Free Types of Life Insurance Policies Study Guide
New Mexico Life, Accident & Health exam — Types of Life Insurance Policies.
Term, whole life, universal, variable and the other policy types are explained in the national Types of Life Insurance Policies guide. New Mexico's state questions on this topic focus on its group life law (NMSA 1978, 59A-21) and the licensing rule for variable products.
Group life eligibility
- Noncontributory plans: when employees pay nothing toward the premium, the policy must insure all eligible employees except those who decline in writing, subject to evidence of insurability where allowed (NMSA 1978, 59A-21-4(B)).
- Association groups: group life may be issued to a professional, business or agricultural association maintained for purposes other than insurance, covering at least 25 members (NMSA 1978, 59A-21-8).
Required group life provisions
| Provision | New Mexico rule |
|---|---|
| Grace period | 31 days for premiums after the first, with death coverage continuing (NMSA 1978, 59A-21-12). |
| Certificates | The insurer issues certificates to the policyholder for each insured, stating the protection, to whom benefits are payable and the conversion rights (NMSA 1978, 59A-21-18). |
| Conversion when coverage ends | An individual policy, other than term, without evidence of insurability, if applied for and paid within 31 days (NMSA 1978, 59A-21-19). |
| Conversion when the group policy ends | People insured at least five years may convert. The amount may be capped at $10,000 or the coverage lost, if less (NMSA 1978, 59A-21-20). |
| Death during the conversion period | The amount the person could have converted is paid as a claim under the group policy, even with no application or premium (NMSA 1978, 59A-21-21). |
Variable life and variable annuities
A producer selling variable life or variable annuities needs the variable line of authority, which requires a life producer license and a securities license (NMSA 1978, 59A-12-17(B); 13.4.2.9(F)(3) NMAC).
Common exam traps
- Group grace period: 31 days.
- Conversion: 31 days, no evidence of insurability, and the new policy can't be term insurance.
- Group policy ending: five years of prior coverage, with a cap of $10,000 or the lost amount if less.
- Association groups need at least 25 members.
- Variable products require a life license plus securities licensing.
Practice Types of Life Insurance Policies questions All Life, Accident & Health topics
Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.
