Life
What is the purpose of Stranger-originated life insurance (STOLI)?
The policy is originated primarily or solely for the purpose of resale
The designee of a producer who is entering active duty with the Armed Forces must do which of the following in order to continue the producer's insurance business?
Apply to the Department of Banking and Insurance for a temporary license
The technical name of the person who makes a policy assignment is the:
Assignor
Which of the following life insurance policies is ideally suited for estate planning purposes?
Joint Survivorship
What is the primary purpose of an annuity?
To protect against outliving one's income
When an insurer appoints a new producer, the Department must be notified within ______ days.
15 days
When a bank or credit union refuses to give a loan unless the borrower buys insurance from a specific company, it is known as __________.
Coercion
The New Jersey Life and Health Insurance Guaranty Association is able to cover the cost of claims by:
Collecting money from each member company
The ____________ has the power to issue rules and regulations to help enforce insurance statutes.
Commissioner
Alice is the insured, Bill is the primary beneficiary, and Claire is the contingent beneficiary. Bill dies and Alice names Dale as the new primary beneficiary. Alice dies, so who receives the policy proceeds?
Dale
If life insurance proceeds are paid to the deceased's estate they may be subject to ________ taxes.
Federal Estate
The Commissioner may fine a licensed agent for unknowingly violating an unfair method of competition no more than __________.
$1,000
Jason has a Whole Life insurance policy with a face amount of $100,000, an annual premium of $1,000, and a cash value of $10,000. If he wants to borrow money from the insurer, what is the maximum he can obtain?
$10,000
Which of the following statements is correct concerning the different lines of insurance for which a producer may be licensed?
Casualty is coverage against legal liability, including death, injury or disability or damage to real or personal property
The bank may require its borrowers to have a life insurance policy to secure a loan in the event of the borrower's death. Which provision gives the bank proportional protection but not control of the policy?
Collateral Assignment
Which annuity settlement option provides a stated monthly amount to the annuitant and upon the annuitant?s death the same or a lesser amount paid for the lifetime of the survivor?
Joint and surviovrship option
The proceeds from a _________ plan provide the necessary funds to recruit, hire, and train a replacement employee.
Key Employee
An insurance producer must receive which of the following from the Commissioner as evidence of their authority?
License
M purchased a traditional permanent life insurance plan many years ago. What happens when he attains age 100?
M gets a check for the face amount of the policy
A former licensee whose license was revoked in May 2015 may apply for reinstatement in:
May 2020
If it is known or should be known by the agent that an existing policy is going to be lapsed, forfeited, surrendered or terminated in favor of a new policy, the agent must submit a:
Notice Regarding Replacement
An insurance producer replacing a life insurance policy must do all of the following, EXCEPT:
Obtain a signed statement from the applicant that includes the reason for replacing their life insurance policy
What is a material misstatement?
One which would have caused the insurer to not issue the policy had it been known
A(n) ________ has all of the contractual rights in an annuity contract.
Owner
If an annuity uses units instead of dollars to determine the value of the policy, then it is a(n) _________ annuity.
Variable
Roth IRAs and Traditional IRAs have only one of the following in common. Which one is it?
catch up contributions for those age 50 or older
All of the following are common exclusions from loss found in disability income policies EXCEPT for that incurred while
commiting a misdemeanor
Life coverage includes
coverage on human lives, including endowment and annuity benefits
Which type of policy rider is ideal for covering the balance of an outstanding mortgage
decreasing term
All of the following are classifications of risk EXCEPT
non-nicotine
Surplus lines is coverage
written by unautharized insurers
KEOGH plans have been largely replaced by ________ plans, which have the same contribution limits, but much less paperwork.
SEP IRA
Maria's policy was issued with an incorrect age. She was actually older than what was listed in the policy. Which of the following will the insurer most likely do if she had died 5 years after policy issue, but prior to this discovery?
The insurer would pay out a reduced benefit in proportion to the underpayment of premium
If the producer discovers that the applicant is not in good health at time of policy delivery, what should the next step be?
The policy should be returned to the insurer, or the deliver the policy only after the insurer grants permission
How does the per capita rule apply to proceeds from a life insurance policy?
The proceeds are divided equally among living primary beneficiaries
Which type of annuity attempts to offset inflation by providing a benefit linked to an underlying investment account?
Variable
Harry, the annuitant of a non-qualified tax deferred annuity with $40,000 cash value chooses the Life Income with Refund Payment Option when he annuitizes the policy. After receiving $1,000 each month for 80 months, Harry suddenly dies. How much will his beneficiary, his wife Lucille, receive?
Zero
How is a life settlement transaction similar to a vatical settlement transaction?
a Third party buys a life insurance policy for less then its face amount
Which of the following is truly a Key Person (Key Employee)? a) the company's truck driver b) a rank-and-file employee c) an executive sales manager d) the company bookkeeper
C) and executive sales manager the key employee must be part of the management team
If the insured of a Whole Life policy is on claim with a Waiver of Premium rider, what happens to the cash values?
Cash value and dividends are not affected
If the policyowner specifies the time over which all settlement option installments are to be paid, he/she has chosen which Settlement Option?
Fixed Period
Which of the following is TRUE of an equity-indexed annuity?
It has a guaranteed minimum interest rate
Why is the accidental death benefit referred to as double indemnity?
It provides twice the face value in the policy for death due to accident
Within how many days must a licensed insurance producer notify the Commissioner about being convicted of a crime?
30 days
When establishing a SIMPLE, what two different types of qualified plans must employers choose between?
401(k) or IRA
When the exchange of value is unequal, the contract is considered:
Aleatory
When a life insurance policy's ownership is changed from the original owner to a new owner without payment, this is known as a(n) ___________.
Absolute Assignment
Which of the following statements is true with regard to suspension or revocation of a producer's license?
Advertising in the producer's legal or business name may not be used
Insurance-related conduct includes selling, soliciting, negotiating insurance, but not binding policies of insurance
False Binding is included
__________ is an attempt by the existing insurer to keep a policy active rather than replace it with another policy.
Conservation
A client wants to make sure that they can have a permanent life insurance policy several years from now when they can afford it without having to prove insurability. What feature should they make sure they have on their new term life insurance policy?
Convertibility
Which of the following statements is true with regard to state legislation?
Court actions are interpretations and rulings by courts of law to settle disputes
Obtaining consumer information reports under false pretenses is prosecutable by which of the following?
Fair Credit Reporting Act
With a Variable Life Policy, which of the following is guaranteed?
Death Benefit
Which is a common approach to addressing the problems inherent in naming a minor as a beneficiary to a life insurance policy?
establishing a trust to administer proceeds
Current assumption whole life policies are sensitive to which of the following?
interest rates
The department must give prior approval of an actual, fictitious, or assumed name of an insurance business which will expire if a license application is not received within ______ days after the prior approval.
90 days
A personalized computer-generated illustration detailing premiums, cash values, interest rates, and surrender values is called __________.
A policy Summary
A producer replacing a life policy must give the applicant all of the following, except: a) buyers guide b) comparison statement c) signed replacement notice d) copy of each sales proposal
A) Buyers guide
How long will prior approval of names expire if no license application is received by the department?
90 days
Premium refunds to the insured must be paid or credited to the insured's account within __________ after received by the producer.
5 business days
To have Currently Insured status under Social Security, a worker must have at least _____ quarter credits during the 13-quarter period ending with the quarter in which the worker dies, becomes disabled, or reaches retirement age.
6
An applicant may be issued a temporary work authority that will expire no more than ________ days after issuance.
60 days
What is the age that is used to determine when the owner of a traditional IRA must begin to take required minimum distributions
72, by april 1st
The policies with fixed interest loan rates usually have a maximum interest rate of
8%
After the department approves a business name, the business has ______ days to submit a license application?
90 days
Group life insures a group of people under a _____________.
Single Contract
Which part of an insurance contract contains the promise to pay losses covered by the policy in exchange for the insured's premium and compliance with policy terms?
insuring clause
Casualty
is coverage against legal liability, including death, injury or divisibility or damage to real or personal property
An entity purchase plan
is one in which life insurance provides the funds necessary to buy out the business interest of the deceased
Personal lines include
property and casualty for primarily noncommercial purposes
How might someone cover the extra expenses of child care and home-related costs?
purchasing family term insurance
In which of the following must a beneficiary change request be filed in writing to the insurer and is made effective by the insurance company recording the change in its records?
recording method
In a level term life policy, which ALWAYS remains constant?
variable
Why is relying solely on employer group life insurance generally considered inadequate for most individual's needs?
It is financially insufficient to cover end of life expenses
All of the following are tax qualified retirement plans EXCEPT
Section 529 plans
If a licensed producer hires another producer to write insurance business on behalf of the employer/producer, the employer will not do which of the following?
Transfer the insurance-related conduct of the employee to the employer's manager
When a policy insures more than one peril, the coverage may not be separately cancelable unless the policy specifies a separate premium for the specific peril
True
For an individual long-term care policy there is an annual dollar limit for tax deductions that is based on which of the following?
age
Which one of the following is particularly important for an insurance producer to explain to a client upon delivery of a life insurance policy?
any exclusions
When is the group conversion option not allowed?
during the annual benefits enrollment period
Which of the following is characteristic of a nonqualified plan?
plan does not meet federal guidlines for tax benefits
What is the order in which beneficiaries receive proceeds from a life insurance policy?
succession of beneficiaries
Group AD&D policies may be deducted by whom and under which deduction category?
the employer under business expenses
If enrolled in an accredited elementary or secondary school, a covered child can continue receiving Survivor Benefits up to what age?
19
In order to renew an insurance license, producers must complete 24-credit hours of instruction every:
2 years
What is the time limit on certain defenses after which the policy becomes incontestable?
2 years
Licenses will not be renewed unless the licensee has completed _______credit hours of continuing education.
24
Prior to renewal, a licensee must complete ________ credit hours of approved continuing education courses, _______ of which must be related to ethics.
24/3
How many days before conducting business must a branch office registration form be filed?
30 days
How many days does a branch office have to notify the Commissioner of closing or moving?
30 days
Widows/widowers of a fully insured deceased worker may begin receiving benefits at age
60
The MIB is used in the underwriting of all of the following types of insurance, except:
Auto and Homeowners
Concealing information requested on an insurance application is a violation of which act
New Jersey Insurance Fraud Prevention Act
The Court ruled the insurance industry was not subject to the commerce clause in the Constitution in which of the following court cases?
Paul vs. Virginia
With respect to a producer's fiduciary capacity, which of the following is true?
Premiums being returned to the insured must be paid to the insured within 5 business days after being received by the producer
An insurer must provide a Buyer's Guide to all prospective purchasers:
Prior to accepting the applicants initial premium
In a STOLI/IOLI transaction, what are the insureds basically doing?
Selling their mortality to another for up-front cash
K needs funds and needs to maintain the life insurance she has at the same time. Which of the following should K do with her traditional whole life policy?
Take out a policy loan
Which of the following is true regarding the duties of replacing insurers?
The replacing insurer must retain records relating to replacement for 5 years
Which of the following statements is true about surplus lines?
The surplus lines producer must also be, or will be licensed for property and casualty authorities
Participating policy dividends become taxable as income when:
The total amount of dividends received by a policyowner exceeds the total amount of premium he/she has paid
When is the Notice of Information Practices required to be provided?
Upon policy delivery or any time personal information is collected, and policy renewal or reinstatement
An agency appointment will terminate:
When an agency contract is cancelled, within 15 days the insurer must notify the Commissioner of the cancellation date and the reason for cancellation.
Twisting is
the act of misleading and convincing an insured to surrender, lapse or exchange an existing policy for a different one, to the insured's detriment.
All of the following are features of the spendthrift clause EXCEPT
the beneficiary may encumber the proceeds
Which of the following occurs immediately after the application is submitted and the initial premium paid?
the underwriting process begins
Which policy type is backed by equity investments and allows the policyholder to adjust the death benefit?
variable universal life
