17 Free Louisiana Life Insurance Exam Practice Questions (2026)
How to Use This Life Insurance Question Set
Louisiana's life questions run through four sections of the combined exam outline: types of life insurance policies at 8 percent, policy provisions, options and riders at 13 percent, annuities at 7 percent, and the life share of a federal tax section that the combined outline splits with health at 2 percent. Candidates who take Life as its own standalone exam face 100 questions in 120 minutes for $36, and the passing score is the same raw 70 percent written into R.S. 22:1545(A), not a scaled score. Louisiana has had no pre-licensing course since Act 273 of 2022 took effect on June 3, 2022.
These 17 questions come from Chapters 5 and 6 of LanePrep's Louisiana Life & Health quiz bank, none of them repeated from the free 25-question sample across the whole exam: 9 on types of life policies and annuities (Chapter 5), and 8 on policy provisions, options and riders, and federal tax for life (Chapter 6). Each question shows its chapter, so a miss tells you exactly which audio lesson to replay.
For context, the NAIC's first-time pass rate on the standalone Life exam was 46.6 percent in 2024 and 29.5 percent in 2025. The 2024 figure includes candidates who tested remotely before remote testing ended on July 8, 2024, and the 2025 figure is in-person only, so don't read the gap as a clean trend.
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 1-6: Annuity Timing, Term Variations, Juvenile and Survivorship Policies
Chapter 5 opens with the single premium immediate annuity and how soon its first payment must arrive, then moves through policy designs: the return of premium feature on a term policy, the juvenile policy whose face amount jumps at a stated age, and the survivorship design built for estate liquidity. It closes this block with the purchasing power risk a fixed annuity leaves with its owner and the cash value that sets whole life apart from term.
Question 1 (Chapter 5)
An individual purchases an annuity and wants to begin receiving monthly income payments immediately. They deposit a lump sum of $100,000. What is the earliest this 'Immediate Annuity' must typically begin making payments?
- A) Within 30 days
- B) After 5 years
- C) Upon reaching age 59 1/2
- D) Within 12 months
Show answer & explanation
Answer: D
A Single Premium Immediate Annuity (SPIA) must begin its first payment within one year (12 months) of the purchase date. If payments are deferred longer than one year, it is classified as a deferred annuity.
Question 2 (Chapter 5)
A client wants a 'Return of Premium' (ROP) feature on their term policy. If the client survives the 20-year term, what typically happens?
- A) The insurer keeps all premiums as profit
- B) The policy automatically converts to Whole Life at no cost
- C) The death benefit is doubled for the next 20 years
- D) The insurer returns all or a large portion of the premiums paid, tax-free
Show answer & explanation
Answer: D
ROP Term is an increasing term policy where the 'increase' is the accumulation of premiums. If the insured is still alive at the end of the term, the insurer returns the premiums paid. These premiums are generally not taxed because they are a return of cost basis.
Question 3 (Chapter 5)
A grandfather in Kenner purchases a life insurance policy for his 5-year-old grandson. The policy's face amount is $10,000, but the contract stipulates that the coverage will automatically increase to $50,000 when the grandson reaches age 21, with no increase in premium. This is an example of:
- A) A Family Maintenance Policy
- B) A Survivorship Life Policy
- C) A Payor Rider
- D) A Jumping Juvenile Policy
Show answer & explanation
Answer: D
A 'Jumping Juvenile' policy is a form of juvenile life insurance where the face amount increases significantly (usually five times) when the child reaches a specific age (often 21) without a corresponding increase in premium or evidence of insurability. A Payor Rider (C) is an add-on that waives premiums if the adult payor dies or becomes disabled, but it is not the policy type itself.
Question 4 (Chapter 5)
A husband and wife in Bossier City purchase a 'Survivorship Life' policy. What is the primary reason for choosing this type of policy over two individual policies?
- A) It pays a death benefit when the first spouse dies to cover funeral costs.
- B) It is generally more expensive but provides double the death benefit.
- C) It pays the death benefit only after the second death, often to provide liquidity for estate taxes.
- D) It allows the surviving spouse to stop paying premiums after the first death.
Show answer & explanation
Answer: C
Survivorship Life (also called 'Second-to-Die') pays the death benefit only when the last insured person dies. It is commonly used in estate planning to pay federal estate taxes. Joint Life (A) is the type that pays upon the first death.
Question 5 (Chapter 5)
A 55-year-old resident of Baton Rouge is concerned about the effects of inflation on their future retirement income. They purchase a Fixed Annuity with a 3% guaranteed interest rate. If the annual inflation rate rises to 5%, which of the following is the primary risk this client faces?
- A) Purchasing Power Risk
- B) Market Risk
- C) Mortality Risk
- D) Liquidity Risk
Show answer & explanation
Answer: A
Purchasing power risk (or inflation risk) is the primary disadvantage of fixed annuities. Because the payout is a fixed dollar amount, its value decreases as the cost of goods and services (inflation) increases. Market risk (B) is associated with variable products where the principal is at risk. Mortality risk (C) is the risk of outliving one's income, which an annuity actually mitigates.
Question 6 (Chapter 5)
A client in Bossier City is comparing Whole Life to Term Life. Which of the following is a unique characteristic of Whole Life insurance?
- A) The death benefit is only paid if the insured dies during a specific period
- B) It is generally cheaper for older applicants than Term insurance
- C) The policy develops a cash value that the owner can borrow against
- D) It does not provide a death benefit if the insured reaches age 100
Show answer & explanation
Answer: C
Whole Life (Permanent) insurance builds cash value (living benefits) that the policyowner can access via loans or surrenders. Term insurance (A) is pure protection with no cash value. Whole Life is more expensive (B) and actually pays the face amount if the insured reaches age 100 (D).
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Practice Questions 7-12: Accumulation, Credit Life, Annuity Payouts and Beneficiary Rules
Chapter 5 finishes with the tax treatment of the accumulation period in a deferred annuity, the ceiling on credit life coverage, and what a joint and survivor payout does after the first annuitant dies. Chapter 6 then opens the provisions, options and riders section with the common disaster clause when an insured and a primary beneficiary die together, the income tax treatment of death benefits, and the dividend option that lowers the next premium.
Question 7 (Chapter 5)
A 45-year-old in Slidell is in the 'Accumulation Period' of a deferred annuity. Which of the following is TRUE regarding the taxes on the interest earned during this phase?
- A) Taxes must be paid every year as interest is credited
- B) Taxes are deferred until the money is withdrawn
- C) The interest is tax-exempt if the annuity is fixed
- D) Taxes are only paid if the owner dies
Show answer & explanation
Answer: B
One of the primary benefits of an annuity is tax-deferred growth. Interest earned during the accumulation phase is not taxed until the owner makes a withdrawal or begins receiving annuity payments.
Question 8 (Chapter 5)
A consumer in Lake Charles takes out a car loan and is required to purchase Credit Life insurance. Which of the following is TRUE regarding the death benefit amount of this policy?
- A) It must be double the amount of the loan.
- B) It is always a level term amount for the life of the loan.
- C) It cannot exceed the total amount of the indebtedness.
- D) It is paid directly to the insured's estate.
Show answer & explanation
Answer: C
Credit life insurance is designed to pay off a debt. Therefore, the face amount cannot exceed the amount of the loan. It is usually decreasing term insurance so that the benefit matches the declining balance.
Question 9 (Chapter 5)
A retiring couple in Metairie chooses a 'Joint and Survivor' annuity payout option. If the husband dies first, what happens to the payments?
- A) They stop immediately.
- B) They continue to the surviving wife for the rest of her life.
- C) They are paid in a lump sum to the children.
- D) They are reduced by 50% and paid to the estate.
Show answer & explanation
Answer: B
The Joint and Survivor option guarantees that payments will continue as long as at least one of the annuitants is alive.
Question 10 (Chapter 6)
A husband and wife are involved in a fatal car accident on I-10. The husband is the insured, and the wife is the primary beneficiary. There is a contingent beneficiary named. If it cannot be determined who died first, how will the proceeds be distributed under the Common Disaster clause?
- A) The proceeds go to the contingent beneficiary as if the primary beneficiary died first.
- B) The proceeds go to the wife's estate.
- C) The proceeds are split 50/50 between the two estates.
- D) The proceeds are held by the state of Louisiana until a court ruling.
Show answer & explanation
Answer: A
The Common Disaster clause (often based on the Uniform Simultaneous Death Act) protects the contingent beneficiary. It assumes the primary beneficiary died first if the deaths are simultaneous or within a specified timeframe, ensuring the money goes to the contingent beneficiary rather than the primary beneficiary's estate.
Question 11 (Chapter 6)
Which of the following statements is true regarding the federal income taxation of life insurance death benefits paid to a named beneficiary?
- A) They are generally received income tax-free.
- B) They are always taxed as ordinary income.
- C) They are taxed as capital gains if the benefit exceeds $500,000.
- D) They are tax-free only if the beneficiary is a spouse.
Show answer & explanation
Answer: A
Under federal tax law, life insurance death benefits paid in a lump sum to a named beneficiary are generally received free of federal income tax.
Question 12 (Chapter 6)
A policyowner in Lafayette receives dividends from their participating policy and chooses to use them to pay part of the next year's premium. Which dividend option is this?
- A) Paid-up additions
- B) Accumulation at interest
- C) Cash payment
- D) Reduction of premium
Show answer & explanation
Answer: D
The Reduction of Premium option applies the dividend toward the next premium due, lowering the out-of-pocket cost for the policyowner.
Practice Questions 13-17: Roth IRAs, Simultaneous Death, Policy Loans, Ownership Rights and SEPs
Chapter 6 closes the Life set with a qualified Roth IRA distribution, a second simultaneous death scenario under the Louisiana version of the Uniform Simultaneous Death Act, what an unpaid policy loan does to the death benefit, which party holds the free look and beneficiary rights when a corporation owns a policy on its CEO, and the retirement plan in which the employer funds an IRA for each employee.
Question 13 (Chapter 6)
A 60-year-old worker in Thibodaux takes a distribution from their Roth IRA. They have owned the account for 8 years. What are the tax consequences?
- A) The distribution is entirely tax-free
- B) The distribution is fully taxable as ordinary income
- C) Only the earnings are taxable
- D) The distribution is tax-free but subject to a 10% penalty
Show answer & explanation
Answer: A
Roth IRA distributions are tax-free if the account has been open for at least 5 years and the owner is at least 59 1/2 years old (a 'qualified distribution').
Question 14 (Chapter 6)
A husband (insured) and wife (primary beneficiary) die in a boating accident on Lake Pontchartrain. It cannot be determined who died first. The policy names their son as the contingent beneficiary. Under the Louisiana version of the Uniform Simultaneous Death Act, how are the proceeds distributed?
- A) 50% to the wife's estate and 50% to the son.
- B) 100% to the wife's estate.
- C) 100% to the son as the contingent beneficiary.
- D) The proceeds are escheated to the State of Louisiana.
Show answer & explanation
Answer: C
Under the Uniform Simultaneous Death Act (and the Common Disaster Clause), if it cannot be determined who died first, the law assumes the primary beneficiary died first. Therefore, the proceeds pass to the contingent beneficiary.
Question 15 (Chapter 6)
An insured in Ruston has a $100,000 policy with a $20,000 cash value. They take a $10,000 loan against the policy. If the insured dies before repaying the loan, how much will the beneficiary receive?
- A) $100,000
- B) $90,000 (minus any unpaid interest)
- C) $80,000
- D) $110,000
Show answer & explanation
Answer: B
When an insured dies with an outstanding policy loan, the insurer deducts the loan balance and any accrued interest from the death benefit before paying the beneficiary.
Question 16 (Chapter 6)
A corporation in Lake Charles purchases a life insurance policy on its CEO. The CEO is the insured, but the corporation is the applicant, premium payer, and beneficiary. Who holds the 'Right to Examine' (Free Look) and the right to change the beneficiary?
- A) The CEO, as the insured party.
- B) The CEO's spouse, as the natural heir.
- C) The corporation, as the policyowner.
- D) The Louisiana Department of Insurance.
Show answer & explanation
Answer: C
The policyowner (in this case, the corporation) holds all contractual rights, including the right to name/change beneficiaries and the right to exercise the 10-day free look period under R.S. 22:931.
Question 17 (Chapter 6)
An employer in Alexandria sets up a SEP (Simplified Employee Pension) plan for their employees. Which of the following is a key characteristic of a SEP?
- A) It is a complex plan requiring a large HR department to manage.
- B) Employees make the primary contributions through salary deferral.
- C) The employer makes contributions directly to an IRA established for each employee.
- D) It is only available to government employees.
Show answer & explanation
Answer: C
A SEP is a simplified retirement plan where the employer contributes to IRAs set up for the employees. It is popular with small businesses due to its low administrative costs.
The Mistakes That Cost Marks
Treating an immediate annuity as a 30-day product. A single premium immediate annuity must begin payments within one year of purchase. The 30-day figure is a distractor; once payments are deferred past a year, the contract is a deferred annuity.
Mixing up survivorship life and a joint and survivor annuity. A survivorship (second-to-die) policy pays its death benefit only after the last insured dies, which is why it fits estate tax liquidity. A joint and survivor annuity is a payout option that keeps paying the surviving annuitant for life. One is a life policy design and the other is an income option.
Forgetting the common disaster rule. When an insured and the primary beneficiary die and nobody can say who died first, the law treats the primary beneficiary as having died first, so the proceeds pass to the contingent beneficiary. This set tests it twice, once as a clause and once under the Uniform Simultaneous Death Act.
Dropping unpaid interest from a policy loan payoff. When an insured dies with an outstanding loan, the insurer subtracts the loan balance plus any accrued interest from the death benefit. The correct choice is the face amount less the loan, minus unpaid interest.
Confusing who holds the contract rights. The policyowner, not the insured, holds the right to name the beneficiary and the 10-day free look under R.S. 22:931. When a corporation owns the policy on its CEO, the corporation holds those rights.
Mixing up the tax rules. Life insurance death benefits paid in a lump sum are generally received income tax-free. Returned premiums on a return of premium term policy are tax-free. A Roth IRA distribution is tax-free only when it is qualified, meaning the account has been open at least 5 years and the owner is at least 59 1/2.
Your Next Step
How did you score?
13 or more correct: You're clearing most of the life sections. Move to the Health insurance exam set next, then read how to pass the Louisiana Life & Health exam on the first try for the full study plan.
9-12 correct: You're in reasonable shape but not comfortable. Note which chapter your misses fell in and replay that chapter's audio lesson before retesting.
Under 9 correct: Start with Chapter 5 of the LanePrep Louisiana Life & Health course and work forward through Chapter 6 rather than testing yourself again right away. A free preview is available at /la/l-and-h/preview, no signup required.
For a 25-question sample across the whole exam, see the free practice set.
Exam format, fees and content outline weights from PSI Services LLC's Louisiana Department of Insurance Candidate Information Bulletin (updated 1/1/2025) and the Series 101 and 103 content outlines (effective 2/10/2016); pass rates from the NAIC compiled pass-rate workbooks for 2024 and 2025. Read October 2026.
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