1. Exam Prep
  2. New Mexico
  3. Life, Accident & Health
  4. Life Insurance Basics

Free Life Insurance Basics Practice Questions

New Mexico Life, Accident & Health exam — 40 practice questions.

Subtopics: Term insurance, Whole life, Universal life, Beneficiary, Insurable interest, Settlement options, Nonforfeiture, Policy loan, Dividends, Free look, Grace period, Reinstatement, Handling risk, Insurable risk, Hazards, Definitions, Insurer classifications, Adverse selection, Elements of a contract, Legal interpretations, Law of large numbers, Indemnity, Aleatory contract, Contract of adhesion, Utmost good faith, Unilateral contract, Conditional contract, Express authority, Apparent authority, Fiduciary duty, Reinsurance, Reciprocal insurer, Estoppel, Insurable interest timing

Read the Life Insurance Basics study guide

Sample questions & answers

1. A New Mexico consumer who wants the most death benefit per premium dollar for a temporary need would typically choose:

Term life insurance

Term life provides the greatest amount of death benefit per premium dollar for a stated, temporary period.

2. A distinguishing feature of whole life insurance compared with term is that whole life:

Builds guaranteed cash value over time

Whole life provides lifetime coverage and accumulates guaranteed cash value, unlike level term insurance.

3. Universal life insurance is generally characterized by:

Flexible premiums and an adjustable death benefit

Universal life offers flexible premiums and an adjustable death benefit with a cash value tied to current interest crediting.

4. A New Mexico policyowner who names a beneficiary that can be changed at any time has named a:

Revocable beneficiary

A revocable beneficiary can be changed by the policyowner at any time without the beneficiary's consent.

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Practice: Life Insurance Basics

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.