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MN Life Insurance Exam Questions and Answers, Exams of Insurance Economics

A comprehensive set of multiple-choice questions and answers covering various aspects of life insurance in minnesota. it's a valuable resource for students studying insurance principles, licensing exams, or professionals seeking to refresh their knowledge. The questions cover topics such as insurance contracts, annuities, term life insurance, and policy provisions, offering a practical approach to learning.

Typology: Exams

2024/2025

Available from 05/08/2025

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MN life insurance With 203 Test Exam
Questions
Which statement best describes agreement as it relates to insurance
contracts? -Correct Answer โœ” โœ” One party accepts the exact
terms of the other party's offer.
Who is the annuity owner? -Correct Answer โœ” โœ” The person who
purchases the annuity
A distribution from an employer-sponsored retirement plan or from
an ira is eligible for a tax-free rollover if it is reinvested in an IRA
within -Correct Answer โœ” โœ” 60 days
Which of the following are characteristics of term life insurance? -
Correct Answer โœ” โœ” Temporary protection, renewability, no cash
value
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MN life insurance With 203 Test Exam

Questions

Which statement best describes agreement as it relates to insurance contracts? -Correct Answer โœ” โœ” One party accepts the exact terms of the other party's offer.

Who is the annuity owner? -Correct Answer โœ” โœ” The person who purchases the annuity

A distribution from an employer-sponsored retirement plan or from an ira is eligible for a tax-free rollover if it is reinvested in an IRA within -Correct Answer โœ” โœ” 60 days

Which of the following are characteristics of term life insurance? - Correct Answer โœ” โœ” Temporary protection, renewability, no cash value

Which of the following is true regarding pure life annuity settlement option? -Correct Answer โœ” โœ” It provides the highest monthly benefit

j works part time in her father's insurance agency but she doesn't have an insurance producer license. she may perform all of the following activities except? -Correct Answer โœ” โœ” Collect premium for in-force polices and explain coverages to clients that have existing polices written by her father

a producer's license lapses. it can be reinstated without requiring the producer pass to the licensing exam again, provided that the producer applies for reinstatement within -Correct Answer โœ” โœ” 12 months

an agreement that is enforceable by law is known as what kind of contract? -Correct Answer โœ” โœ” Legal

The reduction of premium option uses the dividend to reduce -Correct Answer โœ” โœ” Next year's premium

An insurer that operates for one or more social, educational, charitable, benevolent, or religious purposes for the benefit of its members is known as a -Correct Answer โœ” โœ” Fraternal Insurer

Which of the following best describes pure life of annuity? -Correct Answer โœ” โœ” It provides the highest monthly benefits.

An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request? -Correct Answer โœ” โœ” 3 days

A producer's license lapses. it can be reinstated without requiring the producer pass to the licensing exam again, provided that the producer applies for reinstatement within -Correct Answer โœ” โœ” 12 months

An insured has 2 property policies in force covering the same risk. when a loss occurs, which of the following policy provisions states that each policy will pay the same proportion of its limits to the overall coverage? -Correct Answer โœ” โœ” Pro rata

dividends received on participating life insurance policies are -Correct Answer โœ” โœ” Not taxable because they are a return of unused premiums.

All of the following are true of the Survivorship Life policy EXCEPT - Correct Answer โœ” โœ” The premium is based on the age of each insured.

According to the common Disaster Clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who dies first, which of the following will be assumed? - Correct Answer โœ” โœ” The primary beneficiary died before the insured.

Insurers are forbidden to do all of the following with their advertisements EXCEPT -Correct Answer โœ” โœ” Promote interest in insurance coverage.

According to the Fair Credit Reporting Act, all of the following statements are true EXCEPT -Correct Answer โœ” โœ” If an applicant is declined for an insurance policy, he or she has no right to know what was in the report.

  1. Which of the following provisions is usually found in homeowners' policies and provides a replacement cost settlement to policyholders who carry adequate insurance? -Correct Answer โœ” โœ” Insurance to value
  2. Variable life insurance is regulated by all of the following entities EXCEPT -Correct Answer โœ” โœ” The U.S Department of Treasury.
  3. When may an insurer advertise its membership in the Minnesota Insurance Guaranty Association? -Correct Answer โœ” โœ” At no time
  4. Which of the following policies would NOY offer a policy loan option? -Correct Answer โœ” โœ” Term life
  1. an insured has a life insurance policy in the amount of 250 000 naming his wife as beneficiary. upon his death, his beneficiary decides not to received the death benefit for some time, when she finally receives the death benefit check it's in the amount of 250530. is any portion of the proceeds that the beneficiary receives taxable? -Correct Answer โœ” โœ” Yes, proceeds in excess of face amount are taxable as interest.

When an insurer examination is ordered by the Commissioner, who pays for the cost of the examination? -Correct Answer โœ” โœ” The insurance company that is examined

At what point would an automatic premium loan be generated? - Correct Answer โœ” โœ” Following the grace period

An insured decides to surrender his whole life insurance policy. The cash value at surrender is higher than the premiums paid into the policy, due to interest. What part of the surrender value would be

Which of the following is true regarding the cash value in term life insurance policies? -Correct Answer โœ” โœ” There are no cash values

What is the maximum loan amount a policyowner may withdraw from a variable universal life insurance policy? -Correct Answer โœ” โœ” An amount not exceeding the cash value

Insurers Insurer CANNOT transact insurance in this state without a - Correct Answer โœ” โœ” Certificate of authority

If an applicant submits the initial premium with an application, which action constitutes acceptance? -Correct Answer โœ” โœ” The underwriters approve the application

Which of the following is/are correct regarding SIMPLE plans? -Correct Answer โœ” โœ” Contributions and earnings are tax-deferred until funds are withdrawn.

Which of the following is true regarding the cash value life insurance policies? -Correct Answer โœ” โœ” There are no cash value

What is the maximum penalty per offense for transacting insurance without a certificate of authority? -Correct Answer โœ” โœ” $1,

A new homebuyer wants to purchase a life insurance policy that would protect his family against losing the home, should he die before the mortgage was paid. The most inexpensive type of policy that would accomplish this need would be -Correct Answer โœ” โœ” Decreasing term

Licensees must report of any action taken against them in another jurisdiction or by another government agency in Minnesota within how many days of the final disposition of the matter? -Correct Answer โœ” โœ” 30 days

All of the following are true of credit life EXCEPT -Correct Answer โœ”

โœ” The insured names the beneficiary.

Which distribution from a modified endowment contract would be taxable as income at the time received to the extent that the cash value of the contract immediately before the payment exceeds the investment in the contract? -Correct Answer โœ” โœ” Both partial surrender and policy loan

Variable insurance and variable annuities are regulated by -Correct Answer โœ” โœ” SEC, FINRA, and Departments of Insurance.

An annuitant pays the annuity premium on the 14th of each month. Which best describes the arrangement? -Correct Answer โœ” โœ” Level

How does insurance distribute the financial consequences of individual losses? -Correct Answer โœ” โœ” It transfers the risk to all people insured

A whole-life policy that will generate immediate cash value is a - Correct Answer โœ” โœ” Single premium policy

Which of the following is NOT a power held by the commissioner? - Correct Answer โœ” โœ” Set the premium rates for insurance sold in this state.

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option? -Correct Answer โœ” โœ” Extended term

As a part of the policy approval process the commissioner may require the insurer to provide all of the following EXCEPT -Correct Answer โœ”

โœ” The producer's commissioner schedule

Which riders pays a beneficiary a death benefit that is double or triple the face amount if the insureds death was caused by an accident as defined in the policy? -Correct Answer โœ” โœ” An accidental death rider

Which of the following would be an example of an insurer participating in the unfair trade practice of discrimination? -Correct

Which of the following is not true regarding the accumulation period of an annuity? -Correct Answer โœ” โœ” It would not occur in a deferred annuity.

What is the purpose of a free-look period in insurance policies? - Correct Answer โœ” โœ” It allows the insured to reject the policy with a full refund.

An insurance contract must contain all of the following to be considered legally binding EXCEPT: -Correct Answer โœ” โœ” Beneficiary's Consent

Which of the following would be considered an unfair claims settlement practice? -Correct Answer โœ” โœ” A claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered.

All of the following are true regarding insurance policy loans EXCEPT - Correct Answer โœ” โœ” Policy loans can be made on policies that do not accumulate cash value

What is the purpose of a conditional receipt?

a. it serves as proof that the applicant has been determined insurable.

b. it is given only to applicants who fully prepay the premium.

c. It is intended to provide coverage on a date prior to the policy issue.

d. it guarantees that a policy will be issued in the amount applied for. -Correct Answer โœ” โœ” c. It is intended to provide coverage on a date prior to the policy issue.

A license Minnesota insurance producer must notify the Commissioner of a change of address within

If the producer's license lapses, how much time to apply for reinstatement without taking exam? -Correct Answer โœ” โœ” 12 months

In Minnesota, policy issued without containing, bold-face type, the policy owner's right to cancel (free look), to get full refund, the policy must be return within -Correct Answer โœ” โœ” 1 year

Accumulation at interest option except -Correct Answer โœ” โœ” The interest is not taxable since it remains inside the insurance policy

Life settlement broker represents -Correct Answer โœ” โœ” The owner

Another name for interest-sensitive whole life insurance -Correct Answer โœ” โœ” Current assumption life

Under the nonforfeiture option, the policy cash value is converted to - Correct Answer โœ” โœ” Same face amount as the whole life policy

Not a power given to the commissioner -Correct Answer โœ” โœ” Set the insurance rate to be charged

Example of liquidity in life insurance -Correct Answer โœ” โœ” Cash value available to policyowner

The insured can return the policy for a full refund if the insured is dissatisfied with the policy. -Correct Answer โœ” โœ” Free-look period

If the consumer challenges the accuracy of the information contained in the consumer or investigative report, the reporting agency must - Correct Answer โœ” โœ” Respond to the consumer's complaint

Statements are true regarding installments for a fixed amount except -Correct Answer โœ” โœ” Payment stops when the annuitant dies

Change need to make to the application for insurance, the agent may do all the following except -Correct Answer โœ” โœ” Erase the incorrect answer and record the correct answer

In which instances would the premium be tax deductible -Correct Answer โœ” โœ” Premium paid by an employer on 30,000 group term life insurance plans for employees