25 Free Utah Life, Accident & Health Exam Practice Questions (2026)

Answer: D

Correct. Utah Code § 31A-23a-105(1)(b) enumerates the requirements for license issuance and renewal — application, character, CE, examination, training-period requirements, E&O certification, no disqualifying acts, fees, and home-state compliance for nonresidents — and contains no pre-licensing education clause. Section 31A-23a-203(4) explicitly states that training periods under that section apply only to surplus lines producers, consultants, and property-line producers selling NFIP flood coverage. Life and Accident & Health producers are not among them. The Prometric Utah Licensing Information Bulletin (effective 9/25/2025) and the Utah Insurance Department's own web page both confirm: 'Utah has no pre-licensing requirements for licensure.' Option A describes a requirement that exists in many other states but not Utah. Option B confuses the unverified ongoing LTC training requirement (3 hours initial + 3 hours per renewal period) with a pre-licensing mandate. Option C incorrectly suggests a pre-application ethics course; ethics hours are part of continuing education (3 hours per 2-year period under § 31A-23a-202(3)(b)(i)), not a pre-licensing prerequisite.

Answer: D

Correct. Utah licenses are on a 2-year birth-month renewal cycle. The Utah Insurance Department's 'Exam & Licensing Procedures' page states: 'The first renewal may fall 24–35 months after initial issuance, landing on the last day of the licensee's birth month; every renewal thereafter is exactly 2 years.' Issued March 15, 2024, with an October birthday: the first renewal lands on October 31, 2026 (31 months later), which falls within the 24–35 month window. Option A ignores the birth-month cycle. Option B would be only 19 months after issuance, outside the 24-month minimum. Option C uses a calendar-year-end cycle, which Utah does not use.

Answer: C

Under Utah law and general insurance principles, a beneficiary designation in a life insurance policy remains valid unless changed by the policyowner. Divorce does not automatically revoke a beneficiary designation unless state statute specifically provides for it, and Utah has no such statute for life insurance (unlike some states for retirement accounts). The insured had the opportunity to change the beneficiary after the divorce but did not do so. Therefore, the spouse remains the valid beneficiary and is entitled to the death benefit.

Answer: B

Utmost good faith is a fundamental principle of insurance contracts requiring both parties (applicant/insured and insurer) to act with complete honesty and disclose all material facts relevant to the risk. The applicant must not conceal or misrepresent information, and the insurer must not misrepresent policy terms or benefits. This principle underpins doctrines like representations, warranties, and concealment. Option A describes a disclosure format requirement, not utmost good faith. Option C describes strict liability, which is not a principle of insurance contracts. Option D describes a potential legal claim, not a foundational contract principle.

Answer: C

A contract of adhesion is one drafted entirely by one party (the insurer) and presented to the other party (the insured) on a 'take it or leave it' basis, with no opportunity for negotiation. Because of this imbalance, any ambiguities in the contract language are interpreted against the drafter (the insurer) and in favor of the adhering party (the insured). This is a key characteristic of insurance contracts. An aleatory contract (A) depends on an uncertain event (death) for performance. A unilateral contract (B) means only the insurer makes a legally enforceable promise (to pay a claim); the insured's only obligation is to pay premiums, but they can stop at any time. A conditional contract (D) means the insurer's obligation is contingent on certain conditions being met (e.g., proof of death, premium payment). A personal contract (E) means the contract is tied to the individual insured and cannot be transferred without consent.

Answer: D

Level premium term life insurance provides a death benefit only if the insured dies during the specified term. If the insured outlives the term, the policy expires with no cash value and no death benefit payable, unless it is a return-of-premium term policy (which Maria did not purchase). Option A is incorrect because standard level term does not refund premiums. Option B describes decreasing term, not level term. Option C is incorrect because conversion rights, if available, are typically limited to a specific period (e.g., first 10 years) and require evidence of insurability unless otherwise stated in the policy; the scenario does not mention a conversion privilege.

Answer: D

Survivorship life insurance is commonly used in estate planning to provide liquidity for paying estate taxes that are due upon the death of the second spouse, when the estate tax liability typically arises. It is not designed for immediate income replacement (which is better served by first-to-die or individual policies), nor is it typically used for buy-sell agreements (which often use first-to-die or individual policies). Juvenile policies are separate and not the focus of survivorship life.

Answer: A

The free-look period is a provision that allows the policyowner a specified number of days (typically 10-30 days, depending on state regulations) to review the policy after delivery and return it for a full refund of premiums paid if they are not satisfied, with no questions asked. It is not related to increasing the death benefit (Option B), incontestability (Option C), or limited to term insurance (Option D); it applies to most types of life insurance policies.

Answer: A

The cash surrender value option provides the policyowner with the actual cash value of the policy in cash upon surrender, which is typically the highest immediate payout among nonforfeiture options. Extended term insurance uses the cash value to purchase term insurance for a limited period (no immediate cash). Reduced paid-up insurance provides a smaller amount of paid-up whole life coverage (no immediate cash). Automatic premium loan is not a nonforfeiture option; it is a provision that uses policy values to pay premiums to avoid lapse.

Answer: C

For non-qualified annuities surrendered during the accumulation phase, the IRS requires taxation on a LIFO (last-in-first-out) basis. This means the earnings (the last money in) are considered withdrawn first and taxed as ordinary income. Only after all earnings are exhausted is the return of principal (cost basis) received tax-free. Option B describes the exclusion ratio, which applies only during the annuitization (payout) phase. Option A is incorrect because earnings are taxable. Option D is incorrect because annuity gains are taxed as ordinary income, not capital gain.

Answer: D

Traditional IRA contributions may be tax-deductible if the taxpayer (or spouse) is not covered by an employer retirement plan, or if covered, depending on modified adjusted gross income (MAGI) thresholds. Roth IRA contributions, however, are made with after-tax dollars and are never tax-deductible, regardless of income or employer plan coverage. Option A incorrectly reverses the deductibility. Option B is false because deductibility depends on income and plan coverage for traditional IRAs, and Roth contributions are never deductible. Option C misstates the timing rules; deductibility for traditional IRAs is not based on before/after the filing deadline in that way, and Roth contributions are never deductible.

Answer: B

Under a life annuity with period certain (e.g., 10 years certain and life), if the annuitant dies before the period certain expires, payments continue to the beneficiary for the remainder of the guaranteed period. In this case, 7 years of payments have been made, so 3 years remain on the 10-year guarantee. Payments do not stop (A), are not typically commuted to a lump sum unless specified (C), and do not continue for life to the beneficiary (D)—the obligation ends after the period certain is satisfied.

Answer: D

The seven-pay test compares the actual premiums paid in the first seven years to the net level premiums that would be required to fund the same death benefit if the policy were a paid-up whole life insurance policy with premiums payable level for seven years. If the actual premiums exceed this amount, the policy is classified as a MEC. Option A incorrectly compares premiums to cash value. Option B is unrelated to the test (cash value exceeding face amount is not a MEC trigger). Option C misstates the test as a count of payments rather than an amount comparison.

Answer: A

Section 1035 of the Internal Revenue Code allows for the tax-free exchange of certain insurance contracts, including life insurance for life insurance, life insurance for an annuity, endowment for life insurance or annuity, and annuity for annuity, provided the exchange meets specific requirements (same insured/owner, no receipt of money or other property). This enables the policyholder to upgrade or change contracts without triggering immediate taxation of gain. Section 72(e) deals with annuity taxation. Sections 402(c) and 408(d)(3) govern rollovers from qualified plans and IRAs, respectively, not insurance-to-insurance exchanges.

Answer: D

The 'loss of income' benefit refers to disability income or weekly indemnity payments that replace a portion of lost wages when the insured is unable to work due to a covered sickness or injury. Option A describes medical expense coverage (hospitalization). Option B describes accidental death and dismemberment (AD&D) benefits. Option C describes medical expense coverage for outpatient services. Only option D correctly defines loss of income as wage replacement.

Answer: D

Occupation class in disability underwriting is determined by the nature of the job duties and the associated risks of injury or disability. Jobs with higher physical risk or hazardous duties are assigned to higher (more risky) occupation classes, affecting premiums and eligibility. Age and gender (A) may influence rates but not occupation class directly. Income level (B) affects the benefit amount but not the occupation classification. Medical history (C) is used for risk classification but is separate from occupation class, which is based solely on job characteristics.

Answer: D

The elimination period (also called the waiting period) is the time between the onset of disability and when benefit payments begin. Its purpose is to reduce the likelihood of paying for short-term disabilities, lower the insurer's risk, and thereby reduce the premium. It is not intended to allow recovery (A), as benefits begin after this period regardless of recovery status. It is not a probationary period for policy cancellation (B), which is governed by incontestability and other provisions. It is not tied to hospitalization (C); eligibility is based on the inability to work due to disability, not inpatient status.

Answer: A

Residual (or partial) disability benefits are paid when the insured is able to work but experiences a loss of income (typically a defined percentage, e.g., 20% or more) due to a disability, allowing them to work in a limited capacity or in a different role. Option B describes total disability, not residual. Option C describes accidental death and dismemberment (AD&D) benefits. Option D describes a cost-of-living adjustment (COLA) rider, which is separate from the residual disability benefit itself.

Answer: D

D is correct because HMOs require a primary care physician (PCP) to act as a gatekeeper; the PCP must issue a referral before a specialist visit is covered. A is incorrect because indemnity reimbursement describes a fee-for-service model, not an HMO's managed-care approach. B is incorrect because verifying network participation is a PPO/EPO concept; HMOs generally require referrals even for in-network specialists. C is incorrect because precertification is a utilization review function typically initiated by the provider, not a substitute for the HMO's referral requirement.

Answer: D

D is correct: EPOs (Exclusive Provider Organizations) restrict coverage to network providers except for emergency services, similar to HMOs but without referral requirements. PPOs cover both in-network and out-of-network care, with higher cost-sharing for out-of-network. A is incorrect because EPOs typically do not require referrals (a key difference from HMOs). B is incorrect because it reverses the plans' out-of-network coverage rules. C is incorrect because it reverses the network restrictions entirely.

Answer: B

A debtor group consists of individuals who incur a debt to a creditor (such as a bank) and are offered insurance coverage related to that debt, such as credit life or credit disability insurance. This is explicitly defined in Utah insurance regulations as an eligible group type. Options A, C, and D describe other eligible group types (employer-employee, labor union, and trust groups) that do not fit this creditor-debtor relationship.

Answer: D

In a self-funded (or administrative-services-only) arrangement, stop-loss insurance protects the employer against catastrophic claims by reimbursing them for medical expenses that exceed a predetermined threshold (attachment point). It does not pay routine claims (A), which remain the employer's responsibility. Claims administration (B) is typically handled by a third-party administrator, not the stop-loss carrier. Stop-loss does not confer guaranteed issue (C), which is a characteristic of fully insured small group markets under Utah and federal law.

Answer: A

A is correct. In a fully insured arrangement the employer pays a premium and the insurer carries the risk of claims; in a self-funded arrangement the employer pays claims from its own funds and carries that risk, usually buying stop-loss cover to cap it. B is wrong because self-funded plans are generally exempt from state benefit mandates under federal preemption, not the other way round. C is wrong because administrative costs depend on the arrangement. D is wrong because stop-loss insurance belongs to self-funded plans but is not prohibited anywhere.

Answer: D

D is correct because individuals under 65 qualify for Medicare after receiving Social Security disability benefits for 24 months. This waiting period does not apply to those with end-stage renal disease or amyotrophic lateral sclerosis (ALS), who may qualify sooner. A, B, and C are incorrect as they do not match the 24-month requirement for disability-based Medicare eligibility.

Answer: A

A is correct because an indemnity benefit design pays a pre-determined daily or monthly amount for covered services, regardless of the actual cost incurred, up to the policy limit. B is incorrect because an expense-incurred design reimburses only for actual expenses incurred, up to the daily limit. C is incorrect because a pool-of-money design sets a total maximum benefit amount (e.g., $100,000) that can be used over time, rather than a daily or monthly payment. D is incorrect because 'cash benefit design' is not a standard LTC insurance term; the correct term for a fixed payment regardless of expenses is indemnity.