life insurance test
Consideration.
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
30 days
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?
not subject to income taxation by the federal government
Death benefits payable to a beneficiary under a life insurance policy are generally
30
Licensees must notify the Department within how many days of any change of address?
Income for 2 or more recipients until they die.
Life income joint and survivor settlement option guarantees
As of the application date
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
it still stands in full. insurance is considered to be interstate commerce and is therefore subject to regulation by the federal government
U.S. vs. South-Eastern Underwriters was decided in 1944. To what extent does the Supreme Court's decision still apply to insurance today?
Pay the death benefit
An insured purchased a life policy in 2010 and died in 2017. The insurance company discovers at that time that the insured had concealed information during the application process. What can they do?
2 years.
Applicants for an individual producer license must submit proof of completing 24 hours of continuing education credits during the previous
A debtor has an insurable interest in the life of a lender.
Which of the following statements is NOT true concerning insurable interest as it applies to life insurance?
Other-insured rider.
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
the policy will terminate
A small employer owns a group health insurance policy. The employer neglects to pay the premium by the payment due date. The employer fails to pay the premium yet again by the end of the grace period. Which of the following will happen?
60 days
After its issuance, the temporary work authority expires after how many days?
The interest is not taxable since it remains inside the insurance policy.
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT
Surplus lines.
All of the following are considered limited lines of authority EXCEPT
term
Children's riders attached to whole life policies are usually issued as what type of insurance?
Which of the following will NOT be considered unfair discrimination by insurers?
Discriminating in benefits and coverages based on the insured's habits and lifestyle
an unfair trade practice
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
30 days.
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
February 28th, or 10 days after the time the policy is delivered.
J applied for a life insurance policy on January 10. The policy was issued on January 31. J's agent was vacationing at the time the policy was issued, so J did not receive the policy until February 18. J decides that he does not want the policy. When would J need to return the policy to the insurer in order to receive a full refund of premium paid?
2 years
Producer licenses are valid for
Unemployment income.
Social Security was created to provide all of the following benefits EXCEPT
Whole Life
Solicitation rules would apply to which of the following types of coverage?
certification of license status report
The Department can run a report on a specific producer that lists his or her license information, current license status, and the types of insurance that he or she can transact. What is the name of this report?
Set premium rates.
The Ownership provision entitles the policyowner to do all of the following EXCEPT
Universal Life
The Waiver of Cost of Insurance rider is found in what type of insurance?
5
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?
taxable
The interest earned on policy dividends is
death benefit
The term "fixed" in a fixed annuity refers to all of the following EXCEPT
Signed waiver of premium.
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT
policy summary
What describes the specific information about a policy?
it has the highest amount of insurance protection
What is the benefit of choosing extended term as a nonforfeiture option?
They determine how death proceeds will be paid.
What is the purpose of settlement options?
foreign
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?
SEPs are suitable for large companies
Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?
Limited pay whole life
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Rebating.
An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of
Number of years a licensee has been in the business
A Certification of License Status must include all of the following information EXCEPT
Annually Renewable Term policy with a cash value account.
A Universal Life Insurance policy is best described as a/an
The candidate has 6 more months to apply for a license.
A candidate for a producer license passed his licensing exam 6 months ago but has not applied for a license yet. Which of the following is true?
The employer can receive a current tax deduction for any contributions made to the plan.
All of the following statements concerning an employer sponsored nonqualified retirement plan are true EXCEPT
proof of insurability is not required
A couple owns a life insurance policy witbility?h a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insura
the insureds premiums will be waived until she is 21
A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?
Costs of training a replacement
A key person insurance policy can pay for which of the following?
His renewal forms were lost in the mail.
A licensed insurance producer may request a waiver of license renewal procedures under any of the following circumstances EXCEPT
$10,000
A producer was found guilty of a 3rd violation of the Insurance Code. What would be the monetary penalty he will have to pay?
The producer will have to wait 5 years before applying for license reinstatement
A producer's license was revoked as a result of the Insurance Code violation. Which of the following is true?
Taxation on accumulation
All of the following would be different between qualified and nonqualified retirement plans EXCEPT
The plan must provide an offset for social security benefits.
All of the following are general requirements of a qualified plan EXCEPT
Passing the New Jersey licensing examination.
All of the following are requirements for a nonresident license EXCEPT
fair credit reporting act
An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?
$10,000, no tax consequence
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?
The insurer will pay the full death benefit from the group policy to the beneficiary.
An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?
$9,800
An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?
Paid-up option
An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?
Paid-up additions.
An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called
Increases annually.
Annually renewable term policies provide a level death benefit for a premium that
Guaranteed insurability rider.
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
whether an insurable interest exists between the individuals
If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about
Settlement option.
If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a
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?
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?
Court system
If an insurer and insured have a dispute about whether a particular loss is covered under a policy, which authority will settle the dispute?
15
If an insurer cancels an agency contract, it must notify the Commissioner in writing within how many days?
the policy will be interpreted as if the insurer waived its right to have an answer on the application
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?
the death benefit can be increased by providing evidence of insurability
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
Certificate of Authority
To legally transact insurance in this state, an insurer must obtain which of the following?
Old Age Survivors Disability Insurance
What is the official name for the Social Security program?
lump sum
What is the other term for the cash payment settlement option?
it is intended to provide coverage on a date prior to the policy issue
What is the purpose of a conditional receipt?
to explain features and benefits of a proposed policy to the consumer
What is the purpose of a disclosure statement in life insurance policies?
To keep the policy in force
What is the purpose of establishing the target premium for a universal life policy?
To allow the consumer to compare the costs of different policies
What is the purpose of the buyer's guide?
Mode
What is the term for how frequently a policyowner is required to pay the policy premium?
6 months
What is the waiting period on a Waiver of Premium rider in life insurance policies?
It was decided that insurance was not interstate commerce and could not be regulated by the federal government.
What significance did Paul vs. Virginia have on the insurance industry?
Increasing Term
What type of insurance would be used for a Return of Premium rider?
3 days
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
Issue the policy anyway and pay the face value to the beneficiary.
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
31 days
When an employee terminates coverage under a group insurance policy, coverage continues in force
option a
Which Universal Life option has a gradually increasing cash value and a level death benefit?
commissioner
Which authority has the power to deny someone an insurance producer's license?
extended term
Which nonforfeiture option has the highest amount of insurance protection?
Universal life
Which of the following Life Insurance policies would be considered interest sensitive?
It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.
Which of the following best describes the MIB?
Credit insurance
Which of the following types of insurance would be written by a limited lines agent?
Discriminating in benefits and coverages based on the insured's habits and lifestyle
Which of the following will NOT be considered unfair discrimination by insurers?
Universal life
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?
4 years.
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
if the father is disabled for more than 6 months
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?
Required a premium increase each renewal.
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
Level term
A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?
revocable beneficiary
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
Using names or titles that have tendency to misrepresent the true nature of a policy is an example of what illegal practice?
False advertising
The death benefit will be smaller.
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 U.S. vs. the South-Eastern Underwriters Association
The Supreme Court stated that insurance is interstate commerce and is therefore subject to regulation by the federal government in the decision of what case?
the insureds age at death
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
$100,000
The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?
increasing term
What type of insurance would be used for a Return of Premium rider?
substitute insured rider
Which of the following riders is often used in business life insurance policies when the policy owner needs to change the insured under the policy?
Defamation
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?
New Jersey Life and Health Guaranty Association
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?
passing the new jersey licensing examination
All of the following are requirements for a nonresident license EXCEPT
the plan is funded by permanent insurance only
All of the following are true of key person insurance EXCEPT
rebates are allowed if its in the best interest of the client
All of the following are true regarding rebates EXCEPT
A resident producer licensed for Property and Casualty insurance applying for a Life insurance license.
All of the following candidates for a resident producer license may be exempted from the examination requirement EXCEPT
Annually Renewable Term.
All other factors being equal, the least expensive first-year premium payment is found in
she can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan
An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?
The date of medical exam
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?
Applications can only be used in court cases if they are attached to or endorsed upon the issued 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?
applications can only be used in court cases if they are attached to or endorsed upon the issued 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?
$200,000
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?
material misrepresentation
An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?
increases annually
Annually renewable term policies provide a level death benefit for a premium that
it reversed the decision of paul v virginia determining that insurance is interstate commerce and should be regulated federally
What significance did U.S. vs. South-Eastern Underwriters have on the insurance industry?
For 31 days.
When an employee terminates coverage under a group insurance policy, coverage continues in force
180 days
When an insurance producer sustains a spinal cord injury in a car wreck, he is rendered permanently disabled. In order to continue his business, his wife establishes an agreement with another producer to continue his business. This authorization will last for a maximum of
When the application is signed and a check is given to the agent
When is the earliest a policy may go into effect?
Discrimination.
When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered
The earnings in the plan accumulate tax deferred
Which of the following describes the tax advantage of a qualified retirement plan?
The Federal Trade Commission
Which of the following entities established the Do-Not-Call Registry?
A Massachusetts resident who sells insurance full-time in Boston but wants to expand his customer base by becoming licensed in New Jersey.
Which of the following individuals would most likely be issued a nonresident producer's license?
Producer contact information
Which of the following is NOT required information a producer must provide before soliciting insurance?
Surplus lines agent
Which of the following is a person or organization that is allowed to write business in New Jersey for insurance companies that do not possess a certificate of authority in New Jersey, if no authorized insurers in New Jersey offer the specific type of insurance in question?
consultant
Which of the following is an insurance professional who offers advice regarding benefits or advantages of an insurance policy to clients for a fee?
Business name
Which of the following is the legal name of a corporation or partnership under which a licensee conducts insurance business?
term rider
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?
An individual not covered by an employer-sponsored plan who has earned income
Who can make a fully deductible contribution to a traditional IRA?
