Texas life and health insurance exam practice test 2026

1. Question 1 of 26General part, I. Types of policies

   An indexed annuity subtracts a spread (margin) of 3% from any gain in the index. The index return is calculated to be 9%. What return is credited?

   9%12%2.7%6%
2. Question 2 of 26General part, II. Policy riders, provisions, options, and exclusions

   Under Texas Insurance Code 1105.004, a policy of ordinary insurance must pay a cash surrender value in lieu of a paid-up nonforfeiture benefit if premiums have been paid for at least:

   Three full yearsOne full yearFive full yearsSeven full years
3. Question 3 of 26General part, III. Completing the application, underwriting, and delivering the policies

   Under 31 CFR 1025.320, an insurance company must report a suspicious transaction involving a covered product when the transaction involves or aggregates at least:

   $1,000 in funds or other assets$5,000 in funds or other assets$3,000 in funds or other assets$10,000 in funds or other assets
4. Question 4 of 26General part, IV. Retirement and other insurance concepts

   An employee under age 59 1/2 takes an in-service withdrawal from a SIMPLE IRA within the first two years of participation. According to the IRS, the additional tax on the withdrawal is:

   10 percent20 percent50 percent25 percent
5. Question 5 of 26General part, IX. Field underwriting procedures

   Under the Fair Credit Reporting Act, a consumer reporting agency may furnish a consumer report containing medical information in connection with an insurance transaction only if:

   The consumer affirmatively consents to the furnishing of the reportThe agent certifies in writing that the consumer is a good insurance riskThe insurer promises to destroy the report within one year of receiptThe report is limited to the consumer's last two attending physicians
6. Question 6 of 26General part, V. Types of policies

   In the federal prohibition on preexisting condition exclusions, what is a 'preexisting condition exclusion'?

   A limit on benefits for a condition because it existed before the date of enrollmentA limit on benefits for a condition first diagnosed after the date coverage was canceled and reinstatedA limit on benefits for a condition that results from an act of war or a self-inflicted injuryA delay in benefits for a condition that the applicant concealed on the written application
7. Question 7 of 26General part, VI. Policy provisions, clauses, and riders

   An insured gives notice of a covered loss to an authorized agent of the insurer, with information sufficient to identify the insured. Under the Texas Notice of Claim provision, what is the effect?

   It is not notice until the insurer's designated office receives it in writingIt counts as notice only if a copy also goes to the departmentIt constitutes notice to the insurerIt counts as notice only if the agent is a salaried employee of the insurer
8. Question 8 of 26General part, VII. Social insurance

   Under the Social Security Act, which definition best matches 'disability' for disability insurance benefits?

   Inability to perform the duties of the person's own occupation for at least 6 monthsInability to work for at least 24 months because of an accidental injuryInability to engage in substantial gainful activity due to a medical impairment expected to last at least 12 monthsInability to perform at least 2 activities of daily living for at least 90 days
9. Question 9 of 26General part, VIII. Other insurance concepts

   In Texas, an insurance carrier is liable for compensation for an employee's injury that arises out of and in the course and scope of employment, if the employee is subject to the workers' compensation law. On what basis?

   Only if the employer was negligentOnly if the employee was not contributorily negligentOnly if the employee proves the injury was foreseeableWithout regard to fault or negligence
10. Question 10 of 26Texas part, I. Texas statutes and rules common to life and health insurance

    An insurer organized under the laws of another state of the United States that applies to sell in Texas is classified in Texas as a

    Alien insurance companyForeign insurance companyDomestic insurance companyNonadmitted fraternal company
11. Question 11 of 26Texas part, II. Texas statutes and rules pertinent to life insurance only

    Which of the following is exempt from the Texas Standard Nonforfeiture Law for Life Insurance chapter?

    Group insuranceAn individual whole life policy issued after 1974An individual ordinary life policy that provides a cash surrender valueA universal life policy that is issued for a lifetime benefit
12. Question 12 of 26Texas part, III. Texas statutes and rules pertinent to accident and health insurance only

    Under 28 TAC Sec. 21.704, which factor may NOT be used to establish or aid in establishing a proposed insured's sexual orientation?

    The proposed insured's response to a factual question about having been diagnosed with AIDSThe proposed insured's response to a factual question about a sexually transmitted diseaseThe proposed insured's marital status, living arrangements, occupation, or zip codeThe proposed insured's date of birth and age recorded on the application form
13. Question 13 of 26Texas part, IV. Texas statutes and rules pertinent to health maintenance organizations (HMOs)

    Under Chapter 843, "basic health care services" means health care services that

    The HMO's board of directors selects each year to include in its lowest-priced plan for groupsThe commissioner determines an enrolled population might reasonably need to stay in good healthThe enrollee's primary care physician decides are medically necessary for each office visitMedicare requires every HMO to provide to enrollees who are 65 or older and enrolled
14. Question 14 of 26General part, I. Types of policies

    What licenses must an agent hold to sell variable life insurance in Texas?

    A federal securities license and a state insurance licenseA state insurance license only, because variable life is regulated solely by TDIA federal securities license only, because variable life is not insuranceA state real estate license and a state insurance license
15. Question 15 of 26General part, II. Policy riders, provisions, options, and exclusions

    Under Texas Insurance Code 1101.003, a life insurance policy must provide that the entire contract between the parties consists of:

    The policy and every statement the agent made during the sales presentationThe policy, or the policy and the application for the policyThe policy and the insurer's underwriting fileThe application only, with the policy serving as a receipt
16. Question 16 of 26General part, III. Completing the application, underwriting, and delivering the policies

    Which disclosure of nonpublic personal information is allowed under the Gramm-Leach-Bliley Act's general exceptions without the notice and opt-out requirements?

    Selling a list of policyholders and their policy values to an unaffiliated marketing company for a feeGiving a policyholder's credit card or account number to a telemarketer for a mailing campaignSharing a policyholder's health information with an unrelated lender who asks for it without consentA disclosure needed to effect, administer, or enforce a transaction the consumer requested or authorized
17. Question 17 of 26General part, IV. Retirement and other insurance concepts

    A worker dies fully insured. Under 42 USC 402(d), an unmarried child of the worker is eligible for child's insurance benefits if the child is under 18, or is a full-time elementary or secondary school student who has not reached age:

    21221619
18. Question 18 of 26General part, IX. Field underwriting procedures

    In a Texas replacement transaction, the replacing insurer must notify the policy owner of the right to return the new policy and receive an unconditional full refund within how many days after delivery?

    10 days15 days30 days60 days
19. Question 19 of 26General part, V. Types of policies

    How are Medicare supplement (Medigap) policies standardized in most states?

    Into numbered tiers, 1 through 12, each with a different Part A deductibleInto lettered plans (A-D, F, G, K-N), each with the same basic benefits for its letterInto plans named for the insurer, each with benefits set by the insurerInto three levels: bronze, silver and gold, each with a different premium
20. Question 20 of 26General part, VI. Policy provisions, clauses, and riders

    Under 28 TAC 3.3075, a disability income protection policy may have an elimination period of up to 365 days if the benefit is payable for at least two years and is at least what monthly amount?

    $50 per month$100 per month$200 per month$300 per month
21. Question 21 of 26General part, VII. Social insurance

    Medicare does not pay for most long-term care. Which program may help an eligible person pay for it?

    Medicare Part B, after a 90-day waiting periodMedicaid, if the person meets eligibility requirementsMedicare Part D, if the person is also enrolled in a Medigap policyMedicare Advantage, in every plan
22. Question 22 of 26General part, VIII. Other insurance concepts

    A worker covered by workers' compensation is injured by a negligent third party, and the carrier pays benefits. What rights does the carrier have against the third party?

    None; the employee keeps every recovery from the third party without sharing with the carrierIt may sue only the employer for contribution, but not the negligent third partyIt is subrogated to the employee's rights, limited to the benefits it paid or assumedIt may recover from the third party more than the total benefits it paid or assumed
23. Question 23 of 26Texas part, I. Texas statutes and rules common to life and health insurance

    May an insurer pay a commission to a temporary license holder on a policy that covers the temporary license holder's employee?

    Yes, if the policy is delivered after the temporary license holder passes the licensing examination for a permanent licenseYes, but only if the commission is no more than the commission paid on similar policies that were sold to the general publicNo. A commission may not be paid on a contract covering any person who has ever been a customer of the temporary license holder, regardless of whenNo. A commission may not be paid on a contract covering a person who is or in the past six months was the holder's employee
24. Question 24 of 26Texas part, II. Texas statutes and rules pertinent to life insurance only

    An insurer's advertisement compares its policy with another insurer's policy. What does 28 TAC Sec. 21.111 require?

    The advertisement must be approved in advance in writing by the other insurer named in the comparisonThe advertisement must prominently state that the other insurer's description was not furnished by the advertiserThe advertisement must state the other insurer's current financial rating from a rating agencyThe advertisement must be filed with the Texas Secretary of State within 10 days of publication
25. Question 25 of 26Texas part, III. Texas statutes and rules pertinent to accident and health insurance only

    What renewal provisions must a long-term care insurance policy issued in Texas contain?

    Renewal provisions no less favorable than guaranteed renewability or noncancellabilityRenewal provisions that allow the insurer to cancel the policy after any claim is paidRenewal provisions that allow the insurer to refuse renewal each year after a health reviewRenewal provisions that allow renewal only until the policyholder reaches age 75
26. Question 26 of 26Texas part, IV. Texas statutes and rules pertinent to health maintenance organizations (HMOs)

    An HMO wants to cancel a group subscriber's coverage for nonpayment of amounts due under the contract. What minimum written notice does 28 TAC Sec. 11.506 require?

    Not less than 15 days' written notice, with no exception for any kind of nonpaymentNot less than 90 days' written notice, with no exception for any kind of nonpaymentNot less than 30 days' written notice, though no added notice is required for failure to pay premiumImmediate cancellation with no notice at all for any amount due under the contract

Where these come from: our app’s 489 Texas life and health questions were checked against the sources they cite in independent audits on October 31, 2026. These 26 are taken only from questions the audits passed and never flagged, word for word, and only where the app’s text still matches the audited text. They are practice questions, not the exam’s.