Most Common Life Insurance Exam Topics: What You Really Need to Know

1/29/2026

Walking into a testing center to take your life insurance licensing exam is a nerve-wracking experience. The room is quiet, the clock is ticking, and your future career hangs in the balance. But the anxiety usually stems from one specific fear: the unknown.

What if they ask about something you didn’t study? What if the test is full of obscure legal dates or complex tax calculations you glanced over?

Here is the truth: The life insurance exam isn’t a mystery. It is a standardized test built on a predictable framework. While every state has its slight variations, the core curriculum—the "meat and potatoes" of the exam—remains remarkably consistent across the country.

If you can master the most common topics, you aren't just hoping to pass; you are strategically positioning yourself to succeed. This guide strips away the fluff and focuses on the high-yield areas that appear on almost every exam. These are the concepts you simply cannot afford to miss.

Why Do Certain Topics Show Up More Than Others?

Before we dive into the specific topics, it helps to understand why the exam is structured this way. The state licensing board isn’t trying to trick you. Their goal is to ensure consumer protection.

They want to know:

Can you explain products correctly? If you sell a client the wrong policy because you didn’t understand the difference between "Term" and "Whole Life," you could ruin their financial future.
Do you know the rules? Insurance is a contract. You need to understand the legal obligations of that contract.
Will you act ethically? Agents have a fiduciary responsibility. The state needs to know you understand the laws regarding fraud, rebating, and misrepresentation.

Because of this consumer-protection focus, the exam heavily weights topics related to policy provisions, types of policies, and state laws. Let’s break down the heavy hitters.

1. Types of Life Insurance Policies (The "Big Three")

This is the bedrock of the exam. You can expect a significant portion of your questions—sometimes up to 25-30%—to revolve around distinguishing between different policy types. You need to know these inside and out.

Term Life Insurance

You must understand that Term Life is "pure protection." It has no cash value. It lasts for a specific period (term) and then expires.

Key Concepts to Master:

Level Term: The death benefit stays the same, and the premium stays the same for the duration of the term.
Decreasing Term: The death benefit goes down over time (often used for mortgage protection), but the premium usually stays level.
Renewable & Convertible: Know what these features allow a policyholder to do (renew without a physical exam or convert to permanent insurance) and how they affect premiums (prices go up upon renewal based on attained age).

Whole Life Insurance

Whole Life is "permanent" insurance. It lasts until age 100 (or 121 in newer policies). It has a savings component (cash value).

Key Concepts to Master:

Level Premium: The price never changes.
Cash Value: It grows at a guaranteed rate.
Endowment: The policy "endows" or matures when the cash value equals the death benefit (usually at age 100).

Flexible Policies (Universal & Variable)

This is where students get tripped up. These policies offer flexibility that standard Whole Life does not.

Universal Life (UL): Think "flexible." The policyowner can skip premiums (if there is enough cash value) and adjust the death benefit. It separates the insurance component from the savings component.
Variable Life: Think "risk." The policyowner chooses where to invest the cash value (stocks, bonds). Therefore, the policyowner bears the investment risk, not the insurer. Note: You generally need a securities license (like a Series 6 or 7) to sell this product. If you are interested in that path, check out ourSecurities Licensing resources.

Study Tip: Create a comparison chart. Columns should be: Policy Type, Premium (Fixed/Flexible), Death Benefit (Fixed/Adjustable), and Cash Value (Guaranteed/Non-Guaranteed). Memorize the differences.

2. Policy Riders: Customizing the Contract

Riders are add-ons to a basic policy. The exam loves riders because they test your ability to customize coverage for a client’s specific needs.

The Most Tested Riders

Waiver of Premium: If the insured becomes totally disabled, the insurance company waives the premiums, but the policy stays in force. You need to know the waiting period (usually 6 months).
Guaranteed Insurability: Allows the insured to buy more coverage at specific times (like marriage or having a child) without proving good health.
Payor Benefit: Used in juvenile policies. If the parent (payor) dies or becomes disabled, premiums are waived until the child reaches a certain age (usually 21).
Accidental Death Benefit: Often called "Double Indemnity." It pays double the face amount if death is caused by an accident. Be clear on the definition of "accident" (it must happen within 90 days of the injury).

Why this matters: Riders are often the answer to "scenario" questions. For example: "John wants to ensure he can buy more insurance later even if he gets sick. Which rider should he add?" Answer: Guaranteed Insurability.

3. Policy Provisions and Options

If Types of Policies are the vehicle, Provisions are the engine. These are the rules written into the contract that dictate how it works. This is arguably the most technical part of the exam, and it is crucial forLife & Health Insurance License preparation.

Standard Provisions

Grace Period: The time after the premium due date that the policy stays active (usually 30 or 31 days). If you die during the grace period, the death benefit is paid minus the overdue premium.
Reinstatement: If a policy lapses, you can turn it back on. But you must pay back premiums + interest and prove insurability.
Incontestability Clause: After the policy has been in force for 2 years, the company cannot deny a claim due to a lie on the application (unless it was outright fraud in some states, but usually even fraud is protected after 2 years).
Misstatement of Age/Gender: This is unique because it is never incontestable. If you lied about your age, the company won't void the policy; they will just adjust the death benefit to what the premium would have bought at the correct age.

Nonforfeiture Options

This is a fancy way of saying: "What happens to my cash value if I cancel my Whole Life policy?" You cannot "forfeit" your equity. You have three choices:

Cash Surrender: Take the money and run.
Reduced Paid-Up: Use the cash value to buy a smaller Whole Life policy that is fully paid for.
Extended Term: Use the cash value to buy a Term policy for the same face amount for as long as the money lasts. (This is usually the "automatic" option if you don't pick one).

Dividend Options

Dividends are not guaranteed. They are a return of overcharged premiums (making them tax-free!). If you get a dividend, you can:

Take the cash.
Reduce your next premium.
Accumulate at interest (the interest is taxable!).
Buy Paid-Up Additions (buy tiny little extra policies—this usually increases the death benefit the most).

4. Beneficiaries

You need to know who gets the money and how they are designated.

Primary vs. Contingent: Primary is first in line. Contingent (secondary) only gets paid if the Primary is dead.
Revocable vs. Irrevocable:

Revocable: The policyowner can change the beneficiary anytime without asking.
Irrevocable: The policyowner needs the beneficiary’s permission to make changes. This is rare but heavily tested.

Per Stirpes vs. Per Capita:

Per Capita: "By the head." If one child dies, the surviving children split the money.
Per Stirpes: "By the bloodline." If one child dies, their share goes to their children (the grandkids).

5. Annuities: The "Anti-Life Insurance"

While Life Insurance handles the risk of dying too soon, Annuities handle the risk of living too long. Many students struggle here because the terminology flips.

Accumulation Period: Money goes in. It grows tax-deferred.
Annuitization Period: Money comes out.
Parties to an Annuity:

Owner: Pays the money, has the rights.
Annuitant: The person whose life expectancy determines the payout.
Beneficiary: Gets the money if the annuitant dies during the accumulation phase.

Key Exam Distinction: Know the difference between Fixed Annuities (guaranteed rate, safe, purchasing power risk due to inflation) and Variable Annuities (invested in market, hedge against inflation, requires a securities license). If you plan on selling Variable Annuities, you will need to coordinate your study withSecurities Licensing.

6. Taxation of Life Insurance

The exam won't make you calculate a 1040 form, but you must know the general tax rules.

Premiums: Generally not tax-deductible for individuals.
Death Benefit: Generally tax-free to the beneficiary (if paid in a lump sum).
Cash Value Growth: Tax-deferred (you don't pay taxes while it grows).
Loans: Tax-free (it’s your own money).
MECs (Modified Endowment Contracts): If you put too much money into a policy too fast (failed the "7-pay test"), it becomes a MEC. Now, loans and withdrawals are taxed (LIFO - Last In, First Out) and usually have a 10% penalty if under age 59.5.

Study Tip: The phrase "tax-free death benefit" is the golden rule. Start there, and learn the exceptions (like interest earned on the death benefit payout).

7. Underwriting and Risk

How does an insurance company decide to accept you? This section covers the application process.

Insurable Interest: You must care if the person dies. This must exist at the time of application, not at the time of death. (e.g., You can insure your spouse. If you divorce later, the policy is still valid).
The Application: It is the primary source of underwriting information.
The MIB (Medical Information Bureau): A database where insurers share medical data to prevent fraud. It helps insurers know if you lied about a condition on a previous application with another company.
Risk Classifications:

Preferred: Healthy, low risk (lowest premium).
Standard: Average risk.
Substandard: Higher risk (rated up, higher premium).

8. Group Life Insurance

Most people have insurance through work. The exam covers how this differs from individual plans.

Master Contract: The employer holds the policy.
Certificate of Insurance: The employee gets this (not a policy).
Conversion Privilege: If you leave your job, you usually have 31 days to convert your group term to an individual permanent policy without proving insurability. This is a massive benefit and a frequent exam question.

9. State Law (The "Boring" But Critical Stuff)

Do not ignore this. Every state has a specific section of the exam dedicated to its own rules. While the concepts above are national, these rules are local. You need to check your specific state requirements, often found in resources likeInsurance Licensing guides.

Common State Law topics include:

The Insurance Commissioner: What can they do? (Usually issue licenses, conduct hearings, issue Cease and Desist orders). What can they not do? (Write the laws or set premium rates—companies set rates).
Licensing Rules: How many hours of pre-licensing do you need? How many hours of Continuing Education (CE) are required to keep your license?
Unfair Trade Practices:

Rebating: Giving part of your commission back to the client (Illegal).
Twisting: Lying to a client to get them to switch policies to their detriment (Illegal).
Defamation: Talking trash about another insurance company (Illegal).

10. Ethics and Agent Responsibilities

This ties into state law but focuses on your role.

Fiduciary Capacity: You handle money (premiums). You hold a position of trust. You must not commingle funds (mixing client money with your personal money).
Authority:

Express Authority: Written in your contract.
Implied Authority: Not written, but assumed (like collecting business cards to find leads).
Apparent Authority: What the client thinks you have power to do (based on your actions).

Strategies for Mastering These Topics

Now that you know what to study, here is how to tackle it.

Don't Just Memorize Definitions—Learn Relationships

Don't just memorize "Adhesion." Understand why it matters. Because the contract is "Adhesion" (take it or leave it), any ambiguity is decided in favor of the insured. Understanding the relationship helps you answer tricky scenario questions.

Use the "Process of Elimination"

On the exam, you will see questions about topics that seem similar, like "Variable Life" vs. "Variable Universal Life." If you know the specific features of Universal Life (flexible premiums), you can eliminate answers that don't fit that description.

Focus on the "Exceptions"

Exam writers love exceptions.

Death benefits are tax-free... except when transferred for value.
You can't change an irrevocable beneficiary... except if they die first.
Policies are incontestable after 2 years... except for non-payment of premium.
Study the "excepts." That is where the points are hiding.

Leverage High-Quality Pre-Licensing Courses

You cannot get this level of detail from skimming a blog post alone. You need a structured course that walks you through these topics in order. AtAB Training Center, our courses are designed to highlight these specific exam topics. We use practice exams that mirror the distribution of questions you will see on the real test.

If you are just starting out, check ourLife & Health Insurance License page to find the specific training required for your state.

What About Health Insurance?

If you are taking the combined Life & Health exam, remember that Health is typically 40-50% of the test.
Common Health topics include:

Medicare Parts A, B, C, D (know what each covers).
HMO vs. PPO (Gatekeeper vs. Freedom of choice).
Disability Income (Elimination periods and benefit periods).
COBRA (Continuing coverage after leaving a job).

Don't neglect the Health side just because Life insurance seems more straightforward. You need a balanced score to pass.

Thinking Ahead: Beyond the Exam

While your immediate goal is passing the test, mastering these topics is actually the first step in your career.

Understanding Underwriting helps you set realistic expectations for clients.
Understanding Riders helps you upsell and provide better coverage.
Understanding State Law keeps you out of court and allows you to keep your license.

Many agents eventually expand their knowledge base. Once you have mastered Life & Health, you might look intoProperty & Casualty to insure homes and cars. Or, if you find you enjoy the legal/claims side of things, you might exploreAdjuster Licensing or evenWorkers' Compensation Training.

The insurance industry is vast. But it all starts with this one exam.

Conclusion

The Life Insurance exam covers a lot of ground, but it isn't infinite. By focusing your energy on these core topics—Policy Types, Provisions, Riders, Beneficiaries, Annuities, Taxation, and State Law—you are studying smart.

Don't let the volume of information overwhelm you. Break it down. Master the "Big Three" policies first. Then move to the Provisions. Then tackle the Riders. Piece by piece, you will build the knowledge base you need not just to pass, but to excel.

Ready to start your study journey?
Ensure you are studying the right material for your specific state. Visit ourInsurance Pre-Licensing Courses page to find the best-selling courses and exam prep materials that have helped thousands of agents launch their careers. Good luck!

Frequently Asked Questions (FAQ)

Q: Are the questions the same in every state?
A: No. While the general insurance concepts (like what a Whole Life policy is) are the same, the specific questions will vary. Furthermore, the State Law section is entirely unique to your state.

Q: How many questions are on the Life Insurance exam?
A: It varies by state, but typically between 75 and 150 questions. The time limit is usually between 2 to 3 hours.

Q: Do I need to memorize the mortality tables?
A: No. You need to know what a mortality table is (a statistical table used to predict life expectancy), but you do not need to memorize the data inside it.

Q: Is math required for the exam?
A: Very little. You won't be calculating actuarial tables. You might have to do simple math regarding a deductible or a percentage, but nothing that requires an advanced calculator.

Q: Where can I find the specific outline for my state?
A: Your state's Department of Insurance website usually publishes a "Candidate Handbook" or "Content Outline." This is a goldmine. It tells you exactly how many questions are asked for each topic. Always review this before you start studying.