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General Lines Life and Health Texas
Missed Questions EXAM WITH
ACCURATE QUESTIONS AND DETAILED
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GRADED A | LATEST UPDATE 2025- 2026
1. Which of the following options will reduce the death benefit? A. Extended term B. Paid-up additions C. Interest-only payments D. Accelerated payment ✅ Correct Answer: D. Accelerated payment Rationale: An accelerated payment allows the policyholder to access a portion of the death benefit early, typically due to terminal illness. This reduces the final benefit paid out upon death. 2. Which type of insurance has a corridor? A. Whole life B. Term life C. Variable life D. Universal life ✅ Correct Answer: D. Universal life Rationale: Universal life insurance maintains a corridor to meet IRS definitions of life insurance. This corridor ensures the cash value does not exceed the death benefit. 3. Which settlement option is NOT a systematic liquidation of funds? A. Life income B. Fixed amount C. Interest only D. Fixed period ✅ Correct Answer: C. Interest only Rationale: The interest-only option pays interest on the death benefit without reducing the principal, which remains intact. 4. An employer offers Group Term Life insurance worth $10,000 and pays $5 per policy. Which statement is true? A. The employee must pay tax on the coverage B. The policy is subject to state taxation C. No taxes need to be reported in this transaction
D. The employer must report imputed income ✅ Correct Answer: C. No taxes need to be reported in this transaction Rationale: Group life insurance premiums up to $50,000 are typically not taxable to the employee.
5. An injury or illness must reoccur within what time-frame to be considered a recurrent disability? A. 12 months B. 6 months C. 24 months D. 3 months ✅ Correct Answer: A. 12 months Rationale: Recurrent disabilities must happen within 12 months of the original to be considered as such for benefit continuation. 6. If an applicant purchases insurance on a spouse and names themselves primary beneficiary and their daughter contingent, who must sign? A. The applicant and their spouse B. Only the spouse C. Only the applicant D. The agent only ✅ Correct Answer: A. The applicant and their spouse Rationale: When insuring another person, their consent and signature are legally required. 7. Which of the following annuities is most likely used for 401(k) retirement plans? A. Immediate annuity B. Fixed annuity C. Indexed annuity D. Variable annuity ✅ Correct Answer: D. Variable annuity Rationale: Variable annuities are commonly used in qualified plans like 401(k)s because they allow investment in mutual funds and other securities. 8. The purpose of reinsurance can be best described as: A. Catastrophic coverage B. Eliminating all risk C. Investment protection D. Regulatory compliance ✅ Correct Answer: A. Catastrophic coverage Rationale: Reinsurance helps insurers manage large losses by transferring risk.
14. Exchanging a profit-sharing plan into a Straight Life Annuity best describes what? A. Flexible income stream B. A stream of income that cannot be outlived C. A deferred annuity D. Investment in mutual funds ✅ Correct Answer: B. A stream of income that cannot be outlived Rationale: A Straight Life Annuity provides lifetime income with no residual to beneficiaries. 15. Which of the following is NOT a required provision in life insurance policies? A. Extended term B. Grace period C. Reinstatement D. Incontestability ✅ Correct Answer: A. Extended term Rationale: Extended term is a non-forfeiture option, not a required provision. 16. A policy that matures at a certain age or upon death is called: A. Term life B. Variable life C. Whole life D. Endowment contract ✅ Correct Answer: D. Endowment contract Rationale: Endowment contracts pay out at maturity or earlier upon death. 17. All of the following are Social Security benefits EXCEPT: A. Compensation B. Retirement income C. Disability benefits D. Death benefit ✅ Correct Answer: A. Compensation Rationale: Compensation is not a Social Security benefit. 18. What is the minimum group size to qualify for group life insurance? A. 10 B. 5 C. 3 D. 50 ✅ Correct Answer: A. 10 Rationale: Group life plans require at least 10 eligible members.
19. In a company with 5 equal shareholders, what policy handles disability of one? A. Key person insurance B. Disability Buy-Sell C. Deferred comp D. Term life ✅ Correct Answer: B. Disability Buy-Sell Rationale: This policy funds the purchase of a disabled partner's interest. 20. A long-term care rider on a life policy applies when the insured: A. Is diagnosed with cancer B. Is hospitalized C. Cannot perform 2 activities of daily living D. Is over age 65 ✅ Correct Answer: C. Cannot perform 2 activities of daily living Rationale: Long-term care riders activate when the insured needs help with 2+ ADLs. 21. An irrevocable beneficiary can only be changed by: A. The policyowner B. The beneficiary themselves C. The insurer D. The agent ✅ Correct Answer: B. The beneficiary themselves Rationale: Once a beneficiary is named irrevocable, only that person can agree to be removed. 22. If the insurer fails to give the insured a claims form, what action must the insured take? A. File more claims B. Go online and find a claims form C. Petition for unfair claims settlement practices D. Submit proof of loss within any means necessary ✅ Correct Answer: D. Submit proof of loss within any means necessary Rationale: The insured must still submit proof of loss within 90 days using any reasonable method in writing. 23. All of the following may charge a fee in relation to insurance, EXCEPT: A. Insurance counselor B. Legal reserve agent C. Managing general agent D. Certified financial planner ✅ Correct Answer: C. Managing general agent Rationale: Managing general agents are paid through commission, not fees.
D. Benefits begin on the 5th month and paid on the 3rd month ✅ Correct Answer: B. Benefits will not begin until the 5th month and paid on the 6th month Rationale: Social Security Disability has a 5-month elimination period; benefits begin after.
29. A 30-year-old wants a policy for retirement at 60 with cash value and death benefit. Which should they choose? A. Immediate Annuity B. Term to 60 C. Ordinary Life D. 30 Pay Life ✅ Correct Answer: D. 30 Pay Life Rationale: A 30-pay life policy is paid-up at retirement and continues growing cash value with lifetime coverage. 30. Which of the following best describes a policy that matures at a certain age or upon death? A. Term Life B. Variable Life C. Universal Life D. Endowment Contract ✅ Correct Answer: D. Endowment Contract Rationale: An endowment policy pays the face amount upon death or when the insured reaches a specified age (usually age 100). It is essentially a form of whole life policy with a set maturity. 31. All of the following are benefits under Social Security EXCEPT: A. Compensation B. Retirement Income C. Disability Benefits D. Death Benefit ✅ Correct Answer: A. Compensation Rationale: Social Security does not offer "compensation" as a benefit type. It provides retirement, disability, and limited death benefits. 32. Which of the following individuals would need to sign the application for insurance if an applicant is purchasing coverage for their spouse and naming themselves as the primary beneficiary? A. The applicant and their spouse B. Only the applicant C. Only the beneficiary D. Only the agent ✅ Correct Answer: A. The applicant and their spouse
Rationale: When someone is applying for insurance on another person, that person (the proposed insured) must sign to provide consent. An application was submitted and subsequently the policy was issued. Two weeks later the insurer discovers that the application had blank answers to questions on the application. What will the insurer most likely do?
- ANSWER c. honor the coverage When the underwriter issued the policy, they created a waiver of rights. This means that the underwriter accepted the blank answers and decided to issue the policy anyway. Since the policy was issued, the insurer cannot go back and deny claims because of blank answers. Which of the following is true about the taxation of a participating insurer?
- ANSWER a. any amount earned in excess of the dividend is taxable each year Telling an insured that if they do not sign a disclosure agreement they may be unable to obtain the rates at a future date is considered:
- ANSWER b. coercion Coercion is the practice of scaring an insured into purchasing a policy at the moment. Chapter 13, page 165ish An office manager decides to change occupation to a construction worker. Under the change of occupation provision, when a disability occurs, which of the following will most likely occur?
- ANSWER a. The claim would be denied If you change occupations from a low risk job to a high risk job, the state test says your claims are denied. feedback will be added for this question shortly. M has a $250 flat deductible and coinsurance of 80/20 on the first $5,000. When M incurs a claim of $6,000 on his Major Medical PPO, how much will the insurer pay for this claim? a. b. c. d.4800 - ANSWER b. 4750
d.variable universal life - ANSWER d. variable universal life Variable products have the cash value invested into stocks, bonds, mutual funds etc. Under a life insurance contract, all of the following are deemed nonforfeiture options except: a.extended term b.paid up insurance c.automatic premium loan d.cash value - ANSWER c. automatic premium loan feedback will be added for this question shortly. D is a small entrepreneur of a 15 person company who is shopping for a retirement plan to add as a benefit for her employees. D wishes to remain a sole proprietor and realizes her options are limited due to this fact. Which type of retirement plan should the agent recommend? - ANSWER b. Keogh (Unincorporated) The answer is Keogh due to the sole proprietorship nature of the business. The SEP would be a better option and is also for sole proprietors, but for your state test choose Keogh if you see sole proprietorship. Q has a flat deductible of $500 and coinsurance of 80/20. When Q incurs a claim of $5,000 how much will Q pay total for this claim? a.1, b. c. d.850 - ANSWER a. 1, Q would pay $1,400. $5000 - $500 = $4500. 4500 * 20 percent is 900. 900 + 500 = 1400 A person over the age of 65 and is still working, that has Medicare and Group health, which plan is primary? a.Neither b.Group health c.Medicare d.Medicaid - ANSWER b. Group health Group health insurance would be primary even if the person has Medicare.
All of the following are comprehensive plans EXCEPT: a.Preferred Provider Organization. b.Indemnity plan. c.Health Maintenance d.Point of Service plan. - ANSWER b. Indemnity plan. HMO, PPO's and POS's are comprehensive plans, typically also managed care plans. The non-forfeiture option that provides an insured with coverage for a specified period of time can be best described as? a.fixed period b.reduced paid up c.cash surrender value d.extended term - ANSWER d. extended term The three non-forfeiture options are: extended term, reduced paid up and cash. The extended term option purchases a term policy with the cash value for as long as possible (depending on how much cash value is there) and keeps the same face amount. The type of policy that combines medical and life insurance aspects would be akin to: a.Accidental Death and Dismemberment b.Critical Illness c.Comprehensive Medical d.Disability Insurance - ANSWER a. Accidental Death and Dismemberment AD&D pays out during death or dismemberment. The life insurance part is the accidental death and the medical insurance part is the dismemberment (loss of limb). Who would NOT be eligible for marketplace coverage? a.a part time worker b.a spouse who exhausted COBRA c.an unemployed spouse d.a person eligible for employer coverage - ANSWER d. a person eligible for employer coverage A person eligible for employer coverage would not qualify for Marketplace coverage. The Affordable Care Act is for people in the individual market, not the group market. At age 100 what does an original whole life policy pay to the insured?
d.Managed Care - ANSWER d. Managed Care Which of the following investment products have producers who are regulated by the National Association of Securities Dealers (NASD): a.Straight Life b.Fixed Annuities c.Adjustable Life d.Variable Life - ANSWER d. Variable Life Variable selling producers are regulated by FINRA.....FINRA has replaced the NASD but they are the same agency. A return of premium rider is written as which type of insurance? a.decreasing term b.straight life c.increasing term d.universal life - ANSWER c. increasing term The return of premium rider is generally written as increasing term insurance. All of the following are discussed in the Insuring Clause EXCEPT: a.insured b.producer c.perils d.coverages - ANSWER b. producer The producer is not discussed in the insuring clause. The insuring clause states what the covered perils and exclusions are for the insured. Which of the following would help prevent a fixed or variable universal life policy from lapsing? a.Adjustable premium b.Target premium c.Current rate d.Indexed interest - ANSWER b. Target premium The target premium is the amount the insured should pay in universal life to keep the policy in force and at no risk of lapsing. The target premium only applies to universal life policies.
A healthy young student applies for life insurance at the preferred rate. An underwriter begins to ask about the students avocations and discovers the student is a pilot. The underwriter would still like to insure the student, which of the following will most likely happen? a.increased premium due to substandard risk b.lowered face amount to offset liability c.reduction of cash value growth for loans d.an exclusion will be added for piloting - ANSWER d. an exclusion will be added for piloting The underwriter would most likely add an exclusion for piloting. All of the following may be used by an underwriter to decline a risk EXCEPT: a.medical history b.weight c.height d.gender - ANSWER d. gender Gender may not be used by an underwriter to decline risks. An extremely tall/short person could be declined, or an over/underweight person, as well as medical history. K an eligible totally disabled insured qualifies for medical and disability provisions from Social Security. What will define K's benefits? a.his number of children b.his current income c.his age d.his marital status - ANSWER b. his current income Disability insurance is primarily based off your income. Which of the following life insurance policies would be best suited for an insured seeking safe growth that will never lose value, as well as hopefully maintaining protection against inflation? a.Variable Universal Life b.Indexed Universal Life c.Fixed Universal Life d.Modified Universal Life - ANSWER b. Indexed Universal Life Indexed products have a guaranteed minimum interest rate for safety and are tied to markets such as the S&P 500 which normally out-pace inflation. Variable products are
a.determine how long the insured can bring suit against the insurer b.prevent the insurer from overpaying claims c.prevent the insurer from delaying claims unnecessarily d.determine who receives payment during a claim - ANSWER c. prevent the insurer from delaying claims unnecessarily S is purchasing a medical insurance policy and did not pay for his premium at the time of application. When the producer goes to deliver the policy, what must the producer collect? a.premium and a conditional receipt b.premium and a statement of good health c.a statement of good health and a conditional receipt d.a signed sworn statement for proof of loss - ANSWER b. premium and a statement of good health How are benefits from an employer paid Accidental Death & Dismemberment policy handled? a.Benefits are Taxable Income. b.Benefits are Tax Free. c.Benefits are Tax Deferred. d.Benefits are Tax Deductible - ANSWER b. Benefits are Tax Free. Accidental Death & Dismemberment policies have benefits that are always tax free. K has a Disability Income policy providing coverage until age 65, but it includes a provision which allows the insurer to adjust rates based off of her class rating. What is the most likely renewability option? a.cancelable b.guaranteed renewable c.noncancelable d.interim - ANSWER b. guaranteed renewable Guaranteed renewable (Medicare Supplement and LTC) means that the insurer has to renew you every year, but the rates will adjust. Noncancelable means that the insurer will have to renew you, but your premiums stay the same. An insured has a disability policy with a 15 day sickness elimination period. The insured was diagnosed with pneumonia and upon walking out of the doctors' offices trips over a
log, hits their head on the sidewalk and incurs a serious injury of the spine. When would the insured be eligible for benefits? a.15 days b.7 days c.immediately d.never - ANSWER c. immediately Accidents are normally covered immediately. Pure Life may also be referred to as: a.Straight Life b.Variable Life c.Life Income d.Indemnity Life - ANSWER c. Life Income Pure Life is also known as Life Income or a Life Annuity, which provides payments for life. Upon death, the insurer receives the remaining funds. N has a life insurance policy with the guaranteed insurability rider (future increase option). N is age 25 and asks his agent how many more times he can use the rider. What would the agent most likely respond with? a.5 times b.1 time c.40 times d.3 times - ANSWER a. 5 times The Guaranteed Insurability rider, also known as future increase option, only allows you to increase the benefits every 3 years until age 40. 40 - 25 = 15 years, 15/3 = 5 times. How long are newborns covered automatically for? a.15 days b.30 days c.31 days d.20 days - ANSWER c. 31 days Children are covered automatically for 31 days starting at birth. The insured must notify the insurer of the child after it's born. Paid Up Additions is best described as which of the following?
Representations are true to the best of the applicants knowledge, thus the contract cannot be voided if the applicant believed it was a true statement. An insured applied for life insurance on April 1st without including the initial premium. The policy was issued on April 15th and delivered on April 21st, when the insured paid the first months premium and signed a health waiver. When was the insured initially covered a.April 21st b.April 1st c.April 15th d.Never - ANSWER a. April 21st The policy began coverage when the premium was paid and the policy was issued. Since the premium was not paid until April 21st, that is when coverage is afforded. Which rider ensures that all premiums will be paid back to the insured at the end of the policy? a.return of premium b.childs rider c.waiver of premium d.payor benefit - ANSWER a. return of premium Survivorship policies are also known as which? a.first to die b.last to die c.payor benefit d.joint and survivorship - ANSWER b. last to die Joint life is known as first to die, Survivorship is known as last to die. These policies cover multiple people at once. Which of the following is NOT true about a Health Reimbursement Account: a.funds are solely contributed by the employee b.the employee is not required to participate c.funds are contributed by the employer d.there must be an employer sponsored health account - ANSWER a. funds are solely contributed by the employee Health Reimbursement Accounts are funded by the employer, NOT the employee. The plan is used to reimburse employees for costs they spent out of pocket.
Which of the following would most likely have an insurable interest? a.A brother who has never met his sister b.A wife purchasing insurance on her husband c.A business purchasing insurance on its customers d.A bank selling a loan to pay the premiums for life insurance on the debtor - ANSWER b. A wife purchasing insurance on her husband A wife purchasing insurance on her husband has the strongest insurable interest of the options. A contract that has multiple parties and requires conditions to be met before consideration may be paid is best described as: a.adhesion b.aleatory c.conditional d.unilateral - ANSWER c. conditional The keyword in the question is conditional. Conditional contracts have conditions that must be met. The Accelerated Benefit rider is used when an insured is diagnosed with a terminal illness. How would this likely be paid out? a.benefits must be delayed for 90 days b.benefits would be deducted from the death benefit c.benefits would not be paid for 6 months d.benefits would be a loan from the cash value - ANSWER b. benefits would be deducted from the death benefit X's employer has noticed an increase in her experience (group) rated plans premiums this year. In response X's employer has raised the health plans deductible to $2,500. Which type of employee funded roll-over account would allow for savings toward the deductible up until 65? a.Consumer Driven Health Plan b.Flexible Spending Account c.Health Reimbursement Account d.Health Savings Account - ANSWER d. Health Savings Account
