Louisiana life and health insurance Exam 2026 Study Guide Questions with 100% verified correct answers Graded A+

An insurance producer who convinces a prospective insured to purchase a policy by exaggerating the benefits of the policy may be found guilty of

• twisting

• illegal placement

• coercion

• misrepresentation

Misrepresentation

It is illegal to issue, publish, or circulate any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, the payment of dividends, etc. This also refers to oral statements. Committing this illegal act is called misrepresentation.

What happens to the coverage under a children's term rider when that child reaches a certain specified age?

• Coverage decreases automatically

• Coverage increases automatically

• Coverage remains as long as proof of insurability is provided

• Coverage is eliminated

Coverage is eliminated

When a child reaches a certain specified age under a children's term rider, he or she is eliminated from coverage.

A life insurance policy that has premiums fully paid up within a stated time period is called?

• stated payment insurance

• limited universal insurance

• stated modified insurance

• limited payment insurance

Limited Payment Insurance

Limited payment insurance is characterized by premiums that are fully paid up within a stated period, after which no further premiums are required.

Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is this?

• Increasing Term Life policy

• Nonparticipating policy

• Modified Whole Life policy

• Universal Life policy

Universal Life Policy

A permanent life insurance policy where the policyowner pays premiums for a specified number of years is called a(n)?

• adjustable policy

• limited pay policy

• level term policy

• variable universal policy

Limited Pay Policy

A permanent life insurance policy where the policyowner pays premiums for a specified number of years is called a limited pay policy.

Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true?

The policy may be paid up early by using policy dividends

A life insurance replacement transaction could result in a(n)

surrender charge

Which of the following is INELIGIBLE to participate in a Section 125 Plan?

An S-Corp Owner with a greater than 2% share

The least expensive option to pay off a 30-year mortgage balance would be?

• convertible term life

• decreasing term life

• adiustable term life

• increasing term life

Decreasing Term Life

Which type of policy combines the flexibility of a universal life policy with investment choices?

• Adiustable universal life policy

• Flexible universal life policy

• Variable universal life policy

• Modified universal life policy

Variable Universal Life Policy

When the structure and flexibility of a universal life policy are combined with investment choices, the result is a variable universal life policy.

Which of these is NOT subject to income taxation under a Modified Endowment Contract (MEC)?

• Loan against the cash value

• Policy withdrawal

• Policy dividend

• Death benefit

Death Benefit

The death benefit would NOT be subject to income tax under a Modified Endowment Contract (MEC).

A limited payment whole life policy provides?

• protection for 20 ears

• lifetime protection

• protection for more than one person

• discounted premiums

Lifetime Protection

Premiums on limited payment whole life insurance are paid for a limited number of years, but the benefits last a lifetime.

A life insurance policy written on one contract for two people in which it is payable upon the first death is called?

•Split

• Shared

• Joint

• Survivorship

Joint

A joint life insurance policy covers the lives of two people and is payable upon the first death.

What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death?

• Dual Life insurance

• Joint Life insurance

• Last Survivor Life insurance

• Shared Life insurance

Last Survivor Life Insurance

Coverage of two or more individuals with the death benefit payable upon the last person's death is a feature of last survivor insurance.

A life insurance policy that is subject to a contract interest rate is referred to as?

• adiustable life

• group life

• term life

• universal life

Universal Life

Universal life is subject to a contract interest rate or a current annual interest rate.

Term insurance is appropriate for someone who?

• seeks living benefits for themselves

• seeks a policy that builds cash value

• seeks temporary protection and lower premiums

• seeks permanent protection and higher premiums

Seeks temporary protection and lower premiums

What happens to the coverage under a children's term rider when that child reaches a certain specified age?

• Coverage decreases automatically

• Coverage increases automatically

• Coverage remains as long as proof of insurabilitv is provided

• Coverage is eliminated

Coverage is Eliminated

A partial surrender is allowed in which of the following life policies?

• Adjustable whole life

• Universal life

• Decreasing term life

• Limited whole life

Universal Life

What types of life insurance are normally used for key employee indemnification?

• term, whole, and universal life insurance

• increasing term insurance

• joint, credit, and group life insurance

• adjustable, permanent, and limited-pay life insurance

Term, whole, and universal life insurance

What is a corridor in relation to a Universal Life insurance policy?

• The gap between the total death benefit and the policy's

cash value

• The gap between when a claim is filed and when the death benefit is received

• The amount of interest that has accumulated in the policy's cash value

• The point in time when the policy's cash value reaches $0

The gap between the total death benefit and the policy's cash value

A spouse and child can be added to the primary insured's coverage as what kind of rider?

• Dependent term

• Guaranteed insurability

• Primary term

• Family term

Family Term

Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive?

• Adjustable life policy

• Modified life policy

• Endowment policy

• Universal life policy

Endowment Policy

Pre-death distributions from a modified endowment contract (MEC) receive different tax treatment than other life insurance policies because?

• the MEC has tax deductible premiums

• the MEC is considered an illegal product

• the MEC tends to be an investment vehicle

• the MEC does not accumulate cash value

The MEC tends to be an investment vehicle

Reggie purchased a life insurance policy with a face amount of $500,000. After 15 years, the cash value has accumulated to $100,000 and the policy's face amount has become $600,000. Which type of life insurance policy is this?

• Adjustable life

• Credit life

• Modified life

• Universal life

Universal Life

A universal life policy pays a death claim in the amount of the death benefit plus the savings element.

The type of multiple protection coverage that pays on the death of the last person is called a(n)?

• joint life policy

• survivorship life policy

• annuity joint policy

• dual life policy

Survivorship Life Policy

Under a multiple protective policy, the policy that pays on the death of the last person is called a survivorship life policy.

Index whole life insurance contains a securities component that acts as a(n)?

• hedge against inflation

• premium stabilizer

• means to lowering taxes on earnings

• incentive to purchase more coverage

Hedge against Inflation

The securities component of index whole life insurance is considered an effective hedge against inflation.

A single premium cash value policy can be described as?

• a policy that is paid up after only one payment

• a policy that only requires an annual payment

• a policy that is guaranteed issue

• a policy that covers two or more lives

A policy that is paid up after only one payment

What is the underlying concept regarding level premiums?

• Levels premiums build cash value quicker in the early years

• The early years are charged more than what is needed

• The early years are charged less than what is needed

• Level premiums can only be paid annually

The early years are charged more than what is needed.

James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount?

• The original face amount will be paid to the beneficiary

• The policy will be voided with no death benefits paid

• The death benefit paid will be what the premium would have purchased at the correct age

• The amount of premiums paid will be returned with interest

The death benefit paid will be what the premium would have purchased at the correct age.

Under the Misstatement of Age provision, the amount paid will be what the premium would have purchased at the correct age.

A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due?

• Reduction of premium dividend option

• Extended term option

• Paid-up option

• Cash dividend option

Reduction of premium dividend option

A waiver of premium rider allows an insured to waive premium payments if the insured is?

• temporarily disabled

• unemployed

• completely and permanently disabled

• experiencing financial hardship

Completely and Permanently Disabled

Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt's beneficiary if Matt?

• is killed while committing a felony

• does of a stroke

• does instantly from a car accident

• is injured in a skiing accident and dies 18 months later

Dies instantly from a car accident

An insured individual and the policy's beneficiary die from the same accident.

The common disaster provision states the insurer will continue as if?

• the insured outlived the beneficiary

• the beneficiary outlived the insured

• no beneficiary was ever named

• the insured and beneficiary died at the same time

The insured outlived the beneficiary

All of these are common exclusions to a life insurance policy EXCEPT?

• accidental death

• military service

• aviation

• hazardous occupations

Accidental Death

Which of these is considered to be a Living Benefit option in a life insurance policy?

• Reinstatement

• Waiver of premium

• Accelerated death benefit

• Pavor benefit

Accelerated Death Benefit

Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She would like to borrow $15,000 against the cash value. Which of the following statements is TRUE?

• Net death benefit will be reduced if the loan is not repaid

• No interest will be charged on loan balance

• Term life policies are the only type of insurance that allows policy loans

• A loan can be taken out for up to the face amount of the policy

Net death benefit will be reduced if the loan is not repaid

A provision that allows a policyowner to withdraw a policy's cash value interest free is a(n)?

• partial surrender

• waiver of premium

• automatic premium loan

• grace period

Partial Surrender

What is the purpose for having an accelerated death benefit on a life insurance policy?

• It allows for a spouse to be added as a rider to a life insurance policy

• It allows for policy loans to be advanced to the insured in the event of unemployment

• It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill

• It allows for a third party to purchase a life insurance policy at a discounted rate and immediately advance a portion of the death benefit

It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill.

Ron has a life insurance policy with a face value of $100,000 and a cost of living rider.

If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy?

• $400

• $800

• $2,000

• $4,000

$4,000

Of the following dividend options, which of these is taxable?

• Reduction of premium

• One year term

• Paid-up additions

• Accumulation at interest

Accumulation at interest

A rider that assures premiums will be paid on a juvenile policy until the child reaches a specific age is called a(n)?

• waiver of premium rider

• payor rider

• automatic premium loan rider

• juvenile waiver rider

Payor Rider

The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of?

• any interest payable from an outstanding policy loan balance

• past due premiums that have not been paid by the end of the grace period

• the outstanding policy loan balance

• any surrender charges owed by the policyowner

Past due premiums that have not been paid by the end of the grace period.

In a life insurance cash value policy, the automatic premium loan provision authorizes the insurance company to withdraw from the policy's cash values the amount of premiums due if the premium has not been paid by the end of the grace period.

Which of the following is considered to be an alternative to a life settlement?

• Accelerated death benefit rider

• Waiver of premium rider

• Extended term option

• Decreasing term insurance

Accelerated death benefit rider

Dorian exercised a nonforfeiture option by using his life policy's cash value to purchase an extended term insurance option. When the term insurance expires,?

• he has the option of resuming the original policy and paying the same premium

• the coverage can be extended with a lump sum payment

• all remaining cash values are paid to the policyowner

• the protection ends

The protection ends

Which of these is NOT a characteristic of the Accelerated Death Benefit option?

• The face amount and policy premium are not affected by the payment

•Before payment of the benefit is made, specific conditions must exist, such as suffering from a terminal Iliness

• There may be a dollar limit on the maximum benefit

• The benefit can be offered as a rider at a specific extra cost or may be at no cost

The benefit can be offered as a rider at a specific extra cost or may be at no cost

Which of these is NOT a qualifying event for Medicare?

• On Social Security disability for over 2 years

• Kidney failure

• Age 65 or older

• Falling below the federal poverty level

Falling below the federal poverty level

An insurer has days to file a notice of appointment to the Commissioner.

• 10

• 15

• 20

• 25

15

The Fair Credit Reporting Act protects consumers

• from insolvent insurers

• by recommending insurers with good AM Best ratings

• with guidelines regarding credit reporting and distribution

• by providing consumer credit counseling

With guidelines regarding credit reporting and distribution

What is the MINIMUM benefit period that must be offered by a Long-Term Care policy?

• 6 months

• 12 months

• 18 months

• 24 months

12 months

Before a producer may sell, solicit, or negotiate insurance for an insurer, the producer must have

a(n)

• appointment

• certificate

• bond

• binder

Appointment

The agreement between an insurance producer and insurer under which the insurance producer, for compensation, may sell, solicit, or negotiate policies issued by the insurer is called an appointment.

An example of endodontic treatment is a

• bridge

• crown

• filling

• root canal

Root Canal

Endodontics is the branch of dentistry dealing with diseases of the dental pulp. Root canals would be an example

As classified by the Affordable Care Act (ACA), a Silver Plan offers

• 60% actuarial level of coverage provided

• 70% actuarial level of coverage provided

• 80% actuarial level of coverage provided

• 90% actuarial level of coverage provided

70% actuarial level of coverage provided

Benefits for a Medicare Supplement policy

• may duplicate Medicare benefits

• must not duplicate Medicare benefits

• may duplicate specific Medicare benefits

• are provided by Medicare

Must not duplicate Medicare benefits

Which of these is NOT considered a form of life insurance advertisement?

• Billboard announcing a new insurance product

• Sales presentation materials

• Brochures handed out at a promotional event

• Buyer's Guide

Buyer's Guide

Which of these is a requirement for obtaining a resident insurance producer license in this state?

• Pass the appropriate examination

• Graduate from high school

• Graduate from a 4-year college

• Be a resident of this state for at least 5 years

Pass the appropriate examination

Written notice of a health insurance claim should be given to the insurer within ___ days after the occurrence of any loss covered by the policy.

• 20

• 30

• 45

• 60

20

Long-term care policies sold in Louisiana may exclude coverage related to

• injuries

• substance addictions

• dementia

• Alzheimer's disease

Substance Addictions

When a small employer health insurance plan is offered, it must be available

• to all eligible employees who apply

• to all eligible employees after a 12-month waiting period

• only to employees who provide evidence of insurability

• only to employees under age 65

To all eligible employees who apply

When the Commissioner of Insurance requests a producer's business records, they must be produced

• after holding a hearing

• within 30 days

• upon request

• at the producer's convenience

Upon Request

A producer must notify the Commissioner within __ days of a felony conviction.

• 30

• 45

• 60

• 90

30

Within __ days after policy delivery, both Medicare Supplement and Long-Term Care policies can be returned for a 100% premium refund.

• 15

• 20

• 25

• 30

30

A producer who sells most of his/her insurance policies to family members is said to be engaging in

• rebating

• controlled business

• coercion

• replacement

Controlled Business

An example of unfair discrimination would be

• charging different premiums for policyholders in the same risk classification

• charging a higher rate for insurance based on an insured's age

• charging a higher rate for insurance based on an insured's health status

• charging a higher rate for insurance based on an insured's risk classification

Charging different premiums for policyholders in the same risk classification

The required grace period for a life insurance policy sold in Louisiana is days.

• 15

• 30

• 45

• 60

30

Upon receipt of proof of loss, an insurer MUST pay a life insurance death benefit claim

• promptly

• within 10 days

• within 15 days

• within 20 days

Promptly

All of the following actions are considered rebating

EXCEPT

• sharing commissions with other producers

• offering a country club membership as an inducement to purchase insurance

• offering employment as an incentive to purchase insurance

• giving back commissions to a client

Sharing commissions with other producers

All of these types of benefits may be covered by a nonprofit health service plan EXCEPT

• dental

• disability income

• vision

• hospital expense

Disability Income

A nonprofit health service plan may NOT issue a contract that covers disability income benefits.

Terminally-ill life insurance policyowners may sell their policy at a discount to a third party. This type of agreement is called a(n)

• annuitized settlement

• viatical settlement

• accelerated benefit

• nonforfeiture value

Viatical Settlement

Viatical settlements allow policyholders to sell their policies for a percentage of the face amount for a cash payment.

In Louisiana, small employer health plans require a MINIMUM of _ employee(s).

• 1

• 2

• 3

• 4

1

A small employer is defined as having at least 1 employee but no more than 50.

Within how many days must a producer submit a change in address?

• 7

• 10

• 20

• 30

30

A licensed producer who changes a residential or business address must notify the Commissioner within 30 days.

Maria the producer would like to advertise an annuity product on a highway billboard. Which of the following must be included in the advertisement?

• Her home address

• Her name

• The annuity's guaranteed interest rate

• Commissioner's name

Her name

Which of the following policies does NOT build cash value?

• Term

• Straight Life

• Endowment

• Variable Life

TERM

Term life insurance does not build cash value.

An individual who has a contract with an insurance company to represent it is called a(n)

• producer

• representative

• Commissioner

• administrator

Producer

"Insurance producer" or "producer" is a person required to be licensed pursuant to the laws of this state to sell, solicit, or negotiate insurance.

An insurer need NOT pay interest on death benefits if the proceeds of the life policy are paid within

• 20 days after the date of the death of the insured

• 30 davs after the date of the death of the insured

• 40 days after the date of the death of the insured

• 50 davs after the date of the death of the insured

20 days after the date of the death of the insured

The ___________ of Coverage describes policy

features, benefits, exclusions, and riders in a Long-Term Care policy.

• Description

• Outline

• Proof

• Summary

Outline

The document that describes policy features, benefits, exclusions and riders in a Long-Term Care policy is known as the Outline of Coverage. An Outline of Coverage must be delivered to a prospective applicant for long-term care insurance at the time of initial solicitation.

A(n) ___________ sells, solicits, or negotiates

insurance on behalf of insurance companies for compensation.

• adiuster

• administrator

• producer

• representative

Producer

A company that is authorized by the Commissioner to transact insurance business in Louisiana is called

a(n)

• reciprocal insurer

• authorized insurer

• accepted insurer

• legal insurer

Authorized Insurer

When a company is licensed by the Department of Insurance to do business in this state, it becomes an authorized company.

Charles is a producer who is licensed in Louisiana but resides in Mississippi. Charles is considered to be a(n)

• nonresident producer

• admitted producer

• reciprocal producer

• foreign producer

Nonresident Producer

A producer licensed in Louisiana but a resident in another state is called a nonresident producer.

According to Louisiana law, group life insurance conversion privileges must NOT

• allow a new policy to be issued

• allow a time period to convert group life coverage to an individual life policy

• allow a rate increase

• require evidence of insurability

Require Evidence of Insurability

Which entity regulates claim settlement practices?

• Attorney generals

• Better Business Bureau

• NAIC

• State insurance departments

State insurance departments

A business entity wishing to act as an insurance producer MUST

• obtain a producer's license

• obtain a certificate of authority

• secure a $500,000 bond

• meet specific annual sales levels

Obtain a producer's license

After an annuity has been in force for _ year(s), it becomes incontestable.

• 1

• 2

• 3

• 4

2

Which of the following is NOT a requirement to obtaining a Louisiana insurance producer license?

• Must complete a prelicensing course

• Must be age 21

• Must be age 18

• Must submit the application with fees

Must be age 21

A domestic insurance company in Louisiana MUST

• be organized under Louisiana insurance laws

• own real estate in Louisiana

• write insurance on risks located only in Louisiana

• honor the charter of the National Association of

Insurance Commissioners (NAIC)

Be organized under Louisiana Insurance Laws

Which of the following actions by a producer would

NOT result in a license suspension or revocation?

• Found guilty of misrepresentation in obtaining the license

• Misrepresenting the terms of an existing insurance

contract

• Sharing commissions with other licensed producers

• Misappropriating an insured's premium payment

Sharing commissions with other licensed producers

When is a Group Health policy required to provide coverage for a newborn child?

•When the policyowner notifies the insurance company

• At the moment of birth

•When the required additional premium is paid

• No more than 10 days after date of birth

At the moment of birth

A life insurance applicant in Louisiana may backdate the application for up to month(s).

• 5

• 6

• 7

• 8

6

Backdating of life insurance policy applications is allowed if the policies are not backdated earlier than 6 months from the time the policy was applied for.

After a disability policy has been in force for year(s), it is considered incontestable.

• 1

• 2

• 3

• 4

3

After an accident and health policy has been in force for 3 years, it is considered incontestable.

All Louisiana licensed producers MUST complete which of the following continuing education requirements?

• 12 hours annually

• 24 hours every 2 vears

• 24 hours every 3 years

• 12 hours every 2 years

24 hours every 2 years

Producers must complete 24 hours of continuing education per line of authority every two years in order to renew their licenses.

A Medicare Supplement policy can be cancelled by the insurer for

• excessive filing of claims

• poor health

• smoking

• nonpayment

Nonpayment

Sharon the producer intentionally submitted a false statement in support of a claim. This is considered a form of

• inducement

• twisting

• fraud

• discrimination

Fraud

Greg has recently been terminated from his job that covered him for group life insurance. How long does he have to convert his coverage to an individual policy?

• 30 davs

• 31 days

• 45 days

• 60 days

31 days

A person covered by a group policy also has the right to convert such coverage to an individual policy within the conversion period (31 days) without proving insurability. If this right is exercised, the employee is responsible for the payment of premium.

How many days is a temporary producer's license valid?

• 30

• 60

• 90

• 180

180

Which of the following unfair trade practices involves a producer who makes malicious public statements regarding an insurer's financial condition?

• Boycotting

• Defamation

• Unfair discrimination

• Misrepresentation

Defamation

The _________ is the individual responsible for

payment to an HMO.

• policyowner

• subscriber

• insured

• proctor

Subscriber

Coverage for newborns under an accident and health plan MUST include coverage for

• lost wages of the mother

• disability of the mother

• birth abnormalities

• delivery costs

Birth Abnormalities

When the insured gives birth, coverage for eligible newly born children consists of coverage for injury or sickness including birth abnormalities.

Which license is REQUIRED in order to solicit Long Term Care insurance in the State of Louisiana?

• Life Insurance Producer License

• Long Term Care Insurance Producer License

• Limited Lines Insurance Producer License

• Health Insurance Producer License

Health Insurance Producer License

A Health Insurance Producer License is required in order to solicit Long Term Care insurance in the State of Louisiana.

A form of medical health insurance covering the treatment and care of gum disease is called

• Medicaid

• Major Medical

• Franchise health policy

• Dental expense insurance

Dental Expense Insurance

How often must an insurance producer's license in Louisiana be renewed?

• Every year

• Every two years

• Every three years

• Every five years

Every two years

An insurer may exclude preexisting conditions on a

Medicare Supplement policy for months.

• 6

• 8

• 10

• 12

6

A Medicare Supplement policy cannot deny claims for losses occurring more than 6 months after the effective date of coverage because of a pre-existing condition.