MN LIFE INSURANCE LATEST 2026 TEST PAPER QUESTIONS
AND SOLUTIONS SCORED A+
✔✔Increasing Term - ✔✔Death benefit AND premium increase over the term of
coverage
✔✔Whole Life Insurance - ✔✔Provides protection until age 100. Accumulates cash
value over time. It has higher premiums, but they remain level. Money needed from the
death benefit comes from the cash value. Interest payments can be deferred for up to 6
months.
✔✔Straight Line Premium - ✔✔Policy owner pays the same annual premium until the
insured dies or reaches 100.
✔✔Limited Pay Whole Life Insurance - ✔✔Makes payments for the first several years,
then policy is paid in full.
✔✔Endowment - ✔✔Savings > Protection w/ accumulated cash values, TAX
DEFERRED
✔✔Universal Life Insurance - ✔✔Permanent Insurance Protection w/ additional
flexibility. Can increase or decrease death benefit, but need proof of insurance to
increase. Guaranteed minimum interest rate will be paid on the cash value regardless of
market or economy.
✔✔Variable Whole Life - ✔✔Guaranteed minimum life benefit, return based on
investment success, level premium. Requires securities license to sell.
✔✔Variable Universal Life - ✔✔No guaranteed minimum life benefit, requires securities
license to sell.
✔✔Specialized Life Insurance - ✔✔adjustable between term and perm, death benefit
may be increase with proof of insurability.
✔✔Joint Life - ✔✔First to die, payout is paid out
✔✔Survivorship - ✔✔last/second to die, payout is paid out
✔✔Accidental death and dismemberment limited coverage - ✔✔-Principle Sum: amount
is paid when the insured dies an accidental death.
-Capital Sum: amount paid when the insured suffers an accidental dismemberment
✔✔Taxation of Term Life Insurance - ✔✔-Premiums are not tax deductible
-Term don't pay dividends and don't earn interest
, ✔✔MEC (Modified Endowment Contract) - ✔✔If owner unintentionally over-funds the
cash value of a life insurance policy, classified as a MEC and lose out on tax
advantages.
✔✔Assignment Clause - ✔✔Allows policy owner to designate new owner
✔✔Collateral Assignment - ✔✔used to temporarily pledge a life insurance policy as a
security for a loan.
✔✔Reinstatement Provisions - ✔✔May be reinstated for up to 3 years after last
premium due date, must complete application, prove insurability, and pay back
premiums and interest. New incontestability period, not new suicide exclusion. No cash
value if policy lapses and coverage ends.
✔✔Incontestability Clause - ✔✔Insurer can't contest a claim based on
misrepresentation or concealment after policy has been in force for 2 years. 3 cases
that can be contested are impersonation, no insurable interest, and intent to murder.
✔✔War Exclusion - ✔✔If insured dies because of war, the death benefit won't be paid.
Beneficiary will receive a refund or any premiums paid plus interest.
✔✔Settlement Options for Death benefit - ✔✔cash, interest only, installment options,
fixed period, fixed amount.
✔✔Life Annuity Options - ✔✔Life income, joint and survivor income
✔✔Policy loan and withdrawal options - ✔✔-Interest on policy loans may be deferred up
to 6 months
-Loan and accrued interest will be repaid upon the insureds death or policy surrender
✔✔Dividend Options - ✔✔Cash, Premium reductions, paid to addition, one year term,
accumulate at interest, endow policy earlier.
✔✔Waiver of Premium rider with disability - ✔✔-If disabled, no premiums are due during
the duration of the disability
-Continues to fund the cash value for duration of the disability
-When policy oner and insured as the same person
✔✔Payor benefit rider - ✔✔-Applies when policy owner is someone other than the
insured
-Commonly used with juvenile life insurance
-Waives premiums when the parent who owns the policy dies or becomes disabled.
AND SOLUTIONS SCORED A+
✔✔Increasing Term - ✔✔Death benefit AND premium increase over the term of
coverage
✔✔Whole Life Insurance - ✔✔Provides protection until age 100. Accumulates cash
value over time. It has higher premiums, but they remain level. Money needed from the
death benefit comes from the cash value. Interest payments can be deferred for up to 6
months.
✔✔Straight Line Premium - ✔✔Policy owner pays the same annual premium until the
insured dies or reaches 100.
✔✔Limited Pay Whole Life Insurance - ✔✔Makes payments for the first several years,
then policy is paid in full.
✔✔Endowment - ✔✔Savings > Protection w/ accumulated cash values, TAX
DEFERRED
✔✔Universal Life Insurance - ✔✔Permanent Insurance Protection w/ additional
flexibility. Can increase or decrease death benefit, but need proof of insurance to
increase. Guaranteed minimum interest rate will be paid on the cash value regardless of
market or economy.
✔✔Variable Whole Life - ✔✔Guaranteed minimum life benefit, return based on
investment success, level premium. Requires securities license to sell.
✔✔Variable Universal Life - ✔✔No guaranteed minimum life benefit, requires securities
license to sell.
✔✔Specialized Life Insurance - ✔✔adjustable between term and perm, death benefit
may be increase with proof of insurability.
✔✔Joint Life - ✔✔First to die, payout is paid out
✔✔Survivorship - ✔✔last/second to die, payout is paid out
✔✔Accidental death and dismemberment limited coverage - ✔✔-Principle Sum: amount
is paid when the insured dies an accidental death.
-Capital Sum: amount paid when the insured suffers an accidental dismemberment
✔✔Taxation of Term Life Insurance - ✔✔-Premiums are not tax deductible
-Term don't pay dividends and don't earn interest
, ✔✔MEC (Modified Endowment Contract) - ✔✔If owner unintentionally over-funds the
cash value of a life insurance policy, classified as a MEC and lose out on tax
advantages.
✔✔Assignment Clause - ✔✔Allows policy owner to designate new owner
✔✔Collateral Assignment - ✔✔used to temporarily pledge a life insurance policy as a
security for a loan.
✔✔Reinstatement Provisions - ✔✔May be reinstated for up to 3 years after last
premium due date, must complete application, prove insurability, and pay back
premiums and interest. New incontestability period, not new suicide exclusion. No cash
value if policy lapses and coverage ends.
✔✔Incontestability Clause - ✔✔Insurer can't contest a claim based on
misrepresentation or concealment after policy has been in force for 2 years. 3 cases
that can be contested are impersonation, no insurable interest, and intent to murder.
✔✔War Exclusion - ✔✔If insured dies because of war, the death benefit won't be paid.
Beneficiary will receive a refund or any premiums paid plus interest.
✔✔Settlement Options for Death benefit - ✔✔cash, interest only, installment options,
fixed period, fixed amount.
✔✔Life Annuity Options - ✔✔Life income, joint and survivor income
✔✔Policy loan and withdrawal options - ✔✔-Interest on policy loans may be deferred up
to 6 months
-Loan and accrued interest will be repaid upon the insureds death or policy surrender
✔✔Dividend Options - ✔✔Cash, Premium reductions, paid to addition, one year term,
accumulate at interest, endow policy earlier.
✔✔Waiver of Premium rider with disability - ✔✔-If disabled, no premiums are due during
the duration of the disability
-Continues to fund the cash value for duration of the disability
-When policy oner and insured as the same person
✔✔Payor benefit rider - ✔✔-Applies when policy owner is someone other than the
insured
-Commonly used with juvenile life insurance
-Waives premiums when the parent who owns the policy dies or becomes disabled.
