Louisiana Life Insurance Practice Exam Free - 2026

• A. She must first complete a 20-hour approved prelicensing course.
• B. She must first complete a 40-hour approved prelicensing course.
• C. No prelicensing education is required for the Life exam; only Public Adjuster and Bail Bond candidates have prerequisites.
• D. She must hold a bachelor's degree in insurance or an industry designation to waive prelicensing.

Correct answer: C. No prelicensing education is required for the Life exam; only Public Adjuster and Bail Bond candidates have prerequisites.

Explanation: Louisiana repealed its producer prelicensing requirement in 2022 (Acts 2022, No. 273 repealed R.S. 22:1571 and the prelicensing prerequisite in R.S. 22:1546), and the PSI Candidate Information Bulletin states there are no prelicensing requirements for any examination except Public Adjuster and Bail Bond. The 20- and 40-hour figures were the old course lengths and no longer apply, and no degree or designation is needed. See La. R.S. 22:1546(A) and the PSI Louisiana Candidate Information Bulletin.

• A. 18 years of age
• B. 19 years of age
• C. 21 years of age
• D. There is no minimum age once the examination is passed.

Correct answer: A. 18 years of age

Explanation: Before approving a resident producer application, the commissioner must find that the individual is at least eighteen years of age, resides in or maintains a principal place of business in Louisiana, is not disqualified under R.S. 22:1554, has paid the fees, and has passed the examination for the lines applied for. Nineteen and twenty-one are not the statutory ages, and passing the exam does not remove the age requirement. See La. R.S. 22:1546(A)(1).

• A. 10 days
• B. 60 days
• C. 31 days, and the insurer may not choose any other period
• D. 30 days or, at the insurer's option, one month

Correct answer: D. 30 days or, at the insurer's option, one month

Explanation: Louisiana's standard provision entitles the insured to a grace period of thirty days or, at the option of the insurer, one month for any premium after the first, during which the policy stays in full force; if a claim arises during the grace period the overdue premium (with interest not over six percent) may be deducted. Ten and sixty days are wrong, and thirty-one days is the group life conversion period, not the individual grace period. See La. R.S. 22:931(A)(1).

• A. Yes; a material misrepresentation can be raised at any time.
• B. No; after the policy has been in force during the insured's lifetime for two years it is incontestable except for nonpayment of premium and the other permitted exceptions.
• C. No, but only because the contestability period in Louisiana is one year.
• D. Yes, because the Louisiana contestability period is three years.

Correct answer: B. No; after the policy has been in force during the insured's lifetime for two years it is incontestable except for nonpayment of premium and the other permitted exceptions.

Explanation: Louisiana life policies must provide that the policy is incontestable after it has been in force during the lifetime of the insured for two years from its date of issue, except for nonpayment of premiums, military/naval service conditions, and (at the insurer's option) disability and accidental-death benefits. Because 30 months exceeds two years, the misstatement cannot be used to void the policy. One year and three years are not the statutory period, and misrepresentations cannot be raised indefinitely. See La. R.S. 22:931(A)(2).

• A. They are not guaranteed and depend on the insurer's mortality, expense, and investment results
• B. They are guaranteed by the contract once the policy has been in force for a stated number of years
• C. They are taxable as ordinary income when paid, because they represent a share of the insurer's earnings
• D. They are paid by stock insurers on nonparticipating policies out of the shareholders' surplus

Correct answer: A. They are not guaranteed and depend on the insurer's mortality, expense, and investment results

Explanation: Dividends represent divisible surplus and vary with how favorably the insurer's actual mortality, expenses, and investment earnings compare to the assumptions used in pricing, so they can never be guaranteed. Illustrating them as guaranteed would be a misrepresentation. Dividends are treated as a return of excess premium rather than taxable earnings, and only participating policies pay dividends at all.

• A. The dividend is taxable as ordinary income when credited, but interest earned on it is tax deferred
• B. The dividend remains a nontaxable return of premium, but the interest credited on it is taxable income
• C. Both the dividend and the interest are tax free because the funds stay in a life insurance contract
• D. Both the dividend and the interest are taxed as ordinary income in the year the dividend is declared

Correct answer: B. The dividend remains a nontaxable return of premium, but the interest credited on it is taxable income

Explanation: The dividend keeps its character as a return of overpaid premium and is not income, while any interest the insurer credits on the accumulated fund is reportable as ordinary income each year. Saying nothing is ever taxable overlooks that interest element. The dividend itself is not taxable when credited, and leaving funds with a life insurer does not exempt interest from tax.

• A. Nonparticipating policies are eligible to receive policy dividends, while participating policies are not
• B. Participating policies are issued by stock insurers, while nonparticipating policies are issued by mutual insurers
• C. Participating policies are eligible to receive policy dividends, while nonparticipating policies are not
• D. Participating policies build guaranteed cash value, while nonparticipating policies build cash value from dividends alone

Correct answer: C. Participating policies are eligible to receive policy dividends, while nonparticipating policies are not

Explanation: A participating policy gives its owner a share in the insurer's divisible surplus through dividends, while a nonparticipating policy pays no dividends and typically carries a lower fixed premium. Cash value accumulation is a function of the policy design rather than dividend eligibility, and nonparticipating policies pay no dividends at all. Participating coverage is traditionally associated with mutual insurers, so the issuer pairing is reversed.

• A. 6 credits in the last 13 quarters
• B. 20 quarters of coverage
• C. 120 quarters of coverage
• D. 40 quarters of coverage

Correct answer: D. 40 quarters of coverage

Explanation: Fully insured status generally requires 40 quarters, or credits, of covered work, which equates to about ten years of employment and unlocks retirement and the broadest survivor benefits. The six-credits-in-13-quarters standard describes currently insured status, which provides a narrower set of survivor benefits. The 20 and 120 quarter figures are not the recognized thresholds for fully insured status.

• A. A surviving spouse receives no Social Security survivor income
• B. A surviving spouse's benefit is reduced for claiming before full retirement age
• C. A worker's earnings record is frozen and no further credits can be earned
• D. A surviving spouse's benefit is withheld until the youngest child reaches age 16

Correct answer: A. A surviving spouse receives no Social Security survivor income

Explanation: The blackout period begins when the youngest eligible child reaches the age at which the caregiver benefit ends and lasts until the surviving spouse becomes eligible for widow or widower benefits, leaving a gap with no survivor income. This gap is a classic reason to recommend private life insurance. The other choices describe unrelated or reversed situations: early-claiming reductions, a frozen earnings record, and a caregiver benefit that is in fact paid while the youngest child is under 16 and ends, rather than begins, at that point.

• A. A dependent parent under age 62 of the worker
• B. An unmarried dependent child under age 18
• C. An adult sibling who lived with the worker
• D. A business partner who depended on the worker

Correct answer: B. An unmarried dependent child under age 18

Explanation: Social Security survivor benefits are limited to defined family members, and an unmarried dependent child under 18, or under 19 if still in secondary school, is a primary eligible category. Siblings have no claim on a worker's earnings record, and a dependent parent qualifies only after reaching age 62. Business partners are not family members and receive nothing, which is why private life insurance is used for business continuation needs.

• A. $300,000, because the specified amount is the most the insurer ever pays
• B. $340,000, because Option B pays the specified amount plus the accumulated cash value
• C. $260,000, because the cash value is deducted from the specified amount at death
• D. $40,000, because Option B substitutes the cash value for the specified amount

Correct answer: B. $340,000, because Option B pays the specified amount plus the accumulated cash value

Explanation: Under the increasing (Option B) arrangement, the beneficiary receives the specified amount plus the policy's cash value, so the total death benefit grows as the cash value grows: $300,000 + $40,000 = $340,000. Paying only the specified amount describes the level (Option A) design, and the cash value is never subtracted from or substituted for the face amount. State insurance department consumer guides describe the two universal life death benefit options exactly this way.

• A. $100,000, equal to the cash surrender value
• B. $105,000, or 105 percent of the cash surrender value
• C. $250,000, or 250 percent of the cash surrender value
• D. $150,000, or 150 percent of the cash surrender value

Correct answer: C. $250,000, or 250 percent of the cash surrender value

Explanation: Under the cash value corridor of 26 U.S.C. 7702(d), the applicable percentage for an insured under age 40 is 250 percent, so the death benefit must be at least 250% x $100,000 = $250,000. The percentage grades down at older ages, reaching 105 percent in the late-70s-to-80s range and 100 percent by age 95. If the death benefit fell below the corridor, the contract would lose its tax status as life insurance. See 26 U.S.C. 7702.