25 Free New Mexico Life & Health Exam Practice Questions (2026)

New Mexico offers three separately bookable exams through PSI, and this course follows the combined one, Series 18-27, the Life, Accident and Health or Sickness Insurance Producer exam: 150 scored questions in 150 minutes (2.5 hours) for $75. You need 70 percent to pass (NMSA 59A-11-6(D)), a straight share of correct answers and not a scaled score, and the whole exam produces one score, so you cannot pass the life half and fail the health half separately. At registration you choose whether to sit the exam at a PSI test center (Albuquerque, Farmington, Las Cruces, Roswell and Santa Fe, or any PSI test center nationwide) or online proctored. A candidate who wants only one line can book a single-line exam instead, Life (Series 18-25) or Accident and Health or Sickness (Series 18-26), each with 100 questions in 2 hours for $75. All three exams are available in Spanish on request.

PSI's content outline for the combined exam, effective July 1, 2026, has thirteen sections. Their scored questions are Insurance Regulation (New Mexico law) 15; Federal Laws and Regulations 3; General Insurance Concepts 8; Life, Accident and Health Insurance Basics 24; Types of Life Insurance Policies 13; Life Insurance Policy Provisions, Options, and Riders 19; Annuities 12; Accident and Health Insurance Policy Provisions 10; Disability Income and Related Insurance 6; Medical Plans 15; Group Health Insurance 9; Specialized Health Insurance for Qualified Individuals 8; and Federal Tax Considerations for Life and Health Insurance 8. New Mexico law is not split by line: the Insurance Regulation section, 15 of the 150 scored questions, is one undivided block that applies whichever lines you test.

The 25 questions are drawn from LanePrep's New Mexico Life & Health quiz bank and spread across Chapters 1-8 in line with the chapter weights: 3 from Chapter 1, 2 from Chapter 2, 4 from Chapter 3, 2 from Chapter 4, 3 from Chapter 5, 4 from Chapter 6, 3 from Chapter 7, and 4 from Chapter 8. The eight chapters are LanePrep's own grouping, not PSI's sections: Chapter 1 teaches New Mexico regulation, licensing and market conduct, Chapter 2 federal law and general insurance concepts, Chapter 3 life, accident and health basics, Chapter 4 the types of life policies, Chapter 5 life policy provisions, options and riders, Chapter 6 annuities and accident and health policy provisions, Chapter 7 disability income and medical plans, and Chapter 8 group health, specialized health insurance and taxation. Weighted by the 150 scored items, the eight chapters carry 15, 11, 24, 13, 19, 22, 21 and 25 in that order. Chapter 8 is the heaviest and supplies four of these questions, as do Chapters 3 and 6. Every question is labeled with its chapter, so each miss points you to the chapter to revisit.

Some exam-day rules should shape your practice. PSI may add 5 to 10 unscored experimental questions on top of the 150 scored ones, so answer every question as though it counts and do not burn minutes on one you cannot crack. Every attempt, retakes included, costs its own $75, and after four failed attempts at the same exam you must wait six months (NMSA 59A-11-6(E)). To keep your fee, cancel or reschedule at least 2 days before the exam.

Passing the exam is not the last step, and the order matters. The Office of Superintendent of Insurance (OSI) does not require a pre-licensing course, and PSI's candidate bulletin says you are free to prepare with materials of your own choosing. After you pass, a resident applicant completes a national criminal history background check through IdentoGo, which costs $67 and is mandatory by statute (NMSA 59A-12-12(B)), and only then submits the license application through NIPR. The license fee is $30 and the biennial continuation fee is $60 (NMSA 59A-6-1). A passing score must be used to apply for licensure within one year of the pass date. For perspective on the exam itself, the NAIC reports first-time pass rates for the combined exam of 33.6 percent in 2024 and 37.0 percent in 2025, counting both testing modes together. That is under 40 percent in both years, so give the exam a real study plan.

Answer each one before you open the explanation. The explanation is folded underneath every question. A guess you have to defend sticks better than an answer you only nod along with.

Chapter 1 opens the set with New Mexico licensing: the step that follows a passing exam score, the criminal penalty for willfully withholding a prior felony conviction on the application, and what an applicant who is not yet 18 must do. Chapter 2 moves to federal law and general insurance concepts, first with what an insurer owes an applicant when it orders a consumer report and then with the element of an insurable risk that is hardest to establish for a rare, newly identified disease.

Chapter 3 covers the basics of life, accident and health insurance: why a policy on an estranged cousin fails the insurable interest test, and how a producer sizes coverage. Two questions describe the approach that values a breadwinner by the present value of future earnings, and one asks for the name of the fund that pays funeral costs, final medical bills and federal estate taxes right away. Chapter 4 begins with the term policy built for an obligation that shrinks over time, such as a mortgage.

Chapter 4 continues with what happens to the cost of insurance inside a Universal Life policy as the insured ages. Chapter 5 turns to policy provisions, options and riders: what a bank receives when a whole life policy is pledged as collateral for a business loan, which dividend option lowers the next premium, and what a Guaranteed Insurability Rider lets the insured do at set ages or life events. Chapter 6 then starts with annuities and asks who the annuitant is when a husband owns the contract but his wife's life expectancy sets the payout.

Chapter 6 continues with the annuity payout that keeps paying while either of two spouses is alive and with what an insurer does when an annuitant understated his age. It closes with the consent needed to change a beneficiary on a health policy. Chapter 7 covers disability income and medical plans: how long a freelance designer has to return an individual disability income policy for a full refund, and what the benefit is called when it pays in proportion to the income lost after a return to work.

Chapter 7 closes with how many days a member has to examine and return an individual HMO contract. Chapter 8 covers group health: how long New Mexico's state continuation law lets a departing employee keep the group coverage, how many of the eligible employees must enroll before an insurer issues a contributory plan, whether a surviving spouse who has finished continuation must prove insurability to convert, and what risk the insurer faces when an employer cuts its contribution and healthy employees decline coverage.

Getting the licensing steps out of order. After a passing score, the next step in question 1 is the national criminal history background check through IdentoGo. Only when that is done do you submit the application through NIPR, so applying first to lock in the score is out of sequence. A temporary license does not bridge the wait, because temporary licenses cover special situations such as the death or disability of a producer, and New Mexico requires no pre-licensing course, so a mandatory course is not the step either. Question 2 asks for the criminal penalty when a producer willfully withholds a prior felony conviction on the application. Beyond the licensing consequences, NMSA 59A-11-21 makes willfully misrepresenting or withholding application information a misdemeanor with a fine of up to $500. The answer is that misdemeanor and fine, not a third-degree felony and not a free pass for an application error. Question 3 turns on the minimum age: a resident applicant must be at least 18 years old (NMSA 59A-12-12; NMAC 13.4.2.9). An applicant whose birthday is next month still waits to submit, and the options that let her apply early, hold the application as pending or obtain a waiver are invented workarounds.

Misjudging what an insurer owes an applicant and what makes a risk insurable. When an insurer orders a consumer report on an applicant, question 4 turns on the federal rules for consumer reports: the insurer must notify the applicant that a report may be obtained and, if it takes adverse action because of the report, must explain her rights, including the right to dispute the report's accuracy. The duty does not arise only after a denial, it is not waived because underwriting routinely uses such reports, and the answer is not a blanket requirement of written consent. In question 5 the insurer has almost no data on a newly identified disease, so the element it cannot establish is that the chance of loss is calculable and predictable. A definite and measurable loss, an accidental loss and a loss large enough to cause hardship are also elements of an insurable risk, but a lack of data on incidence, severity and cost undermines predictability.

Mixing up insurable interest and the ways to size coverage. A policy on an estranged cousin, bought to pay the applicant's own debts, fails the requirement of a valid insurable interest: the buyer needs a legitimate financial stake in the continued life of the insured (question 6). Utmost good faith, the doctrine of adhesion and indemnity are different principles. Questions 7 and 8 both describe the Human Life Value Approach, which values the breadwinner as the present value of the future earnings, or of the family's share of them, over the remaining working years. The Needs Approach starts from what the survivors would need instead, and the Capital Liquidation and Estate Conservation approaches are different methods again. The cash for funeral costs, final medical bills and federal estate taxes in question 9 is the Cleanup Fund, also called the final expense fund. Capital retention, family dependency period income and a viatical settlement are different needs or a different transaction altogether.

Matching the policy, the assignment, the dividend option and the rider to the need. Decreasing Term Life is built for an obligation that shrinks over time, such as a mortgage: the death benefit falls with the loan balance while the premium typically stays level (question 10). Level Term, Increasing Term and Whole Life do not follow a loan down. In a Universal Life policy the mortality charge is the cost of the pure insurance, so it rises every year with the insured's attained age (question 11); it does not stay level, and a bigger cash value does not lower it. A policyowner who pledges a whole life policy to a bank has made a collateral assignment, and the bank's interest stops at the amount of the outstanding debt (question 12). It is not an absolute assignment of all rights, the insurer does not have to approve the bank's creditworthiness, and personal life policies can be assigned. The Reduction of Premium dividend option applies the dividend to the next premium due (question 13), unlike Paid-Up Additions, Accumulation at Interest or a cash payment. The Guaranteed Insurability Rider lets the insured buy additional coverage at specified ages or life events, such as marriage or the birth of a child, without proof of insurability (question 14). It is not a right to raise coverage at any time, it does not require a new medical exam, and it does not adjust coverage automatically with prices.

Confusing the roles, payouts and consents of annuities and beneficiaries. The annuitant is the person whose life expectancy sets the payout, even when someone else owns the contract and keeps the right to withdraw or surrender (question 15). The owner holds the contractual rights, and the beneficiary receives funds if the annuitant dies prematurely. A Joint and Survivor payout continues as long as at least one of two annuitants is alive (question 16), while a Joint Life payout stops at the first death; Life with Period Certain and Life with Installment Refund are not the options that keep paying a surviving spouse for life. When an annuitant understates his age, the insurer adjusts the payments to what the premium would have purchased at the correct age (question 17); it does not cancel the contract, sue for fraud or do nothing because the incontestable period has passed. Under the Change of Beneficiary provision of a health policy, the insured may change the beneficiary without the beneficiary's consent unless the designation was irrevocable (question 18), so the options of always, never and only for a minor beneficiary are all wrong. Selling annuities in New Mexico also carries a layer beyond product knowledge: the best-interest standard of NMAC 13.9.20, effective October 1, 2022, and a one-time four-credit annuity training course approved by OSI before a producer sells annuities.

Carrying a free-look period over from the wrong product. New Mexico law sets no free look for an ordinary individual life policy, although a policy may contain one, so the right-to-return periods that do exist are tied to specific products. Limited-benefit health plans, including disability income plans, carry a 30-day right to return under NMAC 13.10.34.18(F), so the designer in question 19 is still inside the window and is entitled to a full refund of all premiums. Do not confuse the disability rule with the shorter period for an individual HMO contract, which is ten days to examine and return it (NMSA 59A-46-8(C)), the answer to question 21. The other verified periods are 30 days for long-term care (NMSA 59A-23A-6(E)), 30 days for a Medicare supplement policy (NMSA 59A-24A-10), 30 days for a replacement life policy or annuity (NMAC 13.9.6.10) and at least 15 days for an annuity sold without the buyer's guide and disclosure document at or before the application (NMAC 13.9.12.8). Do not turn any of them into a general rule for life insurance.

Choosing the wrong disability label. Residual disability pays a benefit in proportion to the income lost when the insured returns to work but cannot earn what she did before (question 20). A physical therapist who returns after a back injury, sees fewer patients and loses a share of her earnings is paid the same share of her total benefit under that definition. Presumptive, partial and own-occupation disability define different things, and the explanation under question 20 sets partial disability beside residual so you can see the line between them.

Applying the wrong continuation rule. Question 22 asks about New Mexico's state continuation law (NMSA 59A-18-16), which is separate from federal continuation coverage. An employee or member who leaves the group may continue the group hospital, surgical and medical coverage for six months and then convert to an individual policy. The other options all give longer periods than the statute does, and the long maximums of federal continuation coverage do not carry over to this state law. A person who completes continuation, such as the surviving spouse in question 24, may convert without evidence of insurability, provided she applies and pays on time. She needs no medical exam, no individual underwriting and no approval from OSI.

Misjudging participation and adverse selection in a contributory group plan. A contributory group plan is one where the employees share the cost, and insurers require a minimum share of the eligible employees to enroll before they issue it; the explanation under question 23 gives the percentage and applies it to the group in the question. When an employer cuts its contribution and healthy employees decline coverage (question 25), the insurer faces adverse selection: the healthier people opt out while the less healthy remain. Moral hazard concerns behavior after coverage begins, estoppel is a legal bar and not an underwriting risk, and a contributory plan does not need every eligible employee to enroll.

How did you score?

20 or more correct: That is a strong showing across all eight chapters. Move on to the two deeper sets: the Life insurance exam set and the Health insurance exam set, then read how to pass the New Mexico Life & Health exam on the first try for the full study plan.

12-19 correct: You have a solid base, but 25 questions stand in for a combined exam of 150 scored questions, so a good result here is not a pass yet. Write down the chapter of each miss and replay that chapter's audio lesson before you start the deeper sets above.

Under 12 correct: More questions will not help yet; the material will. Start with the free preview at /nm/l-and-h/preview and work through the audio chapters in order before testing yourself again.

For the full cost picture beyond the exam fee, including the $67 background check, the $30 license fee, the $60 biennial continuation fee and the 24 hours of continuing education every two years (3 of them in ethics), with renewal due on the last day of your birth month, see how much a New Mexico Life & Health license costs. The LanePrep New Mexico Life & Health course preview is a click away whenever you're ready to go deeper.

Exam structure, fees, retake and cancellation rules and content outline item counts from PSI's New Mexico Office of Superintendent of Insurance Candidate Information Bulletin (footer-dated 6/4/2026) and PSI's Examination Content Outlines effective 7/1/2026 (Series 18-25, 18-26 and 18-27); passing score and retake rule from NMSA 59A-11-6; license and continuation fees from NMSA 59A-6-1; background check from NMSA 59A-12-12 and the Office of Superintendent of Insurance's Individual Licensing Instruction (November 2025); continuing education from NMAC 13.4.7.9; right-to-return periods from NMSA 59A-23A-6, NMSA 59A-24A-10, NMSA 59A-46-8(C), NMAC 13.9.6.10, NMAC 13.9.12.8 and NMAC 13.10.34.18(F); annuity best-interest rule from NMAC 13.9.20; pass rates from the NAIC compiled pass-rate workbooks for 2024 and 2025. Read October 2026.