WISCONSIN LIFE EXAM FX ACTUAL PAPER
2026 QUESTIONS WITH SOLUTIONS GRADED
A+
◉ Entity Plans. Answer: Agreements in which a business assumes
the obligation of purchasing a deceased owner's interest in the
business, thereby proportionately increasing the interests of
surviving owners
◉ Human Life Value Approach. Answer: An individuals economic
worth, measured by the sum of the individuals future earnings that
is devoted to the individuals family.
◉ 403(b) Plan. Answer: A tax-deferred retirement plan for certain
employees of public schools, employees of specific tax-exempt
organizations, and certain ministers. For example: teachers, hospital
workers, ministers, and some other public employees
◉ 1035 Contract Exchange. Answer: Applies to annuities. If an
annuity is exchanged for another annuity, a gain (for tax purposes) is
not realized. This is also true for a life insurance policy or an
endowment contract exchanged for an annuity. However, an annuity
cannot be exchanged for a life insurance policy. This provision in the
tax code allows you, as a policyholder, to transfer funds from a life
,insurance, endowment or annuity to a new policy, without having to
pay taxes
◉ Accumulation Period. Answer: The time over which the annuitant
makes payments or investments in an annuity, and when those
payments earn interest tax deferred.
◉ Accumulation Units. Answer: A variable annuity contract owner's
interest in the separate account prior to annuitization.
◉ Annuitant. Answer: The person that buys an annuity; may or may
not be an annuity's policyowner. The annuitant's life expectancy
determines the annuity payments.
◉ Annuity Units. Answer: At the time the variable annuity benefits
are to be paid out to the annuitant, the accumulation units in the
participant's individual account are converted into annuity units.
◉ Cash Refund Option. Answer: Provides that, upon the death of an
annuitant before payments totaling the purchase price have been
made, the excess of the amount paid by the purchaser over the total
annuity payments received will be paid in one sum to designated
beneficiaries.
,◉ Deferred Annuity. Answer: An annuity in which the rents begin
after a specified number of periods. May be purchased on either a
single premium or flexible premium basis. Typically do not begin
making payments for at least 1 year after the date of purchase.
◉ Equity Indexed Annuity. Answer: A fixed, deferred annuity that
allows the owner to participate in the growth of the stock market
and provides downside protection against the loss of principal and
prior interest earnings if the annuity is held to term.
◉ Exclusion Ratio. Answer: Fraction used to determine amount of
annual annuity income exempt from federal income tax. Exclusion
ratio is the total contribution or investment in the annuity divided
by the expected ratio.
◉ Fixed Annuity. Answer: An annuity that offers fixed payments and
guarantees a minimum rate of interest to be credited to the purchase
payment or payments.
◉ Immediate Annuity. Answer: Provides for payment of annuity
benefit at one payment interval from date of purchase. Can only be
purchased with a single payment.
◉ Joint and Survivor Option. Answer: A settlement option which
guarantees that benefits will be payed on a life-long basis to two or
more people. This option may include a period certain and the
, amount payable is based on the ages of the beneficiaries. When the
surviving annuitant dies, no further payments are made to anyone. A
full survivor option pays the same benefit amount to the survivor. A
two-thirds option pays two-thirds of the original joint benefit. A one-
half survivor option pays one-half of the original joint benefit.
◉ Life with Period Certain Annuity (Life Income with Term-Certain
Option). Answer: Designed to pay the annuitant an income for life,
but guarantees a definite minimum period of payments. The life with
period certain option provides income to the annuitant for life but
guarantees a minimum period of payments. Thus, if the annuitant
dies during the specified period, benefit payments continue to the
beneficiary for the remainder of that period.
◉ Market Value Adjusment. Answer: A market value adjustment can
be attached to a deferred annuity that features fixed interest rate
guarantees combined with an interest rate adjustment factor that
can cause the actual crediting rates to increase or decrease in
response to market conditions. Instead of having the annuity's
interest rate linked to an index with as with the equity-indexed
annuity, and MVA annuity's interest rate is guaranteed fixed if the
contract is held for the period specified in the policy. The MVA
feature applies only if the contract is surrendered before the
contract period expires. Otherwise, the annuity functions the same
way a fixed annuity does.
2026 QUESTIONS WITH SOLUTIONS GRADED
A+
◉ Entity Plans. Answer: Agreements in which a business assumes
the obligation of purchasing a deceased owner's interest in the
business, thereby proportionately increasing the interests of
surviving owners
◉ Human Life Value Approach. Answer: An individuals economic
worth, measured by the sum of the individuals future earnings that
is devoted to the individuals family.
◉ 403(b) Plan. Answer: A tax-deferred retirement plan for certain
employees of public schools, employees of specific tax-exempt
organizations, and certain ministers. For example: teachers, hospital
workers, ministers, and some other public employees
◉ 1035 Contract Exchange. Answer: Applies to annuities. If an
annuity is exchanged for another annuity, a gain (for tax purposes) is
not realized. This is also true for a life insurance policy or an
endowment contract exchanged for an annuity. However, an annuity
cannot be exchanged for a life insurance policy. This provision in the
tax code allows you, as a policyholder, to transfer funds from a life
,insurance, endowment or annuity to a new policy, without having to
pay taxes
◉ Accumulation Period. Answer: The time over which the annuitant
makes payments or investments in an annuity, and when those
payments earn interest tax deferred.
◉ Accumulation Units. Answer: A variable annuity contract owner's
interest in the separate account prior to annuitization.
◉ Annuitant. Answer: The person that buys an annuity; may or may
not be an annuity's policyowner. The annuitant's life expectancy
determines the annuity payments.
◉ Annuity Units. Answer: At the time the variable annuity benefits
are to be paid out to the annuitant, the accumulation units in the
participant's individual account are converted into annuity units.
◉ Cash Refund Option. Answer: Provides that, upon the death of an
annuitant before payments totaling the purchase price have been
made, the excess of the amount paid by the purchaser over the total
annuity payments received will be paid in one sum to designated
beneficiaries.
,◉ Deferred Annuity. Answer: An annuity in which the rents begin
after a specified number of periods. May be purchased on either a
single premium or flexible premium basis. Typically do not begin
making payments for at least 1 year after the date of purchase.
◉ Equity Indexed Annuity. Answer: A fixed, deferred annuity that
allows the owner to participate in the growth of the stock market
and provides downside protection against the loss of principal and
prior interest earnings if the annuity is held to term.
◉ Exclusion Ratio. Answer: Fraction used to determine amount of
annual annuity income exempt from federal income tax. Exclusion
ratio is the total contribution or investment in the annuity divided
by the expected ratio.
◉ Fixed Annuity. Answer: An annuity that offers fixed payments and
guarantees a minimum rate of interest to be credited to the purchase
payment or payments.
◉ Immediate Annuity. Answer: Provides for payment of annuity
benefit at one payment interval from date of purchase. Can only be
purchased with a single payment.
◉ Joint and Survivor Option. Answer: A settlement option which
guarantees that benefits will be payed on a life-long basis to two or
more people. This option may include a period certain and the
, amount payable is based on the ages of the beneficiaries. When the
surviving annuitant dies, no further payments are made to anyone. A
full survivor option pays the same benefit amount to the survivor. A
two-thirds option pays two-thirds of the original joint benefit. A one-
half survivor option pays one-half of the original joint benefit.
◉ Life with Period Certain Annuity (Life Income with Term-Certain
Option). Answer: Designed to pay the annuitant an income for life,
but guarantees a definite minimum period of payments. The life with
period certain option provides income to the annuitant for life but
guarantees a minimum period of payments. Thus, if the annuitant
dies during the specified period, benefit payments continue to the
beneficiary for the remainder of that period.
◉ Market Value Adjusment. Answer: A market value adjustment can
be attached to a deferred annuity that features fixed interest rate
guarantees combined with an interest rate adjustment factor that
can cause the actual crediting rates to increase or decrease in
response to market conditions. Instead of having the annuity's
interest rate linked to an index with as with the equity-indexed
annuity, and MVA annuity's interest rate is guaranteed fixed if the
contract is held for the period specified in the policy. The MVA
feature applies only if the contract is surrendered before the
contract period expires. Otherwise, the annuity functions the same
way a fixed annuity does.
