LIFE INSURANCE EXAM 2026 – COMPREHENSIVE STUDY GUIDE WITH PRACTICE
QUESTIONS, EXPLANATIONS & VERIFIED ANSWERS
The Commissioner conducts an examination of a domestic insurer and believes that the costs of
examination places an unreasonable financial burden on the insurer. Which of the following will
happen?
a. The federal government will absorb the full cost
b. The federal government will absorb part of the cost, and the state government will absorb the rest of
the cost
c. The costs will be reduced to the amount that the examinee can reasonable pat; the rest will be paid
by the federal government
d. The Commissioner's office may pay all or part of the costs - (answers)d. The Commissioner's office
may pay all or part of the costs
Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as
a. Defamation
b. Coercion
c. Rebating
D. Misleading advertising - (answers)b. Coercion
An agent who includes a statement or omits a statement which, when taken in context of the whole
presentation, may tend to mislead or deceive the persons addressed has committed
a. Twisting
b. Coercion
c. Misrepresentation
d. Defamation - (answers)c. Misrepresentation
If a consumer requests additional information concerning an investigative consumer report, how long
does the insurer or reporting agency have to comply?
,a. 7 days
b. 10 days
c. 3 days
d. 5 days - (answers)d. 5 days
After the original hearing and a final order is issued, an aggrieved person may request a re-hearing
within
a. 30 days
b. 40 days
c. 15 days
d. 20 days - (answers)20 days
Which of the following is an example of a producer being involved in an unfair trade practice of
rebating?
a. Telling a client that his first premium will be waived if he purchases the insurance policy today
b. Inducing the insured to drop a policy in favor of another one when it is not the insured's best interest
c. Charging a client a higher premium for the same policy as another client in the same insuring class
d. Making deceptive statements about a competitor - (answers)a. Telling a client that his first premium
will be waived if he purchases the insurance policy today
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or
switch policies from one to another?
a. False advertising
b. Rebating
c. Twisting
d. Switching - (answers)c. Twisting
,An insurer can refuse, cancel or deny insurance coverage to a class of risks based on which of the
following?
a. Moral character
b. Physical condition or developmental disability
c. Sexual preference
d. None of the above - (answers)d. None of the above
If a person does not comply with an order issued within 2 weeks after the Commissioner has given
notice, for each day that the violation continues, the Commissioner may issue a fine of up to
a. $3,000
b. $5,000
c. $1,500
d. $2,000 - (answers)b. $5,000
Which of the following persons is NOT required to complete CE?
a. A property insurance intermediary with 40 years of continuous licensure
b. Any licensee over 65 with more than 25 years of continuous licensure
c. A limited lines intermediary with 40 years of continuous licensure
d. A life insurance intermediary with 18 years of continuous licensure - (answers)c. A limited lines
intermediary with 40 years of continuous licensure
An intermediary must notify the Commissioner of a change of residence address within how many days
of the change?
a. 20
b. 30
c. 5
d. 10 - (answers)b. 30
, A claim is not considered overdue if NOT paid within how many days after the insurer receives written
notice?
a. 30 days
b. 60 days
c. 90 days
d. 180 days - (answers)a. 30 days
In comparison to consumer reports, which of the following describes a unique characteristic of
investigative consumer reports?
a. The customer has no knowledge of this action
b. The customer's associates, friends, and neighbors provide the report's data
c. They provide additional information from an outside source about a particular risk
d. They provide information about a customer's character and reputation - (answers)b. The customer's
associates, friends, and neighbors provide the report's data
When the appointment of an individual agent is terminated, the insurer must notify the Office of the
Commissioner with appropriate forms within how many days after the termination date?
a. 20
b. 30
c. 10
d. 15 - (answers)b. 30
All of the following are considered unfair trade practices in the business of insurance EXCEPT
a. Rebating
b. Defamation
c. Sharing commissions
QUESTIONS, EXPLANATIONS & VERIFIED ANSWERS
The Commissioner conducts an examination of a domestic insurer and believes that the costs of
examination places an unreasonable financial burden on the insurer. Which of the following will
happen?
a. The federal government will absorb the full cost
b. The federal government will absorb part of the cost, and the state government will absorb the rest of
the cost
c. The costs will be reduced to the amount that the examinee can reasonable pat; the rest will be paid
by the federal government
d. The Commissioner's office may pay all or part of the costs - (answers)d. The Commissioner's office
may pay all or part of the costs
Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as
a. Defamation
b. Coercion
c. Rebating
D. Misleading advertising - (answers)b. Coercion
An agent who includes a statement or omits a statement which, when taken in context of the whole
presentation, may tend to mislead or deceive the persons addressed has committed
a. Twisting
b. Coercion
c. Misrepresentation
d. Defamation - (answers)c. Misrepresentation
If a consumer requests additional information concerning an investigative consumer report, how long
does the insurer or reporting agency have to comply?
,a. 7 days
b. 10 days
c. 3 days
d. 5 days - (answers)d. 5 days
After the original hearing and a final order is issued, an aggrieved person may request a re-hearing
within
a. 30 days
b. 40 days
c. 15 days
d. 20 days - (answers)20 days
Which of the following is an example of a producer being involved in an unfair trade practice of
rebating?
a. Telling a client that his first premium will be waived if he purchases the insurance policy today
b. Inducing the insured to drop a policy in favor of another one when it is not the insured's best interest
c. Charging a client a higher premium for the same policy as another client in the same insuring class
d. Making deceptive statements about a competitor - (answers)a. Telling a client that his first premium
will be waived if he purchases the insurance policy today
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or
switch policies from one to another?
a. False advertising
b. Rebating
c. Twisting
d. Switching - (answers)c. Twisting
,An insurer can refuse, cancel or deny insurance coverage to a class of risks based on which of the
following?
a. Moral character
b. Physical condition or developmental disability
c. Sexual preference
d. None of the above - (answers)d. None of the above
If a person does not comply with an order issued within 2 weeks after the Commissioner has given
notice, for each day that the violation continues, the Commissioner may issue a fine of up to
a. $3,000
b. $5,000
c. $1,500
d. $2,000 - (answers)b. $5,000
Which of the following persons is NOT required to complete CE?
a. A property insurance intermediary with 40 years of continuous licensure
b. Any licensee over 65 with more than 25 years of continuous licensure
c. A limited lines intermediary with 40 years of continuous licensure
d. A life insurance intermediary with 18 years of continuous licensure - (answers)c. A limited lines
intermediary with 40 years of continuous licensure
An intermediary must notify the Commissioner of a change of residence address within how many days
of the change?
a. 20
b. 30
c. 5
d. 10 - (answers)b. 30
, A claim is not considered overdue if NOT paid within how many days after the insurer receives written
notice?
a. 30 days
b. 60 days
c. 90 days
d. 180 days - (answers)a. 30 days
In comparison to consumer reports, which of the following describes a unique characteristic of
investigative consumer reports?
a. The customer has no knowledge of this action
b. The customer's associates, friends, and neighbors provide the report's data
c. They provide additional information from an outside source about a particular risk
d. They provide information about a customer's character and reputation - (answers)b. The customer's
associates, friends, and neighbors provide the report's data
When the appointment of an individual agent is terminated, the insurer must notify the Office of the
Commissioner with appropriate forms within how many days after the termination date?
a. 20
b. 30
c. 10
d. 15 - (answers)b. 30
All of the following are considered unfair trade practices in the business of insurance EXCEPT
a. Rebating
b. Defamation
c. Sharing commissions
