17 Free Louisiana Life & Health Practice Questions: Application and Underwriting (2026)
How to Use This Set
This set covers the basics common to Life and Health: working out how much coverage is needed, taking the application, underwriting, risk classification and the premium building blocks. In the outlines it sits under Life Insurance Basics (16% of the Life exam), Health and Accident Insurance Basics (10% of the Health and Accident or Sickness exam) and Life, Health, and Accident Insurance Basics (14% of the combined exam).
Practice Questions 1-6: Needs, Receipts, Corrections and Executive Bonus
From the needs approach to conditional receipts and hospital indemnity, these questions turn on naming the right concept.
Question 1 (Chapter 4)
A client wants to ensure that if they pass away, their mortgage is paid off, their two children have $100,000 each for college, and their spouse has a supplemental income of $3,000 a month for 10 years. This method of determining life insurance requirements is known as:
- A) Human Life Value
- B) The Net Worth Approach
- C) The Needs Approach
- D) The Mortality Approach
Show answer & explanation
Answer: C
The Needs Approach identifies specific financial goals and obligations (debts, income needs, education) to determine the total face amount of life insurance required.
Question 2 (Chapter 4)
An applicant submits a life insurance application with the initial premium on March 1st. The producer issues a conditional receipt. The applicant is required to take a medical exam, which is scheduled for March 7th. If the applicant dies in an accident on March 5th, what will the insurer do?
- A) Pay the death benefit regardless of the exam.
- B) Refund the premium and deny the claim because the exam was not completed.
- C) Deny the claim because coverage only begins upon policy delivery.
- D) Pay the death benefit only if the applicant would have passed the medical exam based on March 1st health standards.
Show answer & explanation
Answer: D
Under a conditional receipt (an insurability receipt), coverage is effective as of the date of the application, provided the applicant is found insurable as of that date (or the date of the exam, under some forms). Because the applicant died before the exam, the insurer decides whether the applicant would have been insurable under its standards at the time of application, and pays the death benefit only if so. It does not pay automatically (A), and it does not deny solely because the exam was incomplete (B) or because the policy was not delivered (C).
Question 3 (Chapter 4)
A client purchases a policy that pays a fixed amount of $200 per day for every day they are confined to a hospital, regardless of the actual medical expenses incurred. This is an example of a:
- A) Major Medical Plan
- B) Health Maintenance Organization (HMO)
- C) Disability Income Policy
- D) Hospital Indemnity Policy
Show answer & explanation
Answer: D
Hospital Indemnity (or Hospital Income) policies pay a flat dollar amount per day of hospitalization directly to the insured, not the provider.
Question 4 (Chapter 4)
A producer is delivering a policy and realizes that the applicant made a mistake on the original application regarding their date of birth. To correct this on the application, the producer should:
- A) Cross out the error, write the correct info, and have the applicant initial the change.
- B) Use white-out and type the correct date.
- C) Verbally inform the insurer and make no written changes.
- D) Shred the application and start over from scratch.
Show answer & explanation
Answer: A
Errors on an application should be corrected by crossing out the mistake, writing the correct information, and having the applicant initial the change to verify its authenticity.
Question 5 (Chapter 4)
Which use of life insurance is intended to provide immediate cash to pay for funeral costs, taxes, and outstanding debts upon the death of the insured?
- A) Estate Creation
- B) Capital Conservation
- C) Key Person Protection
- D) Liquidity
Show answer & explanation
Answer: D
Liquidity refers to the immediate availability of cash. Life insurance provides liquidity to an estate so that assets (like a home or business) do not have to be sold quickly to pay for immediate expenses.
Question 6 (Chapter 4)
Under an Executive Bonus plan (Section 162), an employer pays the premiums for a life insurance policy owned by a key employee. How are these premiums treated for tax purposes?
- A) The premiums are tax-deductible to the employer and tax-free to the employee.
- B) The premiums are not deductible to the employer and are taxable to the employee.
- C) The premiums are not deductible to the employer and are tax-free to the employee.
- D) The premiums are tax-deductible to the employer and taxable to the employee as compensation.
Show answer & explanation
Answer: D
In an Executive Bonus plan, the premium paid by the employer is considered a bonus to the employee. Therefore, the employer can deduct the premium as a business expense (compensation), and the employee must report the premium amount as taxable income.
Get the 25-question sample set by email
Want a full-exam practice set to study offline? Drop your email — we'll send 25 questions across every content area, each with the answer and explanation.
No spam. Just the questions and one optional follow-up.
Practice Questions 7-12: Rating, Premium Formulas, Tax and Consumer Reports
Substandard rating methods, the premium formula, how key person life insurance is taxed and the investigative report notice.
Question 7 (Chapter 4)
An applicant is classified as a 'Substandard' risk due to a dangerous hobby. The insurer decides to issue the policy but calculates the premium as if the applicant were 10 years older than they actually are. This rating method is known as:
- A) Flat Extra Premium
- B) Tabular Rating
- C) Lien Plan
- D) Rated-up Age
Show answer & explanation
Answer: D
The 'Rated-up Age' method involves charging the premium rate for an older age group. A 'Flat Extra' (A) is a specific dollar amount added to the premium (e.g., $5 per $1,000 of coverage) regardless of age.
Question 8 (Chapter 4)
In the actuarial formula for life insurance premiums, how does the 'Interest' factor generally affect the premium charged to the policyowner?
- A) Higher interest rate assumptions result in higher premiums.
- B) Interest rates only affect the cash value, not the premium.
- C) Interest rates are only used for health insurance, not life insurance.
- D) Higher interest rate assumptions result in lower premiums.
Show answer & explanation
Answer: D
Insurers invest the premiums they receive. If they assume a higher rate of return (interest), they can afford to charge a lower premium to reach the same future death benefit amount. Interest is a 'credit' in the premium equation.
Question 9 (Chapter 4)
Which of the following correctly describes the 'Net Premium' for a life insurance policy?
- A) Mortality + Expenses
- B) Mortality - Interest + Expenses
- C) Mortality - Interest
- D) Morbidity + Interest
Show answer & explanation
Answer: C
Net Premium is the mortality cost (the risk of death) minus the interest the insurer expects to earn. Gross Premium (the amount the client pays) is Net Premium plus Expenses (Loading).
Question 10 (Chapter 4)
A Louisiana corporation purchases a 'Key Person' life insurance policy on its CEO. If the CEO dies, how is the death benefit typically treated for federal income tax purposes by the corporation?
- A) It is fully taxable as ordinary income
- B) It is taxable only if it exceeds $500,000
- C) It is received tax-free
- D) It is taxed as a capital gain
Show answer & explanation
Answer: C
In a Key Person life insurance arrangement, the business is the owner and beneficiary. While premiums are generally not tax-deductible, the death benefit is usually received by the business tax-free.
Question 11 (Chapter 4)
A resident of Bossier City has a 'Critical Illness' policy. This policy will pay a lump-sum benefit if the insured is diagnosed with:
- A) Any illness requiring hospitalization for more than 10 days
- B) A disability that prevents them from working for at least 90 days
- C) A specific disease named in the policy, such as cancer or heart attack
- D) Any injury resulting from a motor vehicle accident
Show answer & explanation
Answer: C
Critical Illness (or Dread Disease) policies are limited policies that trigger benefits only for specific, named conditions listed in the contract.
Question 12 (Chapter 4)
Under the Fair Credit Reporting Act (FCRA), if an insurer in Louisiana requests an investigative consumer report on an applicant, the applicant must be notified of the request within how many days?
- A) 10 days
- B) 3 days
- C) 30 days
- D) 90 days
Show answer & explanation
Answer: B
The FCRA requires that the applicant be notified in writing that an investigative consumer report has been requested within 3 days of the request.
Practice Questions 13-17: Reports, Risk Classes and Underwriting Sources
The last five cover the agent's report, premium components, risk classes and the information underwriters rely on.
Question 13 (Chapter 4)
Which part of the application process allows the producer to provide their personal observations and knowledge about the applicant's financial status and character to the underwriter?
- A) Part I - General Information
- B) The Agent's Report
- C) Part II - Medical Information
- D) The Attending Physician's Statement
Show answer & explanation
Answer: B
The Agent's (or Producer's) Report is a section of the application where the producer provides subjective information that does not become part of the entire contract.
Question 14 (Chapter 4)
An actuary for a Louisiana life insurer is calculating the 'Gross Premium' for a new whole life product. Which of the following formulas represents the correct components of this calculation?
- A) Mortality + Interest + Expense
- B) Mortality + Interest - Expense
- C) Mortality - Interest + Expense
- D) Mortality - Interest - Expense
Show answer & explanation
Answer: C
Gross Premium is calculated by taking the Mortality cost (risk), subtracting the Interest earned by the insurer on invested premiums, and adding the Expense (loading) for administrative costs.
Question 15 (Chapter 4)
An underwriter at a Louisiana insurance company reviews an application for a 30-year-old non-smoker with a perfect health history. The underwriter assigns a risk category that results in lower-than-average premiums. This classification is:
- A) Standard
- B) Preferred
- C) Substandard
- D) Declined
Show answer & explanation
Answer: B
Preferred risks are individuals whose health, lifestyle, and habits are better than average, qualifying them for lower premium rates.
Question 16 (Chapter 4)
An applicant for health insurance in Slidell intentionally hides the fact that they were recently diagnosed with terminal cancer. This is an example of:
- A) Estoppel
- B) Waiver
- C) Concealment
- D) Warranty
Show answer & explanation
Answer: C
Concealment is the intentional withholding of material information that is critical to an underwriting decision.
Question 17 (Chapter 4)
Which source of underwriting information provides a non-profit exchange of medical information between life insurance companies?
- A) The Fair Credit Reporting Agency
- B) The Medical Information Bureau (MIB)
- C) The Louisiana Department of Health
- D) The National Association of Insurance Commissioners
Show answer & explanation
Answer: B
The MIB is a member-owned corporation that stores coded medical information on applicants, helping insurers identify misrepresentations or undisclosed conditions.
The Mistakes That Cost Marks
Getting the premium formula backwards. Net premium is mortality minus interest; gross premium adds expenses. A higher interest assumption lowers the premium.
Missing what a conditional receipt promises. Coverage is tied to insurability, so a death before the exam turns on whether the applicant would have been insurable.
Mixing up tax treatment. An executive bonus is deductible to the employer and taxable to the employee; key person death benefits are generally received tax-free.
Mistaking limited policies for broad ones. Hospital indemnity pays a flat daily amount and critical illness pays for named conditions only.
Forgetting the producer's reporting role. The agent's report is the producer's own observations and is separate from the application's medical sections.
Your Next Step
Work through all 17 questions once untimed, then again timed, and keep a list of the ones you miss. Our free Louisiana practice question hub collects every topic set, and the course preview lets you hear a lesson before you commit.
If you want the format and weights first, read how many questions are on the exam.
Free: 25 Louisiana L&H practice questions
Liked this article? Get 25 exam-style questions emailed to you — with full answer explanations, no credit card. Closest thing to studying offline.
No spam. Just the questions and one optional follow-up.
Study this topic with LanePrep
Listen to these audio chapters on your commute — no screen required.
Related Articles
How to Pass the Louisiana Life, Health and Accident Insurance Exam on the First Try (2026)
10 min read
About $194 All-In: Louisiana Life & Health License Cost 2026
7 min read
25 Free Louisiana Life & Health Exam Practice Questions (2026)
25 min read
Is the Louisiana Life & Health Exam Hard? Pass Rates and Difficulty (2026)
4 min read
17 Free Louisiana Life & Health Practice Questions: Louisiana Regulation II (2026)
14 min read
17 Free Louisiana Life & Health Practice Questions: General Insurance Concepts (2026)
10 min read
17 Free Louisiana Life & Health Practice Questions: Policy Types and Annuities (2026)
11 min read