MN INSURANCE EXAM PROPERTY AND
CASUALTY COMPREHENSIVE TEST PAPER
2026 COMPLETE ANSWERS ACCURATE
⫸ Mateo applies for an insurance policy that will have an annual
premium payment of $1,000 ($510 semi-annually, $260 quarterly, and
$100 monthly) if issued. Which of the following premium checks would
be adequate consideration if he chose to pay monthly? Answer: $100
⫸ The nonforfeiture option that provides the least amount of coverage
is: Answer: Reduced Paid-Up
⫸ In order for an insurance company to determine if it will issue a
policy, what document must always be submitted for review? Answer:
The application
⫸ Before an insurer can operate in this state, it must have which of the
following? Answer: Certificate of Authority issued by the state
Insurance Department
⫸ Prelicensing education must include how many hours of education
per line of authority? Answer: 20
⫸ If an applicant is a minor, who signs the application? Answer: Their
guardian
,⫸ All of the following are Dividend Options, except: Answer: Reduced
paid-up
⫸ An insured has contributed $12,000 in premiums toward a universal
life policy. She decides to cancel the policy and take the cash value of
$15,000. What are the tax consequences of this distribution? Answer:
$12,000 is a return of after tax dollars (i.e. cost basis), $3,000 is taxable
as ordinary income
⫸ All of the following are characteristics of Ordinary Whole Life
Insurance, except: Answer: If insured lives to age 100, the total amount
of premium paid over the lifetime of the insured is returned to the
policyowner
⫸ Level, decreasing and increasing term refer to which policy feature
Answer: Death benefit
⫸ A misstatement of an insured's age was not discovered until after the
insured died. The policy had been in effect for 3 years. What will the
insurer do to address this situation? Answer: Pay benefits based on what
past premiums would have purchased at the correct age
⫸ All of the following are considered specialized policies, except:
Answer: Whole Life
, ⫸ As part of Social Security benefits, a one-time payment of $_______
may be made paid to a surviving spouse after a taxpayer's death.
Answer: 255
⫸ The insurable interest on one's own life is generally regarded as:
Answer: Unlimited
⫸ When the life insurance policy's cash value equals the face amount of
the policy and the proceeds are paid to the policyowner, this is known as
the policy's _________. Answer: Endowment
⫸ When the owner of the policy and insurer must meet certain
conditions in order for the health insurance policy to be enforceable, it is
referred to as a(n): Answer: Conditional contract
⫸ With indexed life, the interest credited to the policy is: Answer:
Based on a percentage of the increase in a stipulated stock index
⫸ Jerry has selected a Life Income 10 year Period Certain. What
happens to the income payments if he dies in year 4 after starting to
receive income benefit payments? Answer: The payments continue for
the balance of the Period Certain to a named beneficiary
⫸ What is the fastest way to pay up an ordinary whole life policy?
Answer: Buy a single premium policy
CASUALTY COMPREHENSIVE TEST PAPER
2026 COMPLETE ANSWERS ACCURATE
⫸ Mateo applies for an insurance policy that will have an annual
premium payment of $1,000 ($510 semi-annually, $260 quarterly, and
$100 monthly) if issued. Which of the following premium checks would
be adequate consideration if he chose to pay monthly? Answer: $100
⫸ The nonforfeiture option that provides the least amount of coverage
is: Answer: Reduced Paid-Up
⫸ In order for an insurance company to determine if it will issue a
policy, what document must always be submitted for review? Answer:
The application
⫸ Before an insurer can operate in this state, it must have which of the
following? Answer: Certificate of Authority issued by the state
Insurance Department
⫸ Prelicensing education must include how many hours of education
per line of authority? Answer: 20
⫸ If an applicant is a minor, who signs the application? Answer: Their
guardian
,⫸ All of the following are Dividend Options, except: Answer: Reduced
paid-up
⫸ An insured has contributed $12,000 in premiums toward a universal
life policy. She decides to cancel the policy and take the cash value of
$15,000. What are the tax consequences of this distribution? Answer:
$12,000 is a return of after tax dollars (i.e. cost basis), $3,000 is taxable
as ordinary income
⫸ All of the following are characteristics of Ordinary Whole Life
Insurance, except: Answer: If insured lives to age 100, the total amount
of premium paid over the lifetime of the insured is returned to the
policyowner
⫸ Level, decreasing and increasing term refer to which policy feature
Answer: Death benefit
⫸ A misstatement of an insured's age was not discovered until after the
insured died. The policy had been in effect for 3 years. What will the
insurer do to address this situation? Answer: Pay benefits based on what
past premiums would have purchased at the correct age
⫸ All of the following are considered specialized policies, except:
Answer: Whole Life
, ⫸ As part of Social Security benefits, a one-time payment of $_______
may be made paid to a surviving spouse after a taxpayer's death.
Answer: 255
⫸ The insurable interest on one's own life is generally regarded as:
Answer: Unlimited
⫸ When the life insurance policy's cash value equals the face amount of
the policy and the proceeds are paid to the policyowner, this is known as
the policy's _________. Answer: Endowment
⫸ When the owner of the policy and insurer must meet certain
conditions in order for the health insurance policy to be enforceable, it is
referred to as a(n): Answer: Conditional contract
⫸ With indexed life, the interest credited to the policy is: Answer:
Based on a percentage of the increase in a stipulated stock index
⫸ Jerry has selected a Life Income 10 year Period Certain. What
happens to the income payments if he dies in year 4 after starting to
receive income benefit payments? Answer: The payments continue for
the balance of the Period Certain to a named beneficiary
⫸ What is the fastest way to pay up an ordinary whole life policy?
Answer: Buy a single premium policy
