Insurance Test
How must a replacing producer respond to an applicant wishing to replace existing life insurance? a)The producer must provide the applicant with a Notice Regarding Replacement. b)The producer must collect the existing policies and turn them over to the replacing insurer. c)The producer must request the permission of the existing insurer. d)The producer has no specific duties.
a
Which of the following statements about the reinstatement provision is true? a)It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated. b)It permits reinstatement within 10 years after a policy has lapsed. c)It provides for reinstatement of a policy regardless of the insured's health. d)It guarantees the reinstatement of a policy that has been surrendered for cash.
a
Which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members? a)Guaranteed insurability rider b)Change of insured rider c)Term rider d)Accidental death and dismemberment rider
c
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE? a)The insurer may deny coverage later, because of the information missing on the application. b)The policy will be interpreted as if the insurer waived its right to have an answer on the application. c)The policy will be interpreted as if the insured did not have an answer to the question. d)The policy will be void.
b
If a person violates a cease and desist order, the Commissioner can turn the matter over to the New Jersey Superior Court for further legal action and can assess a fine for each violation of up to a)$10,000. b)$1,000. c)$3,000. d)$5,000.
d
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die? a)Joint Life b)Decreasing Term c)Whole Life d)Ordinary Life
a
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? a)It is the policyowner's responsibility to request the reinstatement application; the insurer must then deliver it within 30 days. b)It is the policyowner's responsibility to request the reinstatement application; the insurer must then deliver it within 10 days. c)It is the insurer's responsibility to deliver this application to the policyowner within 30 days of policy lapse. d)It is the insurer's responsibility to deliver this application to the policyowner within 10 days of policy lapse.
a
If an insurer cancels an agency contract, it must notify the Commissioner in writing within how many days? a)10 b)15 c)20 d)30
b
What are the penalties for the first, second, and any subsequent violation of the New Jersey Fraud Prevention Act, respectively? a)$25,000; $50,000; $100,000 b)$5,000; $10,000; $15,000 c)$1,000; $5,000; $10,000 d)$10,000; $15,000; $20,000
b
Which of the following information will be stated in the consideration clause of a life insurance policy? a)The conditions for insurability b)The amount of premium payment c)The parties to the contract d)The time period allowed for the payment of premium
b
A producer's appointment lasts for how long? a)2 years b)3 years c)5 years d)Until it is terminated
d
For how long is an insurance company allowed to defer policy loan requests? a)30 days b)60 days c)6 months d)1 year
c
Variable Whole Life insurance is based on what type of premium? a)Flexible b)Graded c)Level fixed d)Increasing
c
An organization licensed as a producer business entity based in New York would like to transact insurance in New Jersey. Which of the following is true? a)The organization will need to obtain a nonresident business entity license, and its producers will need to obtain nonresident licenses b)The organization will not have to obtain a nonresident license, unless more than 50% of its business is conducted in New Jersey. However, its producers will need to obtain nonresident licenses. c)The organization will not have to obtain a nonresident license, since it is a business entity. However, all of its producers will need to have nonresident licenses. d)The organization will need to obtain a nonresident business entity license, which will secure nonresident status for the business itself and all of its producers.
a
The Medical Information Bureau (MIB) was created to protect a)Medical examiners that perform insurance physical examinations. b)Insurance companies from adverse selection by high risk persons. c)Insurance departments from lawsuits by policyowners. d)Insureds from unreasonable underwriting requirements by the insurance companies.
b
Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process? a)Illustrations b)Buyer's Guide c)Insurance Index d)Policy Summary
b
Which nonforfeiture option provides coverage for the longest period of time? a)Paid-up option b)Accumulated at interest c)Reduced paid-up d)Extended term
c
A producer was found guilty of a 3rd violation of the Insurance Code. What would be the monetary penalty he will have to pay? a)$15,000 b)$25,000 c)$5,000 d)$10,000
d
Which of the following is included in the term "insurance-related conduct"? a)Insurer's acting with the scope of the Insurance Code b)Producer's ethical behavior c)Producer licensing d)Transmitting funds between producers and the insurance company
d
An insured replaces his current policy with one offered by another insurer. If he finds that he is unsatisfied with the new policy, within what period of time can he return it and receive a full refund? a)This is not possible with replacement policies unless a mistake was made by either of the insurers. b)30 days c)60 days d)90 days
b
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term? a)The insured must provide evidence of insurability to renew the policy. b)The insured may only convert the policy to another term policy. c)The insured may renew the policy for another 10 years at the same premium rate. d)The insured may renew the policy for another 10 years, but at a higher premium rate.
d
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT a)The policyholder has the right to withdraw the accumulations at any time. b)The interest is not taxable since it remains inside the insurance policy. c)The annual dividend is retained by the company. d)The interest is credited at a rate specified by the policy.
b
Which of the following is true regarding license cancellation and reinstatement? a)The producer must allow it to lapse. After that point, it can be reinstated any time within the next 2 years, provided that the continuing education requirements have been met. b)The license needs to be returned to the Insurance Department. Once this occurs, it cannot be reinstated. c)The producer must complete a brief interview with the Commissioner's Office. The license may then be reinstated within 1 year. d)The license needs to be returned to the Insurance Department. It can be reinstated by filling out an application and paying a fee.
d
The insurer must maintain copies of Notice Regarding Replacement and the comparative information form, policy summary, and all sales materials until the next regular examination by the Department of Banking and Insurance or for at least a)5 years. b)8 years. c)10 years. d)3 years.
a
The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT a)Projected interest rates. b)Face amount of the policy. c)The insured's age at death. d)The beneficiary's life expectancy.
c
An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation? a)Variable life b)Universal life c)Whole life d)Decreasing term
d
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do? a)Pay a reduced death benefit b)Pay the full death benefit c)Pay nothing; there was a misrepresentation on the application d)Pay the full death benefit and refund excess premium
a
During policy replacement, the replacing insurer must notify existing insurers within what time period? a)10 calendar days b)30 days c)90 days d)5 business days
d
If an insured requires an application in order to reinstate a policy, and if the insured requests reinstatement in writing, an application must be delivered to the insured within a)7 days. b)10 days. c)15 days. d)30 days.
d
If the annuitant dies during the accumulation period, who will receive the annuity benefits? a)The annuity owner b)The insurance company c)The annuitant's estate d)The beneficiary
d
Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated? a)Those who have worked in the company for at least 3 years b)Those who have dependents c)Those who have no history of claims d)Those who have been insured under the plan for at least 5 years
d
