MN INSURANCE EXAMS SCRIPT 2025/2026 ALL
QUESTIONS AND SOLUTIONS GRADED A+ TIP
✔✔In group insurance, are premiums paid by the employer tax-deductible to the
business? - ✔✔yes
✔✔Multiple Employer Trust (MET) - ✔✔A group of small employers who do not qualify
for group insurance individually, formed to establish a group health plan or self-funded
plan. formed by 3rd party administrator
✔✔Fraternal Benefit Societies - ✔✔-Must obtain a certificate of authority from
commissioner and abide by all trade and practice regulations
-not for profit
-has representative government and operates on lodge system
✔✔Risk Retention Group - ✔✔A liability insurance company owned by its members,
which are exposed to similar liability risks by being in the same business or industry.
Group self-insurance programs
✔✔Lloyd's Association - ✔✔-A voluntary association of individuals, or groups of
individuals, who agree to share in insurance contracts. Individually responsible for the
amounts of insurance it writes. Also known as "Surplus Lines."
-Gathers underwriting info, helps settle claims and disputes, provides coverage that
may otherwise be unavailable in certain areas
✔✔underwriter - ✔✔A person who evaluates and classifies risks to accept or reject
them on behalf of the insurer
✔✔underwriting expenses - ✔✔taxes, fees, salaries, operations
✔✔whole life insurance - ✔✔-fixed premium
-fixed and level death benefit
-cash values: tax deferred at guaranteed interest rate, may be surrendered, may be
borrowed, endows at age 100
-death benefit + cash values paid to beneficiary
✔✔Limited Pay Whole Life - ✔✔limits the period of time an insured is required to make
premium payments. Policies mature or endow at the age of 100. The shorter the
premium-payment period, the faster the cash value build up
✔✔Modified Premium Whole Life policy - ✔✔Same as WL but premium low for 1st 3-5
yrs., THEN has one-time premium increase.
,✔✔Graded Premium Whole Life - ✔✔when any policy requires more premium increases
over a period of time, it is referred to as this. In other words, the premium will increase
in a step like fashion; they start out low and gradually increase each year for a period of
usually 5-10 years
✔✔adjustable whole life - ✔✔-In order to address a change in the financial resources of
a policyholder, this policy allows an insured to increase or decrease the amount of
premium paid monthly (thereby altering the face value)
-Increase requires proof of insurability
✔✔level term - ✔✔-level amount of death benefit and insurance throughout the term of
the policy
-premium will also be level
✔✔renewable term - ✔✔the insurance company agrees, in advance, to renew the policy
at the end of the term with no evidence of insurability, meaning no medical exam. The
IC will limit the number of renewals and charge a new premium at the end of each term
based on the insured's attained age.
✔✔Reentry Term - ✔✔it's a form of Renewable Term, which allows an insured the
option to prove insurability at the time of renewal, and receive a lower rate at renewal
✔✔universal life - ✔✔-allows policyholder to adjust premiums and death benefit
coverage
-allow the insured to skip a premium payment if the cash value is sufficient to pay the
premium
-cash account: cost of insurance and fees withdrawn monthly, current or guaranteed
interest
✔✔variable life - ✔✔-policy where the cash value is used to purchase investments
(usually mutual funds)
-investments in a separate account (securities)
-death benefit can increase based on investment performance
-no guarantees besides the minimum death benefits are made
-fixed premiums
✔✔universal variable life insurance - ✔✔-provides policyowners with flexible premiums
and an adjustable death benefit
-no guaranteed death benefit
✔✔Equity Indexed Annuity - ✔✔The annuity that has a guaranteed minimum interest
rate and allows the annuitant to invest money in an index (i.e.: S&P 500). The
investments grow as the index grows.
, ✔✔index linked life - ✔✔Face amount increases by the amount of inflation. Linked to
consumer price index
✔✔Interest Sensitive Whole Life - ✔✔Whole life policy whose premiums vary depending
upon the insurer's underlying death, investment and expense assumptions.
Guaranteed fixed-premium, non-participating permanent life insurance policy with a
Guaranteed Minimum Cash Value that increases each year and equals the Face
Amount at age 100
✔✔disembersment rider - ✔✔This rider is often included with an Accidental Death
Benefit. This coverage will pay a benefit, based on the principal sum (death benefit), if
there is a complete loss of certain parts of the body known as the primary parts.
✔✔nonforfeiture benefit rider - ✔✔state insurance regulations require that all tax-
qualified long-term care insurers offer nonforfeiture benefit riders. As the name
suggests, these riders assure that an insured {won't forfeit all of the benefits even if the
insured stops paying premiums.}
cash accumulation account
✔✔What makes up the entire life insurance contract? - ✔✔1. the application: signed by
insured, applicant, and producer
2. the insurance policy
3. any additional riders
✔✔Legal elements of a contract - ✔✔The Offer: insured submits application
Acceptance: insurer accepts the risks
Consideration: giving something of values
Legal Purpose
Parties must be Competent
✔✔parts of insurance contract - ✔✔DICE
-declarations
-insuring clause: obligations of insurance company to pay claim, first page
-conditions: insured must pay premium for coverage
-exclusions
✔✔Common Disaster Provision - ✔✔-When insured and primary die at the same time, it
is assumed that the primary died first
-Both die within 30-90 days
-Proceeds paid to contingent beneficary or insured's estate
✔✔Policy Loan Provision - ✔✔Describes the conditions by which a policyowner can
borrow from the policy's cash value
Typically loans can be made if the insured has permanent insurance and if there is cash
in the cash accumulation account. The ability to use the contract as a source of
QUESTIONS AND SOLUTIONS GRADED A+ TIP
✔✔In group insurance, are premiums paid by the employer tax-deductible to the
business? - ✔✔yes
✔✔Multiple Employer Trust (MET) - ✔✔A group of small employers who do not qualify
for group insurance individually, formed to establish a group health plan or self-funded
plan. formed by 3rd party administrator
✔✔Fraternal Benefit Societies - ✔✔-Must obtain a certificate of authority from
commissioner and abide by all trade and practice regulations
-not for profit
-has representative government and operates on lodge system
✔✔Risk Retention Group - ✔✔A liability insurance company owned by its members,
which are exposed to similar liability risks by being in the same business or industry.
Group self-insurance programs
✔✔Lloyd's Association - ✔✔-A voluntary association of individuals, or groups of
individuals, who agree to share in insurance contracts. Individually responsible for the
amounts of insurance it writes. Also known as "Surplus Lines."
-Gathers underwriting info, helps settle claims and disputes, provides coverage that
may otherwise be unavailable in certain areas
✔✔underwriter - ✔✔A person who evaluates and classifies risks to accept or reject
them on behalf of the insurer
✔✔underwriting expenses - ✔✔taxes, fees, salaries, operations
✔✔whole life insurance - ✔✔-fixed premium
-fixed and level death benefit
-cash values: tax deferred at guaranteed interest rate, may be surrendered, may be
borrowed, endows at age 100
-death benefit + cash values paid to beneficiary
✔✔Limited Pay Whole Life - ✔✔limits the period of time an insured is required to make
premium payments. Policies mature or endow at the age of 100. The shorter the
premium-payment period, the faster the cash value build up
✔✔Modified Premium Whole Life policy - ✔✔Same as WL but premium low for 1st 3-5
yrs., THEN has one-time premium increase.
,✔✔Graded Premium Whole Life - ✔✔when any policy requires more premium increases
over a period of time, it is referred to as this. In other words, the premium will increase
in a step like fashion; they start out low and gradually increase each year for a period of
usually 5-10 years
✔✔adjustable whole life - ✔✔-In order to address a change in the financial resources of
a policyholder, this policy allows an insured to increase or decrease the amount of
premium paid monthly (thereby altering the face value)
-Increase requires proof of insurability
✔✔level term - ✔✔-level amount of death benefit and insurance throughout the term of
the policy
-premium will also be level
✔✔renewable term - ✔✔the insurance company agrees, in advance, to renew the policy
at the end of the term with no evidence of insurability, meaning no medical exam. The
IC will limit the number of renewals and charge a new premium at the end of each term
based on the insured's attained age.
✔✔Reentry Term - ✔✔it's a form of Renewable Term, which allows an insured the
option to prove insurability at the time of renewal, and receive a lower rate at renewal
✔✔universal life - ✔✔-allows policyholder to adjust premiums and death benefit
coverage
-allow the insured to skip a premium payment if the cash value is sufficient to pay the
premium
-cash account: cost of insurance and fees withdrawn monthly, current or guaranteed
interest
✔✔variable life - ✔✔-policy where the cash value is used to purchase investments
(usually mutual funds)
-investments in a separate account (securities)
-death benefit can increase based on investment performance
-no guarantees besides the minimum death benefits are made
-fixed premiums
✔✔universal variable life insurance - ✔✔-provides policyowners with flexible premiums
and an adjustable death benefit
-no guaranteed death benefit
✔✔Equity Indexed Annuity - ✔✔The annuity that has a guaranteed minimum interest
rate and allows the annuitant to invest money in an index (i.e.: S&P 500). The
investments grow as the index grows.
, ✔✔index linked life - ✔✔Face amount increases by the amount of inflation. Linked to
consumer price index
✔✔Interest Sensitive Whole Life - ✔✔Whole life policy whose premiums vary depending
upon the insurer's underlying death, investment and expense assumptions.
Guaranteed fixed-premium, non-participating permanent life insurance policy with a
Guaranteed Minimum Cash Value that increases each year and equals the Face
Amount at age 100
✔✔disembersment rider - ✔✔This rider is often included with an Accidental Death
Benefit. This coverage will pay a benefit, based on the principal sum (death benefit), if
there is a complete loss of certain parts of the body known as the primary parts.
✔✔nonforfeiture benefit rider - ✔✔state insurance regulations require that all tax-
qualified long-term care insurers offer nonforfeiture benefit riders. As the name
suggests, these riders assure that an insured {won't forfeit all of the benefits even if the
insured stops paying premiums.}
cash accumulation account
✔✔What makes up the entire life insurance contract? - ✔✔1. the application: signed by
insured, applicant, and producer
2. the insurance policy
3. any additional riders
✔✔Legal elements of a contract - ✔✔The Offer: insured submits application
Acceptance: insurer accepts the risks
Consideration: giving something of values
Legal Purpose
Parties must be Competent
✔✔parts of insurance contract - ✔✔DICE
-declarations
-insuring clause: obligations of insurance company to pay claim, first page
-conditions: insured must pay premium for coverage
-exclusions
✔✔Common Disaster Provision - ✔✔-When insured and primary die at the same time, it
is assumed that the primary died first
-Both die within 30-90 days
-Proceeds paid to contingent beneficary or insured's estate
✔✔Policy Loan Provision - ✔✔Describes the conditions by which a policyowner can
borrow from the policy's cash value
Typically loans can be made if the insured has permanent insurance and if there is cash
in the cash accumulation account. The ability to use the contract as a source of
