Oregon Life Insurance Practice Exam Free - 2026

• A. $25
• B. $50
• C. $100
• D. $250

Correct answer: C. $100

Explanation: ORS 746.045(1) prohibits any rebate of premium, commission or other valuable consideration not specified in the policy, but subsection (3) permits giving, as advertising or a promotional program, prizes, goods or merchandise with an aggregate value of not more than $100 in a calendar year to a person (other than health insurance or health benefit plan insureds). The $25 (A), $50 (B) and $250 (D) figures are not the Oregon statutory cap. See ORS 746.045.

• A. At least 60 days, with no interest permitted
• B. 30 days (or one month of not less than 30 days), with interest not exceeding six percent per annum on the days of grace
• C. 10 days, with interest not exceeding eight percent
• D. 31 days, with a flat late fee

Correct answer: B. 30 days (or one month of not less than 30 days), with interest not exceeding six percent per annum on the days of grace

Explanation: ORS 743.165 requires a life policy to allow a grace period of 30 days, or at the insurer's option one month of not less than 30 days (four weeks for industrial policies), during which the policy stays in force; the insurer may impose interest not in excess of six percent per annum for the days of grace and may deduct any overdue premium from proceeds if a claim arises. Sixty days (A) and 10 days (C) are wrong periods, and eight percent is the policy-loan cap in ORS 743.187, not the grace-period rate; Oregon does not set a flat late fee (D). See ORS 743.165.

• A. Yes, backdating is allowed for any period the insurer chooses
• B. Yes, if Karim consents in writing
• C. No, a policy may not purport to take effect more than six months before the original application
• D. No, Oregon prohibits any backdating whatsoever

Correct answer: C. No, a policy may not purport to take effect more than six months before the original application

Explanation: ORS 743.225(2) provides that a life insurance policy may not purport to be issued or to take effect more than six months before the original application was made, so backdating by eight months is prohibited even with consent (A and B are wrong). Backdating within six months remains lawful, so a total ban (D) misstates the rule. See ORS 743.225.

• A. $450,000 in death benefits and the full $150,000 cash value
• B. $100,000 in total benefits
• C. $250,000 in death benefits and $100,000 in cash value
• D. $300,000 in death benefits, but not more than $100,000 in net cash surrender value

Correct answer: D. $300,000 in death benefits, but not more than $100,000 in net cash surrender value

Explanation: ORS 734.810(11) limits the association's obligation for any one life to $300,000 in life insurance death benefits, but not more than $100,000 in net cash surrender and net cash withdrawal values for life insurance, so the full face amount and cash value (A) are not guaranteed. The $250,000 figure (C) is the annuity present-value limit, and $100,000 (B) is the limit for miscellaneous health benefits, not life insurance. See ORS 734.810.

• A. The old policy's contestability period carries over to the replacement policy
• B. The new policy cannot be contested because the insured was already underwritten once
• C. The new policy may start a new period during which misstatements can be contested
• D. The new policy's contestability period is shortened to the time remaining on the old policy

Correct answer: C. The new policy may start a new period during which misstatements can be contested

Explanation: A replacement may create a new contestability period under the new policy. This is an important consumer consideration before replacing coverage.

• A. Advising the client to surrender the old policy before the new one is approved
• B. Recommending the policy with the highest first-year commission to the producer
• C. Presenting the new policy's illustration as a guaranteed projection of values
• D. Comparing old and new coverage honestly before recommending replacement

Correct answer: D. Comparing old and new coverage honestly before recommending replacement

Explanation: A fair replacement discussion compares benefits, costs, limitations, charges, and underwriting consequences before the client makes a decision.

• A. This policy is guaranteed to solve every financial problem with no risk or cost
• B. This policy's cash value grows tax-deferred, but a surrender may produce a taxable gain
• C. The illustrated values that are not guaranteed may be higher or lower than shown
• D. You have a free-look period after delivery during which you may return the policy

Correct answer: A. This policy is guaranteed to solve every financial problem with no risk or cost

Explanation: Overbroad guarantees and statements that hide costs, risks, or limitations are red flags. Producers must not misrepresent policy benefits or terms.

• A. acknowledge receipt of the policy and start the free-look period
• B. understand important policy features and compare coverage
• C. satisfy the insurable interest requirement at policy issue
• D. authorize the insurer to obtain medical and credit information

Correct answer: B. understand important policy features and compare coverage

Explanation: Consumer disclosure materials such as a buyer's guide or policy summary help applicants understand and compare life insurance features, costs, and limitations.

• A. Documentation transfers responsibility for suitability from the producer to the client
• B. Documentation is required before the insurer can issue a binding receipt
• C. Documentation helps show what was discussed and why a recommendation was made
• D. Documentation protects the producer from any claim of misrepresentation

Correct answer: C. Documentation helps show what was discussed and why a recommendation was made

Explanation: Good documentation supports compliance and helps show the basis for recommendations, disclosures, and client decisions.

• A. They are deductible only if the owner has no employer plan
• B. They are fully deductible regardless of income
• C. They are made with after-tax dollars and are not deductible
• D. They reduce the owner's Social Security wage base

Correct answer: C. They are made with after-tax dollars and are not deductible

Explanation: Roth IRA contributions are always made with money that has already been taxed, so no current deduction is allowed; the payoff comes later when qualified distributions are received income-tax free. Deductibility is a traditional IRA concept, which is why the options referencing full or plan-conditioned deductions are wrong. IRA contributions never affect Social Security wage calculations.

• A. A 25 percent excise tax
• B. A 20 percent mandatory withholding on eligible rollover distributions
• C. A 6 percent excess contribution tax
• D. A 10 percent early distribution penalty

Correct answer: D. A 10 percent early distribution penalty

Explanation: Distributions taken before age 59 1/2 without a qualifying exception are subject to a 10 percent additional tax on top of regular income tax. The 6 percent figure is the annual excise tax on excess contributions left in an account. The 25 percent rate applies to SIMPLE IRA distributions taken within the first two years of participation. The 20 percent figure is the mandatory federal withholding on an eligible rollover distribution paid from an employer plan to the participant, which is a withholding requirement rather than a penalty.

• A. The Roth owner is not required to take minimum distributions during his or her lifetime
• B. The Roth owner may deduct contributions in the year they are made, while the traditional owner may not
• C. Earnings in a Roth accumulate tax-deferred, while earnings in a traditional IRA are taxed each year
• D. The Roth owner must begin distributions at an earlier age than the traditional IRA owner

Correct answer: A. The Roth owner is not required to take minimum distributions during his or her lifetime

Explanation: A signature feature of the Roth IRA is that the original owner never has to begin lifetime required minimum distributions, so the account can keep compounding untouched. Deductibility runs the other way: traditional IRA contributions may be deductible while Roth contributions never are. Both IRA types let earnings accumulate without current taxation, so that does not separate them, and there is no rule forcing a Roth owner to start distributions at an earlier age.