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Hawaii life insurance law practice questions

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The Hawaii part of the Life exam has 35 scored questions. Section II, Hawaii laws and rules pertinent to life insurance only, accounts for 12 of them. [1] That section covers replacement, annuities, variable contracts, policy clauses and provisions (protection of beneficiaries from creditors, the policy loan interest rate and spouse's rights), group life (group requirements, assignment and conversion), participation in surplus, and credit life. [1]

Replacement has its own page. This page covers variable contracts, policy clauses, group life and dividends, with 10 practice questions.

Variable contracts (HRS 431:10D-118)

A domestic life insurer may set up separate accounts. Income, gains and losses on a separate account are credited to or charged against that account without regard to the company's other income, gains or losses. [2] A variable contract must describe how the dollar amount of variable benefits is determined, must state that the amount will vary with investment experience, and must say on its first page that benefits are on a variable basis. [2] The commissioner has "sole and exclusive authority" to regulate the issuance and sale of variable contracts and to license the people who sell them. [2]

Protection of beneficiaries from creditors (HRS 431:10-232)

Death proceeds and the net cash value of life and endowment policies and annuities payable to the insured's spouse, child, parent or other dependent are exempt from execution, attachment, garnishment or other process for the insured's debts. Premiums paid in fraud of creditors are an exception. The section does not apply to group life insurance. [3]

Policy loan interest (HRS 431:10D-103)

For policies issued on or after June 22, 1982, the policy must provide either a maximum loan rate of not more than eight per cent a year, or an adjustable maximum rate set by the insurer as the law allows. An adjustable rate must be set at least once every twelve months but not more often than once in any three month period. [4]

Spouses and dependents in group life (HRS 431:10D-212)

Group life may be extended to cover employees' or members' spouses and dependent children, and they may be covered in amounts equivalent to the insured individual's coverage. For this section a dependent child is under eighteen; under twenty three and attending school while relying on the insured for support; or any age if unable to support themselves because of intellectual disability or physical handicap and chiefly dependent on the insured. [5]

Group life (HRS 431:10D-210, 213 to 215)

Participation in surplus (HRS 431:10D-102(a)(6))

In a participating policy, beginning no later than the end of the third policy year, the insurer must each year determine and apportion any divisible surplus. A dividend is payable in cash or applied to another dividend option the policy provides. [10]

Practice questions

1. Who has sole and exclusive authority to regulate the sale of variable contracts in Hawaii?

A. The federal government only
B. The insurance commissioner
C. Each insurer's board
D. The legislature's insurance committee

Answer: B. (HRS 431:10D-118(d)) [2]

2. A creditor of the deceased insured tries to garnish life proceeds payable to the insured's child. What is the general rule?

Answer: The proceeds are exempt, except as to premiums paid in fraud of creditors. (HRS 431:10-232(a)) [3]

3. Does that creditor protection section apply to group life insurance?

Answer: No. (431:10-232(c)) [3]

4. What fixed maximum policy loan rate may a Hawaii policy issued after June 22, 1982 state?

Answer: Not more than eight per cent a year. (HRS 431:10D-103(b)(1)) [4]

5. For spouse and dependent group life coverage, which child counts as a dependent?

A. Any child under 26
B. A 21 year old full time student relying on the insured for support
C. A married 19 year old living alone
D. Any grandchild

Answer: B. Under twenty three, attending an educational institution, and relying on the insured for support. (HRS 431:10D-212(b)) [5]

6. In an association group, what share of eligible members must sign up before the policy takes effect?

Answer: At least seventy five per cent. (HRS 431:10D-210(3)) [6]

7. An employee leaves the job. How long do they have to apply for an individual policy under the group conversion provision?

Answer: The policy must allow not fewer than thirty days after termination to apply and pay the first premium, with no evidence of insurability required. (HRS 431:10D-213(a)(8)) [7]

8. The group policy itself terminates. What cap may the policy put on a converted policy for someone insured at least five years?

Answer: The smaller of the coverage ending (less new group coverage) or $10,000. (431:10D-213(a)(9)) [7]

9. The employer never told a departing employee about the conversion right. What is the longest the conversion period can be extended?

Answer: Sixty days past the original period. The extra time ends fifteen days after notice is given, but never more than sixty days beyond the period in the policy. (HRS 431:10D-214) [8]

10. By when must an insurer begin apportioning divisible surplus on a participating policy?

Answer: No later than the end of the third policy year. (HRS 431:10D-102(a)(6)) [10]

Study tips

Practice more with the Hawaii life practice test or the Hawaii insurance law practice test.

Prep Retention is independent and is not affiliated with Pearson VUE or the state.

Sources

Laws and exam documents quoted as of October 2026.

  1. Pearson VUE, Hawaii content outlines 121201 (effective January 1, 2026): https://www.pearsonvue.com/content/dam/VUE/vue/en/documents/publications/121201.pdf
  2. HRS 431:10D-118: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0010D-0118.htm
  3. HRS 431:10-232: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0010-0232.htm
  4. HRS 431:10D-103: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0010D-0103.htm
  5. HRS 431:10D-212: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0010D-0212.htm
  6. HRS 431:10D-210: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0010D-0210.htm
  7. HRS 431:10D-213: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0010D-0213.htm
  8. HRS 431:10D-214: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0010D-0214.htm
  9. HRS 431:10D-215: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0010D-0215.htm
  10. HRS 431:10D-102: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0010D-0102.htm

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