TEXAS GENERAL LINES LIFE, ACCIDENT AND HEALTH INSURANCE
2025/2026 ACTUAL EXAM COMPLETE 500 QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY
GRADED A+
QUESTION: Qualified Plan Requirements Correct Ans- 1) Be in writing 2)provided for benefit
of employee 3) must satisfy age and serive standards 4) cannot be discriminatory 5) contributions
cannot exceed yearly maximus 6) must provide survivorship benefits 7) must meet miniumum
vesting standards 8) cannot be top heavy
QUESTION: Advantages of Qualified plans Correct Ans- - employer and employee
contributions are tax deductivble and accumulate tax deferred
- Withdrawls before 59.5 is a 10% penalty
- must begin miniumum distributions by age 70.5
QUESTION: Qualified Plan distributions Correct Ans- - taxable upon withdrawl
- 10% penalty upon withdrawl before 59.6
- can take out w/o penalty if death, divorce, qualified financial hardship, plan loan or qualified
rollover, 1st time home buyer, disability of owner
- if you take out the money early, its a 20% penalty
- must rollover w/in 60 days or its considered a premature distribution
QUESTION: Penalty for Withdrawl of Qualified Plan Correct Ans- - a 10% penalry plus
applicable state and federal taxes
QUESTION: IRA IIndividual Retirement Account) Correct Ans- - all individuals who have
earned income
- possible tax deductions
- tax deferral of gains
- Can contribute up to 5,000
- can add 1,000 "catch up" if over 50
1|Page
,QUESTION: Education IRA Correct Ans- - method to provide funding
- Can be transferred to another IRA at 30
QUESTION: Section 529 Plans Correct Ans- - state provided
- can be funded by after tax dollars
- can pay prepaid tuition
- All earnings exempt from federal taxes
- If withdrawn for unqualified withdrawl, 10% penalty
QUESTION: Roth IRA Correct Ans- - Allows owner to make non tax deductible contributions
- to get withdrawls tax free, the account must be in existence for 5 years
- can add money tax free up to 5k
- distributions are tax free
- account is only allowed for people who's income does not exceed a certain amount
QUESTION: SEP IRA (simplified Employee Pension Plan) Correct Ans- - employer sponsored
IRA for small employers
- contrinutions deductible to employer
- Employee must have worked for 3 of last 5 years
- contributions by employer cant exceed 49k or 25% of income, whichever is lesser
- contributions for employees cant exceed 16,500
QUESTION: Keogh Plan Correct Ans- - self employed and employees
- replaced by SEPs
QUESTION: 401k Plan Correct Ans- - allows employees to save for retirement tax free
- money is taken out pre-tax, and can be matched (and deductible to employwer)
- Withdrawl penalty of 10% prior to age 59.5
- Miniumum distributions by age 70.5
2|Page
,- 2011 max was 16,500
QUESTION: 403(b)/tax-sheltered Annuity Correct Ans- - availbale for employees of
nonprofits, schools universities, churches & hospitals
- just like 401k plans
QUESTION: 457 Deffered Compensation Correct Ans- - available for employess of state and
local govt
-the plan is owned by employer
QUESTION: Profit Plan Correct Ans- - part of defined contribitution plan
- annual profits shared among employees
- no guarantee of payment
QUESTION: Pension Plan Correct Ans- Retirement Plan that calculates benefit based upon
years of service and income averages
QUESTION: ESOP Correct Ans- - employee stock ownership plan
- defined contribution plan that provides employer stock to employees based on income and profits
of company
QUESTION: Defined Benefit Plan Correct Ans- - indicates amount of future benefit, based
upon years of service and avg income
QUESTION: Defined Contribution Plan Correct Ans- - indicates amount of contribution from
employer without knowing the benefit
QUESTION: What is taxable in an IRA Correct Ans- - both the contributions and the growth or
earnings
QUESTION: How much can you contribute to an IRA Correct Ans- 100% of earnings or not to
exceed 5,000
3|Page
, QUESTION: Until What age can you contribute to an IRA Correct Ans- 70.5
QUESTION: Group Insurance Correct Ans- - consist of term life insurance or whole insurance
- the employer is the owner and receives the master contract
- the employees are cirtificate holders which outlines the details of it
- underwriting is much more liberal because its a large group and probably wont have adverse
selection
- offered only 1x per year
- if you want to get in at another time, employee has to show insurability
QUESTION: Can any group form an insurance plan Correct Ans- NO , you need a common
bond (eg trade association)
QUESTION: Group Plan Insurance Conversion Correct Ans- - can convert within 31 days
without proof of insurability, if they leave
- You normally convert to a universal life polity
- pricing is based on age
- the employer still ows the policy but he cant name the beneficiaries
QUESTION: Group Life insurance Premiums Correct Ans- - employer pays all of it (non-
contributory plan)
- Contributory - employee pays all of it
- but 75% of employees have to participate
QUESTION: Group Life Insurance Premiums Tax issues Correct Ans- - The beneficiary still
recieves the death benefit tax free and its still an employer expense (tax deductible) but if the
insurance is over 50k, the employee counts the premium paid by the employer as income
QUESTION: Social Security Correct Ans- - employee and employer pay 7.65% of their payroll
- Self employed pay 15.3%
4|Page
2025/2026 ACTUAL EXAM COMPLETE 500 QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY
GRADED A+
QUESTION: Qualified Plan Requirements Correct Ans- 1) Be in writing 2)provided for benefit
of employee 3) must satisfy age and serive standards 4) cannot be discriminatory 5) contributions
cannot exceed yearly maximus 6) must provide survivorship benefits 7) must meet miniumum
vesting standards 8) cannot be top heavy
QUESTION: Advantages of Qualified plans Correct Ans- - employer and employee
contributions are tax deductivble and accumulate tax deferred
- Withdrawls before 59.5 is a 10% penalty
- must begin miniumum distributions by age 70.5
QUESTION: Qualified Plan distributions Correct Ans- - taxable upon withdrawl
- 10% penalty upon withdrawl before 59.6
- can take out w/o penalty if death, divorce, qualified financial hardship, plan loan or qualified
rollover, 1st time home buyer, disability of owner
- if you take out the money early, its a 20% penalty
- must rollover w/in 60 days or its considered a premature distribution
QUESTION: Penalty for Withdrawl of Qualified Plan Correct Ans- - a 10% penalry plus
applicable state and federal taxes
QUESTION: IRA IIndividual Retirement Account) Correct Ans- - all individuals who have
earned income
- possible tax deductions
- tax deferral of gains
- Can contribute up to 5,000
- can add 1,000 "catch up" if over 50
1|Page
,QUESTION: Education IRA Correct Ans- - method to provide funding
- Can be transferred to another IRA at 30
QUESTION: Section 529 Plans Correct Ans- - state provided
- can be funded by after tax dollars
- can pay prepaid tuition
- All earnings exempt from federal taxes
- If withdrawn for unqualified withdrawl, 10% penalty
QUESTION: Roth IRA Correct Ans- - Allows owner to make non tax deductible contributions
- to get withdrawls tax free, the account must be in existence for 5 years
- can add money tax free up to 5k
- distributions are tax free
- account is only allowed for people who's income does not exceed a certain amount
QUESTION: SEP IRA (simplified Employee Pension Plan) Correct Ans- - employer sponsored
IRA for small employers
- contrinutions deductible to employer
- Employee must have worked for 3 of last 5 years
- contributions by employer cant exceed 49k or 25% of income, whichever is lesser
- contributions for employees cant exceed 16,500
QUESTION: Keogh Plan Correct Ans- - self employed and employees
- replaced by SEPs
QUESTION: 401k Plan Correct Ans- - allows employees to save for retirement tax free
- money is taken out pre-tax, and can be matched (and deductible to employwer)
- Withdrawl penalty of 10% prior to age 59.5
- Miniumum distributions by age 70.5
2|Page
,- 2011 max was 16,500
QUESTION: 403(b)/tax-sheltered Annuity Correct Ans- - availbale for employees of
nonprofits, schools universities, churches & hospitals
- just like 401k plans
QUESTION: 457 Deffered Compensation Correct Ans- - available for employess of state and
local govt
-the plan is owned by employer
QUESTION: Profit Plan Correct Ans- - part of defined contribitution plan
- annual profits shared among employees
- no guarantee of payment
QUESTION: Pension Plan Correct Ans- Retirement Plan that calculates benefit based upon
years of service and income averages
QUESTION: ESOP Correct Ans- - employee stock ownership plan
- defined contribution plan that provides employer stock to employees based on income and profits
of company
QUESTION: Defined Benefit Plan Correct Ans- - indicates amount of future benefit, based
upon years of service and avg income
QUESTION: Defined Contribution Plan Correct Ans- - indicates amount of contribution from
employer without knowing the benefit
QUESTION: What is taxable in an IRA Correct Ans- - both the contributions and the growth or
earnings
QUESTION: How much can you contribute to an IRA Correct Ans- 100% of earnings or not to
exceed 5,000
3|Page
, QUESTION: Until What age can you contribute to an IRA Correct Ans- 70.5
QUESTION: Group Insurance Correct Ans- - consist of term life insurance or whole insurance
- the employer is the owner and receives the master contract
- the employees are cirtificate holders which outlines the details of it
- underwriting is much more liberal because its a large group and probably wont have adverse
selection
- offered only 1x per year
- if you want to get in at another time, employee has to show insurability
QUESTION: Can any group form an insurance plan Correct Ans- NO , you need a common
bond (eg trade association)
QUESTION: Group Plan Insurance Conversion Correct Ans- - can convert within 31 days
without proof of insurability, if they leave
- You normally convert to a universal life polity
- pricing is based on age
- the employer still ows the policy but he cant name the beneficiaries
QUESTION: Group Life insurance Premiums Correct Ans- - employer pays all of it (non-
contributory plan)
- Contributory - employee pays all of it
- but 75% of employees have to participate
QUESTION: Group Life Insurance Premiums Tax issues Correct Ans- - The beneficiary still
recieves the death benefit tax free and its still an employer expense (tax deductible) but if the
insurance is over 50k, the employee counts the premium paid by the employer as income
QUESTION: Social Security Correct Ans- - employee and employer pay 7.65% of their payroll
- Self employed pay 15.3%
4|Page
