25 Free Pennsylvania Life & Health Exam Practice Questions (2026)
How to Use This Pennsylvania Question Set
The Pennsylvania Life, Accident and Health examination (PSI Series 16-03) has 150 scored multiple-choice questions, and 70% raw — 105 correct answers — is a pass. PSI may add 5 to 10 unscored experimental questions on top of the 150, and you will not be told which ones they are. The PSI content outline, in force from March 1, 2026, says where the questions come from: Insurance Regulation is the largest single section at 21% (31-32 questions), followed by Life, Accident and Health Basics at 14% (21) and Life Policy Provisions, Options and Riders at 13% (19-20). Annuities, Types of Life Insurance Policies, Individual A&H Policy Provisions and Senior Citizens and Special Needs each carry smaller but still tested shares, and Pennsylvania-specific law is woven through several of those sections rather than sitting in one state block.
These 25 questions come from LanePrep's Pennsylvania Life & Health quiz bank and are sampled in roughly that proportion across all nine course chapters. Insurance basics, policy types, provisions and annuities come first, then taxation, underwriting and health insurance, then insurance regulation, senior health products and a question on the exam itself. Each question shows its chapter, so a miss tells you which chapter to go back to.
The set is not a predictor on its own. Twenty-five questions cannot cover every objective on a 150-question exam. What it does show is whether the general material has stuck and whether the Pennsylvania-specific rules — the automatic revocation of a beneficiary designation on divorce, the replacement notice, the 24-hour continuing education requirement — are in place.
Work them before you read the answer. Every question has the explanation folded underneath it. Guessing and then reading is worth more than reading and then agreeing.
Practice Questions 1-10: Insurance Basics, Policy Types, Provisions and Annuities
The Life side of the outline starts with contract law and company classification, moves into the policy types built for a stated need, then into the provisions that govern a policy once it is in force and the annuity payout and replacement rules that sit next to it.
Question 1 (Chapter 1)
A life insurance policy in Pennsylvania contains an ambiguous clause regarding the payout conditions. According to the legal principle of 'reasonable expectations,' how will a court most likely interpret this clause?
- A) In favor of the insurer, as they drafted the contract.
- B) By voiding the entire contract due to the ambiguity.
- C) In favor of the insured, as they are the less sophisticated party.
- D) By requiring both parties to renegotiate the clause.
Show answer & explanation
Answer: C
The Doctrine of Reasonable Expectations states that a policyholder's reasonable expectations of coverage will be honored, even if the policy language is ambiguous or contradictory. Since insurance contracts are contracts of adhesion (drafted by the insurer and accepted by the insured 'as is'), ambiguities are typically resolved in favor of the insured.
Question 2 (Chapter 1)
An insurer that is incorporated in another state but is authorized to transact insurance business in Pennsylvania is classified in Pennsylvania as a(n):
- A) Foreign insurer
- B) Domestic insurer
- C) Alien insurer
- D) Non-admitted insurer
Show answer & explanation
Answer: A
In Pennsylvania, an insurer incorporated in another state is considered a foreign insurer. A domestic insurer is incorporated in Pennsylvania. An alien insurer is incorporated outside the United States. A non-admitted insurer is not authorized to transact business in the state.
Question 3 (Chapter 1)
Three partners own a thriving restaurant in Scranton. They want to ensure that if one partner dies, the surviving partners can purchase the deceased partner's share of the business without financial strain, and the deceased partner's family receives fair value. They decide to use life insurance to fund this arrangement. This is an example of:
- A) Key person insurance
- B) Executive compensation
- C) Deferred compensation
- D) Buy-sell funding
Show answer & explanation
Answer: D
Buy-sell funding (or a buy-sell agreement) uses life insurance to ensure the smooth transfer of a business interest upon the death of an owner. Each partner typically owns a policy on the other partners, and the proceeds are used to buy out the deceased partner's share, ensuring business continuity and fair compensation for the family. Key person insurance protects the business from the loss of a vital employee, not necessarily an owner's share.
Question 4 (Chapter 2)
A homeowner wants a policy that will pay off their mortgage balance if they die. The coverage amount should decrease over time. Which policy is most appropriate?
- A) Level Term
- B) Universal Life
- C) Single Premium Whole Life
- D) Decreasing Term
Show answer & explanation
Answer: D
Decreasing Term is specifically designed for needs that reduce over time, such as a mortgage, where the coverage amount matches the declining loan balance.
Question 5 (Chapter 2)
Sarah owns an Adjustable Life insurance policy. She initially purchased it with a low face amount and premium. Now, her income has significantly increased, and she wants to raise the death benefit substantially. What is most likely required for Sarah to increase her policy's face amount?
- A) She can increase it automatically without any further action.
- B) She will need to provide evidence of insurability.
- C) She only needs to pay a higher premium, no medical review is necessary.
- D) She must convert the Adjustable Life policy to a Universal Life policy.
Show answer & explanation
Answer: B
While Adjustable Life policies offer flexibility, increasing the death benefit typically requires the insured to prove evidence of insurability (e.g., a medical exam) to ensure they are still a standard risk. This protects the insurer from adverse selection. Decreasing the death benefit usually does not require evidence of insurability.
Question 6 (Chapter 3)
A policyholder realizes they misstated their age on their life insurance application five years ago. Under 40 P.S. § 510(e), how will the insurer handle this discovery upon the death of the insured?
- A) The death benefit will be adjusted to the amount the premiums would have purchased at the correct age.
- B) The policy will be voided due to material misrepresentation.
- C) The insurer will deny the claim entirely.
- D) The insurer will refund all premiums paid and cancel the policy.
Show answer & explanation
Answer: A
The Misstatement of Age provision allows the insurer to adjust the benefit to the amount that the premium actually paid would have purchased at the correct age, rather than voiding the contract.
Question 7 (Chapter 3)
An insured dies in a common disaster with their primary beneficiary. If the policy has a common disaster clause, what is the legal presumption?
- A) The insured is presumed to have died first.
- B) The proceeds are split between the estates.
- C) The proceeds are paid to the state.
- D) The beneficiary is presumed to have died first.
Show answer & explanation
Answer: D
The common disaster clause protects the contingent beneficiary by stipulating that if the primary beneficiary dies within a short time after the insured in the same accident, the primary beneficiary is presumed to have died first.
Question 8 (Chapter 3)
A policyowner has an 'Accelerated Benefit' rider. The insured is diagnosed with a terminal illness. What is the primary impact on the policy?
- A) The death benefit is reduced by the amount of the accelerated payment.
- B) The policy is cancelled immediately.
- C) The premiums increase significantly to cover the payout.
- D) The policyowner must pay back the accelerated benefit upon death.
Show answer & explanation
Answer: A
Accelerated benefit riders allow the insured to receive a portion of the death benefit while still living if they meet specific criteria (like terminal illness). This payment is an advance, so the remaining death benefit is reduced accordingly.
Question 9 (Chapter 4)
An annuity contract is issued with a 'Life with 10-Year Period Certain' payout option. If the annuitant dies 6 years after payments begin, what happens?
- A) Payments stop immediately.
- B) The beneficiary receives a lump sum of the total original premium.
- C) Payments continue to the beneficiary for the remaining 4 years.
- D) Payments continue to the beneficiary for another 10 years.
Show answer & explanation
Answer: C
A 'period certain' option guarantees payments for a specific timeframe. If the annuitant dies before the period ends, the beneficiary receives the remaining payments for the balance of that period.
Question 10 (Chapter 4)
A client is considering replacing an existing annuity with a new one. Under Pennsylvania law, what must the producer do?
- A) Nothing, as replacement rules only apply to life insurance policies.
- B) Wait for the Pennsylvania Insurance Department to approve the transfer of funds.
- C) Charge an additional fee for the administrative work of the replacement.
- D) Provide a replacement notice to the client and ensure the new product is suitable.
Show answer & explanation
Answer: D
Replacement rules (40 P.S. § 625) apply to annuities to prevent 'twisting' and ensure the client is not harmed by unnecessary surrenders or new charges.
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Practice Questions 11-16: Taxation, Underwriting and Health Insurance
One question works the tax math on a surrendered policy, and the rest move into the Accident and Health side: a standard policy exclusion, deductible-coinsurance-stop-loss arithmetic, how long COBRA continuation runs, the HMO gatekeeper role, and a disability provision that waives the usual proof of incapacity.
Question 11 (Chapter 5)
A policyholder surrenders a whole life insurance policy for its cash value. The total premiums paid were $20,000, and the cash value received was $25,000. How is this transaction taxed?
- A) The entire $25,000 is taxable as ordinary income.
- B) Only the $5,000 gain is taxable as ordinary income.
- C) The entire $25,000 is tax-free as it is a return of premium.
- D) The $5,000 gain is subject to a 10% penalty plus income tax.
Show answer & explanation
Answer: B
When a policy is surrendered, the amount of cash value received that exceeds the cost basis (total premiums paid) is considered taxable income. The cost basis itself is a tax-free return of premium.
Question 12 (Chapter 6)
A Pennsylvania resident purchases an individual accident and health policy on May 1st. On May 15th, while trimming trees, the insured accidentally severs a finger. The insurer denies the claim, citing 31 Pa. Code Ch. 88.84, which permits certain standard exclusions. Which of the following standard exclusions under Pennsylvania regulations would allow the insurer to deny a claim resulting from a self-inflicted injury?
- A) Losses sustained while committing a misdemeanor
- B) Standard athletic injuries sustained in amateur sports
- C) Injuries sustained while operating a commercial vehicle
- D) Intentionally self-inflicted injuries
Show answer & explanation
Answer: D
Under 31 Pa. Code Ch. 88.84(1)(ii), insurers may exclude losses resulting from intentionally self-inflicted injuries (D). Distractor A is incorrect because the statutory exclusion applies to felonies, not misdemeanors. Distractors B and C are not standard statutory exclusions under Pennsylvania rules.
Question 13 (Chapter 6)
A comprehensive major medical health insurance policy features a $1,000 deductible, an 80/20 coinsurance clause, and a $5,000 out-of-pocket stop-loss limit. The insured incurs $11,000 in covered medical expenses. How much in total will the insurer pay for these expenses?
- A) $8,000
- B) $7,200
- C) $10,000
- D) $8,800
Show answer & explanation
Answer: A
After the $1,000 deductible, $10,000 of the $11,000 in expenses is subject to the 80/20 coinsurance split. The insurer pays 80% of $10,000, or $8,000, and the insured owes the remaining $2,000 in coinsurance. The insured's total out-of-pocket cost ($1,000 deductible + $2,000 coinsurance = $3,000) stays under the $5,000 stop-loss limit, so the stop-loss provision is never triggered. The insurer's total payment is therefore $8,000.
Question 14 (Chapter 6)
A large manufacturing company in Pennsylvania sponsors a group health plan for its 150 employees. An employee is terminated for reasons other than gross misconduct. Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), for how many months is the former employee generally eligible to continue their group health coverage?
- A) 18 months
- B) 6 months
- C) 12 months
- D) 36 months
Show answer & explanation
Answer: A
Under federal COBRA regulations (which apply to employers with 20 or more employees), the standard maximum period of continuation coverage for qualifying events such as termination of employment or reduction in hours is 18 months. Certain other qualifying events like death or divorce of a dependent allow for 36 months.
Question 15 (Chapter 6)
A Health Maintenance Organization (HMO) in Pennsylvania utilizes a primary care physician (PCP) who acts as the central coordinator for all medical care, including specialist referrals and hospitalizations. What term is commonly used to describe this specific managed care role?
- A) Preferred provider
- B) Utilization reviewer
- C) Independent adjuster
- D) Gatekeeper
Show answer & explanation
Answer: D
In managed care organizations like HMOs, the primary care physician acts as a 'gatekeeper' who manages the patient's healthcare services, authorizes specialist referrals, and controls unnecessary utilization.
Question 16 (Chapter 6)
A Pennsylvania resident is covered by a disability income policy that includes a 'presumptive disability' provision. If the insured suffers the total and permanent loss of sight in both eyes, how will the insurer treat the disability under this provision?
- A) The insurer waives the requirement to prove total disability and pays the full benefit immediately.
- B) The insured must still prove they cannot perform any occupation to receive benefits.
- C) The insurer requires a six-month waiting period before benefits begin.
- D) The insured receives only partial disability payments until they reach age 65.
Show answer & explanation
Answer: A
Presumptive disability provisions automatically qualify the insured for full benefits without further proof of inability to work if specific conditions, such as the loss of sight in both eyes, occur. This bypasses the typical 'own' or 'any' occupation tests.
Practice Questions 17-25: Insurance Regulation, Senior Health Products and Exam Logistics
Insurance Regulation is the single largest section of the outline, so this closing stretch samples it directly — the Commissioner's role, the certificate of authority, continuing education hours, fictitious-name registration and false advertising — before moving into the divorce-and-beneficiary rule, a viatical settlement definition and a mandated-benefit question from Senior Citizens and Special Needs, and closing with the exam's own passing score.
Question 17 (Chapter 7)
Under Pennsylvania law, what is the primary role of the Insurance Commissioner?
- A) To act as a sales agent for state-run insurance programs.
- B) To set premium rates for all insurance policies sold in the state.
- C) To provide legal counsel to insurance companies.
- D) To regulate the insurance industry, enforce insurance laws, and protect consumers.
Show answer & explanation
Answer: D
The Insurance Commissioner's general duties and powers (40 P.S. § 310.2, 1171.7) include regulating the insurance industry, enforcing insurance laws, and protecting consumers. The Commissioner does not act as a sales agent, does not set all premium rates (though they approve forms and rates), and does not provide legal counsel to companies.
Question 18 (Chapter 7)
An insurance company wishes to operate and sell policies in Pennsylvania. Before it can do so, what must the company obtain from the Pennsylvania Insurance Department?
- A) A certificate of authority.
- B) A producer license for each of its employees.
- C) A bond guaranteeing its solvency.
- D) Approval from the state legislature.
Show answer & explanation
Answer: A
For an insurer to legally transact insurance business in Pennsylvania, it must first obtain a certificate of authority from the Pennsylvania Insurance Department (40 P.S. §§ 47, 47a, 420). This signifies that the insurer is 'admitted' or 'authorized' to do business in the state. Producer licenses are for individuals, not companies. While solvency is regulated, a separate bond for that purpose isn't the primary requirement to operate. Legislative approval is not typically required for individual insurers.
Question 19 (Chapter 7)
An insurance producer is required to complete continuing education (CE) to renew their license. How many hours are required in each biennial cycle?
- A) 12 hours.
- B) 20 hours.
- C) 24 hours.
- D) 30 hours.
Show answer & explanation
Answer: C
Under 40 P.S. § 310.8(b), producers must complete 24 credit hours of continuing education per biennial cycle.
Question 20 (Chapter 7)
A producer uses a fictitious name to conduct insurance business. What must the producer do to comply with Pennsylvania law?
- A) Notify the Department of the name before using it.
- B) Use the name only for life insurance, not health insurance.
- C) Register the name with the Pennsylvania Insurance Department.
- D) Obtain a separate license for each fictitious name used.
Show answer & explanation
Answer: C
Per 40 P.S. § 310.7, a producer using a fictitious name must register it with the Pennsylvania Insurance Department.
Question 21 (Chapter 7)
An insurer is preparing a new marketing brochure for a long-term care policy. The brochure includes a statement that the policy is 'fully endorsed by the Pennsylvania Insurance Department.' Which regulation is the insurer violating?
- A) False Advertising.
- B) Twisting.
- C) Defamation.
- D) Unfair Discrimination.
Show answer & explanation
Answer: A
Claiming that a policy is endorsed or approved by the Department is a form of false advertising, as the Department regulates the industry but does not endorse specific private products.
Question 22 (Chapter 8)
Sarah designated her husband, Mark, as the sole primary beneficiary on her life insurance policy in 2018. In 2023, Sarah and Mark divorced, and the divorce decree did not specifically address the life insurance policy. If Sarah were to pass away in 2026 without updating her beneficiary designation, who would receive the death benefit under Pennsylvania law?
- A) Mark, as the original beneficiary designation remains valid unless explicitly changed by Sarah.
- B) The contingent beneficiary named in the policy, if one exists.
- C) The death benefit would be held in trust by the insurer until a court order specifies the recipient.
- D) Sarah's estate, as the divorce automatically revokes the designation of a former spouse.
Show answer & explanation
Answer: D
Under 20 Pa C.S.A. § 6111.2, a divorce or annulment automatically revokes a beneficiary designation of a former spouse in a life insurance policy, unless the policy or the divorce decree states otherwise, or the former spouse is redesignated after the divorce. Since the divorce decree did not address the policy and Sarah did not update the designation, Mark's designation is revoked, and the death benefit would typically pass to Sarah's estate. If a contingent beneficiary were named, they would receive the benefit; however, the question states Mark was the 'sole primary beneficiary' and does not mention a contingent. Therefore, Sarah's estate is the most direct legal recipient in this scenario.
Question 23 (Chapter 8)
Which of the following best defines a 'viatical settlement' under Pennsylvania law (40 P.S. § 626.2)?
- A) An agreement where an insurance company pays a lump sum to a policyholder in exchange for surrendering their life insurance policy.
- B) A transaction involving the sale of a life insurance policy by a policyholder who is terminally or chronically ill to a third party for less than its face value.
- C) A loan taken against the cash value of a life insurance policy, to be repaid with interest.
- D) An arrangement where an insurer provides an accelerated benefit to a policyholder to cover medical expenses.
Show answer & explanation
Answer: B
Under 40 P.S. § 626.2, a viatical settlement is defined as a transaction where a policy owner, typically one who is terminally or chronically ill, sells their life insurance policy to a third party (a viatical settlement provider) for a cash payment that is less than the policy's full death benefit but more than its cash surrender value. The viatical settlement provider then becomes the new owner and beneficiary of the policy. Option A describes a policy surrender. Option C describes a policy loan. Option D describes an accelerated benefit, which is distinct from a viatical settlement, though both involve accessing policy value during the insured's lifetime.
Question 24 (Chapter 8)
A Pennsylvania health policy must cover routine pap smears and annual gynecological exams for women. Under 40 P.S. § 1574, how often must these be covered?
- A) Annually.
- B) Every five years.
- C) Only upon diagnosis of a gynecological condition.
- D) Only if the patient is over age 50.
Show answer & explanation
Answer: A
40 P.S. § 1574 mandates that health insurance policies provide coverage for annual gynecological examinations and routine pap smears for women.
Question 25 (Chapter 9)
What is the passing score requirement for the Pennsylvania Life, Accident and Health exam?
- A) 65%
- B) 70%
- C) 75%
- D) 80%
Show answer & explanation
Answer: B
The passing score for the Pennsylvania Life, Accident and Health exam is 70% of the scored questions.
The Mistakes That Cost Marks
Reading an ambiguous clause as resolved in the insurer's favor. Because an insurance contract is a contract of adhesion — drafted by the insurer and accepted as is — courts apply the doctrine of reasonable expectations and resolve ambiguity in favor of the insured, not the drafter.
Treating a misstated age as grounds to void the policy. Under 40 P.S. § 510(e) the insurer adjusts the death benefit to what the premium actually paid would have purchased at the correct age. It does not void the contract or deny the claim outright.
Forgetting that replacement and privacy duties reach beyond life insurance. The Notice Regarding Replacement applies to annuities as well as life policies, and the federal Fair Credit Reporting Act and Gramm-Leach-Bliley privacy notice are separate obligations layered on top of Pennsylvania's own replacement and unfair-practices rules.
Stopping the arithmetic at the deductible. Deductible, coinsurance share and stop-loss limit are three separate numbers. Work the coinsurance share on the expenses that remain after the deductible, then check the insured's total out-of-pocket against the stop-loss limit before answering.
Assuming a divorce leaves an old beneficiary designation in place. Under 20 Pa. C.S.A. § 6111.2, a divorce automatically revokes a former spouse's designation unless the policy or the decree says otherwise, or the former spouse is redesignated afterward. National study material does not teach this, and the exam tests it directly.
Missing that the pre-licensing course is gone. Act 142 of 2024 removed the 24-credit-hour pre-licensing requirement effective April 29, 2025. A study source that still mentions it is out of date, and the exam's own candidate-requirements questions expect the current answer.
Your Next Step
How did you score?
- 20 or more correct (80%+): You are above the pass mark with room to spare. Book the exam, then spend the remaining days on the two topic sets that go deeper than this sample: insurance regulation, the largest block on the outline, and Medigap, long-term care and senior health.
- 17-19 correct (around 70%): You are at or just above the 70% pass mark, which leaves no margin for a bad day. Note the chapter of every question you missed and work those chapters first. Then take the two topic sets above; they test the same material at closer range.
- Under 17 correct: You need the material, not more questions. Start with the study plan in how to pass the Pennsylvania Life & Health exam on your first try and work through the audio chapters before testing yourself again. The 2025 first-time pass rate was 61%, and Pennsylvania does not publish a separate repeat-candidate rate — there is no reason to expect a second attempt with the same preparation to go better.
Chapters 1 and 9 of the LanePrep Pennsylvania course are free at /pa/l-and-h/preview — full audio and the chapter quiz, no signup. For a full-length simulated run, try the practice exam.
Question counts and content weighting come from the PSI content outline, Series 16-03 Life, Accident and Health (in force from March 1, 2026). Read October 2026.
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