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Exam Review

Key Facts: Life & Health Exam

65-85%

Pass Rate Range

Varies by state

70%

Passing Score

105/150 questions

60-80 hrs

Study Time

Recommended

30%

Life Insurance Section

Largest section

$60,370

Median Agent Salary

BLS 2024

400K

Retiring by 2026

BLS

The Life & Health insurance exam has pass rates of 65-85% depending on state. It requires 70% to pass (105/150 questions). The 'Life Insurance' section accounts for 30% of the exam. With 400,000 insurance professionals expected to retire by 2026 (BLS), the industry faces unprecedented opportunity for new agents. Median insurance agent salary is $60,370 (BLS 2024).

Sample Life & Health Practice Questions

Try these sample questions to review concepts for the Life & Health exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 425+ question experience with AI tutoring.

1Which of the following is an example of a pure risk?
A.Investing in mutual funds
B.Starting a new restaurant
C.The possibility of becoming disabled
D.Buying lottery tickets
Explanation: The possibility of becoming disabled is a pure risk because there are only two outcomes: you either become disabled (loss) or you don't (no loss). There's no opportunity for gain. The other options are speculative risks because they involve the possibility of financial gain as well as loss.
2An applicant lies about their smoking history on a life insurance application. This is an example of:
A.Physical hazard
B.Moral hazard
C.Morale hazard
D.Speculative risk
Explanation: Lying on an insurance application is a moral hazard because it involves intentional dishonesty. The applicant is deliberately misrepresenting information to obtain insurance or pay lower premiums. Physical hazards are tangible conditions, morale hazards involve carelessness, and speculative risk is a category of risk, not a hazard.
3A person doesn't bother to lock their front door because they have homeowners insurance. This is an example of:
A.Pure risk
B.Moral hazard
C.Morale hazard
D.Physical hazard
Explanation: This is a morale hazard—carelessness or indifference to loss because insurance coverage exists. The person isn't being dishonest (moral hazard), but they're being careless because they know insurance will cover any theft. Remember: morale hazard = carelessness, moral hazard = dishonesty.
4A person decides to install a home security system to reduce the chance of burglary. This is an example of:
A.Risk avoidance
B.Risk reduction
C.Risk retention
D.Risk transfer
Explanation: Installing a security system is risk reduction—it decreases the likelihood of a burglary occurring, but doesn't eliminate the risk entirely. Risk avoidance would mean not owning valuable property at all. Risk retention would mean accepting the loss yourself. Risk transfer would mean buying insurance.
5When a policyholder chooses a $2,000 deductible instead of a $500 deductible, they are engaging in:
A.Risk avoidance
B.Risk reduction
C.Risk retention
D.Risk transfer
Explanation: Choosing a higher deductible is risk retention. By accepting the $2,000 deductible, the policyholder is agreeing to pay the first $2,000 of any loss themselves. They're retaining more of the risk in exchange for lower premium payments.
6The primary purpose of purchasing insurance is to:
A.Avoid all risks
B.Reduce the likelihood of loss
C.Transfer the financial consequences of loss to another party
D.Eliminate hazards
Explanation: The primary purpose of insurance is risk transfer—shifting the financial consequences of a loss from the policyholder to the insurance company. Insurance doesn't avoid risks or prevent losses from occurring; it provides financial compensation when covered losses happen.
7The law of large numbers states that:
A.Insurance companies must insure large numbers of people
B.As the number of exposure units increases, actual results more closely match predicted results
C.Large losses are more predictable than small losses
D.Insurance premiums must be based on large numbers
Explanation: The law of large numbers states that as the sample size increases, actual results more closely approximate expected (predicted) results. This allows insurance companies to accurately predict losses and set appropriate premiums when they have many similar policyholders.
8Which of the following is NOT a requirement for an insurable risk?
A.The loss must be accidental
B.The loss must be definite and measurable
C.The loss must guarantee a profit for the insurer
D.The loss must not be catastrophic
Explanation: There is no requirement that an insurable risk must guarantee a profit for the insurer. The requirements for an insurable risk are: due to chance (accidental), definite and measurable, statistically predictable, not catastrophic, and economically feasible. Insurance involves the possibility of loss for both parties.
9Risk pooling works because:
A.It eliminates all risk from the pool
B.The premiums of many pay for the losses of a few
C.It guarantees that no one in the pool will have a loss
D.It reduces the cost of individual claims
Explanation: Risk pooling works because the premiums collected from many policyholders are used to pay for the losses experienced by the few who have claims. Individual uncertainty is replaced by group predictability, and each person's small premium contribution helps cover the significant losses of others.
10In a mutual insurance company, who owns the company?
A.Stockholders
B.The board of directors
C.Policyholders
D.The state insurance commissioner
Explanation: In a mutual insurance company, the policyholders are the owners. When you purchase a policy from a mutual company, you become a part-owner. Profits (surplus) are returned to policyholders as dividends, and policyholders can vote on company matters.

About the Life & Health Exam

The life and health insurance exam covers insurance principles, life insurance products, health insurance, annuities, and state regulations. This license is essential for selling life insurance, health insurance, annuities, and Medicare products.

Exam sponsor: State Insurance Commissioner. The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Questions

150 questions

Time Limit

2 hours

Passing Score

70%

Exam / Certification Fees

$50-150

Exam sponsor website

Reported exam pass rate: 65-85%. varies by state This describes exam candidates, not OpenExamPrep users or results from using our resources. Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

25%

Insurance Principles

Risk, insurability, policy provisions, and underwriting

30%

Life Insurance

Term, whole life, universal life, and policy riders

20%

Health Insurance

Medical, disability, long-term care, and managed care

15%

Annuities

Fixed, variable, immediate, and deferred annuities

10%

Regulations & Ethics

State laws, producer conduct, and prohibited practices

Preparing for the Life & Health Exam

What You Need to Know

  • Passing score: 70%
  • Exam length: 150 questions
  • Time limit: 2 hours
  • Exam / certification fees: $50-150 Official sources

Using Our Practice Resources

  • Work through all 425 available questions
  • Review every answer and explanation
  • Track weak areas and revisit them
  • Use our AI tutor for tough concepts

Life & Health: Suggested Study Strategy

1Master policy provisions - know grace periods, incontestability, nonforfeiture options, and settlement options
2Understand the differences between term, whole life, and universal life insurance
3Learn Medicare Part A, B, C, D coverage and Medigap policies thoroughly
4Study annuity types and their tax treatment - fixed vs variable, immediate vs deferred
5Know prohibited practices: twisting, rebating, misrepresentation, and unfair discrimination

Frequently Asked Questions

What is the Life & Health insurance exam pass rate?

Life & Health insurance exam pass rates range from 65-85% depending on the state. States with more rigorous exams like California may have lower pass rates. With proper preparation using 300+ practice questions, you can significantly improve your chances of passing on the first attempt.

How hard is the life and health insurance exam?

The exam is moderately difficult with pass rates varying by state (65-85%). Most candidates find understanding policy provisions, annuities, and Medicare the most challenging. With 60-80 hours of study and plenty of practice questions, you can pass on your first attempt.

How many questions are on the life and health exam?

Most states have 150 questions on the combined life and health exam (some states separate them). You typically have 2-3 hours to complete the exam, with a passing score around 70% (105 correct answers).

What topics are covered?

The exam covers insurance principles (25%), life insurance products including term, whole, and universal (30%), health insurance including medical, disability, and LTC (20%), annuities (15%), and state regulations (10%). Focus heavily on policy provisions and riders.

How long should I study for the Life & Health exam?

Plan for 60-80 hours of study over 4-6 weeks. Most states require 40+ hours of pre-licensing education. Complete at least 300 practice questions and score 80%+ consistently before scheduling your exam.

What is the job outlook for insurance agents?

The BLS projects 47,000 annual job openings for insurance sales agents. With 400,000 insurance professionals expected to retire by 2026, the industry offers unprecedented opportunity. Median salary is $60,370 with top earners exceeding $135,000.