18 Free Texas Health Insurance Exam Practice Questions (2026)
How to Use This Health Insurance Set
Health Insurance Basics and Individual Policies is 22 of the scored questions on the Texas Life, Accident & Health exam — level with life policy types as the heaviest block. Candidates routinely underestimate it, because the licence is called Life and Health and the life half feels like the real subject.
It is also the block with the most arithmetic. Deductible, coinsurance and out-of-pocket maximum interact in a specific order, and the exam asks for the resulting number rather than the concept. Getting the order wrong produces an answer that appears among the options, which is not an accident.
These 18 questions come from LanePrep's Texas L&H quiz bank and cover the three ways the exam approaches health: what the insured actually pays, which managed care plan is being described, and the supplemental policies that pay for things major medical does not.
Work the cost-sharing questions in order. Deductible first, then coinsurance on the remainder, then stop at the out-of-pocket maximum. Every wrong answer in that family comes from skipping a step or applying one twice.
Practice Questions 1-6: Deductibles, Coinsurance and What You Pay
The arithmetic block. A deductible is paid before anything else, coinsurance splits what follows, and the out-of-pocket maximum caps the insured's total — after which the plan pays everything. Copays and fixed daily indemnity benefits work differently again, and the exam mixes them deliberately.
Question 1 (Chapter 6)
Sarah has a Major Medical policy with a $1,500 annual deductible, 80/20 coinsurance, and a $5,000 out-of-pocket maximum (excluding premiums). In a given year, she incurs $12,000 in covered medical expenses. How much will Sarah be responsible for paying out-of-pocket?
- A) $1,500
- B) $3,600
- C) $5,000
- D) $2,100
Show answer & explanation
Answer: B
First, Sarah pays her $1,500 deductible. This leaves $12,000 - $1,500 = $10,500 in remaining expenses. Next, coinsurance applies to the remaining amount. Sarah's share is 20% of $10,500, which is $2,100. Her total out-of-pocket cost would be her deductible ($1,500) + her coinsurance share ($2,100) = $3,600. Since $3,600 is less than her $5,000 out-of-pocket maximum, she will pay the calculated amount of $3,600.
Question 2 (Chapter 6)
Jennifer's major medical plan has a $2,000 deductible, 70/30 coinsurance, and a $7,000 out-of-pocket maximum. She incurs $10,000 in covered medical expenses this year. How much will she pay out-of-pocket?
- A) $2,000
- B) $2,400
- C) $4,400
- D) $7,000
Show answer & explanation
Answer: C
Jennifer first pays the $2,000 deductible, leaving $8,000 in remaining expenses. Her 30% coinsurance share of $8,000 is $2,400. Total: $2,000 + $2,400 = $4,400. Since $4,400 is below her $7,000 out-of-pocket maximum, she pays the full $4,400.
Question 3 (Chapter 6)
Brandon has a major medical plan with a $1,000 deductible, 80/20 coinsurance, and a $4,000 out-of-pocket maximum. He suffers a serious accident and incurs $50,000 in covered medical expenses. How much will he be responsible for paying out-of-pocket?
- A) $1,000
- B) $4,000
- C) $10,800
- D) $11,000
Show answer & explanation
Answer: B
Without the out-of-pocket maximum, Brandon would owe his $1,000 deductible plus 20% of the remaining $49,000 ($9,800), totaling $10,800. However, his out-of-pocket maximum caps total cost-sharing at $4,000 per year. Once he reaches $4,000, the insurer pays 100% of remaining covered expenses. So Brandon pays $4,000.
Question 4 (Chapter 6)
Lisa pays $30 every time she visits her primary care physician under her health plan. This fixed dollar amount, due at the time of service, is best described as what type of cost-sharing?
- A) Deductible
- B) Coinsurance
- C) Copayment
- D) Premium
Show answer & explanation
Answer: C
A copayment (copay) is a fixed dollar amount paid by the insured for a specific service, typically at the point of service. A deductible is an annual threshold the insured must pay before coverage begins. Coinsurance is a percentage of cost shared after the deductible. A premium is the periodic payment to keep coverage in force.
Question 5 (Chapter 6)
Karen has a comprehensive major medical plan and has incurred enough qualifying expenses this year that she has reached her out-of-pocket maximum. She now needs an additional MRI for a covered condition. What portion of the cost of the MRI will Karen pay out-of-pocket?
- A) Her usual coinsurance percentage
- B) The full cost until the next plan year
- C) Only the copayment
- D) Nothing — the insurer pays 100% of covered expenses for the rest of the year
Show answer & explanation
Answer: D
Once an insured reaches the out-of-pocket maximum, the insurer pays 100% of additional covered medical expenses for the remainder of the plan year. This is the key protection against catastrophic claims. The deductible, coinsurance, and copays all count toward the out-of-pocket maximum.
Question 6 (Chapter 6)
Sarah has a health insurance policy that pays a fixed amount of $100 for each day she is confined in a hospital, regardless of the actual hospital charges. This benefit is paid directly to her and is separate from her major medical coverage. What type of limited benefit policy does Sarah possess?
- A) Major Medical Policy
- B) Critical Illness Policy
- C) Hospital Indemnity Policy
- D) Accidental Death and Dismemberment (AD&D) Policy
Show answer & explanation
Answer: C
Sarah has a Hospital Indemnity Policy. This type of limited benefit policy pays a fixed daily, weekly, or monthly sum directly to the insured for each day they are hospitalized, regardless of the actual cost of care. It's designed to help cover incidental expenses or deductibles, not to replace comprehensive major medical coverage. Major Medical covers actual expenses, Critical Illness pays a lump sum for specific diagnoses, and AD&D pays for accidental death or dismemberment.
Practice Questions 7-12: HMO, PPO, POS and High-Deductible Plans
HMO, PPO, POS and high-deductible plans are usually described rather than named. Two details separate them: whether a primary care physician has to refer you, and whether out-of-network care is covered at all or merely covered worse.
Question 7 (Chapter 6)
David recently moved to Texas and enrolled in a new health insurance plan. He learns that for his plan, he must select a Primary Care Physician (PCP) from a specific network, and all specialist visits require a referral from his PCP. If he sees an out-of-network provider, the services will not be covered at all, except in emergencies. What type of managed care plan does David most likely have?
- A) Preferred Provider Organization (PPO)
- B) Health Maintenance Organization (HMO)
- C) Point of Service (POS)
- D) Exclusive Provider Organization (EPO)
Show answer & explanation
Answer: B
David's plan features, such as requiring a PCP, needing referrals for specialists, and having no coverage for out-of-network care (except emergencies), are characteristic of a Health Maintenance Organization (HMO). PPOs offer more flexibility to see out-of-network providers (though at a higher cost). POS plans combine aspects of HMOs and PPOs, allowing out-of-network care with referrals. EPOs are similar to HMOs in network restriction but may not always require a PCP or referrals for specialists within the network.
Question 8 (Chapter 6)
Maria's health insurance plan allows her to choose any doctor or hospital, but she pays less if she uses providers within a specific network. She does not need a referral to see a specialist, even if they are out-of-network, though her cost-sharing will be higher. What type of provider network does Maria's plan most accurately represent?
- A) Health Maintenance Organization (HMO)
- B) Exclusive Provider Organization (EPO)
- C) Preferred Provider Organization (PPO)
- D) Point of Service (POS)
Show answer & explanation
Answer: C
Maria's plan, which offers the flexibility to choose any provider but incentivizes using an in-network list of 'preferred' providers through lower costs, and does not require referrals for specialists, is characteristic of a Preferred Provider Organization (PPO). HMOs typically require a PCP and referrals, and offer no out-of-network coverage. EPOs are similar to HMOs in network restriction but may not require referrals. POS plans are a hybrid, often requiring a PCP and referrals for in-network care but allowing out-of-network care at a higher cost.
Question 9 (Chapter 6)
Patricia enrolls in a managed care plan in Houston. Her plan requires her to choose a primary care physician who must refer her to any specialist, and the plan does not cover out-of-network care except in emergencies. However, unlike a traditional HMO, the plan is not capitated and providers bill the insurer on a fee-for-service basis with no PCP gatekeeping for some specialists. Which managed care arrangement most closely matches Patricia's plan?
- A) PPO
- B) EPO
- C) HMO
- D) Indemnity
Show answer & explanation
Answer: B
An Exclusive Provider Organization (EPO) covers only in-network providers (like an HMO) and typically does not cover out-of-network care except in emergencies, but generally does NOT require a PCP referral to see specialists (more like a PPO). PPOs allow out-of-network coverage. HMOs require both a PCP and referrals. Indemnity plans have no network restrictions.
Question 10 (Chapter 6)
Greg has a Point-of-Service (POS) plan. He sees an out-of-network orthopedic surgeon for knee surgery without first obtaining a referral from his PCP. Which statement most accurately describes how his POS plan will handle this claim?
- A) The claim will be denied entirely because POS plans never cover out-of-network care.
- B) The claim will be paid at 100% because POS plans don't require referrals.
- C) The claim may be paid, but at a higher out-of-pocket cost to Greg than if he had stayed in-network with a PCP referral.
- D) The claim will be paid only if Greg files an appeal with the Texas Department of Insurance.
Show answer & explanation
Answer: C
A POS plan is a hybrid of HMO and PPO. It typically requires a PCP and referrals for the best (in-network) benefits, similar to an HMO. However, like a PPO, the plan does provide coverage for out-of-network care, but the insured will pay significantly more out-of-pocket. So Greg's claim will likely be paid, but at the higher out-of-network cost-sharing rate.
Question 11 (Chapter 6)
Michael, a self-employed individual in Texas, wants a health insurance plan that offers lower premiums in exchange for a higher deductible, and allows him to save money tax-free for future medical expenses. He is generally healthy and prefers to manage his healthcare spending. Which type of plan and associated savings account would best suit his needs?
- A) HMO with a Flexible Spending Account (FSA)
- B) PPO with a Health Reimbursement Arrangement (HRA)
- C) High Deductible Health Plan (HDHP) with a Health Savings Account (HSA)
- D) Point of Service (POS) plan with a Medical Savings Account (MSA)
Show answer & explanation
Answer: C
Michael's preferences for lower premiums, a higher deductible, and tax-free savings for medical expenses perfectly describe a High Deductible Health Plan (HDHP) paired with a Health Savings Account (HSA). HDHPs are characterized by higher deductibles and lower premiums, while HSAs are tax-advantaged savings accounts that can only be used with HDHPs, allowing individuals to save and pay for qualified medical expenses tax-free. FSAs and HRAs are typically employer-sponsored and have different rules regarding ownership and rollover, and MSAs are generally for self-employed individuals with high-deductible plans but have different eligibility and contribution rules than HSAs.
Question 12 (Chapter 6)
Megan is enrolled in an HDHP and would like to open a Health Savings Account (HSA). Which of the following is a strict eligibility requirement for HSA contributions?
- A) She must be over age 50.
- B) She must be covered by an HDHP and have no other disqualifying health coverage.
- C) She must be enrolled in Medicare Part A.
- D) She must work for an employer that offers HSA matching.
Show answer & explanation
Answer: B
To contribute to an HSA, the individual must be covered by a qualified HDHP and cannot have other disqualifying health coverage (such as a general-purpose FSA or Medicare). HSAs are individually owned and not tied to employer matching. Enrollment in Medicare actually disqualifies a person from contributing to an HSA. There is no minimum age requirement, but age 55+ allows catch-up contributions.
Practice Questions 13-18: Disability, Long-Term Care and Supplements
What major medical does not do. Disability income replaces a salary, long-term care pays for help with daily living, AD&D pays a sum on specific losses, and Medicare supplement fills gaps in Parts A and B. Each has its own trigger, and elimination periods appear in most of them.
Question 13 (Chapter 6)
Dr. Emily Smith, a highly skilled neurosurgeon in Texas, suffers a severe hand injury that prevents her from performing complex surgeries. She can, however, still teach medical students and consult on cases, which generates a lesser income. Her disability income policy states that she is considered totally disabled if she cannot perform the material and substantial duties of her *own occupation*. Which definition of disability is most beneficial for Dr. Smith in this scenario?
- A) Any-Occupation
- B) Own-Occupation
- C) Partial Disability
- D) Residual Disability
Show answer & explanation
Answer: B
The 'Own-Occupation' definition of disability is most beneficial for Dr. Smith. This definition considers an individual totally disabled if they cannot perform the duties of their specific job, even if they can work in another capacity. Since she cannot perform her duties as a neurosurgeon, she would be considered totally disabled under this definition. An 'Any-Occupation' definition would require her to be unable to perform any occupation for which she is reasonably suited by education, training, or experience, which would likely exclude her from benefits since she can still teach and consult. Partial and Residual Disability typically provide benefits for a reduced income due to an inability to perform some, but not all, duties, or a reduced capacity to work, but the question implies total inability for her specific, primary role.
Question 14 (Chapter 6)
Michael purchases a long-term disability income policy in Texas with a 90-day elimination period. He becomes totally disabled due to an accident on July 1st. Assuming his policy's benefit period is 5 years, when will Michael begin receiving benefits from his disability policy?
- A) Immediately on July 1st
- B) On September 29th
- C) On October 1st
- D) After 5 years, when the benefit period ends
Show answer & explanation
Answer: B
The elimination period (also known as the waiting period) is the time an insured must be disabled before benefits begin. With a 90-day elimination period starting on July 1st, benefits will begin on the 91st day of disability. Counting 90 days from July 1st (July has 31 days, August has 31 days, September has 30 days), July 1st + 90 days = September 29th. The benefit period dictates how long benefits will be paid, not when they start.
Question 15 (Chapter 6)
During a severe industrial accident, John tragically loses his life. His Accidental Death and Dismemberment (AD&D) policy has a Principal Sum of $200,000 and a Capital Sum of $100,000. How much will John's beneficiary receive from this policy?
- A) $100,000
- B) $200,000
- C) $300,000
- D) Nothing, as it's not a life insurance policy
Show answer & explanation
Answer: B
In an Accidental Death and Dismemberment (AD&D) policy, the Principal Sum is paid upon accidental death or the loss of two limbs or the sight of both eyes. The Capital Sum is typically a percentage of the Principal Sum and is paid for the accidental loss of one limb or the sight of one eye. Since John lost his life, his beneficiary will receive the full Principal Sum of $200,000.
Question 16 (Chapter 6)
An elderly Texan, Martha, has a Long-Term Care (LTC) insurance policy. She recently suffered a stroke and is now unable to bathe, dress, or feed herself without assistance. These inabilities are crucial because they directly trigger her LTC policy benefits. What are these fundamental personal care tasks commonly referred to in LTC insurance?
- A) Instrumental Activities of Daily Living (IADLs)
- B) Activities of Daily Living (ADLs)
- C) Essential Life Functions (ELFs)
- D) Cognitive Impairment Indicators (CIIs)
Show answer & explanation
Answer: B
The fundamental personal care tasks like bathing, dressing, eating, toileting, transferring, and continence are known as Activities of Daily Living (ADLs). Inability to perform a certain number of ADLs (typically two or more) is a common trigger for Long-Term Care insurance benefits. Instrumental Activities of Daily Living (IADLs) are more complex tasks like managing finances or preparing meals, which are often not direct benefit triggers but indicate a need for care. Cognitive Impairment is another common benefit trigger, but it refers to a decline in mental capacity, not physical tasks.
Question 17 (Chapter 6)
Mr. Henderson, a Texas resident, has an LTC policy with a 60-day elimination period and a 3-year benefit period. He requires full-time skilled nursing care starting January 1st. Assuming his care costs $6,000 per month, how much will his LTC policy pay in total for his care, assuming he remains eligible for the full benefit period?
- A) $216,000
- B) $204,000
- C) $180,000
- D) $198,000
Show answer & explanation
Answer: A
The 60-day elimination period is a waiting period during which Mr. Henderson pays out-of-pocket and no benefits accrue — but the elimination period is NOT subtracted from the benefit period. After the elimination period is satisfied, the 3-year (36-month) benefit period begins and runs for its full stated length. Total payout = 36 months × $6,000 = $216,000. The common trap (Option B, $204,000) incorrectly subtracts the 2-month elimination from the benefit period; this is contrary to standard LTC contract construction (see Q36 for the same convention applied correctly).
Question 18 (Chapter 6)
Mary turned 65 and enrolled in Medicare Part A and Part B last month. She is now considering purchasing a Medicare Supplement (Medigap) policy to cover some of her out-of-pocket costs. According to federal law and Texas regulations, what is the most advantageous time for Mary to purchase a Medigap policy to ensure she cannot be denied coverage or charged more due to her health status?
- A) Anytime within the first 6 months after her 65th birthday.
- B) During her Medigap Open Enrollment Period, which begins the first month she is 65 or older and enrolled in Medicare Part B.
- C) Only during the annual Medicare General Enrollment Period (January 1 - March 31).
- D) Whenever she experiences a qualifying life event, such as moving to a new state.
Show answer & explanation
Answer: B
The most advantageous time for Mary to purchase a Medigap policy is during her Medigap Open Enrollment Period. This period lasts for 6 months and begins the first month she is 65 or older and enrolled in Medicare Part B. During this period, insurers must sell her a Medigap policy, cannot deny coverage due to pre-existing conditions, and cannot charge higher premiums based on health. While certain guaranteed issue rights exist outside this period for specific situations (like losing employer coverage), the Open Enrollment Period is the primary window for guaranteed issue regardless of health.
The Health Insurance Mistakes That Cost Marks
Applying coinsurance to the full bill. Coinsurance starts after the deductible, on what is left. Running 80/20 across the whole amount gives a number that is always among the choices.
Forgetting the out-of-pocket maximum stops the bleeding. Once the insured reaches it, covered expenses are paid in full for the rest of the year. Large-loss questions are built to punish anyone who keeps applying the coinsurance.
Reading 'any occupation' as 'own occupation'. A surgeon who can still teach is disabled under an own-occupation definition and usually not under an any-occupation one. The scenario always tells you what else the person can still do, and that detail is the question.
Confusing the elimination period with the benefit period. The elimination period is the wait before benefits start; the benefit period is how long they last. Long-term care questions give you both numbers and only one of them answers what was asked.
All nine chapters are audio lessons as well — chapter 1 is free, no signup. For the life half of the exam, the 18 life policy types questions cover the other heaviest block, and the 25-question sample set spreads across all eight content areas.
Question counts and content weighting come from the Pearson VUE Texas examination content outline. Read September 2026.
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