New Mexico Health Insurance Practice Exam Free - 2026

• A. Yes, if it gives 30 days' written notice
• B. Yes, because deterioration of health is a permitted ground after the first year
• C. Yes, once the insured is over age 80
• D. No; a long-term care policy may not be cancelled or nonrenewed on the grounds of age or deterioration of mental or physical health

Correct answer: D. No; a long-term care policy may not be cancelled or nonrenewed on the grounds of age or deterioration of mental or physical health

Explanation: NMSA 59A-23A-6(C) provides that no long-term care insurance policy may be cancelled, nonrenewed or otherwise terminated on the grounds of the age or the deterioration of the mental or physical health of the insured; the same section gives a 30-day free examination and requires an outline of coverage at solicitation. Notice length, policy year and age 80 are irrelevant because the ground itself is prohibited. See NMSA 1978, § 59A-23A-6.

• A. 3 months
• B. 6 months
• C. 12 months
• D. 18 months

Correct answer: B. 6 months

Explanation: NMSA 59A-18-16(A)(2)(a) gives each member or employee of an insured group the right to continue the group coverage for a period of six months after termination of employment or membership and thereafter to convert; the person must notify and pay the premium within thirty days after the insurer's notice, and no evidence of insurability or new preexisting limits may be imposed. Three and twelve months are not the statutory period, and eighteen months is the federal COBRA period, not the New Mexico state rule. See NMSA 1978, § 59A-18-16.

• A. 1 to 100 eligible employees
• B. 1 to 25 eligible employees
• C. 2 to 50 eligible employees
• D. 3 to 99 eligible employees

Correct answer: C. 2 to 50 eligible employees

Explanation: NMSA 59A-23C-3 defines a small employer as one that, on at least fifty percent of its working days during either of the two preceding years, employed no less than two and no more than fifty eligible employees, with affiliated companies counted as one employer. One-to-100 and 1-to-25 are definitions used elsewhere and 3-to-99 is not a statutory range. See NMSA 1978, § 59A-23C-3.

• A. At least 90 days' notice; no new class of business for five years without the superintendent's approval
• B. At least 30 days' notice; no restriction
• C. At least 60 days' notice; no new class for one year
• D. At least 180 days' notice; no new class for three years

Correct answer: A. At least 90 days' notice; no new class of business for five years without the superintendent's approval

Explanation: NMSA 59A-23C-6(B) allows a small employer carrier to cease renewing all plans in a class of business only if it notifies affected health benefit plans and the superintendent at least ninety days before termination, after which it may not establish a new class of business for five years without prior approval and may not selectively re-cover the affected employers. Thirty, sixty and 180 days, and one- or three-year bars, are not the statutory figures. See NMSA 1978, § 59A-23C-6.

• A. Total loss of income when the insured cannot perform any occupation
• B. A lump sum paid when the insured suffers the loss of a limb or eyesight
• C. Recurring benefits when a past disability returns after a short recovery
• D. Partial loss of income when the insured can work but not at full capacity

Correct answer: D. Partial loss of income when the insured can work but not at full capacity

Explanation: Residual disability benefits may provide partial benefits when the insured returns to work but suffers reduced earnings due to disability.

• A. Perform the substantial duties of the specific occupation the insured was working in at the time of disability
• B. Perform the duties of any occupation for which the insured is reasonably suited by education, training, or experience
• C. Perform any gainful work at all, regardless of the insured's prior training, income level, or experience
• D. Earn at least the same income as before the disability, whether in the same occupation or a different one

Correct answer: A. Perform the substantial duties of the specific occupation the insured was working in at the time of disability

Explanation: An own-occupation definition asks only whether the insured can perform the substantial duties of the occupation they were actually working in - the most favourable definition for the insured, because they may qualify even if able to do other work. Option B is the 'any-occupation' definition, which is harder to satisfy. Option C describes the stricter Social Security-style standard. Option D describes an income-replacement (residual or partial) test, not a total-disability definition. Exact policy wording controls in every case.

• A. Perform the main duties of the insured's own regular occupation
• B. Work in another suitable occupation based on policy terms
• C. Pay premiums during the elimination period without hardship
• D. Qualify for Social Security disability benefits at the same time

Correct answer: B. Work in another suitable occupation based on policy terms

Explanation: Any-occupation definitions generally look beyond the insured's own job and may consider other suitable work, depending on policy wording.

• A. The insurer cannot cancel coverage but may raise premiums for an entire class of insureds when renewing
• B. The insurer may refuse renewal at any anniversary but must keep the premium rate level for the policy term
• C. The insurer cannot cancel or raise premiums if the insured pays required premiums, subject to policy terms
• D. The insured is guaranteed a benefit period that lasts until the insured's normal retirement age

Correct answer: C. The insurer cannot cancel or raise premiums if the insured pays required premiums, subject to policy terms

Explanation: A noncancelable disability income policy generally protects both renewability and premium rates when premiums are paid as required.

• A. The insurer may raise rates for an individual insured but cannot cancel coverage for any reason
• B. The insurer may decline to renew at each anniversary but cannot change the premium during the year
• C. The insured is guaranteed level premiums for life but the insurer may cancel coverage for poor claims
• D. The insurer usually cannot cancel coverage but may raise rates by class, subject to policy terms

Correct answer: D. The insurer usually cannot cancel coverage but may raise rates by class, subject to policy terms

Explanation: Guaranteed renewable coverage protects continued coverage, but premiums may be increased for a class of insureds under the policy's terms.

• A. The policy, application, and attached papers make up the full contract
• B. The policy and the producer's oral statements together make up the full contract
• C. The producer may change the contract by endorsing the application with the insured
• D. The application alone is the full contract once the first premium has been paid

Correct answer: A. The policy, application, and attached papers make up the full contract

Explanation: The entire contract provision identifies the documents that make up the full insurance contract and limits reliance on outside statements.

• A. To limit how long the insured may wait after a loss before giving notice of the claim
• B. To limit how long the insurer can use certain misstatements to void coverage or deny claims
• C. To limit how long the insurer has to pay a claim after receiving proof of loss
• D. To limit how long the insured has to sue the insurer over a denied claim

Correct answer: B. To limit how long the insurer can use certain misstatements to void coverage or deny claims

Explanation: This provision limits the time period for the insurer to contest certain statements, subject to fraud and policy terms.

• A. Extra time to file a claim after the notice-of-claim deadline has already passed
• B. Extra time to apply for reinstatement without paying the overdue premiums
• C. Extra time to pay a premium after the due date while coverage may remain in force
• D. Extra time to review a new policy and return it for a full premium refund

Correct answer: C. Extra time to pay a premium after the due date while coverage may remain in force

Explanation: A grace period gives the policyowner a limited time after the due date to pay the premium, subject to policy terms.