New Mexico Life and Health Exam.
Questions with Correct Answers 2026-
2027. Graded A
Accumulation period - AnsDuring this period, no taxes are place on
accumulations. Taxes will only come into play at the time of distribution.
Adjustable life - AnsA life policy that offers the policy owner the options to
adjust the policy's face amount, premium, and length of protection without
having to complete a new application or actually exchange policies.
Aleatory - AnsEqual value not given to both parties.
Annuity certain - AnsProvides income during certain period to annuitant
and beneficiary.
Automatic premium loan provision - AnsWill automatically take a loan
against the policy cash value to pay the premium and keep the policy in
force. Available on permanent types of insurance policies.
Benefits of Life Insurance - AnsCash Accumulation & Liquidity, Survivor
Protection, Estate Conservation, Pre-arrangement or Pre-needs policies,
Security, and Timeliness and Certainty.
1
, Capital conservation - AnsThis method derives income only from interest
gained on the principal. It generates income indefinitely.
Capital liquidation - AnsThis method uses both interest and principal to
provide income. This means that a smaller fund is needed when using this
method because there is no concern for leaving the principal intact.
Combination policy - AnsTypically a permanent policy with a term rider, as
with Family Income (decreasing term) or Family Maintenance (level term)
added to the base policy. Term is used to compliment the permanent plan.
Continuous premium whole life - AnsDesigned to endow at age 100 - Pay
level premium up to age 100. This type of policy is often referred to as
straight life insurance.
Contract of Adhesion - AnsPrepared by one party - courts interpret against
the one who prepared it.
Contract of Utmost Good Faith - AnsTruthfulness and integrity on bot
parties = trust.
Convertible term - AnsAllows the insured to convert/exchange their term
policy to a form of permanent insurance. (No contestability/no exam).
Current assumption whole life (CAWL) - AnsIs a whole life insurance that
bases its premiums on current interest rates. Its premiums and face
amounts will fluctuate with interest rates.
2
Questions with Correct Answers 2026-
2027. Graded A
Accumulation period - AnsDuring this period, no taxes are place on
accumulations. Taxes will only come into play at the time of distribution.
Adjustable life - AnsA life policy that offers the policy owner the options to
adjust the policy's face amount, premium, and length of protection without
having to complete a new application or actually exchange policies.
Aleatory - AnsEqual value not given to both parties.
Annuity certain - AnsProvides income during certain period to annuitant
and beneficiary.
Automatic premium loan provision - AnsWill automatically take a loan
against the policy cash value to pay the premium and keep the policy in
force. Available on permanent types of insurance policies.
Benefits of Life Insurance - AnsCash Accumulation & Liquidity, Survivor
Protection, Estate Conservation, Pre-arrangement or Pre-needs policies,
Security, and Timeliness and Certainty.
1
, Capital conservation - AnsThis method derives income only from interest
gained on the principal. It generates income indefinitely.
Capital liquidation - AnsThis method uses both interest and principal to
provide income. This means that a smaller fund is needed when using this
method because there is no concern for leaving the principal intact.
Combination policy - AnsTypically a permanent policy with a term rider, as
with Family Income (decreasing term) or Family Maintenance (level term)
added to the base policy. Term is used to compliment the permanent plan.
Continuous premium whole life - AnsDesigned to endow at age 100 - Pay
level premium up to age 100. This type of policy is often referred to as
straight life insurance.
Contract of Adhesion - AnsPrepared by one party - courts interpret against
the one who prepared it.
Contract of Utmost Good Faith - AnsTruthfulness and integrity on bot
parties = trust.
Convertible term - AnsAllows the insured to convert/exchange their term
policy to a form of permanent insurance. (No contestability/no exam).
Current assumption whole life (CAWL) - AnsIs a whole life insurance that
bases its premiums on current interest rates. Its premiums and face
amounts will fluctuate with interest rates.
2
