Texas Life and Health Insurance Exam
Questions and Answers Latest Version
Already Passed
What is the main purpose of a life insurance policy?
✔✔ To provide financial protection to beneficiaries upon the insured’s death
What is insurable interest in life insurance?
✔✔ A financial or emotional relationship that justifies purchasing insurance on another person
What does the grace period in a life insurance policy allow the policyholder to do?
✔✔ Pay a missed premium without policy cancellation
In Texas, what is the minimum grace period for an individual life insurance policy?
✔✔ 31 days
What is the contestability period in a Texas life insurance policy?
✔✔ Two years from the policy issue date
1
,What is term life insurance designed to do?
✔✔ Provide coverage for a specific period with no cash value
What is whole life insurance?
✔✔ A permanent life policy with level premiums and a guaranteed cash value
What is the cash value of a life insurance policy?
✔✔ The savings portion of a permanent policy that grows over time
When does a life insurance policy pay out the death benefit?
✔✔ Upon the insured’s death, as long as the policy is active
What is the purpose of a beneficiary designation?
✔✔ To identify who receives the death benefit when the insured dies
Can a beneficiary be changed after a policy is issued?
✔✔ Yes, if the beneficiary is revocable
2
,What happens if no beneficiary is named in a life insurance policy?
✔✔ The death benefit goes to the insured's estate
What is the free-look period in Texas life insurance?
✔✔ 10 days to review and cancel the policy for a full refund
What is an accelerated death benefit rider?
✔✔ A provision allowing the insured to access part of the death benefit if terminally ill
What is the purpose of a waiver of premium rider?
✔✔ It waives future premiums if the insured becomes disabled
What is a reinstatement clause in life insurance?
✔✔ It allows a lapsed policy to be restored under certain conditions
What is underwriting in life insurance?
✔✔ The process of evaluating risk and determining premium rates
3
, What information is typically required during the life insurance application process?
✔✔ Personal details, medical history, and financial information
Who regulates life and health insurance in Texas?
✔✔ The Texas Department of Insurance (TDI)
What is the role of the Texas Life and Health Insurance Guaranty Association?
✔✔ To protect policyholders if an insurance company becomes insolvent
How long must insurers keep records of life insurance transactions in Texas?
✔✔ Five years
What is a participating life insurance policy?
✔✔ A policy that may pay dividends to the policyholder
What is a non-participating life insurance policy?
✔✔ A policy that does not pay dividends to policyholders
4
Questions and Answers Latest Version
Already Passed
What is the main purpose of a life insurance policy?
✔✔ To provide financial protection to beneficiaries upon the insured’s death
What is insurable interest in life insurance?
✔✔ A financial or emotional relationship that justifies purchasing insurance on another person
What does the grace period in a life insurance policy allow the policyholder to do?
✔✔ Pay a missed premium without policy cancellation
In Texas, what is the minimum grace period for an individual life insurance policy?
✔✔ 31 days
What is the contestability period in a Texas life insurance policy?
✔✔ Two years from the policy issue date
1
,What is term life insurance designed to do?
✔✔ Provide coverage for a specific period with no cash value
What is whole life insurance?
✔✔ A permanent life policy with level premiums and a guaranteed cash value
What is the cash value of a life insurance policy?
✔✔ The savings portion of a permanent policy that grows over time
When does a life insurance policy pay out the death benefit?
✔✔ Upon the insured’s death, as long as the policy is active
What is the purpose of a beneficiary designation?
✔✔ To identify who receives the death benefit when the insured dies
Can a beneficiary be changed after a policy is issued?
✔✔ Yes, if the beneficiary is revocable
2
,What happens if no beneficiary is named in a life insurance policy?
✔✔ The death benefit goes to the insured's estate
What is the free-look period in Texas life insurance?
✔✔ 10 days to review and cancel the policy for a full refund
What is an accelerated death benefit rider?
✔✔ A provision allowing the insured to access part of the death benefit if terminally ill
What is the purpose of a waiver of premium rider?
✔✔ It waives future premiums if the insured becomes disabled
What is a reinstatement clause in life insurance?
✔✔ It allows a lapsed policy to be restored under certain conditions
What is underwriting in life insurance?
✔✔ The process of evaluating risk and determining premium rates
3
, What information is typically required during the life insurance application process?
✔✔ Personal details, medical history, and financial information
Who regulates life and health insurance in Texas?
✔✔ The Texas Department of Insurance (TDI)
What is the role of the Texas Life and Health Insurance Guaranty Association?
✔✔ To protect policyholders if an insurance company becomes insolvent
How long must insurers keep records of life insurance transactions in Texas?
✔✔ Five years
What is a participating life insurance policy?
✔✔ A policy that may pay dividends to the policyholder
What is a non-participating life insurance policy?
✔✔ A policy that does not pay dividends to policyholders
4
