New Mexico Life Insurance Practice Exam Free - 2026

• A. $25
• B. $100
• C. $500
• D. $50

Correct answer: D. $50

Explanation: NMSA 59A-12-17(G) requires a licensee to notify the superintendent of a change of address within thirty days of the change and imposes a penalty of fifty dollars ($50.00) for failure to do so; 13.4.2.26(A) NMAC applies the same $50 penalty. Twenty-five and one hundred dollars are not the statutory amount, and $500 is the maximum criminal fine for a petty misdemeanor under 59A-1-18, not the address-change penalty. See NMSA 1978, § 59A-12-17.

• A. At the next scheduled examination date
• B. Not until six months after the date of the last examination failed
• C. Not until one year after the last failure
• D. Never; four failures permanently bar her from that line

Correct answer: B. Not until six months after the date of the last examination failed

Explanation: NMSA 59A-11-6(E) allows a failed applicant to retake at any subsequent scheduled date, except that an individual who has taken and failed four of the same examinations may not take another until six months after the date of the last examination failed; 13.4.2.11 NMAC and the Prometric handbook repeat the four-attempt, six-month rule. A passing grade is seventy. Retaking immediately applies only before the fourth failure, a one-year wait is not the rule, and there is no permanent bar. See NMSA 1978, § 59A-11-6.

• A. $250
• B. $500
• C. $1,000
• D. $5,000

Correct answer: C. $1,000

Explanation: NMSA 59A-16-18 makes any person who is not a licensee and who knowingly receives a rebate of premium, or any special favor or advantage not plainly designated in the policy, guilty of a misdemeanor punishable by a fine of not over one thousand dollars ($1,000); the producer's own offer violates 59A-16-15. Five hundred dollars is the petty-misdemeanor cap and $5,000 the per-violation administrative penalty under 59A-1-18, and $250 is not a statutory figure. See NMSA 1978, § 59A-16-18.

• A. $10,000
• B. $5,000
• C. $500
• D. $1,000

Correct answer: A. $10,000

Explanation: NMSA 59A-1-18(B) authorizes an administrative penalty of up to $5,000 for each violation, or up to $10,000 for each violation that is willful and intentional, after a hearing before the superintendent; 59A-16-29 applies that section to trade-practice violations such as misrepresentation under 59A-16-4. Five thousand dollars is the cap for non-willful violations, $500 is the maximum criminal fine for a petty misdemeanor under subsection A, and $1,000 is the fine for illegally receiving a rebate under 59A-16-18. See NMSA 1978, § 59A-1-18.

• A. Cancel the policy after review and receive a refund as required by policy or law
• B. Return the policy and receive a refund minus the cost of coverage during the review period
• C. Request changes to the policy's terms after delivery without submitting a new application
• D. Cancel the policy at any time during the first year and receive a full premium refund

Correct answer: A. Cancel the policy after review and receive a refund as required by policy or law

Explanation: The free-look period gives the policyowner time to review the policy after delivery and cancel for a refund according to applicable rules.

• A. Assignment clause
• B. Automatic premium loan
• C. Spendthrift clause
• D. Common disaster clause

Correct answer: B. Automatic premium loan

Explanation: An automatic premium loan provision can use available cash value to pay premiums and keep the policy in force, if the provision is included and conditions are met.

• A. Lump-sum option
• B. Life income
• C. Fixed-period option
• D. Interest-only option

Correct answer: C. Fixed-period option

Explanation: The fixed-period settlement option pays proceeds over a specified period. Payments stop when the selected period is complete.

• A. The reinsurer
• B. The producer
• C. The underwriter
• D. The beneficiary

Correct answer: D. The beneficiary

Explanation: The beneficiary is the person or entity designated to receive policy proceeds when the insured dies.

• A. An irrevocable beneficiary usually must consent to certain beneficiary changes
• B. An irrevocable beneficiary may be changed by the policyowner at any time without notice
• C. A revocable beneficiary usually must consent before the policy can be assigned or loaned against
• D. An irrevocable beneficiary becomes the policyowner once the designation is made

Correct answer: A. An irrevocable beneficiary usually must consent to certain beneficiary changes

Explanation: A revocable beneficiary can usually be changed by the policyowner. An irrevocable beneficiary generally has rights that require consent for certain changes.

• A. To share the benefit equally with the primary beneficiary at the insured's death
• B. To receive the benefit if the primary beneficiary cannot receive it
• C. To receive the cash value while the primary beneficiary receives the death benefit
• D. To become the policyowner if the original owner dies before the insured

Correct answer: B. To receive the benefit if the primary beneficiary cannot receive it

Explanation: A contingent beneficiary is next in line to receive proceeds if the primary beneficiary dies before the insured or cannot receive the benefit.

• A. The policy automatically lapses
• B. The surviving beneficiaries always split the deceased child's share equally
• C. The deceased child's share may pass to that child's descendants
• D. The insurer keeps that share

Correct answer: C. The deceased child's share may pass to that child's descendants

Explanation: Per stirpes wording generally allows a deceased beneficiary's share to pass down to that beneficiary's descendants.

• A. The producer
• B. The primary beneficiary only
• C. The exam vendor
• D. The policyowner

Correct answer: D. The policyowner

Explanation: The policyowner generally controls ownership rights, including changing a revocable beneficiary, subject to policy rules.