NMLAHIP - New Mexico Life Accident and Health Insurance Producer

Question 21: On a life insurance application, a proposed insured states to the best of her knowledge that she has never used tobacco, a statement believed true and offered as substantially accurate rather than guaranteed as literally exact. Which classification of statement does this best describe?

Warranty

Waiver

Representation

Concealment

Question 22: An insurer issues a whole life policy at a fixed, guaranteed premium and specifies in the contract that no dividends of any kind will be paid to the policyowner, regardless of how favorably the insurer's mortality, expense, or investment experience turns out over time. What type of policy is this?

A participating policy

A convertible policy

A renewable policy

A nonparticipating policy

Question 23: A young policyowner attaches a rider letting him purchase additional life insurance at specified future ages or life events, such as marriage, without submitting new evidence of insurability, even if his health has since declined. Which rider gives him this future purchase option?

Guaranteed insurability rider

Return of premium rider

Cost of living rider

Accidental death rider

Question 24: A policyowner adds a rider to her own permanent life policy that provides a smaller amount of term coverage on her spouse's life, under the same contract, without requiring a completely separate policy to be issued for the spouse. Which rider accomplishes this?

Payor benefit rider

Other-insured rider

Guaranteed insurability rider

Waiver of premium rider

Question 25: A term life policy renews automatically each year without new proof of insurability, but the premium increases every year to reflect the insured's advancing age, while the face amount stays the same from one year to the next. Which term product is being described here?

Decreasing term insurance

Limited-pay whole life insurance

Annually renewable term insurance

Single-premium whole life insurance

Question 26: An insurer's contract with its producer specifically lists the exact duties the producer may perform, such as collecting initial premiums and delivering policies to new policyowners. Which type of authority is created by these specific, written instructions from the insurer?

Implied authority

Apparent authority

Inherent authority

Express authority

Question 27: An insured pays the insurer one lump sum at the time the policy is issued, and in exchange receives permanent, level life insurance protection for the rest of life with an immediate, substantial cash value already built into the contract from the very first day. Which product matches this description?

Single-premium whole life insurance

Annually renewable term insurance

Decreasing term life insurance

Credit life insurance

Question 28: A producer compares two ways an employee could obtain life insurance: enrolling in coverage under the employer's master contract, or applying separately for a policy underwritten specifically on that one employee. Which statement correctly describes a key difference between these two approaches to obtaining coverage?

Individual coverage always costs less per person

Group coverage generally requires less individual underwriting

Group coverage is fully portable for life

Individual coverage never requires a medical exam

Question 29: In exchange for the insurer's promise to pay a covered claim, the policyowner submits an initial premium payment along with true statements on the application. Which contract element does this exchange of value between the policyowner and the insurer represent?

Offer

Acceptance

Consideration

Legal purpose

Question 30: A policyowner uses each annual dividend to purchase as much one-year term insurance as that dividend will buy on the insured's life, with any leftover amount applied under a different dividend option the owner also selected. Which dividend option provides the term coverage portion?

Paid-up additions option

Reduce premium option

Extended term option

One-year term dividend option

Question 31: An inspector notes that a warehouse stores stacks of oily rags near an open flame heater, a condition that raises the likelihood a fire will start or spread once started. Which term names this tangible, physical condition that increases the chance or severity of loss?

Physical hazard

Moral hazard

Morale hazard

Peril

Question 32: A permanent life insurance policy charges a fixed premium like traditional whole life, but its cash value is credited using a current interest rate the insurer periodically declares, subject to a guaranteed minimum rate stated in the contract, rather than one fixed rate set at issue. What is this product?

Universal life insurance

Interest-sensitive whole life insurance

Variable life insurance

Indexed life insurance

Question 33: A policyowner stops paying premiums on a whole life policy and asks the insurer to terminate the contract entirely in exchange for a single lump-sum payment equal to the policy's accumulated value at that point. Which nonforfeiture option has the policyowner chosen?

Reduced paid-up option

Extended term option

Cash surrender option

Automatic premium loan option

Question 34: An insured keeps renewing a one-year renewable term policy for many years in a row. Each time the policy renews, the insured notices that the premium charged for the same amount of coverage is higher than it was the year before. What best explains why the premium keeps climbing?

The face amount is decreasing yearly

Dividends were reduced by the insurer

The insured lost conversion rights

Premiums track increasing attained age

Question 35: A universal life policyowner selects a death benefit option under which beneficiaries receive the stated face amount plus whatever cash value has accumulated inside the policy at the time of death, so the total payout naturally grows as the cash value grows. Which universal life death benefit option is this?

Option B, the increasing death benefit

Option A, the level death benefit

The automatic premium loan option

The guaranteed insurability rider

Question 36: A policyowner converts a term policy to permanent coverage, and the insurer prices the new contract as though issued at the insured's age when the term policy first took effect, requiring payment of the accumulated difference between term and permanent premiums for the elapsed years. Which conversion basis is this?

Attained age conversion

Original age conversion

Adjustable premium conversion

Automatic premium loan conversion

Question 37: After the insured's death, the insurer finds the application listed an incorrect birth date, so the premium charged was too low for the insured's age at issue. Rather than voiding coverage, the insurer adjusts the payable death benefit to what those premiums would have purchased. Which provision requires this approach?

Incontestability clause

Suicide clause

Misstatement of age provision

Entire contract provision

Question 38: An applicant falsely states on a life insurance application that he has never been treated for a chronic illness, and the insurer proves it would have declined or rated the policy differently had it known the truth. Which legal ground does this give the insurer to contest the policy?

Waiver

Estoppel

Adverse selection

Material misrepresentation

Question 39: A section near the front of a life insurance policy names the insurer and the insured, states the insurer's promise to pay a death benefit to the named beneficiary, and identifies the general type of coverage issued. Which provision is being described here?

Insuring clause

Entire contract provision

Consideration clause

Owner's rights provision

Question 40: While the insured is still living, the policyowner alone may change the named beneficiary, choose a settlement option, borrow against the cash value, or surrender the contract, none of which requires the insured's consent unless ownership differs from the insured. Which provision grants this authority?

Assignment provision