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Free Life and Health Insurance Practice Test
Practice the national Life & Health topics with a free short test. Get an explanation after every answer and a score at the end, then continue with the insurance rules for your state.
2,180 published questions in this practice collection. The short set below samples different topics; it does not reproduce a state exam’s weighting.
Try a free 12-question Life & Health Insurance practice set
National insurance topics, with explanations after each answer. No signup or timer.
What this life and health insurance practice test covers
Review both sides of the exam, from life policies and annuities to medical expense, disability and long-term care. Use your state’s current outline to decide how much time to spend on each area.
Practice questions with answers and explanations
Use these worked examples to review the reasoning after your test. Each explanation covers the correct answer, the other options and a memory hook.
The federal statute at 18 USC Section 1033 is intended to:
- A. Require all insurance producers to pass a federal licensing exam
- B. Bar certain persons convicted of felonies involving dishonesty or breach of trust from participating in the insurance industry
- C. Regulate the sale of Medicare supplement policies
- D. Replace state insurance licensing with federal licensing
Answer: B. Bar certain persons convicted of felonies involving dishonesty or breach of trust from participating in the insurance industry
Why B is correct
18 USC Section 1033 prohibits individuals convicted of felonies involving dishonesty or breach of trust from engaging in the insurance business without the permission of a state insurance regulator; Section 1034 provides penalties for violations. It complements state licensing by adding a federal criminal bar, protecting policyholders from persons whose criminal histories indicate they cannot be trusted in the industry. State and federal requirements operate together.
Why the other options are wrong
- A) 18 USC 1033 creates a criminal bar, not a federal licensing examination requirement.
- C) Medicare supplement sales are regulated by CMS rules and state law, not by Section 1033.
- D) The statute supplements, rather than replaces, state licensing.
Memory hook
Federal bouncer: convicted of a dishonesty felony? You are out of the insurance business.
A critical illness accelerated benefit rider differs from a terminal illness accelerated benefit rider primarily in that it:
- A. Pays upon the diagnosis of specified critical illnesses, such as cancer or a heart attack, rather than only when death is imminent
- B. Pays the entire death benefit without reducing the remaining coverage
- C. Is available only on group life policies
- D. Carries no premium
Answer: A. Pays upon the diagnosis of specified critical illnesses, such as cancer or a heart attack, rather than only when death is imminent
Why A is correct
A critical illness rider accelerates a portion of the death benefit when the insured is diagnosed with one of the listed critical conditions, such as cancer, heart attack, stroke, or kidney failure. A terminal illness rider, by contrast, requires a terminal prognosis with a limited life expectancy. Both riders reduce the death benefit remaining for the beneficiary, and both typically pay a lump sum. The critical illness rider is broader in trigger because it pays upon diagnosis rather than waiting for a terminal condition. The list of covered illnesses is defined in the rider at issue.
Why the other options are wrong
- Both types of riders reduce the remaining death benefit by the amount accelerated; neither pays the full benefit without reduction.
- Critical illness accelerated benefits are available on individual policies as well as group policies, not group-only.
- These riders carry a premium charge for the additional benefit; they are not free.
Memory hook
Critical illness pays on the diagnosis; terminal illness waits for the prognosis.
An insured policyowner absolutely assigns her life insurance policy to a lender as part of a business arrangement. Under an absolute assignment, which statement is correct?
- A. The assignee receives full ownership rights, including the right to name and change the beneficiary
- B. The assignment is effective only for the amount of the outstanding loan
- C. The original owner retains the right to change the beneficiary until the loan is repaid
- D. The current beneficiary's written consent is required for the assignment to be valid
Answer: A. The assignee receives full ownership rights, including the right to name and change the beneficiary
Why A is correct
An absolute assignment transfers all ownership rights in the life insurance policy to the assignee, including the rights to change the beneficiary, borrow against or surrender the cash value, and control the contract. This is different from a collateral assignment, which transfers only enough rights to secure a debt, leaving the owner with control over the balance of the policy. Because the absolute assignee steps into the owner's shoes, the previous owner no longer holds the right to change the beneficiary, and no beneficiary consent is required for the transfer. The assignee becomes the new owner for all purposes, so any later beneficiary changes are directed by the assignee.
Why the other options are wrong
- B) Limiting the assignee's rights to the amount of the outstanding loan is the hallmark of a collateral assignment, which transfers only a security interest to protect the creditor. An absolute assignment, in contrast, conveys the entire ownership interest in the policy without limiting the assignee to the size of the debt.
- C) Retaining the beneficiary-change right until the loan is repaid describes a collateral assignment, under which the debtor keeps ownership control over the policy. Under an absolute assignment, the original owner surrenders all rights, including the beneficiary power, immediately and permanently.
- D) A beneficiary's consent is not required to assign a life insurance policy. Consent requirements arise only when an irrevocable beneficiary designation is being changed, because that beneficiary holds a vested interest, which is a different situation from an assignment made by the owner.
Memory hook
Absolute = hand over the whole policy. Collateral = only the security interest.
In an annuity contract, the period during which premium payments are made and funds accumulate is called the:
- A. Accumulation (pay-in) phase
- B. Annuitization (pay-out) phase
- C. Free-look period
- D. Elimination period
Answer: A. Accumulation (pay-in) phase
Why A is correct
An annuity has two phases: the accumulation phase, during which the owner pays premiums (single or periodic) and the account grows tax-deferred, and the annuitization (distribution) phase, when the insurer makes income payments to the annuitant. Money grows tax-deferred during accumulation and is taxed under the exclusion ratio when distributed.
Why the other options are wrong
- B) The annuitization phase is the payout phase, after accumulation ends.
- C) The free-look period is the short statutory right to cancel a policy after delivery — not a contract phase.
- D) The elimination period is a disability insurance waiting period, unrelated to annuities.
Memory hook
Accumulation = the savings phase (money in). Annuitization = the income phase (money out). Build the pile, then convert it to a paycheck.
Add your state’s insurance exam preparation
National practice is one part of preparation. Find your state’s exam guide, official sources and available state-law questions.
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Frequently asked questions
Is this insurance practice test free?
Yes. This short test, its score and all answer explanations are free. No signup or payment is required.
Does this include my state’s insurance laws?
This page practices national concepts only. Choose your state below for exam requirements and state-law practice. State exam formats and passing scores differ.
Is this a full-length licensing exam?
No. This is a 12-question learning exercise, not a full-length exam or a prediction of passing. It uses original study questions rather than official exam questions.
Can I practice life insurance separately?
Yes. Our life insurance practice test focuses on life policies, beneficiaries, annuities and taxation. Use the combined test when preparing for both life and health topics.
What should I study after seeing my score?
Review every incorrect or guessed answer, explain why the other options do not fit, then practice the related topic. Add your state’s current content outline and state-law questions before planning a full exam simulation.
Sources and question review
For context on national practice and state-specific requirements, see Pearson VUE’s life insurance practice overview and Prometric’s insurance practice guidance. These providers do not endorse PassSprint or supply our questions.
Read how our AI-assisted questions are produced and checked. Individual question pages show their verification status and provide a correction link.