Insurance Exam Questions And Correct Answers

Texas General Lines – Life, Accident, and Health Insurance Exam Questions And Correct Answers (2024)

Part 1: Life Insurance (20 Questions)

• Which of the following best defines “insurable interest”?
• The insured’s ability to pay premiums
• The policyowner's risk of loss if the insured dies
• The underwriter’s concern about mortality
• The insurer's interest in issuing a policy

Answer: B

Rationale: Insurable interest means the policyowner must face the possibility of losing something of value if the insured dies.

2. A whole life insurance policy provides protection for:

• 10 years
• Until age 65
• The entire life of the insured
• The policy's cash value term

Answer: C 1 / 4

Rationale: Whole life insurance provides lifelong protection and includes a cash value component.

• What is the purpose of the free-look provision?
• To allow the insurer to cancel for any reason
• To allow the insured to convert to group coverage
• To permit the policyholder to review and cancel the policy without penalty
• To lock in premium rates for the insured

Answer: C

• In a term life policy, what happens at the end of the term?
• The policy automatically renews
• Coverage expires unless renewed or converted
• The insured receives a maturity benefit
• Cash value is refunded

Answer: B

Rationale: Term policies offer coverage for a specific period and expire unless

renewed or converted, typically without a payout.

• What type of policy allows the policyowner to adjust the death benefit and

premium payments?

• Whole life
• Adjustable life
• Term life
• Endowment 2 / 4

Answer: B

Rationale: Adjustable life insurance allows flexibility in adjusting the premium and death benefit amounts.

• Which life insurance rider waives premium payments if the policyholder

becomes disabled?

• Payor Benefit
• Waiver of Premium
• Guaranteed Insurability
• Accidental Death

Answer: B

Rationale: The Waiver of Premium rider keeps the policy active without

payment if the insured is totally disabled.

• What is the purpose of the incontestability clause?
• To prevent claim denial due to suicide
• To limit the time insurers can challenge the validity of a policy
• To guarantee insurability
• To protect against inflation

Answer: B

Rationale: After two years, insurers cannot contest most statements made in

the application.

• Which policy builds cash value and pays a death benefit?
• Term life
• Variable annuity 3 / 4

• Whole life
• Health insurance

Answer: C

• What does the beneficiary receive under a life insurance policy?
• An annuity payout
• Policy dividends
• The death benefit
• Policy surrender value

Answer: C

• Which type of life insurance allows the insured to invest cash values in

separate accounts?

• Variable life
• Universal life
• Term life
• Whole life

Answer: A

Rationale: Variable life insurance includes investment options in separate

accounts.

• In which type of policy does the premium remain level for a specified period?
• Adjustable life
• Renewable term
• Level term
• / 4