Guarantee Exam-Questions Wrong

If an individual willfully violates provisions of the Fair Credit Reporting act, what is the maximum civil penalty?

$2,500

Where are premiums from fixed annuities invested?

A general account

Policies written on a third-party ownership basis are usually written to cover:

Policyowner's minor children or business associate

All of the following are true of credit life EXCEPT

The insured names the beneficary- the lending intitution is the owner and names the beneficiary

In order for a business partner eligible for a Keogh plan, he/she must work full-time and own at least how much of the busiess?

10%

In a noncontributory group policy

100% of eligible employees must participate

According to the Fair Credit Reporting Act, all of the following are true EXCEPT

If an applicant is declined for an insurance policy, he or she has no right what was in the report- the Fair Credit Reporting Act protects consumers against the circulation of inaccurate or obsolete person or financial information, and ensures that consumer reporting agencies are fair in their treatment of consumers. The act allows for the use of consumer reports and investigative consumer reports to botain info regarding the consumer's character, reputation, credit, and habits. If a policy of insurance is declined due to either of the reports, the consumer must be advised, and he or she has the right to know what was in the report.

In credit life insurnace, who is responsible for paying the policy premiums?

Borrower only- the creditor is the owner and beneficiary, the borrow is responsible for paying the policy premiums

All of the following are true of annually renewable term insurance EXCEPT

Proof of insurability must be provided at each renewl- ART is level term insurance in which the DB remains level and the policy may be guaranteed to be renewable each year without proof of insurability, but the premium increase annually according to the insured's attained age.

According to the life insurance replacement regulations, which of the following would be an example of policy replacement?

A policy is reissued with reduction in cash value- replacement refers to any transaction in which new life insurance or an annuity is purchased, resulting in reduced paid-up insurance, continuation of extended term insurance, or otherwise reduced in value by the use of non-forfeiture benefits or other policy values.

A group health insurance policy owner allows the policy to lapse and fails to reinstate the policy after the grace period expires. To what extent will the insurer cover valid claims made before the end of the grace period?

The insurer is liable for all valid claims made- if a group life provides for automatic discontinuance of the policy for nonpament of premium (after grace period), the insurer is still liable for valid claims of covered losses incurred before the end of the grace period.

What does the state Life and Health Insurance Guaranty Association guard againts?

Insurer insolvency- all admitted insurers must be a member of the insurance Guaranty Association as condition of their license. The insurance Guaranty Association is in existence to protect p/o and bene against losses cause by the insolvency of an insurer.

In order to reinstate a life insurance policy the insured must do all of the following EXCEPT

Pay next year's premium in advance- in order to reinstate the owner must pay back premiums plus interest and repay any outstanding loans and interest.

Who is the annuity owner?

The person who purchase the annuity

An insured decides to replace his life insurance policy with one offered by a new insurer. After receiving the policy, he is unstatisfied with the provisions and decides to return it. Within how many days must he return the policy in order to receive a full premium refund?

30 DAYS-

An example of an alien insurer doing business in this state is one formed under the laws of

Mexico-an alien insurer us a company charted outside the United States. Insurance companies incorporated in territorial possessions, such as Puerto Rico, are considered foreign.

All of the following info needs to be included on an application for life insurance EXCEPT

Health insurance policies in force- the info about the applicant's health insurance policies is not materal to a life insurance contract. The agent's statement, medical info, and life insurance with other insured's are all needed to be on application.

Upon surrender of a life insurance policy, what portion of the cash value will be taxed?

Any cash value in excess of cost basis is taxable as ordinary income.

An insurer mails an insurance policy to a new policy owner. When the insurer relinquishes control of the policy, the policy is considered

Delivered

Which of the following would be TRUE for both fixed-period and fixed-amount settlement options?

Both guarantee that the principal and interest will be fully paid out- neither the fixed-period or fixed-amount settlement options guarantee income for the life of the beneficiary; however, they both guarantee that the entire principal and interest will be distributed

Which of the following is NOT true regarding a deferred annuity?

Income payments begin within 1 year from the date or purchase- deferred annuity benefit payments begin sometime after 1 year after the contract was purchased. The rest of the statements are true regarding deferred annuities,.

An insurance producer dies, and his wife takes over his business temporarily through an agreement with another producer. What is the maximum time that she can do this?

180 days

Which of the following statements is INCORRECT?

A minor age 17 is not allowed to purchase insurance in the state of NJ- the minimum age at which one can purchase an annuity/LI is 15 years. Unless the insurer received written appointment of a legal guardian of the minor's property, the minor is considered competent to receive payment made by the insurer to the minor as an insured or beneficiary.

Which of the following has the authority to make and enforce rules and regulations to implement and carry out the purposes of the insurance laws of NJ?

Commissioner

If the policy summary for a life insurance policy is not given with the application is taken, when must the policy summary be given to the policy owner?

When the policy is delivered- the policy summary must be provided when the policy is delivered to the owner.

J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J choose?

Fixed Amount- pays a fixed, specified amount in installments until the proceeds (principal and interest) are exhausted. The recipient selects a specificed fixed $ amount to be paid until it is gone. If the beneficiary dies before the proceeds are exhausted, installments will continue to be paid to a contingent beneficary until all proceeds are paid out.

When an insured terminates membership in the insured group, the insured can convert to

Whole life without proof of insurability

What type of an interest rate is guaranteed in universal life policies?

Contract interest rate- a current interest rate is not guaranteed in the contract and may be higher because of current market conditions.