New Jersey Life only
The Department of Insurance
If the issuance of a license is denied and a hearing is requested, which entity will be making determination whether or not the license should be issued?
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
Grow tax deferred.
In life insurance policies, cash value increases
The type of term insurance that provides increasing death benefits as the insured ages is called
Increasing term.
Which Universal Life option has a gradually increasing cash value and a level death benefit?
Option A
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must
Respond to the consumer's complaint.
Certificate Authority
Which of the following must an insurer obtain in order to transact insurance within a given state? -All insurers (domestic, foreign, or alien) must obtain a certificate of authority before transacting insurance within a given state.
Buy-sell agreements are normally funded with a life insurance policy.
Which of the following statements concerning buy-sell agreements is true?
Face Amount
Which policy component decreases in decreasing term insurance? -Decreasing term policies feature a level premium and a death benefit that decreases each year over the duration of the policy term.
Revocable
Which type of beneficiary is changeable at any point?
Solicitation rules would apply to which of the following types of coverage?
Whole Life
Costs of training a replacement
A key person insurance policy can pay for which of the following?
An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable?
$3,000 -The difference between the premiums paid and the cash value would be taxable. In this example, the difference between the premiums paid ($15,000) and the cash value ($18,000) is $3,000.
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 -Discontinuance of the group policy or contract does not reduce the required time limit for providing notice of claim or proof of loss
Producer licenses are valid for
2 years.
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
It is the policyowner's responsibility to request the reinstatement application; the insurer must then deliver it within 30 days.
A life insurance policy has lapsed, and the policyowner would like to reinstate it. In order to initiate the reinstatement process, he must submit an application to his insurer. Which of the following is true? -
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
The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unavailable to lower-echelon employees. This plan would be funded with before-tax corporate dollars, and it does not meet government approval standards. This annuity plan is
A nonqualified annuity plan.
Automatic premium loan
A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?
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
Other Insured Rider
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
Premiums are determined by the age, sex and occupation of each individual certificate holder.
All of the following are characteristics of group life insurance EXCEPT
They must be part of the contract.
All of the following are requirements for life insurance illustrations EXCEPT
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?
If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's
Ancestry.
Adjustable Life
At age 30, an applicant wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs?
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Cash option
Which authority has the power to deny someone an insurance producer's license?
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
Which of the following types of insurance would be written by a limited lines agent?
Credit insurance
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
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT
Dividends from a mutual insurer.
A life insurance producer is the company's
FIELD UNDERWRITER
Circulating deceptive sales material to the public is what type of Unfair Trade Practice?
False advertising
Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?
Family term 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
Guaranteed insurability rider.
Fixed period
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?
$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 legal action and can assess a fine for each violation of up to
commissioner
It is the job of what authority to appoint and remove officers and other personnel employed within the Department?
Which of the following statements about the reinstatement provision is true?
It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.
Variable Whole Life insurance is based on what type of premium?
Level fixed
Insurance is regulated
Mostly on a state level.
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
Rebating
Annually Renewable Term
The LEAST expensive first-year premium is found in which of the following policies?
Universal Life
The Waiver of Cost of Insurance rider is found in what type of insurance?
If a life insurance policy has an irrevocable beneficiary designation
The beneficiary can only be changed with written permission of the beneficiary.
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
The death benefit can be increased by providing evidence of insurability.
The insured's 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
An employee is insured under her employer's group life 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.
The insured's age at death.
The insurers surrender the policy at its current cash value. Only any excess of value is taxable as income. Once the policyholder opts for cash surrender, the policy is immediately inactive. 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
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT
The interest is not taxable since it remains inside the insurance policy. -The interest credited under this option is TAXABLE, whether or not the policyowner receives it.
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 an annuity owner EXCEPT
The owner must be the party to receive benefits.
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.
Increasing term.
The type of term insurance that provides increasing death benefits as the insured ages is called
SEC registration.
To sell variable life insurance policies, an agent must receive all of the following EXCEPT
Discrimination
Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called? -Permitting individuals of the same class to be charged a different rate for the same insurance is the unfair trade practice of discrimination.
To keep the policy in force
What is the purpose of establishing the target premium for a universal life policy?
Executive Bonus
When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called a(n)
Funds exceeding the premium paid are taxable as ordinary income.
Which is TRUE about the cash surrender nonforfeiture option?
The rider is usually level term insurance.
Which is true about a spouse term rider?
Payor Benefit
Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?
Selection, classification, and rating of risks
Which of the following best details the underwriting process for life insurance?
Policy owner
Which of the following individuals must have insurable interest in the insured?
Producer contact information
Which of the following is NOT required information a producer must provide before soliciting insurance?
It would not occur in a deferred annuity.
Which of the following is NOT true regarding the accumulation period of an annuity?
It is a period during which the payments into the annuity grow tax deferred.
Which of the following is TRUE regarding the accumulation period of an annuity?
Buyer's Guide
Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process
Buyer's Guide
provides GENERIC information on various types of policies.
Policy Summary
provides SPECIFIC information on the policy being issued
