General Concepts
22%of exam
RiskContract LawInsurable InterestProvisionsUnderwriting
Life Products
25%of exam
TermWhole LifeUniversal LifeVariableRiders
Annuities + Taxation
12%of exam
FixedVariableIndexedSuitabilityTax
Health Products
20%of exam
MedicalDisabilityLTCMedigapLimited
Group Insurance
8%of exam
Group LifeGroup HealthCOBRAContinuationConversion
PA Laws + Regulations
13%of exam
PIDTitle 40PLHIGAReplacementUIPA
Quick Facts
- Exam
- Series 16-03
- License
- Life, Accident, Health
- Vendor
- PSI
- Regulator
- PID
- Scored
- 150 questions
- Time
- 2.5 hours
- Pass
- 70%
- Exam fee
- $53 joint
- License fee
- $55 resident
- Prelicense
- None required
- CE
- 24 hrs / biennium
- Ethics CE
- 3 hours
Contract Keys
O A C C L makes contract valid.
OfferAcceptanceConsiderationCapacityLegal purpose
General Concepts
- Pure risk
- Loss/no loss
- Speculative risk
- Gain or loss
- Hazard
- Increases loss likelihood
- Peril
- Cause of loss
- Indemnity
- Restore financially
- Insurable interest
- Valid loss stake
- Utmost good faith
- Honest disclosure
- Adverse selection
- Higher-risk seekers
Contract Elements
- Offer
- Applicant act
- Acceptance
- Insurer issuance
- Consideration
- Premium + statements
- Competent parties
- Legal capacity
- Legal purpose
- Allowed object
- Aleatory
- Unequal exchange
- Adhesion
- Insurer drafted
- Unilateral
- One enforceable promise
Term vs Whole
Term
- Temporary
- No cash value
Whole
- Permanent
- Cash value
Duration drives choice
Life Product Picker
- Temporary need→Term(Low premium)
- Mortgage need→Decreasing term(Declining face)
- Lifetime guarantee→Whole life(Cash value)
- Short premium years→Limited-pay(Paid-up)
- Flexible premium→Universal life(Adjustable)
- Market upside→Variable life(Securities license)
- Index crediting→Indexed life(Formula)
- Estate planning→Survivorship(Second death)
Life Products
- Level term
- Flat face amount
- Decreasing term
- Mortgage protection
- Whole life
- Permanent fixed premium
- Limited-pay
- Short premium period
- Universal life
- Flexible premium
- Variable life
- Separate accounts
- VUL
- Flexible + market
- Indexed life
- Index crediting
UL vs VUL
UL
- Interest crediting
- General account
VUL
- Separate accounts
- Securities license
Interest vs market
Life Provisions
- Entire contract
- Policy plus application
- Insuring clause
- Coverage promise
- Free look
- 10 days PA
- Grace period
- Late-pay window
- Reinstatement
- Restore lapse
- Incontestability
- Two-year limit
- Suicide clause
- Two-year exclusion
- Assignment
- Transfer rights
Riders + Options
- Waiver of premium
- Disability waiver
- ADB
- Accidental death extra
- GIR
- Guaranteed future purchase
- Accelerated benefit
- Terminal illness payout
- Cash surrender
- Take cash
- Reduced paid-up
- Smaller permanent
- Extended term
- Same face temporary
- Automatic premium loan
- Prevent lapse
Annuity Types
- Immediate
- Pays within year
- Deferred
- Pays later
- Fixed
- Guaranteed crediting
- Variable
- Separate accounts
- Indexed
- Index formula
- Single premium
- One payment
- Flexible premium
- Multiple payments
- Annuitization
- Payout phase
Annuity + Tax
- Best interest
- PA adopted 2021
- Suitability form
- Required documentation
- LIFO
- Nonqualified withdrawal order
- Exclusion ratio
- Principal vs interest
- 10% penalty
- Under age 59.5
- 1035 exchange
- Tax-free swap
- Qualified plan
- Pre-tax dollars
- MEC
- Overfunded life
Medicare ABCD
A hospital, B medical, C advantage, D drugs.
HospitalMedicalAdvantageDrugs
HMO vs PPO
HMO
- PCP gatekeeper
- Tighter network
PPO
- Provider choice
- Higher cost
Freedom costs more
Health Product Picker
- Lost income→Disability income(Earnings)
- Business expenses→BOE(Overhead)
- Broad coverage→Major medical(Comprehensive)
- Lowest cost→HMO(Gatekeeper)
- Provider choice→PPO(Out-network)
- HSA wanted→HDHP(High deductible)
- Custodial care→LTC(ADL trigger)
- Medicare gaps→Medigap(Standardized)
Health Products
- Major medical
- Broad coverage
- Disability income
- Lost earnings
- BOE
- Business overhead expense
- AD&D
- Accident benefits
- HMO
- Gatekeeper network
- PPO
- Preferred network
- POS
- Referral blend
- HDHP
- HSA-eligible plan
Claim Flow
Notice, forms, proof, pay, sue.
NoticeFormsProofPaymentLegal action
Advantage vs Medigap
Part C
- Replaces Original
- Network plan
Medigap
- Supplements Original
- Pays gaps
Replace vs supplement
Health Provisions
- Entire contract
- Policy contents
- Time limit
- Defense limit
- Grace period
- Late-pay window
- Notice of claim
- 20 days typical
- Proof of loss
- 90 days typical
- Payment of claims
- Benefits paid promptly
- Legal actions
- 60 days minimum
- COB
- Coordination of benefits
Disability + LTC
- Own occupation
- Cannot perform job
- Any occupation
- Cannot perform work
- Elimination period
- Waiting period
- Benefit period
- Payment duration
- ADLs
- Daily living tasks
- LTC trigger
- Two ADLs or cognitive
- PA Partnership
- Asset protection LTC
- 5% compound
- PA inflation offer
Senior Products
- Part A
- Hospital insurance
- Part B
- Medical insurance
- Part C
- Medicare Advantage
- Part D
- Prescription drugs
- Medigap
- Supplement gaps
- Standardized plans
- A through N
- Open enrollment
- Six months guaranteed
- Medicaid
- Need-based aid
Conversion vs COBRA
Conversion
- Individual policy
- Permanent switch
COBRA
- Same group plan
- 18-month extension
Policy form differs
Group Insurance
- Master policy
- Employer holds contract
- Certificate
- Employee evidence
- Noncontributory
- Employer pays all
- Contributory
- Shared cost
- COBRA
- 18 months continuation
- Mini-COBRA
- PA small employer
- Conversion right
- Individual policy switch
- HIPAA
- Portability protection
PID/PSI Split
PID licenses, PSI tests, NIPR files.
PIDPSINIPRTitle 40
PID vs PSI
PID
- Regulator
- Issues licenses
PSI
- Exam vendor
- Administers tests
Role and authority differ
PA Rule Picker
- Producer license→PID(Title 40)
- Schedule exam→PSI(candidate.psiexams.com)
- Insolvent insurer→PLHIGA($300k life)
- Life replacement→31 Pa Code 81(Disclose)
- Annuity sale→Best interest(Suitability)
- Senior buys life→30-day look(Age 65+)
- LTC sale→Partnership rules(Inflation offer)
- Unfair practice→UIPA Title 40(Investigation)
Exam Map
- 16-03
- Combined L/A/H exam
- Scored
- 150 questions
- Time
- 150 minutes
- Pass
- 70% minimum
- PSI
- Exam vendor
- PID
- Pennsylvania Insurance Department
- Single line
- 100 questions
- Schedule
- candidate.psiexams.com
CE Split
Three ethics plus twenty-one electives.
3 ethics21 electives24 total
License vs Appointment
License
- State qualification
- PID issued
Appointment
- Insurer authority
- Needed to transact
Need both active
Licensing Path
- Age
- 18 minimum
- Prelicense
- None since 2025
- Fingerprints
- $23.85 background
- Application
- $55 resident fee
- Non-resident
- $110 fee
- App window
- Within one year
- NIPR
- Online application
- Appointment
- Insurer authorizes
Free Look
Ten days standard, thirty days senior.
10 days30 days seniorFull refund
Twisting vs Churning
Twisting
- Misleading replacement
- Different insurer
Churning
- Same insurer
- Commission motive
Motive and deception differ
CE + Renewal
- CE total
- 24 hours
- Ethics
- 3 hours required
- Cycle
- 2-year biennium
- Deadline
- Last day birth month
- Carryover
- Up to 24 hours
- Variable
- Securities CE needed
- LTC training
- 8 initial, 4 ongoing
- Annuity training
- 4-hour course
Unfair Practices
- Twisting
- Misleading replacement
- Churning
- Commission replacement
- Rebating
- Illegal premium gift
- Misrepresentation
- False statement
- Defamation
- False insurer attack
- Coercion
- Forced purchase
- Discrimination
- Unfair same-class rates
- Boycott
- Restraint of trade
PLHIGA Limits
- Life death
- $300,000
- Life cash
- $100,000
- Annuity benefit
- $250,000
- Health basic
- $300,000
- Health benefit plan
- $500,000
- Long-term care
- $300,000
- Aggregate
- $300,000 per life
- Sales pitch
- Prohibited use
PA Life Rules
- Free look
- 10 days policy
- Senior free look
- 30 days age 65+
- Annuity replacement
- 30-day senior look
- Replacement reg
- 31 Pa Code 81
- Buyer's guide
- Required disclosure
- Policy summary
- Required at delivery
- Life settlement
- PA Settlement Act
- STOLI
- Investor-originated prohibited
PA Health Rules
- Medigap standards
- 31 Pa Code 89K
- LTC reg
- 31 Pa Code 89a
- Small employer
- Guaranteed issue
- CHIP
- PA children coverage
- MA program
- Pennsylvania Medicaid
- Mandated benefits
- Required coverages
- External review
- Independent appeal
- Mental health parity
- Federal + PA
Common Traps
PID vs PSI
PID regulates licensing ≠ PSI administers exams
Appointment Trap
License qualifies ≠ Appointment authorizes
Prelicense Trap
None since April 2025 ≠ Exam still required
Free Look Trap
10 days standard ≠ 30 days seniors
Replacement Trap
Existing policy swap ≠ Not simple comparison
Guaranty Trap
Safety net only ≠ Not a sales pitch
Medigap Trap
Supplements Medicare ≠ Not Advantage plan
Twisting vs Rebating
Twisting deceives ≠ Rebating bribes
Last Minute
- 1.Series 16-03 = 150 scored
- 2.Time limit 2.5 hours
- 3.Passing score 70%
- 4.PSI administers, PID regulates
- 5.No prelicense since April 2025
- 6.Exam fee $53 joint line
- 7.License fee $55 resident
- 8.CE = 3 ethics + 21
- 9.Renewal due last birth-month day
- 10.PA free look 10 days
- 11.Senior life free look 30 days
- 12.PLHIGA life death $300,000
- 13.PLHIGA life cash $100,000
- 14.PA adopted NAIC best interest
- 15.Appointment required to transact
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