
Why Wrong: A, C, and D are types of term insurance with no cash value.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
5. What is the purpose of the incontestability clause in a life insurance policy?
A. To allow the insurer to contest the policy at any time
B. To prevent the insurer from contesting the policy after a certain period
C. To increase premiums
D. To reduce benefits
Correct Answer: B
Rationale: The incontestability clause prevents the insurer from contesting the policy after 2 years
(usually).
Why Wrong: A is the opposite. C and D are incorrect.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
6. Which provision allows the policyowner to change the beneficiary at any time?
A. Irrevocable beneficiary
B. Revocable beneficiary
C. Contingent beneficiary
D. Primary beneficiary
Correct Answer: B
Rationale: A revocable beneficiary can be changed by the policyowner without consent.
Why Wrong: A requires beneficiary consent to change. C receives benefits if primary dies. D is the first in
line.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
,7. What is the suicide clause in a life insurance policy?
A. The policy pays double if suicide occurs
B. The policy excludes payment if suicide occurs within the first 2 years
C. The policy pays full benefits immediately
D. The policy cancels upon suicide
Correct Answer: B
Rationale: Most policies exclude suicide coverage in the first 1-2 years.
Why Wrong: A is incorrect. C and D are false.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
8. Which type of life insurance allows the policyowner to adjust premiums and death benefits?
A. Whole life
B. Term life
C. Universal life
D. Group life
Correct Answer: C
Rationale: Universal life offers flexible premiums and adjustable death benefits.
Why Wrong: A has fixed premiums. B has no cash value. D is employer-sponsored.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
9. What does the free look period allow the policyowner to do?
A. Increase coverage without evidence of insurability
B. Return the policy for a full refund within a specified period
C. Change the beneficiary
D. Borrow against cash value
Correct Answer: B
Rationale: The free look period (usually 10-20 days) allows the owner to return the policy for a refund.
Why Wrong: A is a different provision. C is a policy right. D is a loan feature.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
10. Which life insurance rider provides additional coverage for accidental death?
A. Waiver of premium
B. Accidental death benefit
C. Guaranteed insurability
D. Living needs
Correct Answer: B
Rationale: The accidental death benefit (double indemnity) pays extra if death is accidental.
Why Wrong: A waives premiums during disability. C allows future purchases. D accelerates benefits for
terminal illness.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
11. What is the purpose of the grace period in a life insurance policy?
A. To allow late payment without lapse
B. To increase premiums
C. To reduce coverage
D. To cancel the policy
Correct Answer: A
Rationale: The grace period (usually 30-31 days) allows payment after the due date without policy lapse.
, Why Wrong: B, C, and D are incorrect.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
12. Which type of life insurance is designed for mortgage protection?
A. Whole life
B. Decreasing term
C. Universal life
D. Variable life
Correct Answer: B
Rationale: Decreasing term insurance reduces the death benefit as the mortgage balance declines.
Why Wrong: A builds cash value. C is flexible. D has investment options.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
13. What is the purpose of the assignment provision?
A. To change the beneficiary
B. To transfer policy rights to another party
C. To increase premiums
D. To cancel the policy
Correct Answer: B
Rationale: Assignment allows the policyowner to transfer ownership or rights to another party.
Why Wrong: A is beneficiary change. C and D are incorrect.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
14. Which clause states that the application and policy constitute the entire contract?
A. Entire contract clause
B. Incontestability clause
C. Grace period clause
D. Suicide clause
Correct Answer: A
Rationale: The entire contract clause states that the policy and application form the complete contract.
Why Wrong: B prevents contest after 2 years. C allows late payment. D excludes suicide initially.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
15. What is the purpose of the misstatement of age clause?
A. To cancel the policy
B. To adjust benefits or premiums if age was misstated
C. To increase coverage
D. To reduce premiums
Correct Answer: B
Rationale: If age is misstated, benefits or premiums are adjusted to what they would have been at the
correct age.
Why Wrong: A is too severe. C and D are incorrect.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
16. Which type of life insurance has a fixed premium and guaranteed cash value?
A. Term life
B. Whole life
2026/2027 Edition | Real Exam Questions with 100%
Verified Correct Answers
Texas Department of Insurance (TDI) General Lines Agent | Expert-Verified Q&A | Certification-Ready Format
Introduction
This document presents the Texas Life and Health Insurance actual exam focusing on the critical integration of
general insurance concepts, life insurance policies, health insurance provisions, annuities, retirement plans, and
Texas-specific state laws, regulations, and producer licensing requirements to ensure compliance and professional
competency. All 145 questions are expert-verified with 100% correct answers, designed for accurate evaluation
and pass-level readiness in accordance with the 2026/2027 Texas Department of Insurance (TDI) and Pearson
VUE examination blueprint.
Content Area Overview
Content Area Questions Key Topics Weight
General Insurance 44 Risk, insurable interest, 30%
Concepts & Life policy provisions, life
Insurance Policies insurance types
Health Insurance, 43 Health policy provisions, 30%
Disability, and disability income,
Medicare/Medicaid Medicare, Medicaid
Annuities, Retirement 22 Annuity types, qualified 15%
Plans & Taxation plans, taxation of benefits
Texas State Laws, 36 TDI regulations, producer 25%
Regulations, Licensing & licensing, unfair
Ethics practices, ethics
Total 145 100%
Examination Questions
Domain: General Insurance Concepts & Life Insurance Policies
1. What is the primary purpose of insurance?
A. To eliminate risk
B. To transfer risk from the insured to the insurer
C. To increase risk
D. To guarantee profit
Correct Answer: B
Rationale: Insurance transfers the financial risk from the individual to the insurance company.
Why Wrong: A is impossible. C is the opposite. D is not the purpose of insurance.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
2. Which principle requires that the insured have a financial interest in the subject of insurance?
A. Utmost good faith
B. Insurable interest
C. Indemnity
D. Subrogation
Correct Answer: B
, Rationale: Insurable interest requires the insured to have a financial stake in the insured item or person.
Why Wrong: A is the duty to disclose. C is restoring to original position. D is the right to recover from third
parties.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
3. What type of life insurance provides coverage for a specified period and pays a benefit only if
death occurs during that period?
A. Whole life
B. Universal life
C. Term life
D. Variable life
Correct Answer: C
Rationale: Term life provides pure death protection for a specific period.
Why Wrong: A builds cash value. B is flexible premium. D has investment options.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
4. Which life insurance policy builds cash value over time?
A. Term life
B. Whole life
C. Decreasing term
D. Level term
Correct Answer: B
Rationale: Whole life insurance accumulates cash value as premiums are paid.
Why Wrong: A, C, and D are types of term insurance with no cash value.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
5. What is the purpose of the incontestability clause in a life insurance policy?
A. To allow the insurer to contest the policy at any time
B. To prevent the insurer from contesting the policy after a certain period
C. To increase premiums
D. To reduce benefits
Correct Answer: B
Rationale: The incontestability clause prevents the insurer from contesting the policy after 2 years
(usually).
Why Wrong: A is the opposite. C and D are incorrect.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
6. Which provision allows the policyowner to change the beneficiary at any time?
A. Irrevocable beneficiary
B. Revocable beneficiary
C. Contingent beneficiary
D. Primary beneficiary
Correct Answer: B
Rationale: A revocable beneficiary can be changed by the policyowner without consent.
Why Wrong: A requires beneficiary consent to change. C receives benefits if primary dies. D is the first in
line.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
,7. What is the suicide clause in a life insurance policy?
A. The policy pays double if suicide occurs
B. The policy excludes payment if suicide occurs within the first 2 years
C. The policy pays full benefits immediately
D. The policy cancels upon suicide
Correct Answer: B
Rationale: Most policies exclude suicide coverage in the first 1-2 years.
Why Wrong: A is incorrect. C and D are false.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
8. Which type of life insurance allows the policyowner to adjust premiums and death benefits?
A. Whole life
B. Term life
C. Universal life
D. Group life
Correct Answer: C
Rationale: Universal life offers flexible premiums and adjustable death benefits.
Why Wrong: A has fixed premiums. B has no cash value. D is employer-sponsored.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
9. What does the free look period allow the policyowner to do?
A. Increase coverage without evidence of insurability
B. Return the policy for a full refund within a specified period
C. Change the beneficiary
D. Borrow against cash value
Correct Answer: B
Rationale: The free look period (usually 10-20 days) allows the owner to return the policy for a refund.
Why Wrong: A is a different provision. C is a policy right. D is a loan feature.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
10. Which life insurance rider provides additional coverage for accidental death?
A. Waiver of premium
B. Accidental death benefit
C. Guaranteed insurability
D. Living needs
Correct Answer: B
Rationale: The accidental death benefit (double indemnity) pays extra if death is accidental.
Why Wrong: A waives premiums during disability. C allows future purchases. D accelerates benefits for
terminal illness.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
11. What is the purpose of the grace period in a life insurance policy?
A. To allow late payment without lapse
B. To increase premiums
C. To reduce coverage
D. To cancel the policy
Correct Answer: A
Rationale: The grace period (usually 30-31 days) allows payment after the due date without policy lapse.
, Why Wrong: B, C, and D are incorrect.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
12. Which type of life insurance is designed for mortgage protection?
A. Whole life
B. Decreasing term
C. Universal life
D. Variable life
Correct Answer: B
Rationale: Decreasing term insurance reduces the death benefit as the mortgage balance declines.
Why Wrong: A builds cash value. C is flexible. D has investment options.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
13. What is the purpose of the assignment provision?
A. To change the beneficiary
B. To transfer policy rights to another party
C. To increase premiums
D. To cancel the policy
Correct Answer: B
Rationale: Assignment allows the policyowner to transfer ownership or rights to another party.
Why Wrong: A is beneficiary change. C and D are incorrect.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
14. Which clause states that the application and policy constitute the entire contract?
A. Entire contract clause
B. Incontestability clause
C. Grace period clause
D. Suicide clause
Correct Answer: A
Rationale: The entire contract clause states that the policy and application form the complete contract.
Why Wrong: B prevents contest after 2 years. C allows late payment. D excludes suicide initially.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
15. What is the purpose of the misstatement of age clause?
A. To cancel the policy
B. To adjust benefits or premiums if age was misstated
C. To increase coverage
D. To reduce premiums
Correct Answer: B
Rationale: If age is misstated, benefits or premiums are adjusted to what they would have been at the
correct age.
Why Wrong: A is too severe. C and D are incorrect.
Reference: 2026 TDI Examination Content Outline, Domain 1 - General Insurance Concepts & Life Insurance
Policies, Texas Insurance Code Chapter 1101.
16. Which type of life insurance has a fixed premium and guaranteed cash value?
A. Term life
B. Whole life
