Free Illinois Life & Health Insurance Practice Exam 2026

Illinois life and health insurance exam sample questions and answers

6 of the 150 practice questions, one from each topic, with the answer explained.

1. 1. When recommending an annuity, an Illinois producer must:

   • A.Act as the consumer's legal fiduciary
   • B.Act in the consumer's best interest
   • C.Recommend the highest-paying product
   • D.Get the Director's approval first

   Answer: B. 50 Ill. Adm. Code 3120.50(a) requires a producer to act in the consumer's best interest, without putting the producer's or insurer's financial interest first, through care, disclosure, conflict of interest and documentation duties. The rule says it does not create a fiduciary obligation.

2. 2. A misstatement in an Illinois insurance application can defeat the policy only if it appears in the policy or written application and was:

   • A.Signed by the applicant before a notary
   • B.Repeated later on the declarations page
   • C.Discovered within five years of issue
   • D.Made to deceive or material to the risk

   Answer: D. 215 ILCS 5/154 says a misrepresentation or false warranty defeats a policy only if it was made with actual intent to deceive or materially affected the acceptance of the risk or the hazard assumed. An innocent, immaterial error does not.

3. 3. An Illinois health insurer charges an applicant more solely because of a disability, with no actuarial basis. This is:

   • A.Prohibited unfair discrimination
   • B.Allowed as a risk classification
   • C.Allowed if disclosed in writing
   • D.Allowed for individual policies

   Answer: A. 215 ILCS 5/364 bars accident and health insurers from discriminating solely because of a disability in rates, benefits or other terms, unless the difference rests on sound actuarial principles or actual or reasonably anticipated experience.

4. 4. An insurer ends an Illinois group medical plan while an employee is totally disabled. Benefits for that disability extend until recovery, the maximum benefit or, if earlier:

   • A.6 months
   • B.90 days
   • C.12 months
   • D.24 months

   Answer: C. 50 Ill. Adm. Code 2013.60(b) treats an extension as reasonable for hospital and medical expense coverage if it lasts to the earliest of 12 months, the maximum benefit or the end of total disability. Ninety days applies only to limited plans such as hospital-only coverage.

5. 5. Which plan could be offered by an Illinois limited health service organization?

   • A.A disability income policy
   • B.A long-term care policy
   • C.A prepaid dental care plan
   • D.A major medical hospital plan

   Answer: C. 215 ILCS 130/1002 limits a limited health service organization to services such as ambulance, dental, vision, pharmaceutical, clinical laboratory and podiatric care. Hospital, medical and surgical care fall outside it.

6. 6. Which statement about federal privacy and telemarketing rules affecting insurance producers is accurate?

   • A.Insurers must provide customers privacy notices
   • B.Registry numbers may be called once per calendar year
   • C.Do Not Call rules exempt all insurance telemarketing calls
   • D.GLBA bans insurers from sharing any customer data

   Answer: A. The Gramm-Leach-Bliley Act requires insurers to give privacy notices explaining their information-sharing practices and to let consumers opt out of sharing nonpublic personal information with nonaffiliated third parties. Insurance telemarketers must honor the National Do Not Call Registry, subject to limited exceptions such as an established business relationship.