Wisconsin Life Insurance Practice Exam Free - 2026

• A. Permitted if disclosed in writing
• B. Permitted for premiums under $100
• C. A prohibited unfair inducement (rebating)
• D. Permitted because it is not a cash payment to the client

Correct answer: C. A prohibited unfair inducement (rebating)

Explanation: No insurer, insurer employee, or intermediary may seek to induce a person to enter into (or terminate) an insurance contract by offering benefits not specified in the policy. Paying the client's premium is a benefit outside the policy and is prohibited regardless of disclosure, amount, or form. The only exception recognized in the statute is premium reductions from expense savings in mass marketing. See Wis. Stat. § 628.34(2)(a).

• A. Permitted, because the fund does protect Wisconsin policyholders
• B. Prohibited; no insurer or intermediary may use the fund's protection as a reason to buy
• C. Permitted only in written advertising approved by the commissioner
• D. Permitted if the intermediary also discloses the fund's coverage limits

Correct answer: B. Prohibited; no insurer or intermediary may use the fund's protection as a reason to buy

Explanation: Wisconsin specifically forbids any insurer or intermediary from making use, in any manner, of the protection given policyholders by ch. 646 (the Insurance Security Fund) as a reason for buying insurance. The fact that the fund exists does not make the sales use lawful, there is no approved-advertising exception, and disclosing limits does not cure the violation. See Wis. Stat. § 628.34(10).

• A. $100,000
• B. $250,000
• C. $450,000
• D. $300,000

Correct answer: D. $300,000

Explanation: The fund's obligation on a single risk, loss, or life, regardless of the number of policies, may not exceed $300,000 (with a separate $500,000 aggregate that applies only to property, liability, and comprehensive/major medical disability benefits). $100,000 and $250,000 are not Wisconsin figures, and the full $450,000 exceeds the statutory cap. See Wis. Stat. § 646.31(4)(ap).

• A. Issue her a temporary license for not more than 12 months
• B. Issue her a temporary license for not more than 180 days
• C. Nothing; only licensed persons may ever act as intermediaries
• D. Issue her a permanent license without examination

Correct answer: A. Issue her a temporary license for not more than 12 months

Explanation: The commissioner may issue a temporary intermediary license for a period of not more than 12 months to the personal representative of a deceased or mentally disabled intermediary (or a designee of a disabled or deployed intermediary) to allow a more favorable sale of the business, recovery, or training of new personnel; it may not be extended beyond the initial period. 180 days is the validity period of an exam score, not a temporary license, and a permanent license without meeting requirements is not authorized. See Wis. Stat. § 628.09(1) and (4).

• A. A beneficiary who shares the proceeds equally with the primary beneficiary
• B. A backup beneficiary who receives proceeds if the primary is deceased
• C. A beneficiary who receives proceeds only if the insured dies by accident
• D. A beneficiary whose designation cannot be changed without written consent

Correct answer: B. A backup beneficiary who receives proceeds if the primary is deceased

Explanation: A contingent (or secondary) beneficiary receives the death benefit proceeds if the primary beneficiary predeceases the insured or is otherwise unable to receive the benefit.

• A. A beneficiary that can be changed only with the beneficiary's consent
• B. A beneficiary that the insurer can remove if premiums go unpaid
• C. A beneficiary that the policyowner can change at any time
• D. A beneficiary that may revoke the policy's settlement option

Correct answer: C. A beneficiary that the policyowner can change at any time

Explanation: A revocable beneficiary can be changed by the policyowner at any time without the beneficiary's consent. This is the most common type of beneficiary designation.

• A. A beneficiary that the policyowner may change at any time without notice
• B. A beneficiary that must be appointed by a probate court
• C. A beneficiary that gains rights only after the insured's death
• D. A beneficiary that cannot be changed without their written consent

Correct answer: D. A beneficiary that cannot be changed without their written consent

Explanation: An irrevocable beneficiary has a vested interest in the policy and cannot be changed without their written consent. This limits the policyowner's flexibility in making policy changes.

• A. Paying the entire death benefit in one payment
• B. Paying the death benefit in installments
• C. Converting the benefit to an annuity
• D. Leaving the benefit on deposit with interest

Correct answer: A. Paying the entire death benefit in one payment

Explanation: The lump sum settlement option pays the entire death benefit to the beneficiary in one single payment. This is the most common and straightforward settlement option.

• A. The insurer pays the proceeds in installments that include principal and interest
• B. The insurer holds the proceeds and pays only the interest to the beneficiary
• C. The insurer pays interest on the death benefit only while the claim is under review
• D. The beneficiary receives the proceeds in one payment plus interest accrued since death

Correct answer: B. The insurer holds the proceeds and pays only the interest to the beneficiary

Explanation: Under the interest only option, the insurance company retains the death benefit principal and pays the beneficiary only the interest earned. The beneficiary can later choose how to receive the principal.

• A. The insurer pays a fixed dollar amount until the proceeds run out
• B. The insurer pays the benefit for as long as the beneficiary lives
• C. The insurer pays the benefit over a fixed number of years
• D. The insurer holds the benefit for a fixed period and then pays a lump sum

Correct answer: C. The insurer pays the benefit over a fixed number of years

Explanation: The fixed period (installments for a fixed period) settlement option pays the death benefit in equal installments over a specified number of years until the principal and interest are exhausted.

• A. Income from the policy's cash value
• B. A single payment for the beneficiary's lifetime needs
• C. Payments until the insured's death
• D. Periodic payments for the beneficiary's entire lifetime

Correct answer: D. Periodic payments for the beneficiary's entire lifetime

Explanation: The life income settlement option provides periodic payments to the beneficiary for their entire lifetime. The payment amount depends on the death benefit amount and the beneficiary's age.

• A. The process of evaluating and classifying risk to determine insurability and premium
• B. The process of soliciting applications and delivering policies to applicants
• C. The process of investigating and settling claims after a loss has been reported
• D. The process of drafting policy forms and filing them with the state for approval

Correct answer: A. The process of evaluating and classifying risk to determine insurability and premium

Explanation: Underwriting is the process by which insurance companies evaluate applications, assess risk factors, determine if coverage will be offered, and set appropriate premium rates.