Start studying for your life only exam using proven materials to help you pass. You’ll learn the concepts through the use of webinars, sample exam questions, and an online playbook.
The Life Insurance Exam Curriculum prepares candidates for licensing to sell life insurance products, focusing on policies, underwriting, regulatory compliance, and state-specific requirements. This curriculum excludes health and accident insurance and emphasizes life insurance principles.
Life Insurance Exam Curriculum
1. General Insurance Principles
- Insurance Basics
- Definition of insurance and risk management
- Law of large numbers and insurable risks
- Elements of a legal contract: Offer, acceptance, consideration, legal purpose
- Characteristics of insurance contracts: Adhesion, aleatory, unilateral, and conditional
- Insurance Regulation
- Role of state Departments of Insurance (DOI)
- Federal laws impacting life insurance (e.g., ERISA, Dodd-Frank Act)
- Licensing, renewal, and continuing education requirements
- Unfair trade practices and market conduct rules
- Key Insurance Terms
- Indemnity, insurable interest, beneficiary, premium, lapse
2. Types of Life Insurance Policies
- Term Life Insurance
- Level, increasing, and decreasing term
- Renewable and convertible term policies
- Whole Life Insurance
- Ordinary whole life, limited-pay, single premium
- Characteristics: Cash value, loan provisions, nonforfeiture options
- Universal Life Insurance
- Flexible premiums and adjustable death benefits
- Option A (level death benefit) vs. Option B (increasing death benefit)
- Variable Life Insurance
- Investment features: Sub-accounts and market risk
- SEC and FINRA regulatory oversight
- Other Life Insurance Products
- Survivorship and joint life insurance
- Final expense insurance
- Industrial (home service) life insurance
- Group Life Insurance
- Employer-sponsored plans
- Conversion privileges and portability
3. Policy Provisions, Options, and Riders
- Standard Policy Provisions
- Ownership rights, beneficiary designation, grace period
- Incontestability, reinstatement, misstatement of age
- Optional Riders
- Waiver of premium
- Accidental death and dismemberment (AD&D)
- Guaranteed insurability
- Cost of living adjustment (COLA)
- Settlement Options
- Lump sum, interest-only, fixed period, fixed amount, life income
- Nonforfeiture Options
- Cash surrender, reduced paid-up, extended term
- Loan Provisions
- Policy loans and automatic premium loans
4. Policy Underwriting and Application
- Application Process
- Parts of an application: General information, medical information
- Conditional and binding receipts
- Underwriting
- Risk classifications: Preferred, standard, substandard
- Medical exams and credit reports
- MIB Group (Medical Information Bureau) and HIPAA compliance
- Policy Delivery
- Legal delivery and effective date
- Collecting premium and delivery requirements
- Replacement of Policies
- Regulations on replacement and disclosure requirements
- Avoiding twisting and churning
5. Taxation of Life Insurance
- Tax Treatment of Premiums
- Personal vs. business-owned policies
- Taxation of Death Benefits
- Lump-sum benefits typically tax-free
- Exceptions for interest income on installment payments
- Taxation of Cash Values
- Tax-deferred growth
- Tax implications of policy loans, withdrawals, and surrenders
- Modified Endowment Contracts (MECs)
- Definition and tax penalties for early distributions
6. Retirement and Financial Planning
- Annuities
- Types: Fixed, variable, immediate, deferred
- Annuity settlement options
- Tax advantages and penalty for early withdrawal
- Life Insurance in Estate Planning
- Estate tax implications of life insurance
- Irrevocable life insurance trusts (ILITs)
- Uses of Life Insurance
- Key person insurance, buy-sell agreements, executive bonuses
- Charitable giving and creditor protection
7. Ethics and Market Conduct
- Suitability Standards
- Matching products to client needs and financial objectives
- Ethical Responsibilities
- Honest disclosure of product features, benefits, and limitations
- Avoiding rebating, misrepresentation, and high-pressure sales tactics
- Consumer Protections
- Privacy rules and complaint resolution
- Regulations for advertising life insurance products
8. State-Specific Laws and Regulations
- Licensing Requirements
- Pre-licensing education (20–40 hours, depending on the state)
- Application process and examination
- Free-Look Period
- Duration for policyholders to review and cancel a policy
- Policy Replacement Rules
- Disclosures and documentation requirements
- State-Mandated Benefits
- Unique state regulations regarding life insurance