Texas General Lines - Life, accident and
health insurance PRACTICE EXAM
COMPLETE QUESTIONS AND
ANSWERS | ALREADY PASSED 2026
LIFE SECTION 1 - Correct answer-LIFE SECTION 1
1) Sandra Timms, age 27, is advised by her producer to purchase Life insurance to
cover a 20-year-amortized $50,000 business-improvement loan. Which of the
following plans would adequately protect Ms. Timms at the minimum premium
outlay?
A- $50,000 Whole Life policy
B- $50,000 Level Term policy for 20 years
C- $50,000 20 Pay Life policy
D- $50,000 Decreasing Term policy for 20 years - Correct answer-D—A $50,000
Decreasing Term policy for 20 years
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,Explanation: The key here is "minimum premium". Term is the most inexpensive
type of coverage. Since Sandra's $50,000 loan will be paid off over 20 years and
the loan balance will decrease each year, Decreasing Term makes sense.
Decreasing Term is not renewable.
2) A 45-year old customer who is seeking to supplement his retirement income at
age 65 would not buy a:
A- Deferred Annuity
B- Equity Indexed Annuity
C- Variable Annuity
D- Immediate Annuity - Correct answer-B- Equity Indexed Annuity
3) John Livingston owns a 30-Pay Life policy that he purchased at the age of 30.
The cash value will equal the face amount of the policy when he reaches the age
of:
A- 60
B- 70
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,C- 100
D- 30 - Correct answer-C- 100
Explanation: Limited Pay Life insurance policies such as Life Paid Up at 65 or 20-
Pay Life are simply variations of Whole Life policies. The cash value will equal
face amount of the policy (at least) at the maturity of the policy, which is always
age 100 on Whole Life policies. These limited-pay policies are designed so that the
insured may pay his or her premiums faster and be "paid up" at a certain age.
However, just because the premiums are paid up doesn't mean the policy has
matured.
4) Which of the following is an example of a Limited-Pay Life policy?
A- Universal life
B- Whole Life
C- Life Paid-Up at Age 65
D- Renewable Term to Age 70 - Correct answer-C- Life Paid-Up at Age 65
5) Which of the following policies provides the greatest amount of protection for
an insured's premium dollar as well as some cash accumulation?
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, A- Annuity
B- Whole Life
C- Term
D- Limited-Pay Life - Correct answer-B- Whole Life
If we had not mentioned cash accumulation, the answer would have been Term.
However, Term has no cash value, so the answer is Whole Life, which is the most
inexpensive type of permanent insurance and is required to have a cash value after
the third policy year. Although Limited Pay Life is a type of Whole Life, it is
incorrect since it is usually quite expensive due to the shortened pay-in period.
Annuities have no cash value except the money the annuitant paid in. Since there is
no death benefit, no protection is offered.
6) Which of the following individual policy conversions is usually permitted
without any evidence of insurability? - Correct answer-C- Conversion from a Term
policy to a Whole Life policy
7) Which of the following is NOT correct regarding Ordinary Whole Life policies?
A- The premiums payments are owed annually until you die or reach age 100
B- The cash value grows more quickly in the beginning years of the policy
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
health insurance PRACTICE EXAM
COMPLETE QUESTIONS AND
ANSWERS | ALREADY PASSED 2026
LIFE SECTION 1 - Correct answer-LIFE SECTION 1
1) Sandra Timms, age 27, is advised by her producer to purchase Life insurance to
cover a 20-year-amortized $50,000 business-improvement loan. Which of the
following plans would adequately protect Ms. Timms at the minimum premium
outlay?
A- $50,000 Whole Life policy
B- $50,000 Level Term policy for 20 years
C- $50,000 20 Pay Life policy
D- $50,000 Decreasing Term policy for 20 years - Correct answer-D—A $50,000
Decreasing Term policy for 20 years
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Explanation: The key here is "minimum premium". Term is the most inexpensive
type of coverage. Since Sandra's $50,000 loan will be paid off over 20 years and
the loan balance will decrease each year, Decreasing Term makes sense.
Decreasing Term is not renewable.
2) A 45-year old customer who is seeking to supplement his retirement income at
age 65 would not buy a:
A- Deferred Annuity
B- Equity Indexed Annuity
C- Variable Annuity
D- Immediate Annuity - Correct answer-B- Equity Indexed Annuity
3) John Livingston owns a 30-Pay Life policy that he purchased at the age of 30.
The cash value will equal the face amount of the policy when he reaches the age
of:
A- 60
B- 70
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,C- 100
D- 30 - Correct answer-C- 100
Explanation: Limited Pay Life insurance policies such as Life Paid Up at 65 or 20-
Pay Life are simply variations of Whole Life policies. The cash value will equal
face amount of the policy (at least) at the maturity of the policy, which is always
age 100 on Whole Life policies. These limited-pay policies are designed so that the
insured may pay his or her premiums faster and be "paid up" at a certain age.
However, just because the premiums are paid up doesn't mean the policy has
matured.
4) Which of the following is an example of a Limited-Pay Life policy?
A- Universal life
B- Whole Life
C- Life Paid-Up at Age 65
D- Renewable Term to Age 70 - Correct answer-C- Life Paid-Up at Age 65
5) Which of the following policies provides the greatest amount of protection for
an insured's premium dollar as well as some cash accumulation?
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, A- Annuity
B- Whole Life
C- Term
D- Limited-Pay Life - Correct answer-B- Whole Life
If we had not mentioned cash accumulation, the answer would have been Term.
However, Term has no cash value, so the answer is Whole Life, which is the most
inexpensive type of permanent insurance and is required to have a cash value after
the third policy year. Although Limited Pay Life is a type of Whole Life, it is
incorrect since it is usually quite expensive due to the shortened pay-in period.
Annuities have no cash value except the money the annuitant paid in. Since there is
no death benefit, no protection is offered.
6) Which of the following individual policy conversions is usually permitted
without any evidence of insurability? - Correct answer-C- Conversion from a Term
policy to a Whole Life policy
7) Which of the following is NOT correct regarding Ordinary Whole Life policies?
A- The premiums payments are owed annually until you die or reach age 100
B- The cash value grows more quickly in the beginning years of the policy
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
