Free practice exam · no signup needed

New Hampshire Life Practice Exam

20 exam-style questions drawn from the same bank as our full New Hampshire Life course (New Hampshire Insurance Producer — Life — Exam Prep). Answer all 20, then grade yourself — most state exams require 70% to pass. Explanations for every question are part of the full course.

1. Decreasing term life insurance is most commonly used to cover which type of obligation?
Final expenses such as funeral costsA mortgage or other amortizing debtEstate taxes that grow over timeA child's future college tuition
2. An indexed annuity has an 80% participation rate, no spread, and no cap. If the underlying index increases 10% during the crediting period, what interest rate is credited?
2%8%12.5%10%
3. Which party to an annuity contract holds all ownership rights, including the right to surrender the contract, change the beneficiary, and elect a settlement option?
The ownerThe beneficiaryThe annuitantThe insurer
4. Interest credited to a fixed indexed annuity (FIA) is generally tied to the performance of:
The insurer's general account portfolio's actual investment yieldThe federal funds rate as published by the Federal Reserve BoardA specified equity or bond market index, such as the S&P 500An owner-selected separate-account subaccount within the contract
5. An insured purchases a 20-year level term policy with a $500,000 face amount. Five years in, the insured is diagnosed with a terminal illness. Which feature, required on most modern term policies, lets the insured switch to permanent coverage without proving insurability?
Waiver of premium riderConvertibility provisionReinstatement provisionRenewability provision
6. Under a universal life policy's Option A (Option 1) death benefit, the death benefit is:
Equal to the contract's current cash value only, with no separate face amountIncreasing at a fixed annual rate of 5% under the standard CPI-linked riderLevel — generally equal to the policy's specified face amountEqual to the face amount plus the contract's accumulated cash value
7. Under IRC §2042, life insurance death proceeds are includible in the insured's gross estate if the insured held any 'incidents of ownership.' Which of the following is an incident of ownership?
The right to change the beneficiaryBeing a relative of the policyownerHaving paid premiums in the pastBeing the named insured only
8. A spouse term (or 'other-insured') rider differs from a separate spouse-owned life policy primarily in that the rider:
Provides level term coverage on the spouse that is administratively bundled into the primary insured's policy and usually expires at a stated age (often 65)Cannot be removed from the underlying primary insured's contract once it has been added at policy issue, even on a written request from the policyownerDoes not require any additional premium because the spouse-rider mortality charge is absorbed by the primary insured's base whole life premium under standard pricingPays the spouse-rider death benefit only after both the primary insured and the covered spouse die, similar in mechanics to a survivorship second-to-die life policy
9. Brandon was born in 1962, making his Social Security Full Retirement Age (FRA) 67. If he elects to begin retirement benefits at age 62, his Primary Insurance Amount (PIA) is reduced by approximately:
20%30%50%8%
10. Within the 3 years immediately preceding normal retirement age, a 457(b) participant may use a 'special catch-up' provision. How does this catch-up generally compare to the standard age-50 catch-up?
It allows the §457(b) participant to make unlimited additional deferrals into the plan during the entire three-year window leading up to normal retirement age.It is identical in dollar amount and structure to the §414(v) age-50 catch-up, but is available three years earlier at age 45 rather than at age 50 for §457 participants.It allows an additional $1,000 in deferral, identical to the IRC §219(b)(5)(B) Traditional and Roth IRA age-50 catch-up contribution amount.It allows up to twice the basic annual deferral limit, but the participant cannot use it in the same year as the age-50 catch-up.
11. In a variable universal life policy, the policy owner directs the cash value into:
FDIC-insured certificates of deposit selected from the insurer's approved-bank partner networkAn indexed crediting strategy tied to S&P 500 returns with floor, cap, and participation featuresThe insurer's general account, where it earns a declared rate subject to a contractual rate floorSeparate-account subaccounts that resemble mutual funds; investment risk is borne by the policy owner
12. An applicant for a resident producer license was convicted of felony insurance fraud five years ago. Under the NAIC Producer Licensing Model Act and 18 U.S.C. §1033 (federal Violent Crime Control and Law Enforcement Act), the applicant generally:
Is barred from working in the insurance business unless the applicant first obtains written §1033 consent from the appropriate state insurance regulatorMay obtain a resident producer license without any restriction once court-ordered probation is complete, under the NAIC Model #218 post-probation-rehabilitation provision applicable to felony applicantsMust complete an additional 40 hours of ethics continuing education before applying under the NAIC Model #218 felony-applicant remediation provision applicable to dishonesty convictionsIs permanently barred from working in the insurance business in any capacity under 18 U.S.C. §1033 for any prior felony conviction involving dishonesty regardless of any waiver mechanism
13. Under the federal Fair Credit Reporting Act (15 U.S.C. §§1681 et seq.), when a life insurer denies a policy or charges a higher premium based in whole or in part on a consumer report, the insurer must:
Refund 50% of the application fee paid by the applicant under the federal Fair Credit Reporting Act §615 mandatory partial-fee-refund provision applicable to all denied-or-rate-up life insurance underwriting decisions made by carriers in the underwriting workflow processNotify the state insurance commissioner within 10 business days of the adverse-action decision under the federal Fair Credit Reporting Act §615(a) mandatory commissioner-notification provision applicable to all consumer-report-based insurance underwriting outcomesTake no action — the federal Fair Credit Reporting Act does not apply to insurance underwriting decisions under 15 U.S.C. §1681 et seq. as a matter of statutory scope under the federal consumer-reporting framework applicable to all financial institutions across the United States todaySend the applicant a written adverse-action notice identifying the consumer reporting agency, providing the agency's contact information, and informing the applicant of the right to obtain a free copy of the report and to dispute its accuracy
14. Dividends paid on a participating whole life policy are generally treated for income-tax purposes as:
A nontaxable return of premium until basis is recoveredTaxable to the policyowner only if reinvested under a paid-up-additions dividend optionA long-term capital gain at the preferential capital-gains rate under IRC §1221Taxable to the policyowner as ordinary income at the marginal federal rate when received
15. If a life insured dies during the grace period with the renewal premium unpaid, the insurer will typically:
Deny the claim because the premium was unpaidPay the death benefit minus the unpaid premiumPay only the policy's cash valuePay the full face amount with no adjustment
16. A whole life policy has a cash value of $50,000 and total premiums paid (basis) of $30,000. The owner surrenders the policy for $50,000. What is the income-tax consequence?
$50,000 is taxable as ordinary income$20,000 is taxable as a capital gainNothing is taxable because life insurance proceeds are exempt$20,000 is taxable as ordinary income
17. Which statement about MEC status under IRC §7702A is correct?
A MEC loses the §101(a) death benefit federal income-tax exclusion at the insured's death, and the proceeds are fully taxable to the named beneficiary as ordinary incomeOnce a contract is classified as a MEC, it remains a MEC for the rest of its existence and any contract received in a §1035 exchange from it is also a MECMEC status under §7702A automatically resets and is removed every seven contract years if no excess premiums are paid during that contract period under the contract's funding patternMEC rules under §7702A apply only to variable life contracts issued through SEC-registered separate accounts with subaccount investment risk borne by the policyowner
18. The principal distinction between an immediate annuity and a deferred annuity is:
Whether the contract is qualified or non-qualifiedWhether premiums are fixed or variableWhen income payments beginWhether the contract has a death benefit
19. A client wants permanent coverage but only wants to pay premiums until age 65, after which the policy must be fully paid up. Which whole life variation fits?
Straight (ordinary) whole lifeSingle-premium whole lifeLimited-pay whole lifeModified whole life
20. What is the primary purpose of credit life insurance?
To pay off the outstanding balance of a specified debt if the borrower dies before it is repaidTo fund federal estate-tax liabilities at the borrower's death using ILIT-held permanent proceedsTo provide a long-term savings vehicle for the borrower with tax-deferred cash-value buildupTo replace a borrower's income for the rest of the borrower's life on a lifetime-income annuity basis

Want a different set? Refresh the page for 20 new questions — the full course has 500+, each with a complete explanation, plus full-length timed exam simulations and an AI tutor.