1|Page
NEW MEXICO LIFE, HEALTH, ACCIDENT
ACTUAL EXAM PREP 2026 ALL QUESTIONS
AND CORRECT DETAILED ANSWERS
ALREADY A GRADED WITH EXPERT
FEEDBACK | NEW AND REVISED
A New Mexico insurance agent solicits a life insurance policy. In the
event of a controversy between the insured and the company, the agent
is considered to represent the - ANSWER- Company
For individual health insurance, coverage for pre-existing conditions
may be excluded for up to ___ months after issuance of the policy -
ANSWER- 12
An example of replacement is - ANSWER- canceling a term life policy
to buy a whole life policy
The Life and Health Insurance Guaranty Association is - ANSWER-
funded by insurance companies through assessments
Suitability is best described as - ANSWER- obtaining information from
the applicant to determine whether an insurance or annuity product is
appropriate
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In New Mexico, small employer health plans require a MINIMUM of
___ employee(s). - ANSWER- 2
What happens if the insurer discovers that the insured's age was
accidentally misstated on an application for an individual life insurance
policy? - ANSWER- Benefits will be calculated according to how much
coverage the premium paid would have purchased for the correct age
What may be the result of replacing an existing life insurance policy
with a new one? - ANSWER- Surrender Charge
When an agent is replacing an existing life insurance policy, the agent
must take all of the following actions EXCEPT - ANSWER- obtain the
beneficiary's signature
Long-term care insurance applications MUST contain plain and
unambiguous health questions. The exception to this rule would be
applications for - ANSWER- Guaranteed issue
A company that is chartered and organized in any country other than the
United States is called a(n) _____ company. - ANSWER- Alien
A foreign insurance company doing business in New Mexico -
ANSWER- is a company domiciled under the laws of another state
A non-admitted insurance company - ANSWER- is not protected by the
Guaranty Fund
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A valid Contract - ANSWER- Must include offer and acceptance
Which of the following is a requirement to attain a nonresident agent
license? - ANSWER- Be licensed as an agent in the agent's state of
domicile
Which of the following is an example of an agent's fiduciary duty? -
ANSWER- Being responsible for all funds collected from clients
A(n) ______ company is owned by its shareholders. - ANSWER- Stock
Newborn coverage under health insurance policies MUST include
coverage for - ANSWER- Birth abnormalities
Taking a sum of money and decreasing it in size is called - ANSWER-
Capital liquidation
When a sum of money undergoes capital liquidation, that sum will -
ANSWER- Decrease in size
What are premiums for group credit life insurance based on? -
ANSWER- Flat rate unrelated to the borrowers age
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Who regulates an insurer's claim settlement practices? - ANSWER-
State Insurance Departments
In regards to health insurance, what is meant by the term "primary
policy"? - ANSWER- It is the policy that will pay up to its limit before
any other policy pays
Which of the following would most likely purchase an immediate
annuity? - ANSWER- Retiree having a lump sum to invest
How are the premiums for an individually-owned disability income
policy treated for tax purposes? - ANSWER- Not Tax-Deductible at all
Which of these would NOT likely qualify as a presumptive disability? -
ANSWER- Lost of sight in one eye
A prepaid dental plan has an agreement in place with a network of
dentists which - ANSWER- accepts an established amount as payment
in full for the dental services rendered
Dividends from a stock insurance company are normally sent to -
ANSWER- Shareholders
Under a key person disability income policy, benefits will be received as
- ANSWER- tax free income to the business
NEW MEXICO LIFE, HEALTH, ACCIDENT
ACTUAL EXAM PREP 2026 ALL QUESTIONS
AND CORRECT DETAILED ANSWERS
ALREADY A GRADED WITH EXPERT
FEEDBACK | NEW AND REVISED
A New Mexico insurance agent solicits a life insurance policy. In the
event of a controversy between the insured and the company, the agent
is considered to represent the - ANSWER- Company
For individual health insurance, coverage for pre-existing conditions
may be excluded for up to ___ months after issuance of the policy -
ANSWER- 12
An example of replacement is - ANSWER- canceling a term life policy
to buy a whole life policy
The Life and Health Insurance Guaranty Association is - ANSWER-
funded by insurance companies through assessments
Suitability is best described as - ANSWER- obtaining information from
the applicant to determine whether an insurance or annuity product is
appropriate
,2|Page
In New Mexico, small employer health plans require a MINIMUM of
___ employee(s). - ANSWER- 2
What happens if the insurer discovers that the insured's age was
accidentally misstated on an application for an individual life insurance
policy? - ANSWER- Benefits will be calculated according to how much
coverage the premium paid would have purchased for the correct age
What may be the result of replacing an existing life insurance policy
with a new one? - ANSWER- Surrender Charge
When an agent is replacing an existing life insurance policy, the agent
must take all of the following actions EXCEPT - ANSWER- obtain the
beneficiary's signature
Long-term care insurance applications MUST contain plain and
unambiguous health questions. The exception to this rule would be
applications for - ANSWER- Guaranteed issue
A company that is chartered and organized in any country other than the
United States is called a(n) _____ company. - ANSWER- Alien
A foreign insurance company doing business in New Mexico -
ANSWER- is a company domiciled under the laws of another state
A non-admitted insurance company - ANSWER- is not protected by the
Guaranty Fund
,3|Page
A valid Contract - ANSWER- Must include offer and acceptance
Which of the following is a requirement to attain a nonresident agent
license? - ANSWER- Be licensed as an agent in the agent's state of
domicile
Which of the following is an example of an agent's fiduciary duty? -
ANSWER- Being responsible for all funds collected from clients
A(n) ______ company is owned by its shareholders. - ANSWER- Stock
Newborn coverage under health insurance policies MUST include
coverage for - ANSWER- Birth abnormalities
Taking a sum of money and decreasing it in size is called - ANSWER-
Capital liquidation
When a sum of money undergoes capital liquidation, that sum will -
ANSWER- Decrease in size
What are premiums for group credit life insurance based on? -
ANSWER- Flat rate unrelated to the borrowers age
, 4|Page
Who regulates an insurer's claim settlement practices? - ANSWER-
State Insurance Departments
In regards to health insurance, what is meant by the term "primary
policy"? - ANSWER- It is the policy that will pay up to its limit before
any other policy pays
Which of the following would most likely purchase an immediate
annuity? - ANSWER- Retiree having a lump sum to invest
How are the premiums for an individually-owned disability income
policy treated for tax purposes? - ANSWER- Not Tax-Deductible at all
Which of these would NOT likely qualify as a presumptive disability? -
ANSWER- Lost of sight in one eye
A prepaid dental plan has an agreement in place with a network of
dentists which - ANSWER- accepts an established amount as payment
in full for the dental services rendered
Dividends from a stock insurance company are normally sent to -
ANSWER- Shareholders
Under a key person disability income policy, benefits will be received as
- ANSWER- tax free income to the business
