Nebraska Life Insurance Practice Exam Free - 2026

• A. 31 days, with no interest charge permitted
• B. 60 days, with interest at the policy loan rate
• C. 10 days, with no interest charge permitted
• D. One month, subject at the company's option to interest not exceeding 6 percent per annum

Correct answer: D. One month, subject at the company's option to interest not exceeding 6 percent per annum

Explanation: Neb. Rev. Stat. § 44-502(2) requires every life or endowment policy to give the insured a grace of one month for payment of any premium after the first year, subject at the company's option to an interest charge not in excess of six percent per annum for the days of grace elapsing before payment, with the policy continuing in force during the grace period. Thirty-one days is the grace period for group life policies under § 44-1607(1), ten days is the free-look period under § 44-502.05, and sixty days is not a Nebraska life grace period. See Neb. Rev. Stat. § 44-502.

• A. 60 days
• B. 30 days
• C. Two months
• D. 15 days

Correct answer: B. 30 days

Explanation: Neb. Rev. Stat. § 44-3,143 requires an insurer to pay interest, at the rate calculated under § 45-103, on life insurance proceeds not paid within thirty days of receipt of proof of death when the insured was a Nebraska resident and the beneficiary elected a lump-sum payment; interest runs from receipt of proof of death, and a violation is an unfair claims settlement practice. Two months is the outer limit for settling a death claim under § 44-502(12), not the interest trigger; sixty and fifteen days are not the statutory periods. See Neb. Rev. Stat. § 44-3,143.

• A. $300,000
• B. $450,000
• C. $500,000
• D. $250,000

Correct answer: A. $300,000

Explanation: Neb. Rev. Stat. § 44-2703(3)(b)(i)(A) limits the association's obligation to $300,000 in life insurance death benefits with respect to one life, regardless of the number of policies, and to $100,000 in net cash surrender and withdrawal values. The full $450,000 face amount exceeds the cap; $500,000 is the limit for health benefit plans; and $250,000 is the limit for the present value of annuity benefits. See Neb. Rev. Stat. § 44-2703.

• A. At least 30 days
• B. At least 10 days
• C. At least 15 days
• D. At least 31 days

Correct answer: C. At least 15 days

Explanation: Neb. Rev. Stat. § 44-502(15)(a) requires policies issued or delivered in Nebraska on or after January 1, 2026 to provide that, at least fifteen days before termination or lapse for default in premium payment, a notice will be sent electronically or mailed to the last-known address of the owner and any assignee on record, and § 44-502(15)(b) gives the assignee the same standing as the owner. Thirty days is the address-change reporting period under § 44-4054(8), ten days is the free-look period under § 44-502.05, and thirty-one days is the group life grace period under § 44-1607. See Neb. Rev. Stat. § 44-502.

• A. When the insurer recalculates payments each year based on returns
• B. When premiums are paid and the value grows before payout begins
• C. When the annuitant receives periodic income payments from the contract
• D. When the contract's value is paid to the beneficiary at the annuitant's death

Correct answer: B. When premiums are paid and the value grows before payout begins

Explanation: The accumulation period (also called pay-in period) is when the annuity owner pays premiums and the account value grows through interest or investment returns before income payments begin.

• A. When the beneficiary receives the remaining value at the annuitant's death
• B. When the owner is paying premiums and the value is growing tax-deferred
• C. When the annuity contract converts to periodic income payments
• D. When the owner surrenders the contract for its cash value less charges

Correct answer: C. When the annuity contract converts to periodic income payments

Explanation: Annuitization is when the accumulated value is converted into periodic income payments. Once annuitized, the contract typically cannot be reversed or surrendered for cash value.

• A. An annuity that pays a death benefit equal to the face amount at death
• B. An annuity that provides income payments for a set number of years
• C. An annuity that provides income payments only until the premiums paid are returned
• D. An annuity that provides income payments for the annuitant's lifetime

Correct answer: D. An annuity that provides income payments for the annuitant's lifetime

Explanation: A life annuity (straight life) provides income payments for as long as the annuitant lives. Payments stop at death, regardless of how much has been paid out or how much remains in the account.

• A. An annuity that guarantees payments for a specified period, regardless of survival
• B. An annuity that guarantees payments for life but stops when the annuitant dies
• C. An annuity that must remain in the accumulation phase for a specified period
• D. An annuity that guarantees payments until the total of all premiums paid has been returned

Correct answer: A. An annuity that guarantees payments for a specified period, regardless of survival

Explanation: A period certain annuity guarantees payments for a specified number of years. If the annuitant dies before the period ends, payments continue to a beneficiary until the period is complete.

• A. Combining multiple policies
• B. Misrepresenting or making incomplete comparisons to induce a policyholder to lapse or switch policies
• C. A complex policy structure
• D. A type of policy endorsement

Correct answer: B. Misrepresenting or making incomplete comparisons to induce a policyholder to lapse or switch policies

Explanation: Twisting is an illegal practice where an agent misrepresents or makes misleading comparisons to induce a policyholder to cancel an existing policy and purchase a new one, often for the agent's commission benefit.

• A. Misrepresenting a policy to induce a client to switch insurers
• B. Returning part of a commission to a client as an inducement
• C. Excessive replacement of policies to generate commissions
• D. Rapidly processing applications without proper underwriting

Correct answer: C. Excessive replacement of policies to generate commissions

Explanation: Churning is the unethical and often illegal practice of an agent inducing excessive policy replacements primarily to generate commissions, rather than for the client's benefit.

• A. Splitting commissions between two licensed producers who both worked on the same sale
• B. Returning unearned premium to the policyowner when a policy is cancelled before its term ends
• C. Making a false or misleading comparison of policies to induce a policyowner to replace coverage
• D. Giving part of the premium or commission back to the insured as an inducement

Correct answer: D. Giving part of the premium or commission back to the insured as an inducement

Explanation: Rebating is the illegal practice of returning part of the premium or agent's commission to the policyholder as an inducement to purchase insurance. This is prohibited in most states.

• A. Making false or misleading statements to induce someone to buy insurance
• B. Paying a commission to a person who does not hold a valid producer license
• C. Placing business with an insurer that is not authorized to do business in the state
• D. Returning part of a commission to a client as an inducement to purchase a policy

Correct answer: A. Making false or misleading statements to induce someone to buy insurance

Explanation: Misrepresentation is making false, deceptive, or misleading statements, either oral or written, to induce someone to purchase, lapse, or change an insurance policy. This is illegal and unethical.