(6) - New Jersey Laws, Rules, and Regulations Pertinent to Life Only

Payments to minors who are at least 15 years old may not exceed _____________ in any calendar year from a single insurer.

$2,000

Payments to minors who are at least 18 years of age may not exceed ________________ in any calendar year.

$5,000

By how many days does the discontinuance of a group policy reduce the time limit for providing notice of claim or proof of loss?

0 days - Discontinuance of the group policy or contract does not reduce the required time limit for providing notice of claim or proof of loss. -

Twisting

A misrepresentation, or incomplete or fraudulent comparison of insurance policies that persuades an insured/owner, to his or her detriment, to cancel, lapse, switch policies, or take out a policy with another insurer.

Dividend

A payment made by a policy (distribution of profits or return of unused funds)

Suitability

A requirement to determine if an insurance product or an investment is appropriate for a partial customer

Credit Insurance

A special type of coverage written to insure the life of the debtor and pay off the balance of a loan in the even of the death of the debtor.

Each producer who initiates the application must submit the following to the insurance company with or as part to the applicant and;

A statement signed by the applicant as to whether the replacement of existing life insurance or annuity is involved in the transaction A signed statement as to whether the producer knows replacement is or may be involved in the transaction

It is the producer's responsibility to evaluate the consumer's suitability information, which includes:

Age Income Financial situation, existing assets, needs, and objectives Financial Experience Use of Annuity Risk Tolerance Tax Status

Replacement

Any transaction in which new life insurance or a new annuity is purchased

An insurance company and insured are settling a lawsuit involving a life insurance policy. The insurer believes that the application would help to establish material facts in the case. Which of the following is true?

Applications can only be used in court cases if they are attached to or endorsed upon the issued policy. - Life Insurance application cannot as evidence in any action related to the policy unless a copy of the application was attached or endorsed upon the policy when issued. -

Nonforfeiture Values

Benefits in a life insurance policy that the policyowner cannot lose

Failure of an insurer or its agent and other representatives to provide information required by the state regulations will constitute omission and may result in penalties by the Unfair Trade Act, EXCEPT WITH:

Individual or Group Annuities Credit Life Insurance Group Life Insurance Variable Life Insurance under which the death benefit and cash values vary in accordance with unit values of investments held in a separate account Life Insurance policies issued in connection with pension and welfare plans (ERISA)

All advertisements are the responsibility of the ______________.

Insurer

Lapse

Policy termination due to nonpayment of premium

True or False: Credit Life Insurance cannot pay our more than the balance of the debt.

True

Replacing Insurers must also perform the following duties:

Verify that the required replacement forms are received and are in compliance with the state regulations Notify any existing insurer within 5 business days that a replacement may be in order for an existing policy, and mail a copy of the illustration or policy summary for the replacement policy Provide a PO notice of the right to return the policy within 30 days of the delivery and receive an unconditional full refund of all premiums (free-look provision) Maintain copies of the Notice Regarding Replacement and the comparative information form, policy summary, and all sales materials for at least 5 years or until the next regular examination by the Department of Banking and Insurance

The term of coverage (credit life) cannot extend more than __________ beyond the scheduled maturity date of the loan, unless the coverage is extended at no charge to the borrower.

15 days

What is the minimum age at which an individual can purchase a life insurance policy or an annuity contract?

15 years old The minor is considered competent to receive payment made by an insurer to the minor as an insured or beneficiary

How long must each insurer maintain a complete file of disclosure documents, and where, following the date of its last authorized use.

3 years at its home office

All advertisements must be maintained on file by the insurer for a period of _____________ from their last use.

5 years

In the event of termination of the insurance prior to the scheduled maturity date of the indebtedness, any refund of premium due or any amount collected from the debtor for insurance must be refunded to the debtor or credited against the debt in no more than _______________ from the termination.

60 days

In this state, the term of coverage for credit life insurance must be at least ______________ when the credit life insurance is being placed on loans with a term of 8 to 15 years.

7 years For loans with a term excess of 15 years, credit life insurance must be for a term of not less than 8 years.

Debtor

A borrower of funds

Creditor

A lender of funds

Insurer's must provide all prospective purchasers with a ___________________ prior to accepting the applicant's initial premium.

Buyer's Guide

What is Credit Life usually written as?

Decreasing Term Insurance

ERISA

Employee Retirement Income Security Act: defines standards for private pension plan

Group Life insurance plans may be sponsored by:

Employers Debtor groups Labor Unions Credit Unions Associations Any other organizations formed for a reason other than purchasing insurance

________________ is the company whose policy is being replaced.

Existing Insurer

Extension of Benefits

If a group life plan contains a disability benefit extension of any type (such as a waiver of premium, or payment of income for a specified period during total disability) the discontinuance of the group coverage will not terminate the extension of benefit

A life insurance policy has lapsed, and the policyowner would like to reinstate it. In order to initiate the reinstatement process, he must submit an application to his insurer. Which of the following is true?

It is the policyowner's responsibility to request the reinstatement application; the insurer must then deliver it within 30 days.

Written Notice of Discontinuance

Must be sent to the policyholder or other party responsible for paying premiums.

Producers must always assess how well a recommended product will meet the clients ________ and ______________.

Needs Capabilities

The insurer must also provide _______________ where the insurer has identified the policy form as one that will not be marketed with an illustration. This may show policy guarantees only, and must be presented as a separate document.

Policy Summary

Duties of Replacing Poducer:

Present to the applicant a Notice Regarding Replacement that is signed by both the applicant and the producer. A copy must be left with the applicant. Obtain a list of all existing life insurance and/or annuity policies to be replaced including policy numbers and the names of all the companies being replaced Leave the applicant with the original or a copy of written or printed communications used for presentation to the applicant Submit to the replacing insurance company a copy of the replacement notice with the application

Disclosure Regulation

Purpose is to require the insurers to provide information to buyers that will help them to better understand life insurance products under consideration and make educated decisions

_____________ is the company that issues the new policy.

Replacing Insurer

Duties of Replacing Insurance Company:

Require from the producer a list of the applicant's life insurance or annuity contracts to be replaced and a copy of the replacement notice provided to the applicant Send each existing insurance company a written communication advising of the proposed replacement within a specified time of the date that the application is received in the replacing insurance company's home or regional office. A policy summary or ledger statement containing policy data on the proposed life insurance or annuity must be included.

Disclosure

Revealed information to help someone make an intelligent and educated decision

Maturity Date

The date when the final payment on a loan becomes due and payable

Life insurance proceeds are protected from creditors and will be received by the policy beneficiary, as long as the beneficiary is not:

The insured The person effecting the insurance The executor or administrator of the insured