Life & Health Insurance Exam Cheat Sheet (Free, 2026)

This is a free, no-signup cheat sheet of the facts that show up most often on the Life & Health licensing exam. Learn these cold and you have covered a large share of the test. For the full term list, see the glossary.

Contract & policy provisions

• Free-look period: 10–30 days after delivery to cancel for a full refund (varies by state).
• Grace period: time after a missed premium when coverage stays in force (commonly 30–31 days).
• Incontestability: after ~2 years in force, the insurer cannot void the policy for application misstatements (fraud exceptions vary).
• Reinstatement: restoring a lapsed policy; usually requires back premium plus proof of insurability.
• Insurable interest: must exist at policy issue for life insurance (not at claim).

Life insurance basics

• Term: pure death benefit, no cash value, lowest cost.
• Whole life: permanent, fixed premium, guaranteed cash value.
• Universal life: flexible premium and death benefit, cash value tied to interest.
• Variable life: cash value invested in subaccounts; requires a securities (FINRA) registration to sell.
• MEC (Modified Endowment Contract): over-funded life policy that loses FIFO tax treatment; distributions taxed LIFO with a possible penalty.

Annuities

• Immediate vs deferred: when payout begins.
• Fixed vs variable: guaranteed rate vs subaccount performance.
• Accumulation vs annuitization (payout) phase.
• Surrender charges typically decline over a set schedule.

Federal tax facts (high-yield)

• Death benefit: generally income-tax-free to the beneficiary (IRC §101).
• Cash value growth: tax-deferred while inside the policy.
• Policy loans: not taxable while the policy stays in force.
• HSA (IRC §223): triple tax advantage; requires an HDHP.

Health insurance

• HMO: network-only, requires a PCP and referrals, lowest cost.
• PPO: out-of-network allowed at higher cost, no referral needed.
• Deductible → coinsurance → out-of-pocket max: the order costs are shared.
• COBRA: continuation of group coverage, generally up to 18 months.

Social insurance

• Medicare Part A (hospital), Part B (medical), Part C (Medicare Advantage), Part D (drugs).
• Medigap: standardized lettered plans that supplement Original Medicare.
• Medicaid: needs-based, state-administered.

Practice it

Reading this once is not enough — the exam tests recall under time pressure. Run a free practice exam to turn these facts into points, then read how hard the exam is for the study approach that works.