Life and Health Insurance Agent Licensing Practice Exam

Take this free practice test to get an idea of what is on your state's life and health insurance agent licensing exam.

As an insurance agent, one is allowed to offer many different lines of coverage – provided that the required training and testing qualifications have been met. Those who wish to sell life and health insurance are required to posses the proper licensing for each state in which they conduct business. In order to obtain a life and health insurance license, individuals must take and successfully pass an exam that is offered by the state licensing boards.

To prepare for your licensing exam, use the full-length Life & Health Insurance Agent Practice Exam with answers fully explained for ideal study. 

The practice exam is written by Susan Wright, CLU, ChFC, RHU, REBC, CSA, CLTC, CCFC, CSS, who has over 20 years of experience in the insurance industry.

The following practice exam is a sample from the full-length test.  

General Life Insurance Basics, Insurable Interest, Parties and Regulations

1. All of the following are parties to a life insurance contract EXCEPT:
  1. Insurer
  2. Underwriter
  3. Beneficiary
  4. Owner
  5. Insured
2. Which of the following will have to meet an insurable interest requirement in order for a policy to issue?

Types of Life Insurance Policies and Individual versus Group Life Insurance

3. Jack and his wife Lyn just purchased a home with a 15-year mortgage. Wanting to make sure that Lyn would be able to pay off the mortgage balance in the event of Jack's death, Jack had a "temporary" need for life insurance. What type of policy should Jack purchase?
4. Which type of life insurance is considered to be more risky based on its investment component?

Life Insurance Application and Underwriting

5. Life insurance underwriters look at a variety of factors when determining the acceptance of an applicant. These factors can include:
Life and Health Insurance Practice Exam
6. Which of the following needs to have an insurable interest for an underwriter to issue an insurance policy?

Selling Life Insurance, Determining Coverage Needs and Issuance and Delivery

7. Which of the following deals with a set of relationships where one person is authorized to act on behalf of another in order to create a legal relationship with a third party.
8. All of the following can be considered life-changing events that could result in a change in the amount of life insurance coverage needed EXCEPT:

I. Birth of a child
II. Divorce
III. Marriage
IV. Change in job title
 

Life Insurance for Business Owners and in Estate Planning

9. Term life insurance should always be used in buy / sell agreements.
10. Corporate owned life insurance proceeds may be used for the following purposes:

I. To find, replace, and train a new employee or executive
II. To fund other corporate debt obligations
III. To redeem the deceased employee's stock

 

Policy Components, Riders and Non-forfeiture Options

11. What is the most common component in all life insurance policies?
12. Permanent life insurance policies always have two components. What are they?

I. Death benefit
II. Cash value
III. Living Benefits
IV. Conversion Benefit

 

Claims, Settlement Options and Tax Concepts

13. A beneficiary on a life insurance policy will receive what value upon the death of the insured?
14. John, who had a life insurance policy with a death benefit, died on August 31st, after a long bought with cancer. He had been hospitalized for a month before his death. His wife contacted the insurance company to file her claim for the death benefit on September 5th, after John's burial, and after she had time to collect her emotions to deal with her personal loss. The insurance agent filed the papers to process the claim with his supervisor, and the death benefit was settled on October 30th. Were any laws violated in this scenario?

Living Benefits and Viatical and Life Settlements

15. Which of the following is a rider that allows a terminally ill person to access at least a portion of the death benefit proceeds prior to death?
16. Living benefits on a life insurance policy can be typically be accessed via:

General Health Insurance Basics, Regulation and Social Health Insurance

17. The insured party has no part in determining the wording of an insurance contract. In this respect, insurance contracts are considered to be __________.
18. A(n) __________ in an insurance contract is a statement by the issuing insurance company that sets out the essential element of insurance - to pay for losses covered in the policy.

Types of Health Insurance Policies and HMO and PPO

19. Which of the following is not a form of health insurance?

I. Dental insurance
II. Vision insurance
III. Disability insurance
IV. Long-term care insurance

 
20. A business client is looking for ways to decrease its monthly premiums. To get down to the premium level sought after by the company, the agent realizes they have to go to a high deductible health plan. As part of your advice to the business, what should you include in your discussion?

Health Insurance Policy Components and Exclusions

21. The components of a long-term care insurance policy include all of the following EXCEPT:
22. When constructing a major medical insurance policy, several criteria must be established, including:

Selling Health Insurance, Issuance and Delivery and Tax Considerations

23. As a marketing tool, Ted, a health insurance agent, offered to send an applicant and his wife on a weekend vacation to a local resort to induce the applicant to purchase a policy. Is this practice permitted and, if not, what is it called?
24. An agent is in need of generating business. He gets an idea of asking his client to let his policy lapse so that the agent can sell him a new similar policy. Is this permissible and, if not, what is this action called?

Deductibles and Copayments

25. A __________ is the amount that an insured person is expected to pay for a medical expense at the time of the visit.
26. The "deductible" in a long-term care insurance policy is referred to as the __________.

Health Insurance Claims and Indemnity vs. Reimbursement

27. On a health insurance claim form, the exact procedures that were performed for the insured are represented by standard codes that are referred to as __________.
28. What type of notice is used to show all of the services or supplies that were billed to Medicare during a 3-month period, what Medicare paid, and what the patient may owe the provider?

Disability and Related Insurance and Seniors and Special Needs Individuals

29. As a professional surgeon, which type of disability coverage would offer the most liberal definition of benefits triggers for the policy holder in terms of benefit receipt if the insured were to break their hand?
30. Social Security should be considered one's primary source of disability income coverage.