	Term	Whole	Universal
Premium	Lowest; level for the term	Level, highest; fixed for life	Flexible — payer adjusts
Duration	10–30 yrs, then expires	Lifetime (to age 100/121)	Lifetime if adequately funded
Cash value	None	Guaranteed, tax-deferred	Current interest, not guaranteed
Best when	"Temporary need" · "most coverage per dollar"	"Permanent need" · "guaranteed values"	"Flexible premium" · "adjustable death benefit"

Keyword decoder — the question's adjective is the answer: temporary/cheapest → Term · lifetime/guaranteed → Whole · flexible/adjustable → Universal.

Common traps

what test-writers bet you'll get wrong

✗ Sounds right — "the free look period starts at application"

✓ Exam wants — it starts at policy DELIVERY (10 days; 30 for replacements)

✗ Sounds right — "universal life premiums are fixed"

✓ Exam wants — UL premiums are FLEXIBLE — whole life is the fixed one

✗ Sounds right — "a variable annuity just needs an insurance license"

✓ Exam wants — it's a security — FINRA registration required too

✗ Sounds right — "Medicare Part B covers the hospital stay"

✓ Exam wants — Part A = hospital inpatient · Part B = outpatient/medical

✗ Sounds right — "term life builds some cash value over time"

✓ Exam wants — term is pure protection — zero cash value, ever

✗ Sounds right — "guaranteed insurability rider requires new underwriting"

✓ Exam wants — that's the point of the rider — more coverage, NO new proof

Last-minute checklist

0/12

Tap each once you can recite it cold. Progress saves on this device.

Numbers to memorize

Rules that trip people

All 12 locked in?

Prove it — a 10-question mixed set takes a few minutes.

Take the practice set →

Quick facts

the numbers to know before exam day

Questions

2h m

Time limit

70% (60% in CA)

Passing score

$39

Exam fee

State DOI

Governing body

Full write-up

the complete guide, in prose

Exam Snapshot

80 scoreable questions
120-minute time limit
Exam fee: $39

Life Insurance Policy Types

Term: covers a specified period, death benefit only if death occurs within term, no cash value — cheapest per dollar of coverage
Decreasing term: death benefit shrinks over time; common for mortgage protection
Whole life: level premium, guaranteed death benefit, guaranteed cash value on a fixed schedule; cash value = face amount at maturity (age 100 or 121)
Universal life: flexible premiums/death benefit; splits mortality, expense, interest; cash value earns current rate with a guaranteed minimum
Variable life: cash value in separate-account subaccounts; owner bears investment risk; it's a security — needs FINRA registration + life license

Policy Provisions

Grace period: 30 or 31 days after missed premium — coverage stays in force
Incontestability: after 2 years in force, insurer can't contest for misstatement/concealment (except nonpayment)
Suicide clause: excludes suicide in first 2 years; insurer liable only for refund of premiums
Misstatement of age/sex: death benefit adjusted to what premium would've bought at correct age
Nonforfeiture options: cash surrender, reduced paid-up insurance, or extended term

Riders

Waiver of premium: waives premiums if insured becomes totally disabled
Guaranteed insurability: buy more coverage at set intervals, no evidence of insurability
Accelerated death benefit: advances part of death benefit if terminally ill

Underwriting & Beneficiaries

Insurable interest needed only at policy inception, not at time of loss
Everyone has unlimited insurable interest in their own life
Risk classes: preferred, standard, substandard, or decline
MIB: nonprofit database of coded medical impressions shared among insurers
FCRA: insurer using a consumer/investigative report must notify applicant of info collected
Primary beneficiary is first in line; contingent collects only if primary predeceases insured
Revocable beneficiary: owner can change anytime. Irrevocable: needs beneficiary consent to change
No surviving beneficiary → proceeds go to insured's estate

Annuities

Annuity = opposite of life insurance: turns a lump sum into income, protects against outliving assets
Fixed: guaranteed minimum rate, insurer bears risk. Variable: separate accounts, owner bears risk, is a security (registration required)
Life-only payout: largest payment, stops at death

Health, Disability & LTC

Major medical: deductible + coinsurance + out-of-pocket max
HMO: prepaid network care, PCP gatekeeper for referrals
PPO: lower in-network cost-sharing, allows (pricier) out-of-network care
Disability income: replaces lost earnings after elimination period; own-occ vs any-occ definitions
LTC: covers custodial/skilled care; benefits trigger on inability to perform stated # of ADLs

Taxation — Memorize These

Lump-sum death benefit to named beneficiary: generally income-tax-free
Settlement option: principal tax-free, interest taxable
Personal life premiums: never deductible
MEC (fails 7-pay test): loans/withdrawals taxed LIFO + possible 10% penalty before age 59½
Annuity payments: taxed via exclusion ratio (part return of principal, part taxable ordinary income)
Annuity withdrawal before 59½: 10% penalty
1035 exchange: swap life/annuity contracts of like kind, no current tax
Group life: first $50,000 employer-paid coverage tax-free; excess = imputed income

Frequently asked questions

What are the must-know numbers for the Life-Only exam?

Memorize the recurring numbers: the grace period is typically 30 or 31 days after a missed premium, the incontestability and suicide clauses both run two years, annuity withdrawals before age 59½ generally incur a 10% penalty, and employer-paid group life coverage is tax-free up to $50,000. Whole life matures when cash value equals the face amount, typically at age 100 or 121. These figures show up constantly in exam questions.

What policy-type distinctions should I have memorized cold?

Know that term insurance builds no cash value and pays only if death occurs within the term, while whole life carries a level premium with guaranteed death benefit and cash value. Universal life adds flexible premiums with a guaranteed minimum interest rate on cash value, and variable life shifts investment risk to the policyowner and requires a FINRA registration on top of the life license because it is a security. Decreasing term is the classic mortgage-protection answer.

What are the most common traps on the Life-Only exam?

Timing and taxation traps catch the most candidates. Remember that insurable interest must exist at policy inception, not at the time of loss; that a death benefit paid to a named beneficiary in a lump sum is generally income-tax-free while interest under a settlement option is taxable; and that personal life insurance premiums are never deductible. Also watch the MEC trap: an overfunded policy that fails the seven-pay test gets LIFO taxation on loans and withdrawals plus a possible 10% penalty before age 59½.

Which beneficiary and rider rules belong on my cheat sheet?

For beneficiaries: a revocable beneficiary can be changed anytime, an irrevocable one must consent to a change, and if no beneficiary survives, proceeds go to the insured's estate. For riders: waiver of premium waives premiums on total disability, guaranteed insurability lets you buy more coverage at set intervals with no evidence of insurability, and the accelerated death benefit advances part of the death benefit for terminal illness. These one-line rules are pure memorization points the exam loves.

How should I use the cheat sheet the night before the exam?

Use it as a final-pass review, not a first-time learning tool — skim every line and flag anything that doesn't feel automatic yet. Spend your last hour only on the flagged items, like nonforfeiture options (cash surrender, reduced paid-up, extended term) or the misstatement-of-age adjustment, then stop and sleep. The cheat sheet complements full study; it works because it triggers recall of material you've already practiced.

Sources

1.State Insurance Department Directory — NAIC
2.Insurance Licensing Exams (Pearson VUE) — Pearson VUE

Official sources

Primary documents used to verify the exam details shown on this page.

Texas Life Agent ExamTexas DOI / Pearson VUEpearsonvue.com
Renew a License — Continuing EducationCalifornia Department of Insuranceinsurance.ca.gov
California Insurance Code Section 1749.8 — Annuity TrainingCalifornia Legislature (Insurance Code)leginfo.legislature.ca.gov
California Insurance Code Section 1749.3 — Continuing EducationCalifornia Legislature (Insurance Code)leginfo.legislature.ca.gov
California Insurance Code Section 1749 — Prelicensing EducationCalifornia Legislature (Insurance Code)leginfo.legislature.ca.gov
Renew a License — Producer LicensingCalifornia Department of Insuranceinsurance.ca.gov

Last verified against the official exam content outline: July 18, 2026

Life-Only Insurance Cheat Sheet.The night-before summary, built like the exam.

Exam blueprint — study by weight

Annuity Picker

Side-by-sides the exam loves