WISCONSIN LIFE INSURANCE EXAM 2026 LIFE
INSURANCE LICENSING ASSESSMENT
QUESTIONS 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
INSURANCE LICENSING ASSESSMENT
QUESTIONS 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
