NM Life Insurance Exam Ch. 3 Questions
and Answers Graded A+
d - Correct answer-All of the following are true regarding the insurable interest
creditors have in the lives of their debtors, EXCEPT:
Select one:
a. Creditors may take out life insurance on the lives of debtors.
b. Creditors may take out life insurance on the lives of debtors in an amount equal
to the unpaid debt.
c. Creditors must have debtors, consent to take out life insurance policies on them.
d. The face amount of life insurance on debtors stays constant throughout the
policy term.
a - Correct answer-The Social Security blackout period begins when the youngest
child reaches the age of:
Select one:
a. 16
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,b. 18
c. 19
d. 21
c - Correct answer-All of the following are drawbacks of buying a viatical
settlement, EXCEPT:
Select one:
a. Viatical settlement payouts may be subject to creditors claims if the insured has
debt.
b. Viators may be unable to receive benefits through Medicaid or Supplemental
Social Security Income.
c. The insured's life insurance protection ends.
d. The portion of the death benefit the viator receives in a viatical settlement ranges
from 50 to 80 percent of the death benefit.
a - Correct answer-Viatical brokers represent _______; viatical producers represent
_________.
Select one:
a. viators; viatical settlement providers
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, b. viatical settlement providers; viators
c. insurers; insureds
d. insureds; insurers
d - Correct answer-Insurance agent Jessica evaluates Ben's life insurance needs. In
calculating the amount of life insurance needed, Jessica uses the cost for funeral
and burial, mortgage payments, cost of education for Ben's children, and the
amount of income Ben's dependents would need to maintain their standard of
living. Which method did Jessica use?
Select one:
a. Survivor method
b. Estate method
c. Human life value approach
d. Needs approach
c - Correct answer-What is the term attributed to the third party that buys the death
benefit from a life insurance policy?
Select one:
a. Beneficiary
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and Answers Graded A+
d - Correct answer-All of the following are true regarding the insurable interest
creditors have in the lives of their debtors, EXCEPT:
Select one:
a. Creditors may take out life insurance on the lives of debtors.
b. Creditors may take out life insurance on the lives of debtors in an amount equal
to the unpaid debt.
c. Creditors must have debtors, consent to take out life insurance policies on them.
d. The face amount of life insurance on debtors stays constant throughout the
policy term.
a - Correct answer-The Social Security blackout period begins when the youngest
child reaches the age of:
Select one:
a. 16
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,b. 18
c. 19
d. 21
c - Correct answer-All of the following are drawbacks of buying a viatical
settlement, EXCEPT:
Select one:
a. Viatical settlement payouts may be subject to creditors claims if the insured has
debt.
b. Viators may be unable to receive benefits through Medicaid or Supplemental
Social Security Income.
c. The insured's life insurance protection ends.
d. The portion of the death benefit the viator receives in a viatical settlement ranges
from 50 to 80 percent of the death benefit.
a - Correct answer-Viatical brokers represent _______; viatical producers represent
_________.
Select one:
a. viators; viatical settlement providers
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, b. viatical settlement providers; viators
c. insurers; insureds
d. insureds; insurers
d - Correct answer-Insurance agent Jessica evaluates Ben's life insurance needs. In
calculating the amount of life insurance needed, Jessica uses the cost for funeral
and burial, mortgage payments, cost of education for Ben's children, and the
amount of income Ben's dependents would need to maintain their standard of
living. Which method did Jessica use?
Select one:
a. Survivor method
b. Estate method
c. Human life value approach
d. Needs approach
c - Correct answer-What is the term attributed to the third party that buys the death
benefit from a life insurance policy?
Select one:
a. Beneficiary
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
