1. Exam Prep
  2. New Mexico
  3. Life, Accident & Health
  4. Annuities and Taxation

Free Annuities and Taxation Practice Questions

New Mexico Life, Accident & Health exam — 52 practice questions.

Subtopics: Annuity purpose, Accumulation phase, Fixed annuity, Variable annuity, Annuity suitability, Surrender charge, Annuity exchange, Death proceeds tax, Cash value growth, MEC, Annuity payout math, Annuitant, Standard provisions, Assignment, Beneficiaries, Beneficiary clauses, Settlement options, Nonforfeiture options, Policy loans, Dividend options, Riders, Grace period, Reinstatement, Incontestable clause, Suicide clause, Misstatement of age, Primary beneficiary, Irrevocable beneficiary, Minor beneficiary, Per capita, Estate as beneficiary, Dividend option cash, Dividend option reduce premium, Dividend option accumulate at interest, Dividend option one-year term, Joint and survivor settlement, Guaranteed insurability rider, Cost of living rider, Payor benefit rider, Return of premium rider, Child term rider

Sample questions & answers

1. The primary purpose of an annuity purchased by a New Mexico consumer is to:

Create a stream of income, often for retirement

An annuity is primarily designed to liquidate a sum into a stream of income, commonly used for retirement.

2. During the accumulation phase of a New Mexico deferred annuity:

Funds are paid in and grow tax-deferred

In the accumulation phase the owner pays in funds that grow tax-deferred until annuitization or withdrawal.

3. A fixed annuity issued in New Mexico generally guarantees:

A minimum interest rate and fixed income payments

A fixed annuity guarantees a minimum interest rate during accumulation and fixed-dollar payments during payout.

4. A producer selling a variable annuity in New Mexico generally must also hold:

An appropriate securities registration in addition to a life license

Variable annuities are securities, so the producer must hold the proper securities registration along with a life insurance license.

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Practice: Annuities and Taxation

Take a randomized, timed-style practice test. Answer choices are shuffled and your results are scored instantly with an explanation for every question.

Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.