Life Insurance Licensing

An adjustable life policyowner can change what?

the coverage period

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 statements is not true concerning incurable interest as it applies to life insurance?

A debit has an insurance interest in the life of a lender

All of the following could own group life insurance except

A group needing low cost life insurance.

The term in illustration in the life insurance policy refers to

A presentation of nonguaranteed elements of a policy.

Your customer doesn't mind paying a higher premium as long as he gets a life insurance product that would allow for a faster growth of the cash value. What kind of policy would you recommend?

An endowment policy

Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the application in the decision making process?

Buyer's guide

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?

Cash surrender

A long stretch of national economic hardship because it's a 7% rate of inflation. The policy owner notices of the face value of her insurance policy has been raised 7% as a result which policy rider caused this change?

Cost of living Rider

Which of the following types of insurance policies is most commmonly used in credit life insurance?

Decreasing term

Which of the following is not a duty of the commissioner?

Developing interest rate

Usernames or titles that is a tendency to misrepresent the true nature of a policy is an example of what a legal practice?

False advertising

Which rider, one attached to a permanent life insurance policy, provides an amount of insurance on every family member?

Family term rider

In a direct rollover, how is the money transferred from one plan to another?

From trustee to trustee

Which of the following is true about the premium on the children's rider in a life insurance policy?

It remains the same no matter how many children are added to the policy

On its advertisement a company claims that it has funds in its possession that are, in fact, not available for the payment of losses pr claims. The company is guilty of

Misrepresentation

On a participating insurance policy insured by mutual insurance company, dividends paid to policyholders are

Not taxable since the IRS treats them as a return of a portion of the premium paid

All of the following would be considered an insurance transaction except

Obtaining an insurance license

Which of the following allows the insurer to relieve a minor insured premium payments if the minor's parents have died or become disabled?

Pay or Benefit

What describes the specific information about a policy?

Policy summary

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

All of the following are considered unfair trade practices in the business of insurance except

Sharing commissions

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

Signed waiver of premium

The McCarran act stated that the federal government would not regulate insurance as long as an adequate job of regulating the industry was done by

States

In a case where the primary beneficiary predeceases the insured, in the event of the insured's death, the death benefit proceeds will be paid to

The contingent beneficiary

If an insurer requires a medical examination of an applicant in connection with the application for life insurance, who is responsible for paying the cost of the examination?

The insurer

Under an extended term nonforfeiture option, the policy cash value is converted to

The same face amount as in the whole life policy

Why should the producer personally deliver the policy when the first premium has already been paid?

To help the insured understand all aspects of the contract

A policy owner fails to pay the premium on his whole life after the grace period passes but the policy remains in force. This is due to the

automatic premium loan

In classifying a risk, the Home Office underwriting department will look at all of the following EXCEPT

Applicant's past income

Which of the following is true about credit life insurance?

Creditor is the policyowner

Which of the following is NOT typically excluded from life policies?

Death due to plane crash for a fare-paying passenger

What would be an advantage to naming a contingent (or secondary) beneficiary in a life insurance policy?

It determines who receives policy benefits if the primary beneficiary is deceased.

Twin brothers are starting a new business. They know it takes several years to build a business to the point that they can pay off their debt incurred and starting the business. What type of insurance would be most affordable and still provide a death benefit should one of them die?

Joint Life

Variable whole life insurance is based on what type of premium

Level fixed

Who might receive dividends from a mutual insurer?

Policyholders

All of the following is true regarding the guaranteed insurability rider except

This writer is available to all insured with no additional premium

An insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract. This is called

consideration

The automatic premium loan provision is activated at the end of the

grace period

An individual is purchasing a permanent life insurance policy with the face amount of $25,000. Well this is all the insurance that he can afford at this time, he wants to be sure that the additional coverage will be available in the future. Which of the following option should be included in the policy?

Guarantee insurability option

An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of?

Rebating

Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase a new insurance?

Replacement rule

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy

Required a premium increase each renewal.

A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of

coercion

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

false advertising

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

And insured purchased a 15 year term life insurance policy with the face amount of $100,000. The policy contain an accidental death writer, offering a double indemnity benefit. The insured was seriously injured in an auto accident, and after 10 weeks of hospitalization died from the injuries. What amount with his beneficiary receive as a settlement?

$200,000

What is the fine for violating the Commissioner's cease and desist order?

$5,000

If a person violates a cease and desist order, the commissioner can turn the matter over to the New Jersey Superior Court for further action and can assess a fine for each violation of up to

$5,000.

What is the minimum Licensing age for non-resident insurance producers in New Jersey?

18

Who is a third-party owner?

A policyowner who is not the insured

Which of the following is a duty of the commissioner of insurance in the state?

Amend rules and regulations

The least expensive first-year premium is found in which of the following policies?

Annually Renewable Term

All the following are true of the federal tax advantages of a qualified plan except

At distribution, all amounts received by the employee are free of taxes.

In New Jersey, the public is protected by a notice of discontinuance when a policy is discontinued for nonpayment of premiums. When a policy is discontinued, all of the following are required except

Ceasing to collect premium payments from group participants unless the group policy owner remains responsible for the benefits

All of the following are duties and responsibilities of producers at the time of application except

Change any incorrect statement on the application by personally initialing next to the corrected statement.

It is the job of what authority to appoint and remove officers and other personnel employed within the department?

Commissioner

Who makes up the Medical Information Bureau?

Insurers

Which of the following was created to protect the policy owners, insured, and beneficiaries under the insurance contracts when insurers failed to perform contractual obligations due to financial impairment?

New Jersey and Health Guaranty Association

Which of the following will be included in a policy summary?

Premium amounts and surrender values

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

Which of the following best defines target premium in a universal life policy?

The recommended amount to keep the policy in force throughout its lifetime

What kind of policy allows withdrawals or particularly surrenders?

Universal Life

If a producer dies or is rendered severely disabled, an unlicensed person can contract with another producer to continue this person's insurance transactions for

180 days

A certification of license status report can be run on any currently licensed New Jersey producer, but can only contain information on formal disciplinary actions taken within the past

4 years

Who can make a fully deductible contribution to a traditional IRA?

An individual not covered by an employer-sponsored plan who has earned income

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

An insurance company and insured are setting 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 e used in court cases if they attached to or endorsed upon the issued policy

An employee quits his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his

Attained age

If a life insurance policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

Guarantees insurability rider

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

If the father is disabled for more than 6 months

All of the following are considered limited lines of authority except

Surplus lines

Which of the following is incorrect concerning a non contributory group plan?

The employee receive individual policies

Who does an insurance agent represent?

The insurer

When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer

Foreign

Which of the following best describes the unfair trade practices of defamation?

Making derogatory oral statements about another's insurer's financial condition

Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance?

defamation

What do individuals use to transfer their risk of loss to a larger group?

insurance

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

warranty

Which of the following settlement options in life insurance is known as straight life?

Life income

Proceeds from a life insurance policy 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 of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles?

Standard risk is representative of the majority of people.

Which of the following is a person or organization that is allowed to write business in New Jersey for insurance companies that does not possess a certificate of authority New Jersey, if no auhtorizedin New Jersey office specific type of insurance in question?

Surplus lines agent

An employee is insured under her employer's group plan. If she terminates her group coverage, which of the following statements is incorrect?

The insured may choose to convert to term or permanent individual coverage

Insurance is the transfer of

Risk

Bill's license was revoked 2 years ago. How much longer will he have to wait in order to request his license to be reinstated?

3 years

All of the following are example of third-party ownership of a life insurance policy except

An insured borrows money from the bank and makes collateral assignment of a part of the death benefit to secure the loan

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash option

The type of term insurance that provides increasing death benefits as the insured ages is called

increasing term

When a producer was reviewing a potential customer's insurance coverage that is written by another company, the producer made several oral statements that were maliciously critical of that other insurer. The producer could be found guilty of

Defamation

A producer agent must do all of the following when delivering a new policy to the insured except

Disclose commissions earned from the sale of the policy

All the following statements concerning dividends are true except

Dividend amounts are guaranteed in the policy

All of the following could be considered rebates if offered to an insured in the sale of insurance except

Dividends from a mutual insurer.

The provision which states the policy and a copy of the application form the contract between the policy-owner and the insurer is called the

Entire Contract

Life insurance death proceeds are

Generally not taxed as income

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

An applicant for a producers license has successfully completed all of the steps necessary to obtain a license. As 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

A small employer owns a group health insurance policy. The employer does not pay the premium by the premium due date and fails again to pay by the end of the grace period. The insurer cancels the policy. Which of the following is true?

The insurer will pay all losses through the end of the grace period. *If a group life or group health policy provides for automatic discontinuance of the policy for nonpayment of premium (after the grace period), the insurer is still liable for valid claims of covered losses incurred before the end of the grace period.

When an insured under a life insurance policy died, the designed beneficiary received the face amount of the policy as well as a refund of all the premiums paid. Which rider is attached to the policy?

The return of premium

US versus south eastern underwriters was decided in 1944. To what extent of the supreme court decision still apply to insurance today?

It still stands in full. Insurance is considered to be interstate commerce and is therefore

Which of the following statements is true concerning the accidental death rider?

It will pay double or triple the face amount

When transacting business in this state an insurer formed under the laws of another country is known as a/an

alien insurer

All of the following candidates for a resident producer license may be exempted from the examination requirement except

A resident producer licensed for property and casualty insurance applying for a Life insurance license

If an insurer and insured have a dispute about whether a particular loss is covered under a policy which authority will settle the dispute?

Court system

When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will

Issue the policy anyway and pay the face value to the beneficiary

An employee quit his job on May 15 and doesn't convert his group life policy to an individual policy for two weeks. He doesn't freak accident on June 1. Which of the following statements best describes what will happen?

The insurance will pay the full death benefit from the group policy to the beneficiary

When an insurer begins underwriting procedures for an applicant, what will be the main source for its underwriting information?

Application

A group of 15 skydivers meet at a seminar and begin talking about life insurance during a break. Because it is expensive to get individual life insurance, they decide to band together to form a small group so that they will be eligible. They apply for small group life insurance and are rejected. Why?

The purpose of the group was to purchase life insurance.

Presenting any written or oral statement in support of or in a position to a claim payment, while knowing the statement contains false and misleading information material to the claim, would be considered

Violation of the New Jersey insurance fraud prevention act

The two types of assignments are

absolute and collateral

All of the following are among the commissioners broad powers except

Having interest in insurance companies regulated by the department

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?

Illegal under any circumstances

Which of the following documents delivered to the policy owner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years?

A policy summary

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. Which type of life insurance policy would be best suited to this situation?

Decreasing term

An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)

Equity indexed annuity

The paid-up addition option uses the dividend

To purchase a smaller amount of the same type of insurance as the original policy.

Which of the following is the legal name of a corporation or partnership under which licensee conducts insurance business?

Business Name

An insured has a life insurance policy from a participating company and receives quarterly dividends. He was instructed the company to apply the policies dividends to increase the death benefit. The dividend option that the insured is called

Paid-up additions

An insured purchased a life policy in 2010 and died in 2017. The insurance company discovers at the time that the insured has misstated information during the application process. What can they do?

Pay the death benefit

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.

If an agent wishes to sell variable life policies, what license must the agent obtain?

securities