100+ Free LOMA 280 Practice Questions

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Insurance operates by combining a large number of similar exposure units so that the insurer can predict losses more accurately. This concept is known as the:

Law of large numbers

Rule of contra proferentem

Doctrine of indemnity

Principle of subrogation

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2026 Statistics

Key Facts: LOMA 280 Exam

Multiple-Choice Questions

LOMA 280 Course Catalog

120 min

Time Limit

LOMA 280 Course Catalog

70%

Minimum Passing Score

LOMA Exam Standards

16+ hrs

Estimated Course Time

LOMA 280 Course Catalog

FLMI

Counts Toward Designation

LOMA FLMI Program

I*STAR

Computerized Exam Format

LOMA

LOMA 280 — Principles of Insurance is the introductory course in LOMA's insurance designation curriculum. The proctored I*STAR or paper exam has 60 multiple-choice questions, a 120-minute time limit, and requires a minimum score of 70% to pass. The syllabus spans the financial services industry and regulation, contract law concepts, insurable risk and risk classification, underwriting and policyowner rights, individual and group life insurance, health insurance, annuities, product development factors, and policy provisions such as grace period, incontestability, reinstatement, policy loans, and settlement options. LOMA does not publish a course-level pass rate. The passing credit counts toward LOMA designations such as the FLMI.

Sample LOMA 280 Practice Questions

Try these sample questions to test your LOMA 280 exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Within the financial services industry, life insurance companies are best classified as which type of institution?

A.Contractual savings institution

B.Depository institution

C.Investment intermediary only

D.Government-sponsored enterprise

Explanation: Life insurance companies are contractual savings institutions: they accept funds (premiums) under contracts that obligate the company to make payments when specified events occur. This distinguishes them from depository institutions such as banks and credit unions.

2Most life insurance companies in the United States are organized as which form of business entity?

A.Sole proprietorship

B.General partnership

C.Limited liability partnership

D.Corporation

Explanation: Life insurance companies are organized as corporations because the corporate form provides limited liability, continuity of existence, and the ability to raise capital and pool large amounts of money needed to back long-term insurance obligations.

3A stock insurance company differs from a mutual insurance company primarily because a stock company is owned by its:

A.Policyowners

B.Board of directors

C.Policyholders and creditors jointly

D.Stockholders

Explanation: A stock insurance company is owned by its stockholders (shareholders), who supply capital and receive dividends from profits. A mutual insurance company, by contrast, is owned by its policyowners.

4In the United States, the primary responsibility for regulating the business of insurance rests with the:

A.Federal government through the SEC

B.U.S. Department of the Treasury

C.National Association of Insurance Commissioners directly

D.Individual state governments

Explanation: Under the McCarran-Ferguson Act, insurance is primarily regulated at the state level. Each state has an insurance department headed by a commissioner who oversees licensing, solvency, and market conduct within that state.

5What is the principal function of the National Association of Insurance Commissioners (NAIC)?

A.To directly license insurance agents in every state

B.To set federal insurance tax rates

C.To act as the federal insurance regulator

D.To develop model laws and promote uniformity among state regulators

Explanation: The NAIC is an organization of state insurance commissioners that develops model laws and regulations and promotes uniformity and coordination among the states. The states then choose whether to adopt the model laws.

6A state guaranty association exists primarily to:

A.Protect policyowners and beneficiaries if an insurer becomes insolvent

B.Guarantee the investment returns on annuity contracts

C.Approve premium rate increases

D.Insure insurance company stockholders against losses

Explanation: State guaranty associations provide a safety net by protecting policyowners, insureds, and beneficiaries when a member insurer becomes insolvent, paying covered claims up to statutory limits. Solvent insurers fund the association through assessments.

7Federal law plays a role in insurance regulation in certain areas. Which of the following is primarily governed by FEDERAL regulation rather than state regulation?

A.Licensing of resident agents

B.Approval of policy form language

C.Variable life insurance and variable annuities as securities

D.Insurer solvency monitoring within a state

Explanation: Variable products are considered securities and therefore fall under federal securities regulation by the SEC, in addition to state insurance regulation. Agents selling them must hold appropriate securities registration.

8Which document must an insurance company file with and obtain approval from a state insurance department before using it to sell a product in that state?

A.The company's annual marketing plan

B.Its internal underwriting manual

C.The policy form and contract language

D.Its reinsurance treaties

Explanation: Before an insurer may sell a product in a state, it generally must file the policy form (the contract language) with the state insurance department and obtain approval to ensure the form complies with applicable law and is not misleading.

9An insurance contract has been prepared entirely by the insurer, and the applicant must accept it as written or reject it without negotiating its terms. This characteristic makes the insurance policy a contract of:

A.Indemnity

B.Utmost good faith

C.Adhesion

D.Novation

Explanation: A contract of adhesion is drafted by one party (the insurer) and offered to the other on a take-it-or-leave-it basis. Because the applicant cannot negotiate, ambiguities in the contract are generally interpreted in favor of the policyowner.

10An insurance contract is described as aleatory. What does this mean?

A.Both parties exchange items of equal value

B.Only one party makes a legally enforceable promise

C.The contract requires no consideration

D.The amounts exchanged by the parties may be unequal, depending on chance events

Explanation: An aleatory contract is one in which the values exchanged by the parties may be unequal and depend on an uncertain event. A policyowner may pay only a few premiums yet receive a large death benefit, or pay many premiums and the insured may live.

About the LOMA 280 Exam

LOMA 280 Principles of Insurance is an introductory course covering the financial services industry, insurance regulation, the legal nature of insurance contracts, insurable risk and risk classification, the process of becoming insured, policyowner rights, life, health, and annuity products, product development, and policy provisions, assessed by a 60-question proctored multiple-choice exam.

Questions

60 scored questions

Time Limit

120 minutes (2 hours)

Passing Score

70% minimum on the proctored examination

Exam Fee

Set by LOMA North American course pricing; varies by member or nonmember status and may bundle the exam fee (LOMA (Life Office Management Association), part of LIMRA)

LOMA 280 Exam Content Outline

~10%

Financial Services Industry and Insurance Regulation

Structure of the financial services industry, why insurers are organized as corporations, stock versus mutual companies, and state and federal regulation including the NAIC and guaranty associations.

~10%

Types of Contracts and Legal Concepts

Valid, void, and voidable contracts; formal and informal; bilateral and unilateral; commutative and aleatory; adhesion; utmost good faith; representations; misrepresentation; concealment.

~12%

Insurable Risk and Risk Classification

Pure versus speculative risk, characteristics of insurable risk, insurable interest, anti-selection, the law of large numbers, mortality tables, and standard, preferred, and substandard risk classes.

~12%

Process of Becoming Insured and Policyowner Rights

Underwriting, the application, premium receipts, the MIB, the Fair Credit Reporting Act, policyowner contractual rights, beneficiary designations, and assignment of a policy.

~14%

Individual and Group Life Insurance

Term, whole life, universal life, and variable life features; supplemental benefit riders; group life under a master contract; certificates; group underwriting; and group retirement plans.

~12%

Health Insurance Products

Medical expense insurance, disability income insurance, elimination periods, deductibles, coinsurance, managed care and HMOs, and long-term care insurance.

~14%

Annuity Products

Annuity basics, accumulation and payout phases, fixed versus variable annuities, immediate and deferred annuities, payout options, surrender charges, mortality and expense charges, and annuity taxation.

~8%

Product Development Considerations

Mortality, interest, and expense assumptions in premium rate setting, the cost of benefits, and the role of policy reserves in insurer solvency.

~8%

Policy Provisions

Grace period, incontestability, reinstatement, policy loans, settlement options, free-look, nonforfeiture options, suicide and misstatement-of-age provisions, and the entire contract provision.

How to Pass the LOMA 280 Exam

What You Need to Know

Passing score: 70% minimum on the proctored examination
Exam length: 60 questions
Time limit: 120 minutes (2 hours)
Exam fee: Set by LOMA North American course pricing; varies by member or nonmember status and may bundle the exam fee

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

LOMA 280 Study Tips from Top Performers

1Master the contract-law vocabulary early, including valid versus void versus voidable and aleatory versus commutative, because these distinctions appear throughout the exam.

2Build a comparison chart of term, whole, universal, and variable life so you can quickly contrast premiums, cash value, and flexibility.

3Memorize the core policy provisions such as grace period, incontestability, reinstatement, and settlement options, and what each one protects.

4Practice distinguishing pure risk from speculative risk and connect insurable interest, anti-selection, and mortality tables to underwriting.

5Pace yourself at about two minutes per question to match the 60-question, 120-minute format.

6Use LOMA's sample exam and Top 10 Tough Topics review, then drill any module where you score below 70%.

Frequently Asked Questions

How many questions are on the LOMA 280 exam?

The LOMA 280 proctored exam has 60 multiple-choice questions. Candidates have 120 minutes to complete it, which is about two minutes per question on average.

What is the passing score for LOMA 280?

Candidates must score a minimum of 70% on the proctored LOMA 280 examination to pass. LOMA applies this 70% standard to its proctored course exams.

How long is the LOMA 280 exam?

The LOMA 280 exam has a time limit of 120 minutes (2 hours). It is delivered through LOMA's computerized I*STAR system or in paper format under proctored conditions.

What topics does LOMA 280 cover?

LOMA 280 covers the financial services industry and insurance regulation, insurance contracts and legal concepts, insurable risk and risk classification, becoming insured and policyowner rights, individual and group life insurance, health insurance, annuities, product development, and policy provisions.

Are there prerequisites for LOMA 280?

No. LOMA 280 Principles of Insurance is an introductory course with no formal prerequisites. It is typically the starting point in LOMA's insurance designation curriculum, including the FLMI program.

Does LOMA 280 count toward a LOMA designation?

Yes. Passing LOMA 280 earns credit that counts toward LOMA designations such as the Fellow, Life Management Institute (FLMI). It is one of the core courses in that curriculum.

What study materials does LOMA provide for LOMA 280?

LOMA provides the Principles of Insurance textbook and the Test Preparation Guide for LOMA 280, along with online learning aids, practice questions, and a sample exam through its course portal.

Can I retake the LOMA 280 exam if I do not pass?

Yes. Candidates who score below 70% may re-register and retake the proctored LOMA 280 exam under LOMA's re-examination policy, typically for an additional exam fee.