lets go
A producer was found guilty of a 3rd violation of the Insurance Code. What would be the monetary penalty he will have to pay?
$10,000
An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?
$10,000, no tax consequence
An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as a settlement?
$200,000
Provided that it is a first offense, what is the maximum penalty for failing to respond to a subpoena?
$5,000
By how many days does the discontinuance of a group insurance policy reduce the time limit for providing notice of claim or proof of loss?
0 days
The Commissioner believes that a licensee has violated an insurance regulation and decides to conduct a hearing. How long of a notice must the Commissioner provide the licensee?
10 days
Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is CORRECT?
100% participation of members is required in noncontributory plans.
In New Jersey, what is the minimum age at which a person can purchase a life insurance policy on his or her own life?
15
The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?
2 years
During policy replacement, the replacing insurer must notify existing insurers within what time period?
5 business days
An insurer must keep all sales materials for at least how long?
5 years
Which of the following individuals would most likely be issued a nonresident producer's license?
A Massachusetts resident who sells insurance full-time in Boston but wants to expand his customer base by becoming licensed in New Jersey.
An insurance producer is acting as a broker when he or she negotiates for an insurance contract on behalf of
A client.
the term "illustration" in a life insurance policy refers to
A presentation of nonguaranteed elements of a policy.
in choosing an insurance business name, which of the following would be allowed?
A proper name which does not belong to any officers, stockholders, or executives
Who can make a fully deductible contribution to a traditional IRA?
An individual not covered by an employer-sponsored plan who has earned income
What is a foreign insurer?
An insurer with a home office in another state
The death protection component of Universal Life Insurance is always
Annually Renewable Term
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?
Any form of life insurance
When an insurer begins underwriting procedures for an applicant, what will be the main source for its underwriting information?
Application
When an insurance producer negotiates for an insurance contract on behalf of a client, the producer is acting as a(n)
Broker
How is the Insurance Guaranty Association funded?
By its members - authorized insurers
Which of the following is NOT typically excluded from life policies?
Death due to plane crash for a fare-paying passenger
If a change needs to be made to the application for insurance, the agent may do all of the following EXCEPT
Erase the incorrect answer and record the correct answer.
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?
False advertising
An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?
Foreign
Life insurance death proceeds are
Generally not taxed as income.
A Universal Life insurance policy has two types of interest rates that are called
Guaranteed and Current.
if a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a
Guaranteed insurability rider.
Fixed annuities provide all of the following EXCEPT
Hedge against inflation.
Under which of the following circumstances would a nonresident producer NOT required to complete CE hours in New Jersey?
If the producer's home state has the same CE requirements and the producer satisfies them
Annually renewable term policies provide a level death benefit for a premium that
Increases annually.
Which of the following policy components contains the company's promise to pay?
Insuring clause
All of the following are Nonforfeiture options EXCEPT
Interest only
When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income?
Interest only
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?
It is reduced to the amount of what the cash value would buy as a single premium.
What significance did Paul vs. Virginia have on the insurance industry?
It was decided that insurance was not interstate commerce and could not be regulated by the federal government.
Which of the following statements is TRUE concerning the Accidental Death Rider?
It will pay double or triple the face amount.
The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called
Joint and survivor.
Which part of an insurance application would contain information regarding the cause of death of the applicant's deceased relatives?
Medical Information
Which of the following information about the applicant is NOT included in the General Information section of the application for insurance?
Medical background
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report
Must be informed of the source of the report.
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?
Mutual
Which of the following most likely would NOT be required to complete continuing education hours in this state?
Nonresident producers
A life insurance policy insures against several different perils. If the policyowner wants to cancel the coverage for one of those perils, can that be done?
Only if the policy specifies that a separate premium for that peril coverage is separately cancelable.
In which of the following instances would the premium be tax deductible?
Premiums paid by an employer on a $30,000 group term life insurance plan for employees
When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to
Purchase a single premium policy for a reduced face amount.
The Federal Fair Credit Reporting Act
Regulates consumer reports.
A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the
Revocable beneficiary.
All of the following are considered unfair trade practices in the business of insurance EXCEPT
Sharing commissions.
Which type of life insurance policy generates immediate cash value?
Single Premium
Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?
Size of each installment
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?
Term rider
All of the following entities regulate variable life policies EXCEPT
The Guaranty Association.
Which of the following is TRUE regarding variable annuities?
The annuitant assumes the risks on investment.
If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?
The death benefit will be smaller.
Which of the following is INCORRECT concerning a noncontributory group plan?
The employees receive individual policies.
Who does an insurance agent represent?
The insurer
Which of the following is true regarding license cancellation and reinstatement?
The license needs to be returned to the Insurance Department. It can be reinstated by filling out an application and paying a fee
What is the advantage of reinstating a policy instead of applying for a new one?
The original age is used for premium determination.
All of the following are true of key person insurance EXCEPT
The plan is funded by permanent insurance only.
All of the following are general requirements of a qualified plan EXCEPT
The plan must provide an offset for social security benefits.
A group of 15 skydivers met at a seminar and began talking about life insurance during a break. Because it was expensive to get individual life insurance, they decided to band together to form a small group so that they could qualify for group life insurance. After they applied for group life insurance, they were rejected. Why?
The purpose of the group was to purchase life insurance. In order to qualify for small group life insurance, a group must be formed for a purpose other than attaining life insurance.
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
A producer's appointment lasts for how long?
Until it is terminated
When would a 20-pay whole life policy endow?
When the insured reaches age 100
If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than
With the policy.
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?
pplications can only be used in court cases if they are attached to or endorsed upon the issued policy.
Licensees must file with the Department a branch office registration form within how many days before business is first conducted there?
30
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?
30 days
#83. Which of the following would NOT be considered rebating?
Giving a client a $50 pen with the insurer's logo during the insurance application process
If a settlement option is not chosen by the policyowner or the beneficiary, which option will be used?
Lump sum
Which of the following best describes the unfair trade practice of defamation?
Making derogatory oral statements about another insurer's financial condition
Which of the following is NOT true regarding policy loans?
Money borrowed from the cash value is taxable.
Which of the following was created to protect policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment?
New Jersey Life and Health Guaranty Association
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
Other-insured rider.
Which of the following is another term for the accumulation period of an annuity?
Pay-in period
All of the following are characteristics of group life insurance EXCEPT
Premiums are determined by the age, sex and occupation of each individual certificate holder.
Proceeds from life insurance policies are protected from the beneficiary's debts under all of the following circumstances EXCEPT
Some of the premiums were paid in an attempt to defraud creditors.
Which is NOT true about beneficiary designations?
The beneficiary must have insurable interest in the insured.
Which of the following is TRUE regarding the insurance amount in a credit life policy?
The creditor can only insure the debtor for the amount owed.
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
The customer's associates, friends, and neighbors provide the report's data.
An applicant for a producer's license has successfully completed all of the steps necessary to obtain the license. The soon-to-be producer does not want to wait until he receives his license in order to begin working. Which of the following is possible?
The person can obtain a temporary work authority.
Which is true about a spouse term rider?
The rider is usually level term insurance.
What is the purpose of establishing the target premium for a universal life policy?
To keep the policy in force
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?
Warranty
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
30 days.
Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
Universal life
The company owes premium money to the insured. The insurer gave the funds to the producer to return to the insured. Within how many days must the producer pay the insured?
5
Which of the following types of policies allows for a flexible premium and a variable investment component?
Variable universal life insurance
Presenting any written or oral statement in support of or in opposition to a claim payment, while knowing that the statement contains false or misleading information material to the claim, would be best considered
A violation of the New Jersey Insurance Fraud Prevention Act.
Which of the following is an example of a producer being involved in an unfair trade practice of rebating?
Telling a client that his first premium will be waived if he purchases the insurance policy today
After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?
Monthly premium waiver and monthly income
Which of the following policies would be classified as a traditional level premium contract?
Straight Life
All of the following are unfair claims settlement practices EXCEPT
Suggesting negotiations in settling the claim.
The interest earned on policy dividends is
Taxable.
Which of the following must an insurer obtain in order to transact insurance within a given state?
Certificate of authority
It is the job of what authority to appoint and remove officers and other personnel employed within the Department?
Commissioner
An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?
Common Disaster
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated.
