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ExamFX Life and Health Insurance Exam Prep 2025 | Study
Guide, Practice Questions, and Licensing Test Simulation
Prepare for your ExamFX Life and Health Insurance Exam with this 2025 updated guide.
Covers life insurance basics, annuities, health policy provisions, underwriting, ethics, and state
regulations. Includes ExamFX-style questions, rationales, and test strategies to help you pass
your insurance licensing exam on the first try.
• ExamFX Life and Health Exam 2025
• Life and Health Insurance licensing exam
• ExamFX Life and Health practice test
• Life and Health Insurance pre-licensing exam
What happens to the death penalty and premium in a 10-year level term $100,000 policy? - ANSWER-
Premium stays the same and the death penalty will be the same no matter when the insured dies
If the policy renews after 10 years, the premium will be based on the insured's attained age
What happens in the annually renewable term? (ART) - ANSWER-Premiums stay level for a year and then
the policy must be renewed. Usually is guaranteed to be renewable without proof of insurability, but the
premium increases due to attained age
What happens in a decreasing term policy? - ANSWER-A level premium and a death benefit that
decreases each year over the duration of the policy term
Usually used when the amount of needed protection is time sensitive or decreases over time
Usually convertible, but usually not renewable since the death benefit is $0 at the end of the policy term
,2|Page
What is a decreasing term policy usually used for? - ANSWER-Commonly used to insure the payment of a
mortgage or other debts if the insured dies prematurely
Amount of coverage decreases as the outstanding load balance decreases
What is a return of premium life insurance policy? (ROP) - ANSWER-Increasing term insurance policy that
pays an additional death benefit to the beneficiary equal to the amount of the premiums paid
ROP is paid if the death occurs within a specified period of time or if the insured outlives the policy term
How is a Return of Premium life insurance policy structured differently? - ANSWER-Structured to
consider the low risk factor of a term policy but at a significant increase in premium cost
Traditional policies offer low-cost, simple death benefit for a specified term but no investment
component or cash value= term expires and you have no coverage
What does it mean if a policy is renewable? - ANSWER-Allows the policyowner the right to renew the
coverage at the expiration date without evidence of insurability
What is the definition of a unilateral contract? - ANSWER-One-sided: only one party makes an
enforceable promise
Insurance is the transfer of - ANSWER-Risk, not loss apparently
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? -
ANSWER-$2,500
What provides an underwriter with information concerning an applicant's health history? - ANSWER-The
Medical Information Bureau
A medical exam provides info on current health
If a consumer requests additional information concerning an investigative consumer report, how long
does the insurer or reporting agency have to comply? - ANSWER-5 days
,3|Page
What is term insurance? - ANSWER-Temporary protection because it only provides coverage for a
specific period of time.
"Pure life insurance"
Provide the greatest amount of coverage for the lowest premium
Usually a max age above which coverage will not be offered or renewed
No cash value or other living benefits and if an insured dies during term, the policy pays the death
benefit to the beneficiary
What are the three basic types of term coverage available? - ANSWER-Level, increasing, and decreasing
What fluctuates in the different types of term coverage? - ANSWER-Regardless of the type of term, the
premium stays level throughout the term of the policy. Only the amount of the death benefit may
fluctuate, depending on the type of term insurance
What happens in a Level term insurance policy? - ANSWER-The death benefit does not change
throughout the life of the policy
Most common type of temporary protection used
What does it mean if a policy is convertible? - ANSWER-The policyholder has the right to convert the
policy to a permanent insurance policy without evidence of insurability
Premium based on attained age at time of conversion
What is permanent life insurance? - ANSWER-General term for various forms of life insurance that build
cash value and remain in effect for the entire life (or 100) of the insured as long as premium is paid
What is the most common type of permanent life insurance? - ANSWER-Whole life insurance
What is whole life insurance? - ANSWER-A type of permanent life insurance
Provides lifetime protection and includes a savings element
Endows at insured's age 100= the cash value created by the accumulation of premium is scheduled to
equal the face amount of the policy at age 100
, 4|Page
premiums for whole life are usually higher than for term policies
What are the key characteristics of whole life insurance? - ANSWER-Level premium throughout whole
policy, death benefit is guaranteed and remains level, cash value increases as the accumulation of
premium increases and has a guaranteed interest rate, and the policyowner can borrow against the cash
value
What is straight life policy? - ANSWER-Pays premium until death or age 100
Has the lowest annual premium of common whole life policies
What are limited-pay policies? - ANSWER-Whole life policies designed so that the premiums for coverage
will be completely paid-up will before age 100
Common version is a 20-pay life where coverage is completely paid for in 20 years, or 65-pay life
Shorter premium paying period so the annual premium will be higher
What is single premium whole life insurance policy? (SPWL) - ANSWER-Whole life insurance provides
level death benefits until insured's death or age 100
Completely paid up after one premium and generates immediate cash
What is adjustable life insurance? - ANSWER-Provides the policyowner with the best of both worlds
(term and permanent coverage)
Insured determines how much coverage is needed and the premium, the insurer decides what policy
type to use
Always adjustable and convertible
What is universal life insurance? - ANSWER-also known as flexible premium adjustable life
Has flexibility to increase and decrease premium paid, can even skip a payment if the policy has enough
cash value to cover payment
Also allows owners to withdraw money from the policy, but usually limits
What is Option A of universal life insurance? - ANSWER-Death benefit remains level while the cash value
increases
ExamFX Life and Health Insurance Exam Prep 2025 | Study
Guide, Practice Questions, and Licensing Test Simulation
Prepare for your ExamFX Life and Health Insurance Exam with this 2025 updated guide.
Covers life insurance basics, annuities, health policy provisions, underwriting, ethics, and state
regulations. Includes ExamFX-style questions, rationales, and test strategies to help you pass
your insurance licensing exam on the first try.
• ExamFX Life and Health Exam 2025
• Life and Health Insurance licensing exam
• ExamFX Life and Health practice test
• Life and Health Insurance pre-licensing exam
What happens to the death penalty and premium in a 10-year level term $100,000 policy? - ANSWER-
Premium stays the same and the death penalty will be the same no matter when the insured dies
If the policy renews after 10 years, the premium will be based on the insured's attained age
What happens in the annually renewable term? (ART) - ANSWER-Premiums stay level for a year and then
the policy must be renewed. Usually is guaranteed to be renewable without proof of insurability, but the
premium increases due to attained age
What happens in a decreasing term policy? - ANSWER-A level premium and a death benefit that
decreases each year over the duration of the policy term
Usually used when the amount of needed protection is time sensitive or decreases over time
Usually convertible, but usually not renewable since the death benefit is $0 at the end of the policy term
,2|Page
What is a decreasing term policy usually used for? - ANSWER-Commonly used to insure the payment of a
mortgage or other debts if the insured dies prematurely
Amount of coverage decreases as the outstanding load balance decreases
What is a return of premium life insurance policy? (ROP) - ANSWER-Increasing term insurance policy that
pays an additional death benefit to the beneficiary equal to the amount of the premiums paid
ROP is paid if the death occurs within a specified period of time or if the insured outlives the policy term
How is a Return of Premium life insurance policy structured differently? - ANSWER-Structured to
consider the low risk factor of a term policy but at a significant increase in premium cost
Traditional policies offer low-cost, simple death benefit for a specified term but no investment
component or cash value= term expires and you have no coverage
What does it mean if a policy is renewable? - ANSWER-Allows the policyowner the right to renew the
coverage at the expiration date without evidence of insurability
What is the definition of a unilateral contract? - ANSWER-One-sided: only one party makes an
enforceable promise
Insurance is the transfer of - ANSWER-Risk, not loss apparently
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? -
ANSWER-$2,500
What provides an underwriter with information concerning an applicant's health history? - ANSWER-The
Medical Information Bureau
A medical exam provides info on current health
If a consumer requests additional information concerning an investigative consumer report, how long
does the insurer or reporting agency have to comply? - ANSWER-5 days
,3|Page
What is term insurance? - ANSWER-Temporary protection because it only provides coverage for a
specific period of time.
"Pure life insurance"
Provide the greatest amount of coverage for the lowest premium
Usually a max age above which coverage will not be offered or renewed
No cash value or other living benefits and if an insured dies during term, the policy pays the death
benefit to the beneficiary
What are the three basic types of term coverage available? - ANSWER-Level, increasing, and decreasing
What fluctuates in the different types of term coverage? - ANSWER-Regardless of the type of term, the
premium stays level throughout the term of the policy. Only the amount of the death benefit may
fluctuate, depending on the type of term insurance
What happens in a Level term insurance policy? - ANSWER-The death benefit does not change
throughout the life of the policy
Most common type of temporary protection used
What does it mean if a policy is convertible? - ANSWER-The policyholder has the right to convert the
policy to a permanent insurance policy without evidence of insurability
Premium based on attained age at time of conversion
What is permanent life insurance? - ANSWER-General term for various forms of life insurance that build
cash value and remain in effect for the entire life (or 100) of the insured as long as premium is paid
What is the most common type of permanent life insurance? - ANSWER-Whole life insurance
What is whole life insurance? - ANSWER-A type of permanent life insurance
Provides lifetime protection and includes a savings element
Endows at insured's age 100= the cash value created by the accumulation of premium is scheduled to
equal the face amount of the policy at age 100
, 4|Page
premiums for whole life are usually higher than for term policies
What are the key characteristics of whole life insurance? - ANSWER-Level premium throughout whole
policy, death benefit is guaranteed and remains level, cash value increases as the accumulation of
premium increases and has a guaranteed interest rate, and the policyowner can borrow against the cash
value
What is straight life policy? - ANSWER-Pays premium until death or age 100
Has the lowest annual premium of common whole life policies
What are limited-pay policies? - ANSWER-Whole life policies designed so that the premiums for coverage
will be completely paid-up will before age 100
Common version is a 20-pay life where coverage is completely paid for in 20 years, or 65-pay life
Shorter premium paying period so the annual premium will be higher
What is single premium whole life insurance policy? (SPWL) - ANSWER-Whole life insurance provides
level death benefits until insured's death or age 100
Completely paid up after one premium and generates immediate cash
What is adjustable life insurance? - ANSWER-Provides the policyowner with the best of both worlds
(term and permanent coverage)
Insured determines how much coverage is needed and the premium, the insurer decides what policy
type to use
Always adjustable and convertible
What is universal life insurance? - ANSWER-also known as flexible premium adjustable life
Has flexibility to increase and decrease premium paid, can even skip a payment if the policy has enough
cash value to cover payment
Also allows owners to withdraw money from the policy, but usually limits
What is Option A of universal life insurance? - ANSWER-Death benefit remains level while the cash value
increases
