TN Life & Health common mistakes
TN Life & Health · Understand the traps and how to avoid them.
When asked how many continuing-education hours a Tennessee producer needs, the candidate picks '12 hours every year' or '24 hours with no specified subject requirements.'
Most states the candidate has seen use annual 12-hour cycles, and study outlines often list '24 hours' without emphasizing that Tennessee's cycle is biennial and that a fixed slice must be ethics.
What to do instead
Build a Tennessee-only numbers card and drill it: license term is 2 years, 24 CE hours per term, including 3 hours of ethics. Say the phrase 'two-year term, twenty-four hours, three ethics' out loud before answering any CE question.
On a question about a producer who moves to a new address or receives an administrative action against a license in another state, the candidate selects 'report it at the next renewal' rather than 'report within 30 days.'
Renewal is the most memorable event on the licensing timeline, so candidates anchor everything to it and overlook the short statutory reporting clock.
What to do instead
Memorize a single rule: address changes, administrative actions, and criminal prosecutions are reported to the Tennessee Department of Commerce and Insurance within 30 days. Anything with a '30 days' answer choice on a reporting question is usually correct; renewal is for CE and fees, not for disclosures.
Given a scenario where a producer replaces a client's existing policy by falsely telling the client the old policy is worthless, the candidate labels the conduct 'misrepresentation' instead of 'twisting.'
Both violations involve false statements, so candidates match on the word 'false' and stop reading for the replacement element that makes the act twisting.
What to do instead
Use a trigger-word table: twisting = replacement + false or misleading comparison; misrepresentation = false statement about policy terms standing alone; rebating = giving value not in the contract to induce a sale. If the fact pattern says 'replaced' or 'lapsed the old policy,' choose twisting.
The candidate states that insurable interest must exist at the time of the insured's death for a life insurance policy, or says a person can buy life insurance on a stranger as long as the beneficiary consents.
Property and casualty rules (interest at time of loss) are taught alongside life rules, and candidates carry the P&C timing over to life.
What to do instead
Anchor on one sentence: for life insurance, insurable interest must exist at the time of application and is not required at death. For property/casualty, it must exist at the time of loss. Write both on one line and compare before choosing.
When a question asks who may change the beneficiary, take a policy loan, or surrender the policy, the candidate answers 'the insured' because the insured's life is covered.
Everyday intuition treats the person insured as the person who owns the policy; exam stems deliberately describe the insured and owner as different people to test this.
What to do instead
Draw a three-column table before the exam: owner (all rights: beneficiary change, loan, surrender, assignment), insured (consent and underwriting only), beneficiary (no rights until the insured dies). If the stem separates the roles, the answer is almost always the owner.
On a question about the tax treatment of a loan taken from a whole life policy, the candidate selects 'the loan is taxable income when received.'
Candidates blend life policy loans with withdrawals from qualified plans and annuities, where distributions are often taxable.
What to do instead
Memorize the contrast: a life policy loan is generally not taxable when taken because it is a loan secured by cash value; it becomes taxable only if the policy lapses or is surrendered with an outstanding loan exceeding the policy's basis. Interest on the loan is not tax-deductible for an individual.
The candidate mixes up the nonforfeiture options, choosing 'extended term' when the question describes a smaller face amount kept for the insured's lifetime with no further premiums.
Both options use the same cash value and both eliminate premiums, so candidates remember only that 'coverage continues' and ignore whether face amount or duration is the thing being reduced.
What to do instead
Anchor on which variable changes: reduced paid-up cuts the face amount but keeps lifetime coverage; extended term keeps the face amount but cuts the coverage to a limited number of years. Ask 'what got smaller, the amount or the time?'
For a nonqualified annuity that has been annuitized, the candidate treats the entire payment as taxable, or applies the exclusion ratio to payments taken during the accumulation phase.
The candidate conflates annuitization with ordinary withdrawal and forgets that the exclusion ratio exists to return the after-tax basis gradually.
What to do instead
State the rule in one line: exclusion ratio = investment in the contract divided by expected return, and it applies only after annuitization of a nonqualified annuity. Before annuitization, withdrawals are taxed LIFO (gain first, then basis), not by exclusion ratio.
Shown a plan that pays a fixed dollar amount per office visit, the candidate labels it 'coinsurance'; shown a percentage split, the candidate labels it a 'copay.'
All cost-sharing terms are studied together and candidates match on the general idea of 'the patient pays part' instead of the structure of the payment.
What to do instead
Classify by structure, not by who pays: copay = fixed dollar amount; coinsurance = percentage of covered expense; deductible = threshold paid before benefits begin. If a number has a dollar sign, it is a copay or deductible; if it has a percent sign, it is coinsurance.
On a health policy classification question, the candidate chooses 'guaranteed renewable' when the stem says the insurer can never cancel the policy or increase the premium.
The two terms sound nearly identical, and candidates remember only that both prevent cancellation.
What to do instead
Separate them by premium power: noncancellable = insurer cannot cancel and cannot raise the premium; guaranteed renewable = insurer cannot cancel but can raise premiums by class. If the stem gives the insurer no premium power at all, the answer is noncancellable.