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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. Which of the following must an agent possess to sell variable annuities?
A state property and casualty producer license with a personal-lines variable-products endorsementOnly the FINRA Series 7 general securities registration with no state-level life producer licenseA state life producer license alone, issued by the agent's resident state insurance departmentA state life license plus FINRA Series 6 or 7 and a state securities registration
2. A 20-pay life policy and a 20-year endowment policy both have a 20-year premium-paying period. What is the key difference between them?
20-pay life is paid up at year 20 but coverage continues for life; a 20-year endowment matures and pays the face amount to the living insured at year 20Both contracts pay the face amount at year 20 to the policy owner; only the premium amount and the underlying mortality assumption differ between the two20-pay life builds no cash value during its premium-paying period, while the endowment builds the cash value that funds the year-20 maturity distribution20-pay life is a form of decreasing term insurance, while the 20-year endowment is a permanent contract that endows at age 100 under standard mortality
3. The provision listing the premium and statements on the application as the insured's part of the bargain is the
Insuring clauseConsideration clauseOwnership clauseEntire contract
4. Constructive delivery occurs when:
The soliciting producer leaves a voicemail message stating that the contract is ready for pickup at the agency officeThe insurer relinquishes control of the policy by mailing it to the producer with unconditional instructions to deliver it, regardless of when the producer physically hands it overThe applicant pays the first modal premium in full at the producer's office at the time the agent presents the policyThe applicant physically signs the policy acceptance form on the contract's delivery receipt and personally returns the executed acknowledgment to the insurer's home office underwriting department
5. A client purchases an annuity today and is scheduled to receive monthly income beginning 18 months from now. This contract is properly classified as a:
Term-certain annuityDeferred annuityHybrid annuityImmediate annuity
6. A charge for withdrawing more than allowed during the early years of an annuity is a
Surrender chargeAnnual feePremium taxMortality charge
7. A policy combining whole life on one parent with term on the spouse and children is a
Group policyFamily policyJoint life policySurvivorship policy
8. An insured carries a $200,000 whole life policy with an ADB rider equal to the face amount. The insured is severely injured in an auto accident, lingers in a coma for 100 days, and then dies from those injuries. How is the claim settled under the typical ADB clause?
$200,000, base only, because coma is treated as a sickness, not an accident$600,000, base, ADB, and a triple-indemnity bonus for catastrophic injury$200,000, base only, because the 90-day causation window in most ADB riders has elapsed$400,000, both base and ADB are paid because death resulted from the accident
9. Endowments issued today usually fail the federal tax test and become
Term policiesFixed annuitiesModified endowment contractsQualified plans
10. Accidental death and dismemberment coverage pays for loss of life or
Limbs or sightEarning capacityMental capacityHospital stays
11. Under IRC §2042, the death benefit of a life insurance policy is included in the decedent's gross estate if the decedent at death held any 'incidents of ownership' in the policy. Which of the following is NOT an incident of ownership?
Right to change the beneficiaryRight to borrow against the cash valueRight to surrender the policy for cashRight to be the named insured
12. Annuity gains are taxed as
Capital gainsQualified dividendsOrdinary incomeTax-free income
13. An annuity's main purpose is to protect against the risk of
Dying too soonOutliving savingsMarket inflationDisability
14. Taxable MEC distributions before age 59 1/2 generally carry a
No penalty10% penalty20% penalty5% penalty
15. Beneficiary income from settlement options is taxed in which manner?
Only the first $50,000 of cumulative settlement-option payments received is tax-free to the named beneficiary, following the IRC §79 group-term-life dollar threshold for employer-paid coverageThe portion of each payment representing the original death benefit is income-tax-free under IRC §101(a); the portion representing interest earned after the insured's death is taxableEvery dollar of every payment received under any settlement option is fully taxable as ordinary income to the named beneficiary on the federal return for the year of receipt under §72 distribution rulesAll payments under any settlement option are fully tax-free as a continuation of the original income-tax-free death benefit, regardless of any interest credited after the insured's date of death
16. The earliest age to start reduced Social Security retirement benefits is
6259 1/26065
17. Whole life with premiums paid for a set number of years, such as 20, is
Straight lifeTerm to 65Modified lifeLimited pay life
18. An applicant signs a life application. The producer later notices the date-of-birth field is blank and pencils in what the producer believes is the correct date without telling the applicant. This action is BEST described as:
Material misrepresentation/falsification of an application, which is prohibitedA permissible scrivener's correction under the entire-contract clause's good-faith error doctrineA reasonable evidentiary inference allowed by common law and the parol-evidence ruleAcceptable practice, because the producer functions as the insurer's authorized field representative
19. Under what type of insurer account are the assets supporting a traditional fixed annuity held?
General accountSubaccountSeparate accountCustodial account
20. In a variable annuity, the contract owner's premiums are allocated to:
U.S. Treasury direct-purchase bonds only, held in a separately registered investor accountA bank custodial trust account governed by the contract's institutional-custody addendumSeparate account subaccounts holding professionally managed portfoliosThe insurer's general account, where the carrier credits a declared minimum interest rate

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