prime

If an applicant for a life insurance policy is found to be substandard risk, the insurance company is most likely to

charge a higher premium

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

An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?

Limited-pay Life

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

Mutal

What was created to keep tele markers from calling consumers who do not wish contacted?

National Do Not Call Registry

Sam has a life insurance policy from a participating company and receives quarterly dividends. Sam has instructed the company to apply his dividends to the policy to increase the death benefit. The dividend option that Sam has chosen is called

Paid-up additions

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

To help the insured understand all aspects of the contract

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of (Choose from the following options) 1. Twisting. 2. Defamation. 3. Misrepresentation. 4. Rebating.

Twisting.

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called (Choose from the following options) 1. Waiver of premium. 2. Guaranteed insurability. 3. Waiver of cost of insurance. 4. Payor benefit.

Waiver of premium.

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

$5,000

If an insured receives accelerated death benefits, what is the least amount of the original death benefit that the beneficiary would receive after the insured's death?

0

The Commissioner believes that an insurance regulation has been violated by a licensee and decides to conduct a hearing. The licensee must get written notice of the hearing's date and time

10 days

Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is CORRECT?

100% participation of members is required in noncontributory plans. If the employer pays all of the premium, then all employees must be included.

M is the owner of a $100,000 life policy with a triple indemnity rider for accidental death. When M is killed in a car accident, it is determined that the accident was his fault. The triple indemnity rider in M's 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?

100,000

An insurer is closing a branch office in this state. Within how many days of the office closing must the insurer notify the Department?

30 days

When an employee terminates coverage under a group insurance policy, coverage continues in force

31 days

If a consumer requests additional information concerning an Investigative Consumer Report, how long does the insurer or reporting agency have to comply?

5 days

What are the penalties for the first, second, and any subsequent violation of the New Jersey Fraud Prevention Act, respectively?

5,000; $10,000; $15,000

According to the telemarketing sales rules, what are the permissible calling hours for telemarketing calls?

8am until 9pm

80. If a violation of the New Jersey insurance code were to occur, a cease and desist order and/or penalty may be issued. Who may issue a cease and desist order? (Choose from the following options) 1. Department of Banking and Insurance 2. Insurance Company 3. Governor 4. Commissioner

Commissioner

When a policy is surrendered for its cash value,

Coverage ends and the policy cannot be reinstated.

Who is a third-party owner?

A policyowner who is not the insured

All of the following candidates for a resident producer license may be exempted from the examination requirement EXCEPT (Choose from the following options) 1. A person in public employment in the insurance field whose license terminated 10 months ago. 2. A nonresident producer in good standing who is moving to this state. 3. A resident producer licensed for Property and Casualty insurance applying for a Life insurance license. 4. A professional who holds a Certified Financial

A resident producer licensed for Property and Casualty insurance applying for a Life insurance license.

Which of the following is a duty of the Commissioner of insurance in this state?

Amend rules and regulations

Which of the following statements is true concerning a 403(b) plan (TSA)?

An arrangement made with certain tax-exempt "501c(3)" organizations and public schools under which employees may set aside amounts of income for retirement purposes.

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

An unfair trade practice.

Which of the following is a term for a person who seeks insurance from an insurer?

Applicant

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

Applicant's past income

An insurer wants to begin underwriting procedures for an applicant. What source will it consult for the majority of its underwriting information?

Application

An insurer cancelled a contract with a producer on April 1st. By what date must the insurer notify the Commissioner of this action?

April 15th

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be (Choose from the following options) 1. Certified. 2. Qualified. 3. Approved. 4. Authorized.

Authorized.

All of the following statements are correct regarding Credit Life Insurance EXCEPT

Benefits are paid to the borrower's beneficiary.

When an insurance producer negotiates for an insurance contract on behalf of a client, the producer is acting as a(n)

Broker

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

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

Decreasing term

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 factors, which are identified on the application, play a vital role in determining the insured's insurability EXCEPT (Choose from the following options) 1. Gender. 2. Occupation. 3. Education. 4. Age

Education

The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the (Choose from the following options) 1. Total contract. 2. Aleatory contract. 3. Complete contract. 4. Entire contract.

Entire contract.

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

Fair Credit Reporting Act

Which is true about the cash surrender nonforfeiture option? 1. Funds exceeding the premium paid are taxable as ordinary income. 2. After the cash surrender, the insured is covered for a grace period of 1 month. 3. The policy remains active for some time after the policyholder opts for cash surrender. 4. The policyholder receives the original cash value of the policy.

Funds exceeding the premium paid are taxable as ordinary income.

Cameron is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he feels he can afford at this time, he wants to be sure that additional coverage will be available in the future. He should include in this policy a

Guaranteed insurability option.

Life income joint and survivor settlement option guarantees

Income for 2 or more recipients until they die.

Which of the following statements regarding HIV testing for insurance purposes is NOT true?

Insurers are barred from requesting HIV testing.

Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?

Insuring clause

If a retirement plan or annuity is "qualified," this means (Choose from the following options) 1. It accepts after-tax contributions. 2. It is noncancellable. 3. It has favorable tax treatment. 4. It has a penalty for early withdrawal.

It has favorable tax treatment.

What significance did U.S. vs. South-Eastern Underwriters have on the insurance industry?

It reversed the decision of Paul vs. Virginia, determining that insurance is interstate commerce and should be regulated federally.

What significance did Paul vs. Virginia have on the insurance industry?

It was decided that insurance was not interstate commerce and could not be regulated by the federal government.

Two equal partners in a business worth $150,000 are using a Cross Purchase plan to protect against the death of each other. Which of the following statements would be correct? (Choose from the following options) 1. Partner B buys a policy on partner A in the amount of $75,000 naming Partner A as beneficiary. 2. Partner A buys a policy on partner B in the amount of $150,000 naming Partner A as beneficiary. 3. Partner B buys a policy on partner A in the amount of $150,000 naming Partner A as beneficiary. 4. Partner A buys a policy on partner B in the amount of $75,000 naming Partner A as beneficiary

Partner A buys a policy on partner B in the amount of $75,000 naming Partner A as beneficiary.

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

Pay a reduced death benefit

A prospective insured receives a conditional receipt and dies before the policy is issued. The company will

Pay the policy proceeds only if it would have issued the policy.

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?

Payor Benefit

What describes the specific information about a policy?

Policy summary

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.

An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe?

Reduction of Premium

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

Replacement Rule

Statements made by an applicant for a life insurance policy that are true to the best of the applicant's knowledge are referred to as

Representations.

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 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

Revocable beneficiary

Upon policy delivery, the agent may be required to obtain any of the following EXCEPT (Choose from the following options) 1. Payment of premium. 2. Corrected and resigned application. 3. Signed waiver of premium. 4. Statement of good health

Signed waiver of premium.

Which type of life insurance policy generates immediate cash value?

Single 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 the

States.

Who does an insurance agent represent?

The insurer

The Medical Information Bureau

The policyholder can receive distributions at any time without being penalized.

Which of the below statements is FALSE concerning a Modified Endowment Contract (MEC)? (Choose from the following options) 1. The policyholder can receive distributions at any time without being penalized. 2. Distributions before age 59 1/2 have a penalty tax of 10% on the gain in the policy. 3. Policy loans are taxable distributions. 4. MECs lose some of the favorable tax treatment of distributions.

The policyholder can receive distributions at any time without being penalized.

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.

What is the purpose of the buyer's guide? (Choose from the following options) 1. To list all policy riders 2. To provide information about the issued policy 3. To allow the consumer to compare the costs of different policies 4. To provide the name and address of the agent/producer issuing the policy

To allow the consumer to compare the costs of different policies

The term "illustration" in a life insurance policy refers to

a presentation of non guaranteed elements of a policy

If a change needs to be made to the application, it should be accomplished by any of the following methods EXCEPT

erase or white-out the incorrect answer and record the correct answer

An applicant who receives a preferred risk classification qualifies for

lower premiums than a person who receives a standard risk

When collecting the initial premium, the agent should issue the applicant a

premium receipt

Under the Fair Credit Reporting Act, if the consumer challenges the correctness of the information contained in his/her report, the reporting agency must

respond to the consumer's complaint

Which is the appropriate action by the insurer if a proespective insured submitted an incomplete application?

return the application to the applicant for completion

Which of the following best details the underwriting process for life insurance?

selection, classification, and rating of risks

which of the following entities established the DO-Not-Call Registry?

the federal trade commission