25 Free Tennessee Life & Health Exam Practice Questions (2026)

Question 1 (Chapter 1)

A Tennessee resident, John, purchases a life insurance policy where the premiums remain constant throughout his entire life, and the death benefit also stays level. The policy builds cash value that he can access. This policy is designed to cover him until age 100, at which point the cash value will equal the death benefit. What type of policy did John most likely purchase?

• A) Limited-pay whole life
• B) Decreasing term life
• C) Universal life
• D) Ordinary whole life

Question 2 (Chapter 1)

A young family in Tennessee purchases a life insurance policy to cover the outstanding balance of their 30-year mortgage. They want a policy where the death benefit decreases over time, mirroring the declining balance of their loan, and provides coverage only for the duration of the mortgage. What type of policy is most suitable for this situation?

• A) Level term life
• B) Universal life
• C) Ordinary whole life
• D) Decreasing term life

Question 3 (Chapter 1)

A Tennessee client is considering a life insurance policy that offers the flexibility of universal life but also allows for the cash value to be invested in a separate account, similar to variable life. This means the client is exposed to market risk and requires a securities license for the agent selling it. What type of policy is this?

• A) Variable universal life
• B) Indexed universal life
• C) Interest-sensitive whole life
• D) Adjustable whole life

Question 4 (Chapter 1)

Ms. Johnson, a 40-year-old professional in Tennessee, wants to start saving for retirement through an annuity. She plans to make regular contributions over the next 25 years and then begin receiving income payments when she turns 65. Which type of annuity, based on its payout timing, should she choose?

• A) Immediate Annuity
• B) Single Premium Annuity
• C) Variable Annuity
• D) Deferred Annuity

Question 5 (Chapter 2)

An insured in Memphis has a life insurance policy with a Waiver of Premium rider. He suffers a total disability that lasts for eight months before he fully recovers. What is the insurer's obligation regarding the premiums paid during this period?

• A) The insurer will waive only the premiums due after the 8-month mark, with no refund for the waiting period.
• B) The insurer will refund all premiums paid during the initial 6-month waiting period and waive all subsequent premiums while the disability lasted.
• C) The insurer will pay a monthly disability income to the insured in addition to waiving the premiums.
• D) The insurer will reduce the death benefit by the amount of the waived premiums.

Question 6 (Chapter 2)

An insurer discovers three years after issuing a policy that the insured lied about a history of heart disease on the application. Under the policy's standard Incontestability provision, what action can the insurer take?

• A) The insurer cannot contest the claim or void the policy because the two-year period has passed.
• B) Void the policy and return all premiums.
• C) Sue the insured for insurance fraud and triple damages.
• D) Reduce the death benefit to what the premium would have purchased if the truth were known.

Question 7 (Chapter 2)

Which of the following is a common policy exclusion that would allow an insurer to deny a life insurance claim?

• A) Death resulting from a commercial airline crash as a fare-paying passenger.
• B) Death resulting from a heart attack while at work.
• C) Death resulting from a car accident where the insured was at fault.
• D) Death resulting from an act of war while the insured is a member of the military.

Question 8 (Chapter 3)

An insurance contract is often referred to as a 'contract of adhesion.' What does this mean for a Tennessee policyholder if a policy provision is found to be ambiguous in court?

• A) The contract is voided and premiums are returned.
• B) The court will interpret the ambiguity in favor of the insurer because they wrote the contract.
• C) The producer is required to arbitrate the meaning of the clause.
• D) The court will interpret the ambiguity in favor of the insured because they had no say in the contract's wording.

Question 9 (Chapter 3)

A 45-year-old individual in Knoxville pays $2,000 in annual premiums for a $500,000 life insurance policy. After only one month, the individual dies unexpectedly. The insurer pays the full $500,000. This disparity in value illustrates which contract characteristic?

• A) Unilateral
• B) Aleatory
• C) Conditional
• D) Personal

Question 10 (Chapter 3)

A life insurance policy that fails the '7-pay test' is classified by the IRS as a Modified Endowment Contract (MEC). What is the primary tax consequence of a policy becoming a MEC?

• A) The death benefit becomes fully taxable as ordinary income.
• B) The insurer must refund all premiums to the policyholder immediately.
• C) The policy is automatically converted to a term insurance policy.
• D) Policy loans and withdrawals are taxed on a Last-In, First-Out (LIFO) basis and may be subject to a 10% penalty.

Question 11 (Chapter 3)

To be considered 'fully insured' for Social Security retirement benefits, a worker must generally have earned how many quarters of coverage?

• A) 6 quarters
• B) 20 quarters
• C) 10 quarters
• D) 40 quarters

Question 12 (Chapter 4)

Mark belongs to a Health Maintenance Organization (HMO). He has been experiencing back pain and wants to see a specialist. According to standard HMO procedures, what must Mark do first?

• A) Contact any specialist in the state and submit a claim later
• B) Pay the full cost of the specialist and seek reimbursement from the HMO
• C) Wait until the open enrollment period to change his plan to a PPO
• D) Obtain a referral from his Primary Care Physician (PCP)

Question 13 (Chapter 4)

Medicare Supplement (Medigap) policies are required to be 'standardized' under federal law. What does this mean for a consumer?

• A) A Plan F offered by Company A must provide the same core benefits as a Plan F offered by Company B
• B) Every insurance company must charge the exact same premium for Plan G
• C) The policies cover all costs not paid by Medicaid
• D) The federal government provides the insurance directly to the consumer

Question 14 (Chapter 4)

Linda has a Major Medical policy with a $1,000 deductible, 80/20 coinsurance, and a $5,000 stop-loss limit. She incurs $11,000 in covered medical expenses. How much will Linda be responsible for paying in total?

• A) $1,000
• B) $2,000
• C) $5,000
• D) $3,000

Question 15 (Chapter 5)

A consumer receives a new individual health insurance policy in the mail. They read the terms and decide they no longer want the coverage. Under the 'Right to Examine' (Free Look) provision, how many days do they typically have to return the policy for a full refund of all premiums paid?

• A) 7 days
• B) 10 days
• C) 30 days
• D) 45 days

Question 16 (Chapter 5)

An insured has a 'Guaranteed Renewable' health insurance policy. Which of the following statements is TRUE regarding the insurer's rights?

• A) The insurer must renew the policy but can increase premiums for an entire class of insureds.
• B) The insurer can cancel the policy at any time for any reason.
• C) The insurer can increase premiums for an individual insured based on their claims history.
• D) The insurer cannot increase premiums under any circumstances.

Question 17 (Chapter 5)

Which statement regarding Medicaid (administered as TennCare in Tennessee) is CORRECT?

• A) It is a needs-based program funded by both federal and state governments.
• B) It is a federal program with no state involvement.
• C) It is available to anyone over age 65 regardless of income.
• D) It only covers prescription drugs for the elderly.

Question 18 (Chapter 5)

A worker in Murfreesboro becomes totally and permanently disabled and applies for Social Security Disability Income (SSDI) benefits. After meeting the strict definition of disability, what is the standard waiting period before benefits actually begin?

• A) 5 months
• B) 30 days
• C) 90 days
• D) 12 months

Question 19 (Chapter 6)

Tom has both a group health plan through his employer and an individual policy he purchased on the ACA marketplace. Both plans cover the same hospitalization expense of $10,000. Under coordination of benefits (COB) rules, which statement best describes the payment outcome?

• A) Each plan pays $5,000, resulting in a total payment of $10,000.
• B) The primary plan pays the full $10,000; the secondary plan pays nothing.
• C) Both plans pay the full $10,000, and the insured must return the excess $10,000.
• D) The secondary plan pays the remaining balance after the primary plan’s payment, up to the total expense.

Question 20 (Chapter 6)

Which of the following is a prohibited provision in a standardized Medicare Supplement (Medigap) policy?

• A) A clause limiting benefits to services rendered in Tennessee only.
• B) A provision that requires the insured to obtain prior authorization for all services.
• C) A requirement that the insured must maintain continuous coverage for at least two years before filing a claim.
• D) A statement that the policy will not pay for any services received from a provider who does not accept Medicare assignment.

Question 21 (Chapter 6)

Which of the following is a mandated coverage that must be offered in Tennessee individual and group accident and health policies under Tenn. Code Ann. §§56-7-1002 and 56-7-1003?

• A) Coverage for inpatient mental health services equal to medical/surgical benefits.
• B) Coverage for annual vision exams for adults.
• C) Coverage for dental cleanings for children under age 12.
• D) Coverage for elective cosmetic surgery procedures.

Question 22 (Chapter 7)

During a sales meeting, a producer offers a client a $50 cash rebate for signing a new policy, stating it is a special promotion. Which of the following statements is correct regarding this practice?

• A) Rebating is permissible if the client receives a tangible benefit
• B) Rebating is allowed if the producer discloses the rebate to the Commissioner
• C) Rebating is only prohibited for property and casualty lines
• D) Rebating is prohibited under Tenn. Code Ann. §56-6-125 and related unfair practice statutes

Question 23 (Chapter 7)

Which statement accurately reflects the fiduciary duty of a Tennessee insurance producer?

• A) The producer must place the client’s interests above the producer’s personal gain.
• B) The producer must act in the best interest of the insurer only.
• C) The producer must disclose all material facts to the insured.
• D) The producer must guarantee the performance of the policy.

Question 24 (Chapter 7)

The Tennessee Life and Health Guaranty Association primarily exists to:

• A) Provide protection to policyholders when a licensed insurer becomes insolvent
• B) Regulate premium rates for life and health insurers
• C) Issue producer licenses for life and health lines
• D) Conduct investigations of unfair claims practices

Question 25 (Chapter 8)

A service‑member is offered a 5% discount on the premium of a term life policy because of his military status. Which Tennessee rule governs the permissibility of this discount?

• A) Dept. Rule 0780‑1‑40‑.04
• B) Dept. Rule 0780‑1‑24‑.02
• C) §56-7-2305
• D) Dept. Rule 0780‑1‑89