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Free Pennsylvania Producer's Examination for Life Insurance Practice Questions

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Sample Practice Questions

Try these 10 sample questions from the Pennsylvania Producer's Examination for Life Insurance practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1Before applying for a Pennsylvania resident producer license for the life line, what must an individual who has no statutory exemption do?

    1. A. Pass the licensing examination for the requested line
    2. B. Obtain an insurer appointment
    3. C. Complete one full license period of continuing education
    4. D. Register a fictitious business name

    Answer: A

    Explanation: Section 604-A(a) says, "Prior to applying to the department for an insurance producer license, an individual shall pass an insurance producer licensing examination required for the lines of authority" requested. The exam precedes the license application; an appointment is not the prerequisite tested here.

    Reference: Chapter 006A - Act of May 17, 1921,P.L. 789, No. 285 Cl. 40 - "INSURANCE DEPARTMENT ACT OF 1921, THE" — 40 P.S. § 310.4(a)

  2. 2When a Pennsylvania producer is authorized by a client to secure insurance as the consumer's representative, whose legal agent is the producer?

    1. A. The client
    2. B. Every insurer quoted
    3. C. The testing vendor
    4. D. The Insurance Commissioner

    Answer: A

    Explanation: Section 37a.20(a) provides that the producer "shall be considered the legal agent of the client."

    Reference: No Job Name — 31 Pa. Code § 37a.20(a)

  3. 3Before delivering a variable life policy in Pennsylvania, what special company approval must the insurer have?

    1. A. Written approval from the Commissioner to issue variable life policies
    2. B. Approval from every policy applicant
    3. C. A temporary producer license
    4. D. A waiver of all policy-form requirements

    Answer: A

    Explanation: Section 82.12(2) requires that "The insurer has obtained the written approval of the Commissioner for the issuance of variable life insurance policies in this Commonwealth."

    Reference: No Job Name — 31 Pa. Code § 82.12(2)

  4. 4After group life coverage ends because employment terminates, how long does the insured generally have to apply and pay the first premium for an individual conversion policy?

    1. A. 31 days
    2. B. 15 days
    3. C. 45 days
    4. D. 60 days

    Answer: A

    Explanation: The Group Life Insurance Law requires the application and first premium "within thirty-one days after such termination."

    Reference: Group Life Insurance Law — Group Life Insurance Law § 6(8), 40 P.S. § 532.6(8)

  5. 5For a Pennsylvania life policy physically delivered by an insurer representative, which date begins the owner's statutory examination period?

    1. A. The date the representative physically delivers the policy to the owner
    2. B. The date the owner signs the insurance application
    3. C. The date the insurer approves the policy form
    4. D. The date the first premium is deposited

    Answer: A

    Explanation: Current section 404-A(a)(2) defines the delivery date as "the date the policy or annuity is physically delivered to the owner by a representative of the insurer." That physical-delivery date starts the statutory examination period.

    Reference: Insurance Company Law (1921) — Insurance Company Law of 1921, § 442

  6. 6Upon delivery of a new fixed-dollar annuity that replaces nothing, what review time must Pennsylvania give the contractholder?

    1. A. At least 10 days after delivery
    2. B. At least 15 days after delivery
    3. C. At least 30 days after delivery
    4. D. At least 45 days after delivery

    Answer: A

    Explanation: Section 410E(a)(1) requires notice that the contractholder may return the contract "within at least ten (10) days of its delivery."

    Reference: Insurance Company Law (1921) — Insurance Company Law of 1921, § 410E(a)(1)

  7. 7A taxpayer receives a distribution from a traditional IRA and intends an ordinary rollover. Assuming no waiver or special exception, what is the latest day to contribute it to the qualifying destination?

    1. A. By the 120th day after receiving the distribution
    2. B. By the 30th day after receiving the distribution
    3. C. By the 90th day after receiving the distribution
    4. D. By the 60th day after receiving the distribution

    Answer: D

    Explanation: "You must generally make the rollover contribution by the 60th day after the day you receive the distribution from your traditional IRA or your employer's plan." The latest general deadline here is day 60.

    Reference: IRS Publication 590-A — IRS Publication 590-A, Rollovers, 60-Day Rollover

  8. 8A candidate is registering for the Pennsylvania life producer examination. What must be remitted before the candidate takes the examination?

    1. A. A completed examination application and the nonrefundable examination fee
    2. B. A producer appointment and the annual appointment fee
    3. C. A renewal form and proof of 24 continuing-education credits
    4. D. A consumer representation agreement and service fee

    Answer: A

    Explanation: Section 604-A(c) requires "a completed application for examination indicating the lines of authority" and "the nonrefundable examination fee established by the department prior to taking" the exam.

    Reference: Chapter 006A - Act of May 17, 1921,P.L. 789, No. 285 Cl. 40 - "INSURANCE DEPARTMENT ACT OF 1921, THE" — 40 P.S. § 310.4(c)

  9. 9In reviewing a life applicant's risk, an underwriter notes a condition that increases the chance of an insured loss. Which insurance term describes that condition?

    1. A. Claim
    2. B. Peril
    3. C. Loss
    4. D. Hazard

    Answer: D

    Explanation: "Hazard - circumstance which tends to increase the probability or severity of a loss." The condition changes the likelihood of loss; a peril is its cause, while loss and claim describe later outcomes or requests.

    Reference: NAIC Glossary of Insurance Terms — NAIC Glossary, Hazard

  10. 10May an adult Pennsylvania resident insure the resident's own life and name any beneficiary?

    1. A. Yes
    2. B. Only if the beneficiary is a blood relative
    3. C. Only if the beneficiary is a creditor
    4. D. Only with the Commissioner's approval

    Answer: A

    Explanation: Section 412(a) permits a competent person to insure the person's own life "for the benefit of any person." Insurable interest is not required in the chosen beneficiary when the insured procures the coverage on the insured's own life.

    Reference: Insurance Company Law (1921) — Insurance Company Law of 1921, § 412(a), 40 P.S. § 512(a)

Topics in this practice bank

These topics describe the available practice for Pennsylvania Producer's Examination for Life Insurance. Review the examination outline and its sources for scope and allocation details.

  • 1.0 Insurance Regulation
    • Licensing
    • Licensing > Process and types
    • Licensing > Process and types > Requirements (40 P.S. § 310.1, 310.3-310.14)
    • Licensing > Process and types > Resident/nonresident (40 P.S. § 310.3–310.5, 310.10)
    • Licensing > Process and types > Temporary license (40 P.S. § 310.9)
    • Licensing > Process and types > Managers and exclusive general producers (40 P.S. § 310.1, 310.31)
    • Licensing > Maintenance and duration
    • Licensing > Maintenance and duration > Change in contact information (40 P.S. § 310.11(19))
    • Licensing > Maintenance and duration > Renewal (40 P.S. § 310.8)
    • Licensing > Maintenance and duration > Duty to report administrative or criminal actions (40 P.S. § 310.78)
    • Licensing > Maintenance and duration > Fictitious names (40 P.S. § 310.7)
    • Licensing > Maintenance and duration > Continuing education (40 P.S. § 310.8(b), 310.6(a), 31 Pa. Code Ch. 39a)
    • Licensing > Maintenance and duration > Waiver due to military or extenuating circumstances (40 P.S. § 310.8)
    • Licensing > Disciplinary actions
    • Licensing > Disciplinary actions > License denial, nonrenewal, suspension, or revocation (40 P.S. § 310.91, 310.11)
    • Licensing > Disciplinary actions > Penalties and fines for violations (40 P.S. §§ 310.12, 310.41a, 310.91, 1171.11)
    • Licensing > Disciplinary actions > Cease and desist order (40 P.S. §§ 310.91, 1171.9)
    • Licensing > Disciplinary actions > Cease and desist order (40 P.S. §§ 310.91, 1171.9) > Civil
    • Licensing > Disciplinary actions > Cease and desist order (40 P.S. §§ 310.91, 1171.9) > Criminal
    • Licensing > Disciplinary actions > Cease and desist order (40 P.S. §§ 310.91, 1171.9) > Hearings
    • Licensing > Disciplinary actions > Consent agreement
    • State regulation
    • State regulation > Acts constituting insurance transactions
    • State regulation > Acts constituting insurance transactions > Negotiate, sell, solicit (40 P.S. §§ 310.1, 310.3, 310.8, 310.11)
    • State regulation > Commissioner's general duties and powers (40 P.S. §§ 310.2, 1171.7)
    • State regulation > Company regulation
    • State regulation > Company regulation > Certificate of authority (40 P.S. §§ 47, 47a, 420)
    • State regulation > Company regulation > Solvency (40 P.S. §§ 72, 112)
    • State regulation > Company regulation > Policy forms and rates (40 P.S. §§ 510, 776.1–776.7, 1181–1199, 1221–1238)
    • State regulation > Company regulation > Unfair claims settlement practices (40 P.S. § 1171.5(a)(10); 31 Pa. Code Ch. 146)
    • State regulation > Producer regulation
    • State regulation > Producer regulation > Fiduciary responsibility (40 P.S. § 310.96; 31 Pa. Code Ch. § 37.81)
    • State regulation > Producer regulation > Examination of books and records (40 P.S. § 323.3-4)
    • State regulation > Producer regulation > Producer disclosure requirements (40 P.S. § 310.71(b))
    • State regulation > Producer regulation > Commissions and fees (40 P.S. §§ 310.72–310.74)
    • State regulation > Producer regulation > Prohibited acts (40 P.S. § 310.11)
    • State regulation > Appointment procedures
    • State regulation > Appointment procedures > Producer appointment (40 P.S. § 310.71, 31 Pa Code 37.61)
    • State regulation > Appointment procedures > Appointment termination (40 P.S. § 310.71a)
    • State regulation > Unfair insurance practices (40 P.S. §§ 1171.1 1171.5)
    • State regulation > Unfair insurance practices (40 P.S. §§ 1171.1 1171.5) > Rebates and Inducements (40 P.S. §§ 310.45, 310.46, 1171.5(a)(8))
    • State regulation > Unfair insurance practices (40 P.S. §§ 1171.1 1171.5) > Misrepresentation (40 P.S. §§ 310.47–.48, 1171.5(a)(1),(2))
    • State regulation > Unfair insurance practices (40 P.S. §§ 1171.1 1171.5) > Twisting (40 P.S. §§ 473)
    • State regulation > Unfair insurance practices (40 P.S. §§ 1171.1 1171.5) > False advertising (40 P.S. § 1171.5; 31 Pa. Code Ch. 51)
    • State regulation > Unfair insurance practices (40 P.S. §§ 1171.1 1171.5) > Defamation (40 P.S. § 1171.5(a)(3); 31 Pa. Code Ch. 51)
    • State regulation > Unfair insurance practices (40 P.S. §§ 1171.1 1171.5) > Boycott, coercion or intimidation (40 P.S. § 1171.5(a)(4))
    • State regulation > Unfair insurance practices (40 P.S. §§ 1171.1 1171.5) > Misappropriation of funds (40 P.S. §§ 310.11(4), 310.42)
    • State regulation > Unfair insurance practices (40 P.S. §§ 1171.1 1171.5) > Unfair discrimination (40 P.S. § 1171.5; 31 Pa. Code § 145.4)
    • State regulation > Unfair insurance practices (40 P.S. §§ 1171.1 1171.5) > Replacement (40 P.S. § 625, 31 Pa Code Ch. 81)
    • State regulation > Privacy of consumer financial information (40 P.S. § 310.77(a); 31 Pa. Code §§ 146a.1–.44)
    • State regulation > Insurance fraud regulation (40 P.S. §§ 325.1–325.62; 18 Pa. C.S. § 4117)
    • Federal Regulation
    • Federal Regulation > Fair Credit Reporting Act
    • Federal Regulation > Fraud and False Statements (18 USC Sections 1033 and 1034)
    • Federal Regulation > Privacy (Gramm-Leach-Bliley)
    • Federal Regulation > National Do Not Call List (https://www.donotcall.gov/)
  • 2.0 General Insurance Concepts
    • Risk
    • Risk > Methods of Handling Risk (e.g., Avoidance, Retention, Sharing, Reduction, Transfer)
    • Risk > Elements of Insurable Risks
    • Risk > Definitions (e.g., Risk, Hazard, Peril, Loss)
    • Classifications of Insurers
    • Classifications of Insurers > Mutual, Stock
    • Classifications of Insurers > Admitted, Non-Admitted
    • Classifications of Insurers > Foreign, Domestic, Alien
    • Elements of a Contract
    • Elements of a Contract > Consideration
    • Elements of a Contract > Competent Parties
    • Elements of a Contract > Legal Purpose
    • Elements of a Contract > Offer
    • Elements of a Contract > Acceptance
    • Authority and Powers of Producers
    • Authority and Powers of Producers > Express
    • Authority and Powers of Producers > Implied
    • Authority and Powers of Producers > Apparent
    • Authority and Powers of Producers > The Law of Agency
    • Legal Interpretations Affecting Contracts
    • Legal Interpretations Affecting Contracts > Reasonable Expectations
    • Legal Interpretations Affecting Contracts > Indemnity
    • Legal Interpretations Affecting Contracts > Good Faith
    • Legal Interpretations Affecting Contracts > Fraud
    • Legal Interpretations Affecting Contracts > Warranties, Representations, Misrepresentations, and Concealment
  • 3.0 Life Insurance Basics
    • Insurable Interest (40 P.S. § 512)
    • Personal Uses of Life Insurance
    • Personal Uses of Life Insurance > Survivor Protection
    • Personal Uses of Life Insurance > Estate Creation
    • Personal Uses of Life Insurance > Liquidity
    • Personal Uses of Life Insurance > Estate Conservation
    • Personal Uses of Life Insurance > Asset Protection
    • Determining Amount of Personal Life Insurance
    • Determining Amount of Personal Life Insurance > Human Life Value Approach
    • Determining Amount of Personal Life Insurance > Needs Approach
    • Business Uses of Life Insurance
    • Business Uses of Life Insurance > Buy-Sell Funding
    • Business Uses of Life Insurance > Key Person
    • Business Uses of Life Insurance > Executive Compensation
    • Viatical and life settlements
    • Viatical and life settlements > Disclosure to consumers (40 P.S. § 626.7)
    • Viatical and life settlements > General rules (40 P.S. § 626.8)
    • Viatical and life settlements > Definitions (40 P.S. § 626.2)
    • Classes of life insurance policies
    • Classes of life insurance policies > Group versus individual
    • Classes of life insurance policies > Permanent versus term
    • Classes of life insurance policies > Participating versus nonparticipating
    • Classes of life insurance policies > Fixed versus variable life insurance
    • Classes of life insurance policies > General account versus separate account (40 P.S. § 506.2; 31 Pa. Code Ch. 82.41-.51)
    • Classes of life insurance policies > Regulation of variable life insurance (31 Pa. Code Ch. 82.1, .14, .81)
    • Factors in Premium Determination
    • Factors in Premium Determination > Mortality
    • Factors in Premium Determination > Interest
    • Factors in Premium Determination > Expense
    • Premium Frequency
    • Producer responsibilities
    • Producer responsibilities > Sales presentations
    • Producer responsibilities > Advertising (31 Pa. Code Ch. 51.1–.36, .42)
    • Producer responsibilities > Life and Health Insurance Guaranty Association (40 P.S. § 991.1717)
    • Producer responsibilities > Life insurance disclosure statement (31 Pa. Code Ch. 83)
    • Producer responsibilities > Illustrations (40 P.S. § 625.7–625.8)
    • Producer responsibilities > Life insurance surrender comparison index disclosure (31 Pa. Code Ch. 83.51–.57)
    • Field Underwriting
    • Field Underwriting > Application Procedures
    • Field Underwriting > Warranties and Representations
    • Policy Delivery
    • Policy Delivery > Effective Date of Coverage
    • Policy Delivery > Premium Collection
    • Policy Delivery > Statement of Good Health
    • Policy Delivery > Delivery receipt requirement (40 P.S. § 625.4)
    • Company Underwriting
    • Company Underwriting > Sources of Information
    • Company Underwriting > Classifications of Risk (Preferred, Standard, Substandard, Declined)
    • Company Underwriting > Selection criteria and unfair discrimination (40 P.S. § 477a)
    • Classification of Risks
    • Classification of Risks > Preferred
    • Classification of Risks > Standard
    • Classification of Risks > Substandard
  • 4.0 Types of Life Insurance Policies
    • Term Life Insurance
    • Term Life Insurance > Level
    • Term Life Insurance > Decreasing
    • Term Life Insurance > Increasing Term
    • Term Life Insurance > Renewable Term
    • Whole (Permanent, Ordinary) Life Insurance
    • Whole (Permanent, Ordinary) Life Insurance > Single Premium
    • Whole (Permanent, Ordinary) Life Insurance > Continuous Premium
    • Whole (Permanent, Ordinary) Life Insurance > Limited Payment Life
    • Whole (Permanent, Ordinary) Life Insurance > Adjustable Life
    • Universal Life
    • Index Whole Life
    • Specialized Policies
    • Specialized Policies > Joint Life
    • Specialized Policies > Survivorship Life
    • Specialized Policies > Juvenile
    • Specialized Policies > Return of Premium Term Insurance
    • Group Life Insurance
    • Group Life Insurance > Eligible Groups
    • Group Life Insurance > Characteristics of Group Life Insurance
    • Group Life Insurance > Conversion to individual policy (40 P.S. § 532.7)
  • 5.0 Life Insurance Policy Provisions, Options, and Riders
    • Standard Life Insurance Provisions (40 P.S. § 510)
    • Standard Life Insurance Provisions (40 P.S. § 510) > Ownership
    • Standard Life Insurance Provisions (40 P.S. § 510) > Assignment
    • Standard Life Insurance Provisions (40 P.S. § 510) > Right to Examine (Free Look) (40 P.S. § 510C (a), (2), (3), (b1))
    • Standard Life Insurance Provisions (40 P.S. § 510) > Payment of Premiums (a)
    • Standard Life Insurance Provisions (40 P.S. § 510) > Grace Period (b)
    • Standard Life Insurance Provisions (40 P.S. § 510) > Misstatement of Age/Sex (e)
    • Standard Life Insurance Provisions (40 P.S. § 510) > Incontestability (c)
    • Standard Life Insurance Provisions (40 P.S. § 510) > Reinstatement (k)
    • Standard Life Insurance Provisions (40 P.S. § 510) > Entire Contract (d)
    • Standard Life Insurance Provisions (40 P.S. § 510) > Payment of claims (l)
    • Standard Life Insurance Provisions (40 P.S. § 510) > Prohibited provisions including backdating (40 P.S. § 511)
    • Beneficiary Designation Options
    • Beneficiary Designation Options > Individuals
    • Beneficiary Designation Options > Classes
    • Beneficiary Designation Options > Estates
    • Beneficiary Designation Options > Minors
    • Beneficiary Designation Options > Trusts
    • Types of Beneficiaries
    • Types of Beneficiaries > Revocable versus Irrevocable
    • Types of Beneficiaries > Primary and Contingent
    • Beneficiary-Related Clauses
    • Beneficiary-Related Clauses > Common Disaster
    • Beneficiary-Related Clauses > Spendthrift
    • Beneficiary-Related Clauses > Effects of Divorce on Designation of Beneficiaries (20 Pa C.S.A.§ 6111.2)
    • Settlement Options
    • Settlement Options > Cash Payment (Lump Sum)
    • Settlement Options > Interest Only
    • Settlement Options > Life Income
    • Settlement Options > Fixed-Period
    • Settlement Options > Fixed-Amount Installments
    • Settlement Options > Retained Asset Account
    • Nonforfeiture Options
    • Nonforfeiture Options > Cash Surrender Value
    • Nonforfeiture Options > Extended Term
    • Nonforfeiture Options > Reduced Paid-Up Insurance
    • Policy Loan and Withdrawal Options
    • Policy Loan and Withdrawal Options > Loans
    • Policy Loan and Withdrawal Options > Automatic Premium Loans
    • Policy Loan and Withdrawal Options > Withdrawals Partial Surrenders
    • Dividend Options
    • Dividend Options > Paid-Up Additions
    • Dividend Options > Cash Payment (Lump Sum)
    • Dividend Options > One Year Term
    • Dividend Options > Reduction of Premium
    • Dividend Options > Accumulation at Interest
    • Disability Riders
    • Disability Riders > Waiver of Premium
    • Disability Riders > Disability Income Benefit
    • Disability Riders > Payor Benefit Life
    • Riders Covering Additional Insureds
    • Riders Covering Additional Insureds > Spouse
    • Riders Covering Additional Insureds > Children
    • Riders Covering Additional Insureds > Family
    • Riders Affecting Death Benefit Amount
    • Riders Affecting Death Benefit Amount > Accidental Death
    • Riders Affecting Death Benefit Amount > Guaranteed Insurability
    • Riders Affecting Death Benefit Amount > Cost of Living
    • Riders Affecting Death Benefit Amount > Return of Premium
    • Riders Affecting Death Benefit Amount > Accelerated (Living) Benefit Provision Rider
    • Riders Affecting Death Benefit Amount > Accelerated (Living) Benefit Provision Rider > Conditions for payment (31 Pa. Code Ch. 90f.3)
    • Riders Affecting Death Benefit Amount > Accelerated (Living) Benefit Provision Rider > Effect on death benefit (31 Pa. Code Ch. 90f.3)
    • Riders Affecting Death Benefit Amount > Accelerated (Living) Benefit Provision Rider > Exclusions and restrictions (31 Pa. Code Ch. 90f.4)
    • Riders Affecting Death Benefit Amount > Long-Term Care Rider
    • Policy Exclusions
  • 6.0 Annuities
    • Annuity Principles and Concepts
    • Annuity Principles and Concepts > Accumulation Period versus Annuity Period
    • Annuity Principles and Concepts > Owner, Annuitant, and Beneficiary
    • Annuity Principles and Concepts > Right to Examine (40 P.S. § 510D)
    • Immediate versus Deferred Annuities
    • Annuity (Benefit) Payment Options
    • Annuity (Benefit) Payment Options > Life Contingency Options
    • Annuity (Benefit) Payment Options > Annuities Certain
    • Annuity (Benefit) Payment Options > Pure Life versus Life with Guaranteed Minimum
    • Annuity (Benefit) Payment Options > Single Life versus Multiple Life
    • Annuity Products
    • Annuity Products > Fixed Annuities
    • Annuity Products > Equity Indexed Annuities
    • Annuity Products > Immediate Annuities
    • Annuity Products > Variable annuities
    • Annuity Products > Variable annuities > Assets in a separate account (31 Pa. Code Ch. 85.21–.27)
    • Annuity Products > Variable annuities > Regulation of variable annuities (SEC, FINRA and Pennsylvania) (31 Pa. Code Ch. 85.1–.4)
    • Annuity Products > Suitability of annuities (Act 48 of 2018)
    • Uses of Annuities
    • Uses of Annuities > Lump-Sum Settlements
    • Uses of Annuities > Retirement Income
    • Uses of Annuities > Education
  • 7.0 Federal Tax Considerations for Life Insurance
    • Requirements of Life Insurance Qualified Plans
    • Federal Tax Considerations for Qualified Plans
    • Federal Tax Considerations for Qualified Plans > Withdrawals
    • Federal Tax Considerations for Qualified Plans > Rollovers versus Transfers
    • Qualified Plan Types, Characteristics, and Purchasers
    • Qualified Plan Types, Characteristics, and Purchasers > Individual Retirement Accounts (IRAs; Traditional versus Roth; Immediate Annuity)
    • Qualified Plan Types, Characteristics, and Purchasers > 401k
    • Qualified Plan Types, Characteristics, and Purchasers > 403b
    • Taxation of Personal Life Insurance
    • Taxation of Personal Life Insurance > Premiums
    • Taxation of Personal Life Insurance > Dividends
    • Taxation of Personal Life Insurance > Settlements
    • Modified Endowment Contracts (MECs)

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