← Annuities & Retirement – Life & Health Insurance License Exam

Free Annuities & Retirement – Life & Health Insurance License Exam Practice Test (2026)

150 questions · 180 min · 70% to pass

150 Questions · 180 Minutes · 70% to Pass

Question 1 of 5

Sample Questions

Question 1

What is a 'pure life' (straight life) annuity payout option?

Answer: A pure life annuity pays income only for as long as the annuitant lives, with no further payments upon death—even if the annuitant dies shortly after annuitization.

Question 2

How does a fixed annuity differ from a variable annuity?

Answer: A fixed annuity credits a guaranteed minimum interest rate with no investment risk to the owner, while a variable annuity's value fluctuates based on the performance of separate account sub-accounts chosen by the owner.

Question 3

What are the two phases of an annuity contract?

Answer: The accumulation phase (pay-in period where money grows) and the annuitization phase (payout period where the insurer makes periodic payments to the annuitant).

Question 4

What is the difference between the annuity owner and the annuitant?

Answer: The owner controls the contract and pays premiums, while the annuitant is the person whose life expectancy determines the payout. These can be the same person or different people.

Question 5

What is the PRIMARY purpose of an annuity?

Answer: An annuity is designed to provide a steady income stream, primarily to protect against the risk of outliving one's assets (longevity risk).