17 Free Tennessee Life & Health Practice Questions: Tennessee Life-Only Laws and Rules (2026)
How to Use This Set
Section VI of the Tennessee Life exam, Tennessee laws and departmental rules pertinent to life insurance only, is 4 of the 18 scored Tennessee questions. It is the smallest block on the exam and the most rule-number heavy.
The outline names required provisions in Tenn. Code Ann. §§56-7-2305, 56-7-2307 and 56-7-2308, definitions, disclosure and general rules in Dept. Rule 0780-1-40, replacement in Dept. Rule 0780-1-24, annuities in 0780-01-58-.14(2) and 0780-01-86, and military sales practices in Dept. Rule 0780-1-89, new in the outline effective October 7, 2026.
Practice Questions 1-6: Entire Contract, Disclosure, Replacement, Suitability and Reinstatement
An informal change to the death benefit, financing disclosure, a replacement exemption, annuity suitability, reinstatement and the replacement comparison.
Question 1 (Chapter 8)
During a policy review, a producer tells a client that a handwritten note from a previous meeting modifies the death benefit amount. The client later disputes the change. Which Tennessee provision controls the enforceability of that handwritten note?
- A) §56-7-2305 (Grace period)
- B) §56-7-2307 (Incontestability)
- C) Dept. Rule 0780‑1‑40‑.04 (Disclosure)
- D) §56-7-2308 (Entire contract provision)
Show answer & explanation
Answer: D
Section 56‑7‑2308 declares that the policy, together with the application, constitutes the entire contract, preventing external documents or oral statements from altering the contract. The other provisions are unrelated to contract completeness.
Question 2 (Chapter 8)
When selling a single‑premium life insurance policy, a producer must disclose certain premium financing terms. Which rule specifically requires that disclosure?
- A) Dept. Rule 0780‑1‑40‑.02
- B) Dept. Rule 0780‑1‑40‑.03
- C) Dept. Rule 0780‑1‑40‑.05
- D) Dept. Rule 0780‑1‑40‑.04
Show answer & explanation
Answer: D
Dept. Rule 0780‑1‑40‑.04 sets the disclosure requirements for life insurance contracts, including premium financing. The other rules cover definitions, general rules, or the definition of "policy".
Question 3 (Chapter 8)
A policyholder converts a term policy to a whole-life policy shortly after issue, claiming an exemption from the standard replacement rules. Which provision confirms that this conversion is exempt?
- A) Dept. Rule 0780‑1‑24‑.02
- B) Dept. Rule 0780‑1‑24‑.05
- C) §56-8-104
- D) Dept. Rule 0780‑1‑24‑.04
Show answer & explanation
Answer: D
Dept. Rule 0780‑1‑24‑.04 enumerates the exemptions to the replacement rule, including conversions made within a statutory period after issue. The other options address the general replacement rule, producer duties, or the definition of replacement.
Question 4 (Chapter 8)
An elderly client with limited net worth wants to purchase a variable annuity. Which rule requires the producer to determine the suitability of this product for the client?
- A) Dept. Rule 0780‑01‑58‑.14(2)
- B) Dept. Rule 0780‑1‑24‑.05
- C) Dept. Rule 0780‑1‑40‑.04
- D) Dept. Rule 0780‑01‑86
Show answer & explanation
Answer: A
Dept. Rule 0780-01-58-.14(2) specifically addresses suitability requirements for annuity transactions, mandating that the producer assess the client's financial situation and needs. Rule 0780-01-86 relates to annuity licensing, not suitability. The other rules cover replacement duties and disclosure.
Question 5 (Chapter 8)
A 52‑year‑old policyholder let a whole‑life policy lapse after missing three consecutive premium payments. Six weeks later, she contacts the insurer and asks to have the policy reinstated by paying all back premiums with interest. Which Tennessee provision governs the insurer’s obligation to allow reinstatement?
- A) Tenn. Code Ann. §56‑7‑2305
- B) Tenn. Code Ann. §56‑7‑2307
- C) Tenn. Code Ann. §56‑7‑2308
- D) Dept. Rule 0780‑1‑40‑.05
Show answer & explanation
Answer: A
Section 56‑7‑2305 is the required‑provision statute that mandates a reinstatement provision for life policies. It tells the insurer when and how a lapsed policy may be reinstated. §56‑7‑2307 deals with incontestability, §56‑7‑2308 with the entire‑contract clause, and Rule 0780‑1‑40‑.05 contains general advertising rules, so they are incorrect.
Question 6 (Chapter 8)
When recommending a replacement of a 20‑year term policy with a new 30‑year term policy, the producer must provide the consumer with a side‑by‑side comparison of the two policies. Which rule imposes this duty?
- A) Dept. Rule 0780‑1‑24‑.02
- B) Dept. Rule 0780‑1‑24‑.04
- C) Dept. Rule 0780‑1‑40‑.04
- D) Dept. Rule 0780‑1‑24‑.05
Show answer & explanation
Answer: D
Rule 0780‑1‑24‑.05 sets out the producer’s duties in a replacement transaction, including the requirement to give a written side‑by‑side comparison. .02 establishes the replacement rule itself, .04 lists exemptions, and .04 of the disclosure rule is unrelated.
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Practice Questions 7-12: Military Rules, Grace Period, Definitions and Replacement Duties
Proof of military status, a death in the grace period, the definition of insured, the replacement acknowledgment, a military discount and a not-required-provision question.
Question 7 (Chapter 8)
A veteran client asks whether the insurer can require proof of military service before offering a discounted premium. Under Tennessee's military sales practices rule, is this permissible?
- A) Yes, a producer may require satisfactory proof of the service member's status before applying a military-based discount.
- B) No, producers may never request proof of military status.
- C) Yes, but only the Commissioner may verify military status, not the producer.
- D) No, military status may never be used as a basis for any premium difference.
Show answer & explanation
Answer: A
Dept. Rule 0780-1-89, Tennessee's military sales practices rule, allows a producer to require satisfactory proof of a service member's status before applying a military-based discount. Options B and D are incorrect because the rule does not prohibit verifying status or offering such discounts outright. Option C is incorrect because the producer, not only the Commissioner, handles this verification.
Question 8 (Chapter 8)
A producer is explaining the grace period provision to a client who purchased a life insurance policy with monthly premiums due on the 5th of each month. The client misses the June 5 payment but dies on June 20. According to Tenn. Code Ann. § 56-7-2305, which statement is correct regarding the death benefit?
- A) The death benefit is paid in full because the policy remained in force during the grace period.
- B) The death benefit is paid minus any unpaid premium for June.
- C) The death benefit is denied because the premium was not paid by the due date.
- D) The death benefit is paid only if the client had paid the May premium on time.
Show answer & explanation
Answer: B
Tenn. Code Ann. § 56-7-2305 establishes the grace period provision, which keeps the policy in force after a missed premium payment. If the insured dies during the grace period, the insurer pays the death benefit minus any unpaid premium. Option B correctly states this. Option A is incorrect because the unpaid premium is deducted. Option C is incorrect because the policy remains in force during the grace period. Option D is incorrect because payment of prior premiums does not affect the grace period application for a missed payment.
Question 9 (Chapter 8)
A producer is discussing policy definitions with a client and states that the 'insured' is the person who receives the death benefit upon the insured's death. Which Tennessee departmental rule provides the correct definition of 'insured' for life insurance?
- A) Dept. Rule 0780-1-40-.02
- B) Dept. Rule 0780-1-40-.04
- C) Dept. Rule 0780-1-40-.03
- D) Dept. Rule 0780-1-40-.05
Show answer & explanation
Answer: C
Dept. Rule 0780-1-40-.03 defines 'insured' as the person whose life is covered by the policy, not the beneficiary who receives the death benefit. The producer's statement incorrectly defines 'insured' as the beneficiary. Option C is the correct rule for this definition. Option A defines 'policy'. Options B and D relate to disclosure and general rules, not the definition of 'insured'.
Question 10 (Chapter 8)
During a replacement transaction, a producer fails to obtain a signed statement from the client acknowledging receipt of the required comparison of policies. Which rule is the producer violating?
- A) Dept. Rule 0780-1-24-.02
- B) Dept. Rule 0780-1-24-.03
- C) Dept. Rule 0780-1-24-.05
- D) Dept. Rule 0780-1-24-.04
Show answer & explanation
Answer: C
Dept. Rule 0780-1-24-.05 requires producers to obtain a signed statement from the client acknowledging receipt of the required policy comparison and other disclosure materials in a replacement transaction. Failure to obtain this statement violates the producer's duties under this rule. Option C is correct. Options A, B, and C do not contain this specific requirement.
Question 11 (Chapter 8)
A producer offers a 10% discount on the premium of a life insurance policy to a client who is an active-duty member of the Tennessee National Guard. Which rule governs the permissibility of this discount based on military status?
- A) Dept. Rule 0780-1-40-.02
- B) Dept. Rule 0780-1-89
- C) Dept. Rule 0780-1-40-.03
- D) Dept. Rule 0780-1-40-.04
Show answer & explanation
Answer: B
Dept. Rule 0780-1-89, the Military Sales Practices rule, prohibits unfair discrimination based on military status, which includes offering preferential treatment such as discounts that are not based on actuarial or risk-related factors. Offering a discount solely because of military status may be considered an unfair practice under this rule. Option B is correct. Options A, C, and D relate to life insurance definitions, disclosure, and general rules, not military sales practices.
Question 12 (Chapter 8)
A producer is reviewing a life insurance policy to ensure it contains all required provisions under Tennessee law. Which of the following is NOT a required provision mandated by Tenn. Code Ann. §§ 56-7-2305, 56-7-2307, or 56-7-2308?
- A) Free look provision
- B) Grace period provision
- C) Incontestability clause
- D) Entire contract provision
Show answer & explanation
Answer: A
Tenn. Code Ann. §§ 56-7-2305, 56-7-2307, and 56-7-2308 mandate the grace period provision (§56-7-2305), incontestability clause (§56-7-2307), and entire contract provision (§56-7-2308) as required provisions in life insurance policies issued in Tennessee. The free look provision, while a consumer protection, is not mandated by these specific statutes; it is typically addressed in other regulations or rules (such as those related to replacement or annuities) but is not a required provision under the cited sections. Therefore, Option A is correct as it is NOT a required provision under the specified statutes.
Practice Questions 13-17: Insured, Beneficiary, Military Rule Date and Grace Period Again
Definitions of insured and beneficiary, the effective date of the military rule, and two more grace-period scenarios. Read each for what is unpaid.
Question 13 (Chapter 8)
A producer is discussing a life insurance policy with a client and states that the policy's 'insured' is the person who pays the premiums. The client questions this definition. According to Tennessee Department of Insurance Rule 0780-1-40-.03, which statement correctly defines the term 'insured' in a life insurance policy?
- A) The person who pays the premiums for the policy.
- B) The person who receives the death benefit proceeds.
- C) The person whose life is covered by the policy and upon whose death the benefit is payable.
- D) The insurance company that issues the policy.
Show answer & explanation
Answer: C
Rule 0780-1-40-.03 defines 'insured' as the person whose life is insured under the policy. Option A describes the policyowner, Option B describes the beneficiary, and Option D describes the insurer. Only C matches the rule's definition.
Question 14 (Chapter 8)
A producer is discussing policy definitions with a client and states that the 'beneficiary' is the person whose life is insured. The client corrects the producer. According to Tennessee Department of Insurance Rule 0780-1-40-.03, which statement correctly defines 'beneficiary'?
- A) The person who pays the premiums for the policy.
- B) The person whose life is covered by the policy.
- C) The person designated to receive the death benefit upon the insured's death.
- D) The insurance company that underwrites the policy.
Show answer & explanation
Answer: C
Rule 0780-1-40-.03 defines 'beneficiary' as the person designated to receive the death benefit or policy proceeds. Option A describes the policyowner, Option B describes the insured, and Option D describes the insurer.
Question 15 (Chapter 8)
A service-member is considering purchasing a life insurance policy. The producer mentions that Tennessee has specific rules regarding military sales practices. Which rule contains these provisions, and what was its effective date in the current outline?
- A) Dept. Rule 0780-1-89, effective October 15, 2025
- B) Dept. Rule 0780-01-58-.14(2), effective October 7, 2026
- C) Dept. Rule 0780-1-24-.05, effective October 7, 2026
- D) Dept. Rule 0780-1-89, effective October 7, 2026
Show answer & explanation
Answer: D
Dept. Rule 0780-1-89, which governs military sales practices, was added to the Life-Tennessee Specific outline effective October 7, 2026, as noted in the outline revision. Option A has the wrong effective date, Option B refers to annuity suitability, and Option C refers to replacement duties.
Question 16 (Chapter 8)
A producer is discussing the grace period provision with a client who has a life insurance policy with quarterly premiums due on March 31, June 30, September 30, and December 31. The client misses the September 30 payment but dies on October 15. According to Tenn. Code Ann. § 56-7-2305, which statement is correct regarding the death benefit?
- A) The death benefit is paid minus any unpaid premium for the quarter ending September 30.
- B) The death benefit is paid in full because the policy remained in force during the grace period.
- C) The death benefit is denied because the premium was not paid by the due date.
- D) The death benefit is paid only if the client had paid the premium for the quarter ending June 30.
Show answer & explanation
Answer: A
A is correct because Tenn. Code Ann. § 56-7-2305 establishes the grace period provision, which keeps the policy in force after a missed premium payment. If the insured dies during the grace period, the insurer pays the death benefit minus the unpaid premium. B is incorrect because the death benefit is not paid in full; the overdue premium is deducted. C is incorrect because the policy remains in force during the grace period, so the claim is not denied for missing the due date. D is incorrect because earlier premiums that were paid on time have no bearing on the grace period for the missed one.
Question 17 (Chapter 8)
A producer is explaining the required provisions of a life insurance policy to a client who has a policy with monthly premiums due on the 10th. The client misses the April 10 payment but dies on April 25. According to Tenn. Code Ann. § 56-7-2305, which statement is correct regarding the death benefit?
- A) The death benefit is paid in full because the policy remains in force during the grace period.
- B) The death benefit is paid minus any unpaid premium and any outstanding policy loan balance.
- C) The death benefit is not paid because the policy lapsed on April 11.
- D) The death benefit is paid only if the beneficiary pays the overdue premium before filing the claim.
Show answer & explanation
Answer: B
Tenn. Code Ann. § 56-7-2305 establishes the grace period provision, which keeps the policy in force if the insured dies during the grace period after a missed premium payment. However, any unpaid premium due is deducted from the death benefit before payment. Option A is incorrect because it omits the deduction of unpaid premiums. Option C is incorrect because the policy does not lapse immediately; the grace period provides coverage. Option D is incorrect because the beneficiary is not responsible for paying the overdue premium; the insurer deducts it from the benefit.
The Mistakes That Cost Marks
Mixing up the required-provision statutes. The outline lists §§56-7-2305, 56-7-2307 and 56-7-2308 as required provisions: grace period, incontestability and entire contract.
Deducting nothing in a grace-period death. If the insured dies during the grace period, the insurer pays the death benefit minus the unpaid premium.
Blurring insured, owner and beneficiary. The insured is the person whose life is covered; the beneficiary is the person designated to receive the death benefit; the owner is not necessarily either.
Dropping the military rule. Dept. Rule 0780-1-89 on military sales practices was added to the Life Tennessee section in the outline effective October 7, 2026.
Misplacing the annuity rules. Annuity suitability is Dept. Rule 0780-01-58-.14(2) and 0780-01-86.
Memorizing rule numbers without topics. Pair each rule number with its subject: replacement is 0780-1-24, definitions and disclosure 0780-1-40.
Your Next Step
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