Free MSLH Practice Questions

Question 1

An indexed life segment records an 11% index gain. The policy applies an 80% participation rate, followed by a 7% cap, and has a 0% floor. While reviewing the annual statement, what credited rate should the producer explain for this segment before policy charges?

Accepted Answer

7%, because the cap limits the calculated 8.8% rate

Answer

8.8%, because the participation rate is applied to the index gain

Answer

11%, because the policy credits the full change in the index

Answer

4%, because the cap is subtracted from the index gain

Question 2

A 46-year-old owns a level term policy that is still within its conversion period. After a serious diagnosis, she wants permanent coverage but would not qualify through new medical underwriting. Which policy feature permits the change?

Accepted Answer

Convertibility, which permits exchange to an eligible permanent policy without new evidence of insurability

Answer

Renewability, which keeps the term policy in force without new evidence but does not change it to permanent insurance

Answer

Reinstatement, which restores lapsed coverage after the owner satisfies overdue-premium and insurability conditions

Answer

A guaranteed insurability rider, which permits additional coverage only on scheduled option dates or qualifying life events

Question 3

A 70-year-old annuitant wants the largest available monthly income for as long as she lives. She has no need to preserve payments for a beneficiary and accepts that payments will stop at her death. Which payout option best matches that objective?

Accepted Answer

Life only

Answer

Life with a 10-year period certain

Answer

Joint and survivor

Answer

Fixed period

Question 4

A policyowner who is also the insured wants to borrow against a whole life policy's cash value. The policy names an irrevocable primary beneficiary, and the owner reserved no right to impair that beneficiary's interest. Besides the owner's request, whose consent is ordinarily required?

Accepted Answer

The irrevocable primary beneficiary

Answer

The contingent beneficiary

Answer

The writing producer

Answer

The insurer's home-office underwriter who approved the original policy

Question 5

A whole life policyowner plans to stop paying premiums. She wants the policy's original face amount to remain in force for as long as the existing cash value can purchase coverage, with no further premiums due. Which nonforfeiture election fits her instruction?

Accepted Answer

Extended-term insurance

Answer

Cash surrender

Answer

Reduced paid-up insurance

Answer

Automatic premium loan

Question 6

An applicant for a large single-premium annuity presents several cashier's checks purchased by unrelated people, refuses to identify the source of funds, and asks whether a suspicious activity report will be filed. What should the producer do next?

Accepted Answer

Use the insurer's AML procedures, suspend processing as required, and do not reveal whether a report will be filed

Answer

Accept the checks because cashier's checks are guaranteed funds

Answer

Reject the applicant permanently and contact local police directly

Answer

Divide the premium among several smaller applications so no single transaction triggers the insurer's enhanced review

Question 7

A life insurer issues a rated offer after relying partly on information in a consumer report. Which statement accurately describes the applicant's rights under the Fair Credit Reporting Act?

Accepted Answer

The insurer must give an adverse-action notice identifying the reporting agency and explaining the right to dispute the report and obtain a free copy within 60 days

Answer

Because coverage was offered rather than declined, no adverse-action notice is required even though the report caused a higher premium

Answer

The reporting agency must explain the actuarial basis for the rating and reconsider the applicant's risk class within 30 days

Answer

The insurer may withhold the reporting agency's identity if it gives the applicant a HIPAA privacy notice

Question 8

A 45-year-old owns a Modified Endowment Contract with a $70,000 cost basis and a $100,000 cash value. With no applicable tax exception, the owner takes a $20,000 policy loan. How is the loan treated for federal income-tax purposes?

Accepted Answer

It is treated as a $20,000 gain-first distribution and is generally subject to the 10% additional tax

Answer

It is tax-free because a policy loan is secured by cash value

Answer

It is a tax-free return of basis under first-in, first-out treatment

Answer

The loan remains tax-deferred unless the owner later surrenders the policy, allows it to lapse, or withdraws more than the cost basis

Question 9

An HMO member is traveling far outside the plan's service area when sudden symptoms reasonably appear to require emergency evaluation. The nearest emergency department is not in the HMO network. Which statement best describes the plan's usual treatment of this care?

Accepted Answer

Emergency evaluation and stabilization may be covered outside the network under the plan, while routine follow-up remains subject to network rules

Answer

The member must delay evaluation until the primary care physician or the HMO's utilization-review department authorizes transfer to an in-network emergency facility

Answer

The HMO excludes all out-of-network services, including emergency services, without exception

Answer

Using the emergency department automatically converts the member's coverage to a PPO benefit

Question 10

In 2026, a 52-year-old has self-only HDHP coverage with a $2,000 deductible and an $8,200 in-network out-of-pocket maximum. She is not enrolled in Medicare and cannot be claimed as another taxpayer's dependent. Her spouse's general-purpose health FSA can reimburse her medical expenses. Which fact makes her ineligible to contribute to an HSA?

Accepted Answer

The general-purpose health FSA can reimburse her expenses before the HDHP deductible

Answer

The HDHP deductible is below the 2026 self-only minimum

Answer

The $8,200 out-of-pocket maximum exceeds the 2026 self-only HDHP ceiling and therefore disqualifies the plan

Answer

She is younger than the age for an HSA catch-up contribution

Free MSLH Practice Questions

Domain 1: Types of Life Policies

Question 1

Question 2

Question 3

Domain 2: Life Policy Riders, Provisions, Options, and Exclusions

Question 4

Question 5

Domain 3: Completing the Application, Underwriting, and Delivering Life Policies

Question 6

Question 7

Domain 4: Retirement and Other Life Insurance Concepts

Question 8

Domain 5: Types of Accident and Health Policies

Question 9

Question 10

The rest of the MSLH blueprint

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