Idaho Life Insurance Practice Exam Free - 2026

• A. She must be at least 18 years of age before the license can be approved
• B. She must be at least 21 years of age
• C. She must be at least 19 years of age
• D. Age is not a licensing qualification in Idaho as long as she passed the exam

Correct answer: A. She must be at least 18 years of age before the license can be approved

Explanation: Idaho Code 41-1007(1)(a) requires the Director to find that a resident producer applicant is at least eighteen (18) years of age, in addition to fingerprints, fees, a clean record and passing the exam. Twenty-one is the minimum age for an adjuster's license under 41-1104, not a producer. Nineteen appears nowhere in the licensing chapter. Passing the exam does not waive the age finding because 41-1007 lists age as a separate qualification. See Idaho Code § 41-1007.

• A. 20 hours every two years, including 2 hours of ethics
• B. 30 hours every two years, including 3 hours of ethics
• C. 24 hours every two years, including a minimum of 3 ethics credits
• D. 24 hours every year, with no ethics requirement

Correct answer: C. 24 hours every two years, including a minimum of 3 ethics credits

Explanation: IDAPA 18.06.04.012.01 requires a licensee to complete a total of 24 hours of continuing education, including a minimum of 3 ethics credits, on or before the license renewal date every two years, as authorized by Idaho Code 41-1013. Twenty and thirty hours are not Idaho figures, and the requirement is biennial, not annual, so D misstates both the cycle and the ethics minimum. See IDAPA 18.06.04.012.

• A. Retake the licensing examination and submit a new application immediately
• B. Submit proof of all education within 90 days of expiration and pay a $100 administrative penalty for a delinquency of 1 to 30 days
• C. Submit proof of education and pay a $200 penalty, the flat fee for any late reinstatement
• D. Wait one year and reapply as a new applicant

Correct answer: B. Submit proof of all education within 90 days of expiration and pay a $100 administrative penalty for a delinquency of 1 to 30 days

Explanation: Idaho Code 41-1013(7) lets a licensee who missed CE reinstate by submitting proof of all education requirements within ninety (90) days from the expiration date and paying an administrative penalty of $100 for a delinquency of 1 to 30 days; $200 applies only to 31 to 60 days and $300 to 61 to 90 days, so C is wrong for a 20-day delinquency. Retesting and a new application are required only after the 90th day and up to one year (A), and reapplying as a new applicant applies only after the license has been expired one year or more (D). See Idaho Code § 41-1013.

• A. Within 30 days after the agency contract is executed
• B. Within 10 days after the first application is submitted
• C. Within 5 days after the agency contract is executed
• D. Within 15 days from the date the agency contract is executed or the first application is submitted

Correct answer: D. Within 15 days from the date the agency contract is executed or the first application is submitted

Explanation: Idaho Code 41-1018(2) requires the appointing insurer to file a notice of appointment within fifteen (15) days from the date the agency contract is executed or the first insurance application is submitted. Thirty days is the period for an insurer to notify the Director of a producer's termination under 41-1019, and five days is how quickly the Director must tell the insurer that a producer is ineligible under 41-1018(3); ten days is not an appointment figure. See Idaho Code § 41-1018.

• A. replacing an executive's salary during a temporary disability
• B. providing retirement income to all rank-and-file employees
• C. insuring the company's inventory and equipment against loss
• D. providing funds after an owner's or key person's death

Correct answer: D. providing funds after an owner's or key person's death

Explanation: Business continuation planning uses life insurance to create liquidity when a death could disrupt ownership, operations, or financial stability.

• A. The business must have a legitimate interest in the insured person's continued life
• B. The insured employee must have an ownership stake in the business before coverage is issued
• C. The insurable interest must continue to exist at the time the death claim is paid
• D. The business must name the insured's family as the beneficiary of the policy

Correct answer: A. The business must have a legitimate interest in the insured person's continued life

Explanation: A business must have a legitimate financial interest in the insured person's continued life, especially for key person or business-continuation coverage.

• A. Two partners each buy a policy on the other to fund the purchase of a deceased partner's share
• B. A company buys coverage on a founder whose death would harm business operations
• C. A company pays the premium on a policy an executive owns as a form of extra compensation
• D. A company provides group term coverage to every full-time employee on the payroll

Correct answer: B. A company buys coverage on a founder whose death would harm business operations

Explanation: Key person coverage is appropriate when the death of a founder, owner, executive, or specialized employee could create financial loss for the business.

• A. The beneficiary's driver's license
• B. The producer's business card
• C. The buy-sell agreement
• D. The insurer's advertising flyer

Correct answer: C. The buy-sell agreement

Explanation: The buy-sell agreement sets the rules for transfer and valuation. Life insurance is often used to fund the obligations created by that agreement.

• A. how a producer's commission is reported to the insurer
• B. which state administers the licensing exam
• C. whether a home has replacement cost coverage
• D. how life insurance proceeds are paid to a beneficiary

Correct answer: D. how life insurance proceeds are paid to a beneficiary

Explanation: Settlement options describe ways policy proceeds can be paid, such as lump sum, interest only, fixed period, fixed amount, or life income options.

• A. holds the proceeds and pays interest to the beneficiary
• B. pays equal installments of principal and interest for a set period
• C. pays the beneficiary a guaranteed income for the rest of her life
• D. pays the full proceeds in a single lump sum plus any accrued interest

Correct answer: A. holds the proceeds and pays interest to the beneficiary

Explanation: With an interest-only option, the insurer holds the principal proceeds for a period and pays interest according to the settlement arrangement.

• A. only if the beneficiary passes an exam
• B. over a selected period of time
• C. until the insurer changes its logo
• D. only as a single lump sum

Correct answer: B. over a selected period of time

Explanation: The fixed-period option pays proceeds over a stated number of years. Payment size depends on the amount, interest, and selected period.

• A. equal installments spread over a chosen number of years, regardless of amount
• B. a guaranteed income for life that ends at the beneficiary's death
• C. a selected dollar amount at regular intervals until funds are exhausted
• D. interest on the retained proceeds while the principal stays with the insurer

Correct answer: C. a selected dollar amount at regular intervals until funds are exhausted

Explanation: Under a fixed-amount option, the beneficiary receives a chosen dollar amount periodically until the proceeds and interest are exhausted.