Free Life & Health Insurance Practice Questions 2026: 400+ Exam Questions

Key Facts

• The Life and Health insurance exam is state-specific: each state Department of Insurance sets its own question count, vendor, and passing score.
• California's combined Life, Accident and Health exam has 150 questions, while its single-line Life and Accident & Health exams have 75 questions each (California Department of Insurance).
• California requires 60 percent to pass its producer license exams but 70 percent for adjuster and bail exams; Illinois uses a scaled passing score of 70.
• Illinois adds 5 unscored pretest questions to each Life and Accident and Health exam, on top of the scored questions (Pearson VUE Illinois content outlines).
• Pearson VUE and PSI administer most state insurance license exams; a few states use Prometric or run their own.
• The first $50,000 of employer-paid group term life insurance is tax-free; coverage above $50,000 creates taxable imputed income (IRC Section 79).
• Medicare Part A coinsurance for hospital days 61-90 is $434 per day in 2026, up from $419 in 2025 (CMS).
• Doctors who do not accept Medicare assignment may charge up to 15% above the Medicare-approved amount, called the limiting charge.
• Prelicensing education varies by state: Illinois requires 20 hours per line, while California repealed its 20-hour course in 2026 but still requires 12 hours of ethics and code.

Why Life & Health Insurance Agents Need Solid Exam Prep

The life and health insurance exam is your gateway to a rewarding career in insurance. Each state runs its own exam and sets its own passing standard, so proper preparation is essential.

Our free practice questions help you:

• Master life insurance products and provisions
• Understand health insurance plans and Medicare
• Learn annuity taxation and features
• Navigate state regulations and ethics
• Life & Health Exam Format (2026)

Everything about the Life & Health exam varies by state - there is no single national test. Each state's Department of Insurance sets its own question count, time limit, passing score, and contracted testing vendor. The table below shows the most common ranges; always confirm your state's exact outline with its DOI (find yours through the NAIC state insurance department directory ) or testing provider.

Component Details (varies by state)

Total Questions California: 150 on the combined Life, Accident and Health exam, 75 on each single-line exam; Illinois Life: 50 scored general + 31 scored state questions

Pretest Questions Some states add unscored pretest items (Illinois: 5 per exam) that do not count toward your score

Time Limit California combined exam: 195 minutes in the PSI bulletin; Illinois Life: 75 minutes general + 50 minutes state

Passing Score California 60%; Illinois scaled score of 70

Topics Life basics, annuities, health insurance, disability income, Medicare/Medicaid, plus a state law portion

• Format Multiple choice, computer-based
• Testing Vendor Pearson VUE or PSI in most states; a few use Prometric or run their own exam

Prelicensing Hours Varies by state (Illinois: 20 hours per line; California: 12 hours of ethics and code since January 1, 2026; Pennsylvania: none since April 29, 2025)

Because the exam is state-specific, the vendor and the state-law section change depending on where you license. The core insurance concepts - the material in the practice questions below - are tested nationwide, so they are the highest-value thing to master first.

• Sample Practice Questions by Topic
• Life Insurance Principles

Question 1: Which type of life insurance provides coverage for a specific period of time?

• A) Whole life
• B) Term life
• C) Universal life
• D) Variable life

Answer: B - Term life insurance provides coverage for a specific period (10, 20, 30 years). It has no cash value and premiums are typically lower than permanent insurance.

Question 2: The incontestability clause prevents the insurer from:

• A) Canceling the policy for non-payment
• B) Denying claims after 2 years based on misrepresentations
• C) Increasing premiums after issue
• D) Changing policy terms

Answer: B - After the incontestability period (typically 2 years), the insurer generally cannot void the policy or deny claims based on misrepresentations in the application. Remaining exceptions come from state law (Illinois and California, for example, keep nonpayment of premiums but list no fraud exception).

Question 3: If an employee has $150,000 of employer-paid group term life insurance, how much coverage is subject to imputed income taxation?

• A) $0
• B) $50,000
• C) $100,000
• D) $150,000

Answer: C - The first $50,000 of employer-paid group term life is tax-free. The amount above $50,000 is subject to imputed income taxation. $150,000 - $50,000 = $100,000 is taxable.

Question 4: Which nonforfeiture option provides the longest coverage period?

• A) Cash surrender
• B) Extended term
• C) Reduced paid-up
• D) Automatic premium loan

Answer: B - Extended term uses the cash value to purchase term insurance for the full face amount for as long as possible. Reduced paid-up provides permanent but reduced coverage.

Question 5: In an IUL policy, if the linked index returns -15% for the year and the floor is 0%, the interest credited will be:

• A) -15%
• B) -7.5%
• C) 0%
• D) Whatever the cap rate is

Answer: C - The floor in an IUL policy protects against market losses. If the index returns negative, the policy credits 0% (the floor), not a negative return.

Health Insurance

Question 6: What typically happens after 24 months under a split definition disability policy?

• A) Benefits automatically end
• B) The definition changes from "own occupation" to "any occupation"
• C) Benefits increase by 50%
• D) The elimination period is extended

Answer: B - A split definition policy uses "own occupation" for the first 24 months, then transitions to "any occupation" for continued benefits.

Question 7: A patient has been in the hospital for 75 days. How much coinsurance will they pay for days 61-75 under Medicare Part A in 2026?

• A) $0
• B) $4,340 ($434 × 10 days)
• C) $6,510 ($434 × 15 days)
• D) $13,020 ($868 × 15 days)

Answer: C - For Medicare Part A, days 61-90 require $434/day coinsurance in 2026 (up from $419 in 2025). Days 61-75 = 15 days × $434 = $6,510 . Lifetime reserve days (91+) cost $868/day in 2026.

Question 8: A Medicare beneficiary sees a doctor who does not accept Medicare assignment. What is the maximum the doctor can charge above the Medicare-approved amount?

• A) 5%
• B) 10%
• C) 15%
• D) 25%

Answer: C - Doctors who don't accept assignment can charge up to 15% above the Medicare-approved amount (called the "limiting charge").

Question 9: Which Medicare supplement plan covers the Part B deductible?

• A) Plan A
• B) Plan C
• C) Plan G
• D) Plan N

Answer: B - Plan C (and Plan F for those eligible before 2020) covers the Part B deductible. Plans G and N do not cover this deductible.

Question 10: A self-employed individual pays $12,000 annually for family health insurance. Their net self-employment income is $8,000. What is their maximum self-employed health insurance deduction?

• A) $0
• B) $8,000
• C) $12,000
• D) $20,000

Answer: B - The self-employed health insurance deduction is limited to net self-employment income . Even though premiums are $12,000, the maximum deduction is $8,000 .

Annuities

Question 11: An indexed annuity with a 70% participation rate and a 10% cap experiences an index gain of 12%. What interest rate is credited?

• A) 7%
• B) 8.4%
• C) 10%
• D) 12%

Answer: B - Apply participation rate first: 12% × 70% = 8.4% . Compare to cap: 8.4% < 10%, so 8.4% is credited.

Question 12: In a deferred annuity, withdrawals before age 59½ are generally subject to:

• A) No penalty
• B) 10% penalty on earnings
• C) 20% penalty on earnings
• D) 10% penalty on entire withdrawal

Answer: B - Early withdrawals from annuities are subject to a 10% IRS penalty on earnings plus ordinary income tax. The penalty doesn't apply to the return of principal (after-tax contributions).

Question 13: Which annuity payout option provides the largest monthly payment?

• A) Life only
• B) Life with 10-year certain
• C) Life with 20-year certain
• D) Joint and survivor

Answer: A - Life only (straight life) provides the largest monthly payment because there's no guarantee period. The insurance company keeps any remaining funds if the annuitant dies early.

Question 14: A variable annuity's cash value:

• A) Is guaranteed by the insurance company
• B) Fluctuates with market performance
• C) Earns a fixed interest rate
• D) Cannot decrease below the premium paid

Answer: B - Variable annuity values fluctuate with market performance of the underlying subaccounts. Unlike fixed annuities, there's no guaranteed minimum return.

Regulations & Ethics

Question 15: An insurance producer who replaces a client's existing policy without properly comparing benefits may be guilty of:

• A) Rebating
• B) Twisting
• C) Churning
• D) Misrepresentation

Answer: B - Twisting is inducing a policyholder to replace an existing policy through misrepresentation or incomplete comparison. It's prohibited in all states.

Want more practice? Access our full question bank with 420+ free life & health practice questions →

Question 16: Which practice is permitted under insurance regulations?

• A) Rebating premiums to customers
• B) Sharing commissions with licensed agents
• C) Offering inducements not in the policy
• D) Discriminating based on genetic information

Answer: B - Sharing commissions with other licensed agents is permitted. Rebating, improper inducements, and genetic discrimination are prohibited.

• Key Exam Topics to Master
• Life Insurance Must-Know Concepts
• Term vs. permanent life insurance differences
• Nonforfeiture options : cash surrender, reduced paid-up, extended term
• Settlement options : lump sum, interest only, fixed period, life income
• Policy provisions : grace period, reinstatement, incontestability
• Health Insurance Must-Know Concepts
• Medicare Parts A, B, C, D coverage and costs
• Disability income own occupation vs. any occupation
• COBRA continuation requirements
• ACA marketplace plans and subsidies
• Annuity Must-Know Concepts
• Fixed vs. variable vs. indexed annuity differences
• Taxation of qualified vs. non-qualified annuities
• Surrender charges and free withdrawal provisions
• Death benefit options
• Study Tips for Success
• Master policy provisions - they're heavily tested
• Know Medicare inside out - Part A, B, C, D coverage and costs
• Understand annuity taxation - qualified vs. non-qualified
• Learn prohibited practices - twisting, rebating, misrepresentation
• Practice calculations - especially Medicare coinsurance
• Start Your Free Practice

Our free life and health insurance practice question bank includes 420+ questions covering all exam topics with detailed explanations - and it is genuinely free, no credit card required.

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• Resource Description
• Free Practice Questions → 420+ exam-style questions with detailed explanations
• Complete Study Guide → Full exam content covering life, health, and annuities
• Insurance Category → All insurance exam resources in one place

Start with our free practice questions, then master the content with our comprehensive study guide. With thorough preparation, you can pass your insurance license exam on the first try!