Northwestern Mutual Final Exam Life
Insurance License Exam Questions and
Answers Graded A+
Which life insurance policy provision prohibits a beneficiary from "commuting,
encumbering, withdrawing, or assigning" any portion of the proceeds prior to
actual receipt from the company? - Correct answer-Spendthrift clause
Which life insurance settlement option pays a stated monthly benefit until both
principal and interest are exhausted? - Correct answer-Fixed amount installment
option
When an individual is planning to protect his family with life insurance, one
method of doing so is called need analysis. What exactly does needs analysis
involve? - Correct answer-Identifies the needs of an individual and the individuals
dependents
Steve has a group disability income policy where the premiums are paid by his
employer. He elected to pay for additional residual disability coverage. Which of
the following statements is true? - Correct answer-Steve will pay taxes on the
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,disability benefit received from his employer, but will receive any residual
disability benefits tax-free
Death proceeds from a life insurance policy are typically included in a deceased
insured's gross estate - Correct answer-for federal income tax reasons
Any employee insured under a group life insurance plan is normally - Correct
answer-covered with term life insurance
In which of the following situations can an insurance company offer group Health
insurance? - Correct answer-The sponsoring group provides an employer-employee
relationship
A producer must maintain customer records for how many years following the
completion date of the insurance transaction? - Correct answer-Three
Medicare Part A coinsurance payments are covered by - Correct answer-Medicare
supplement Plan A
An agent's authority to bind an insurer to an insurance contract may be granted in
the - Correct answer-agent's contract and the insurance company's appointment
Which type of Medicare Supplement information can be used without prior state
approval? - Correct answer-Government publications
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, An insurance policy may be issued with a preferred insurance premium in all of
these situations EXCEPT - Correct answer-living in a rural area
A large corporation pension plan purchased an accumulation annuity contract
where all of the participating employees received certificates of participation. What
is this contract called? - Correct answer-Group deferred annuity
A life insurance guaranteed insurability rider gives the insured the right, without
proving insurability, to - Correct answer-periodically purchase additional insurance
Which statement concerning the Entire Contract provision in an individual
accident and health insurance policy is TRUE? - Correct answer-The agent doesn't
have the authority to change the policy or waive its provisions
Each of the following will trigger a benefit under the Presumptive Disability
provision, EXCEPT - Correct answer-Loss of any one limb
An accident and health insurer has just received written proof of loss from one of
its insureds. The insured must now wait 60 days before - Correct answer-bringing
legal action against the insurer
A material change in a modified endowment contract (MEC) results in - Correct
answer-the seven pay test, adjusted for cash value, applies again
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
Insurance License Exam Questions and
Answers Graded A+
Which life insurance policy provision prohibits a beneficiary from "commuting,
encumbering, withdrawing, or assigning" any portion of the proceeds prior to
actual receipt from the company? - Correct answer-Spendthrift clause
Which life insurance settlement option pays a stated monthly benefit until both
principal and interest are exhausted? - Correct answer-Fixed amount installment
option
When an individual is planning to protect his family with life insurance, one
method of doing so is called need analysis. What exactly does needs analysis
involve? - Correct answer-Identifies the needs of an individual and the individuals
dependents
Steve has a group disability income policy where the premiums are paid by his
employer. He elected to pay for additional residual disability coverage. Which of
the following statements is true? - Correct answer-Steve will pay taxes on the
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,disability benefit received from his employer, but will receive any residual
disability benefits tax-free
Death proceeds from a life insurance policy are typically included in a deceased
insured's gross estate - Correct answer-for federal income tax reasons
Any employee insured under a group life insurance plan is normally - Correct
answer-covered with term life insurance
In which of the following situations can an insurance company offer group Health
insurance? - Correct answer-The sponsoring group provides an employer-employee
relationship
A producer must maintain customer records for how many years following the
completion date of the insurance transaction? - Correct answer-Three
Medicare Part A coinsurance payments are covered by - Correct answer-Medicare
supplement Plan A
An agent's authority to bind an insurer to an insurance contract may be granted in
the - Correct answer-agent's contract and the insurance company's appointment
Which type of Medicare Supplement information can be used without prior state
approval? - Correct answer-Government publications
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, An insurance policy may be issued with a preferred insurance premium in all of
these situations EXCEPT - Correct answer-living in a rural area
A large corporation pension plan purchased an accumulation annuity contract
where all of the participating employees received certificates of participation. What
is this contract called? - Correct answer-Group deferred annuity
A life insurance guaranteed insurability rider gives the insured the right, without
proving insurability, to - Correct answer-periodically purchase additional insurance
Which statement concerning the Entire Contract provision in an individual
accident and health insurance policy is TRUE? - Correct answer-The agent doesn't
have the authority to change the policy or waive its provisions
Each of the following will trigger a benefit under the Presumptive Disability
provision, EXCEPT - Correct answer-Loss of any one limb
An accident and health insurer has just received written proof of loss from one of
its insureds. The insured must now wait 60 days before - Correct answer-bringing
legal action against the insurer
A material change in a modified endowment contract (MEC) results in - Correct
answer-the seven pay test, adjusted for cash value, applies again
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
