Simulated Questions
In the state of New Jersey, an applicant must apply for a Producer license within what period of time from the date of passing the state exam? 6 months 1 year 2 years 18 months
1 year
How long must an individual be unable to engage in any gainful activity due to physical or mental disability in order to qualify for Social Security Total Disability? 3 months 6 months 12 months 18 months
12 months
It is the company's responsibility to supply a claim form to an insured within how many days after receiving notice of claim? 15 30 60 90
15
24 Continuing Education credits are required to be completed by a producer every? 4 years Every year 18 months 2 years
2 years
How many employees must an employer have for a terminated employee to be eligible for COBRA? 20 30 40 50
20
The state of New Jersey requires completion of a total of how many CE credits upon renewal of a Producer's license? 15 credits, 3 of which are ethics 24 credits, 4 of which are ethics 15 credits, 4 of which are ethics 24 credits, 3 of which are ethics
24 credits, 3 of which are ethics
In New Jersey, a Producer is required to notify the DOBI of any change in resident or business address, within what period? 15 days 30 days 45 days 60 days
30 days
Under the New Jersey Continuance of Benefits Law, notice to extend coverage is required within how many days of a qualifying event? 15 days 30 days 45 days 90 days
30 days
The licensee shall advise the Department of Banking and Insurance of the closing of a branch office within how many days? 20 days in writing 20 days 30 days in writing 30 days
30 days in writing
In New Jersey, an insurer is required to maintain files of all published and printed advertisements for? -5 years from the date of first use -3 years from the date of first use -5 years from the date of last use -3 years from the date of last use
5 years from the date of last use
In life insurance, replacing companies must keep records of all replacement materials on file for how long? 3 years 5 years or until the next regular examination by the Commissioner 3 years or until the next regular examination 5 years
5 years or until the next regular examination by the Commissioner
The Commissioner may revoke a producer's license if it is found that the commissions earned on "controlled business" during any 12 month period exceeded what percentage of the producer's aggregate commissions on all business written? 25% 30% 50% 65%
50%
In accordance with New Jersey law, a Producer must remit health insurance premiums to the insurer within what period? -5 days -5 business days -7 business days -10 days
7 business days
In New Jersey a small group health plan requires a continuance of prior credible coverage provided that there has been no gap in coverage for a period not to exceed what period of time? 15 days 30 days 90 days 180 days
90 days
Maternity care must be provided to mother and newborn in a licensed facility for at least how many hours following a cesarean section? 24 hours 36 hours 48 hours 96 hours
96 hours
In the state of New Jersey, advertisements of which of the following are prohibited? Testimonials Celebrity paid endorsements A Trademark in lieu of the Company's name Insurer's ranking
A Trademark in lieu of the Company's name
Upon policy delivery, which of the following must a producer have an applicant sign if no initial premium was collected with the life insurance application? A waiver of premium A replacement form A good health statement An exclusion
A good health statement
If an insured's age on a life insurance policy has been misstated, what is the insurer's liability if the insured dies? No death benefit is owed because of the misstatement of age The full original death benefit listed on the policy A prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at the correct age The original death benefit listed on the policy minus any outstanding loans and interest
A prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at the correct age
Kathy's annuity is currently experiencing tax-deferred growth until she retires. Which phase is this annuity in? Payout period Accumulation period Deferred period Growth period
Accumulation period
Under the misstatement of age provision in a health insurance policy, what can a company do if it discovers that an insured gave a wrong age at the time of application? Cancel the policy Assess a penalty Increase the premiums Adjust the benefit
Adjust the benefit
Under the misstatement of age provision in a health insurance policy, what can a company do if it discovers that an insured gave a wrong age at the time of application? Cancel the policy Increase the premium Adjust the benefits Assess a penalty
Adjust the benefits
In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments Whenever an insured is unable to work During the time an insured is confined in a hospital Following an accidental injury, but not during sickness After an insured has become totally disabled as defined in the policy
After an insured has become totally disabled as defined in the policy
How does life insurance create an immediate estate? Cash value may be borrowed upon at any time Nonforfeiture options are immediately available The insured's estate receives the death benefit After first premium is paid, the face amount may be available to the beneficiary
After first premium is paid, the face amount may be available to the beneficiary
Twisting is? Replacement A violation of MEC rules An Unfair Trade Practice Permitted only with an Internal Replacement
An Unfair Trade Practice
The deeds and actions of a producer indicate what kind of authority? Express Apparent Implied Conditional
Apparent
Bill requires some nursing care and supervision but NOT full-time care. Which of these nursing home options would best serve him? Nursing home Assisted living Congregate housing Custodial residence
Assisted living
Donald is the primary insured of a life insurance policy and adds a children's term rider. What is the advantage of adding this rider? Can be converted to permanent coverage without evidence of insurability Coverage can be different for each child Premiums on this rider are not required until the limiting age is reached Increases the policy's overall cash value
Can be converted to permanent coverage without evidence of insurability
Members covered by a group health insurance plan receive a document that summarizes the benefits and the important policy provisions. This document is known as a Master policy Member's policy Coordination of benefits Certificate
Certificate
The Department of Banking and Insurance can make information pertaining to a Producer's license, available through? Disclosure of non-public information Temporary license Temporary Work Authority Certificate of License Status Report
Certificate of License Status Report
The coverage, conditions, and limitations in the master policy of a group contract can be found in which document? Certificate of Authority Consumer report Coverage document Certificate of coverage and benefits
Certificate of coverage and benefits
Naming a contingent beneficiary as "all surviving children" is described by which term? Contingent designation Primary designation Class designation Tertiary designation
Class designation
Because the design and wording of a policy are in the hands of the insurer, insurance policies are said to be Unilateral contracts Contracts of indemnity Aleatory contracts Contracts of adhesion
Contracts of adhesion
Insurance licenses are intended to be issued for the purpose of authorizing the transaction of business with members of the general public and not primarily allowing someone to benefit from commissions on business which insures their personal interest. This is a description of which of the following? Compared business Organization business Negotiated business Controlled business
Controlled business
Tim is covered under a group plan and would like to change his group coverage to an individual policy with the same insurer because of employment termination. Which of these describes the change that will take place? Coordination of benefits Conversion Extension of benefits Rollover
Conversion
Julie has a $100,000 30-year mortgage on her new home. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period? Adjustable life insurance Decreasing term insurance Increasing term insurance Modified life insurance
Decreasing term insurance
Lisa has recently bought a fixed annuity. Which of these is considered to be a disadvantage of owning this type of annuity? Payments cease 5 years after the annuitant's death During periods of inflation, annuitants will experience an increase in purchasing power of their payments During periods of inflation, annuitants will experience a decrease in purchasing power of their payments Payment amounts can be unpredictable from month to month
During periods of inflation, annuitants will experience a decrease in purchasing power of their payments
Coverage under a cancelable health insurance policy may be terminated by The insurer only the insured only Either the insured or the insurer An arbitration committee
Either the insured or the insurer
The policyholder for a group health benefit plan is considered to be the Employee Employer Liaison Insurer
Employer
The Insurance Commissioner may revoke a Producer license for? Failing to meet required sales quotas Unpaid charge-back of unearned commissions Failing to meet continuing education credit requirements Engaging primarily in Controlled Business sales
Engaging primarily in Controlled Business sales
Continuing Education credits may be approved for which of the following? Pre-licensing education Motivational education Sales and marketing education Ethics
Ethics
The taxable portion of each annuity payment is calculated using which method? Exclusion Ratio Taxable Ratio Cost Basis Tax Basis
Exclusion Ratio
One of the most important considerations when replacing health insurance would be the Age of the insured Exclusions on a new policy Occupation of the insured Cost
Exclusions on a new policy
The Department of Insurance may revoke a Producer's license for which of the following? Failing to meet sales quota Failure to maintain an insurer's appointment Acting as a Broker in a surplus lines transaction Felony conviction
Felony conviction
If an individual health contract is issued on a conditionally renewable basis, the insurer has a right to refuse renewal For any reason stated or unstated For specific reasons stated in the contract only Because of changes in the covered individual's health status When losses for the policy period exceed premiums
For specific reasons stated in the contract only
Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this? Guaranteed insurability rider Additional coverage rider Paid-up option rider Extended insurability rider
Guaranteed insurability rider
In order to be eligible for a non-resident producer license an individual must do which of the following? Pass an examination in New Jersey Hold a comparable license in another state Previously been a resident of New Jersey Have an office in New Jersey
Hold a comparable license in another state
How does one qualify as a fully-insured individual under Social Security disability coverage? Individual has been credited with the appropriate number of quarters of coverage Individual is currently covered under Medicaid Individual is expected to be disabled for 5 months Individual is currently employed
Individual has been credited with the appropriate number of quarters of coverage
The principle of insurable interest, in regards to a life insurance contract, is accurately described in which statement? An agent establishes insurable interest An individual does not have insurable interest on his or her own life Insurable interest only pertains to business arrangements Insurable interest can be based on the love and affection of individuals related by blood or law
Insurable interest can be based on the love and affection of individuals related by blood or law
The part of a health insurance policy that states the kind of benefits provided and the circumstances under which they will be paid is the Definitions Conditions Insuring clause Face of the policy
Insuring clause
Insurance companies determine risk exposure by which of the following? Insurable interest Insurance exchanges Law of large numbers and risk pooling Population table data
Law of large numbers and risk pooling
The time limit for filing claim disputes is addressed in which provision of an accident and health policy? Legal actions Entire contract Time of payment of claims Payment of claims
Legal actions
Low frequency diseases can be exclusively covered by what kind of health insurance policies? Limited policies Blanket policies Employer policies Restricted policies
Limited policies
Someone needing custodial care at home would require which type of coverage? Major medical Disability Long-term care Medicaid
Long-term care
Over the course of a year, which premium payment mode is most expensive? Monthly Quarterly Semi-Annually Annually
Monthly
Producers selling insurance in New Jersey, while having a residence and business address outside the state, are? Brokers Consultants Surplus lines brokers Non-Resident producers
Non-Resident producers
To cancel a health insurance policy, which one of the following must the insured do? Notify the insurer by telephone Notify the insurer in writing Replace the current policy with another Change at least two uniform mandatory provisions
Notify the insurer in writing
Producer license denials are appealed at a hearing before? Commissioner of Insurance Board of Arbitration Committee formed by the Commissioner Office of Administrative Law
Office of Administrative Law
How do interest earnings accumulate in a deferred annuity? On a tax credit basis On a tax-deferred basis On a tax-free basis On a taxable basis
On a tax-deferred basis
During the solicitation of a Life policy, when must an insurer must furnish a prospective buyer with a Buyer's Guide and a Policy Summary? Prior to, or at the time of policy delivery Five days before the initial premium is accepted Seven days before the initial premium is accepted Within 10 days after the initial premium is accepted
Prior to, or at the time of policy delivery
Dana is an employee who deposits a percentage of her income into her individual annuity. Her company also contributes a percentage into a separate company pension plan. What kind of annuity is this considered? Qualified retirement annuity Key employee retirement annuity Executive compensation plan Keogh annuity plan
Qualified retirement annuity
If credit life insurance is terminated before the scheduled maturity date of the debt, any unearned premium held by the insurer will be? Refunded to the debtor Added to the insurer's surplus funds Debited to an account for "bad debts" Refunded to the creditor
Refunded to the debtor
First year commissions may be legally paid to someone holding? Certificate of Authority Temporary license Consultant license State license and Appointment with the paying insurer
State license and Appointment with the paying insurer
Justin is receiving disability income benefits from a group policy paid for by his employer. How are these benefits treated for tax purposes? Partially taxable income Non-taxable income Taxable income Conditionally taxable income
Taxable income
Jonas has disability insurance through his employer. The employer pays 75% of the premium, and Jonas pays the other 25%. What is Jonas's tax liability for any benefits paid from the disability plan? Taxes must be paid on all benefits received No taxes are payable on any benefits received Taxes must be paid on 25% of the benefits received Taxes must be paid on 75% of the benefits received
Taxes must be paid on 75% of the benefits received
The National Do Not Call List is monitored by which of the following? The State of New Jersey The Federal Government (Federal Trade Commission) The NAIC The telephone police agency
The Federal Government (Federal Trade Commission)
The Commissioner of Insurance is appointed by which of the following? The Legislature The Senate The Secretary of State The Governor
The Governor
James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount? The original face amount will be paid to the beneficiary The policy will be voided with no death benefits paid The death benefit paid will be what the premium would have purchased at the correct age The amount of premiums paid will be returned with interest
The death benefit paid will be what the premium would have purchased at the correct age
Individual health insurance policies may include a provision concerning unpaid premiums. When the provision applies, if a premium payment is overdue when a claim for benefits is made Coverage is suspended until the premium is paid. The insurer may pay the claim and then cancel the policy. A written demand for premium payment will be sent to the insured. The insurer may deduct the overdue premium from the benefits
The insurer may deduct the overdue premium from the benefits
Each of the following about Branch offices is true, EXCEPT At least one license producer is permanently assigned to that office The assigned producer is present or accessible during business hours, except when engaged in branch activities elsewhere The office is accessible to the general public during reasonable business hours The office must be open 9-5, 5 days a week
The office must be open 9-5, 5 days a week
The statement which best describes the relationship between the premiums of a whole life policy and the premium payment period is The shorter the payment period, the lower the premium The longer the payment period, the higher the premium The shorter the payment period, the higher the premium The payment period has no affect on the premium payment
The shorter the payment period, the higher the premium
Insurers are required to keep copies of Policy Summaries and Buyer's Guides on file for at least: Two years after the documents are used Three years after the documents are used Five years after the documents are used Seven years after the documents are used
Three years after the documents are used
Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is this? Increasing Term Life policy Nonparticipating policy Modified Whole Life policy Universal Life policy
Universal Life policy
Craig submits a $500 claim for medical expenses. With a past due premium of $100, the insurer pays $400. Which of the Uniform Optional Provisions covers this situation? Payment of claims Legal actions Unpaid premium Time of payment of claims
Unpaid premium
In the health insurance policy, when should the written notice of claim be given to the insurer? Within 20 days after the occurrence or commencement of any loss covered by the policy 30 to 60 days after the occurrence or commencement of any loss covered by the policy 90 to 120 days after the occurrence or commencement of any loss covered by the policy 1 year after the occurrence or commencement of any loss covered by the policy
Within 20 days after the occurrence or commencement of any loss covered by the policy
People with higher loss exposure have the tendency to purchase insurance more often than those at average risk. This is called risk retention preexisting conditions law of large numbers adverse selection
adverse selection
Loss of income insurance provides an individual the means to replace wages an individual the ability to collect workers' compensation an individual the ability to continue with medical coverage after a disability unlimited income replacement to a disabled person
an individual the means to replace wages
Medical Expense Insurance would cover an injury occurring at the insured's residence an injury occurring at work an injury caused by war elective surgeries
an injury occurring at the insured's residence
Someone who sells, solicits, or negotiates insurance contracts for compensation on behalf of an insurer is called an insurance broker an insurance producer an insurance advisor an insurance solicitor
an insurance producer
Before a licensed agent is eligible to transact insurance sales, they must be appointed by an insurance company trained by an authorized insurance company approved by the governor assigned an insurance mentor
appointed by an insurance company
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a terminated employee's benefits must be less extensive and premium cannot exceed 102% be the same and the premium cannot exceed 102% be more extensive and the premium cannot exceed 102% be the same as well as the premium
be the same and the premium cannot exceed 102%
Preferred risk policies with reduced premiums are issued by insurance companies because the insured has a higher face amount than average a better ability to pay premiums over a long period of time worse than average mortality or morbidity experience better than average mortality or morbidity experience
better than average mortality or morbidity experience
The type of policy where the insurer can send a notice to the insured that the policy has been cancelled in the middle of the term is called noncancelable conditionally renewable optionally renewable cancelable
cancelable
Under a group life policy, the insurer will issue an individual _____ to the policyowner for delivery to each person insured. policy certificate application rider
certificate
Ownership of a life insurance policy may be temporarily transferred with a(n) collateral assignment absolute assignment transferable assignment beneficiary assignment
collateral assignment
Life insurance policies will normally pay for losses arising from commercial aviation war suicide hazardous jobs
commercial aviation
In an insurance contract, the element that shows each party is giving something of value is called offer acceptance consideration purpose
consideration
Medicare Part B covers long-term care hospital room and board doctor's charges prescription drugs
doctor's charges
Benefits provided by a Medicare Supplement policy must NOT be payable to the insured duplicate Medicare benefits be sold to individuals under 70 charge additional premiums
duplicate Medicare benefits
Under the Health Insurance Portability and Accountability Act (HIPAA), the employee's new Group Health Plan will verify Creditable Coverage so that the -employee's benefits still owed can be claimed -employee cannot be excluded from the new employer's health plan -employee's waiting period for coverage of a preexisting condition can be reduced under the new employer's health plan -new health insurance carrier will have a clear record of any chronic conditions that exist
employee's waiting period for coverage of a preexisting condition can be reduced under the new employer's health plan
The purpose of the Life and Health Insurance Guaranty Association is to ensure that claims filed against insolvent insurance companies will be paid ensure that premium rates are uniform throughout the state approve disability policy forms protect the public from fraudulent insurance company marketing practices
ensure that claims filed against insolvent insurance companies will be paid
Level premium permanent insurance accumulates a reserve that will eventually equal the face amount of the policy pay a dividend to the policyowner require the policyowner to make periodic withdrawals become larger than the face amount
equal the face amount of the policy
Purchasing a life insurance policy in order to avoid the forced sale of assets upon death is called estate funding capital withholding capital gains estate conservation
estate conservation
Under a non-qualified annuity, interest is taxed after the deposits have been made death of the annuitant distribution of payments exclusion ratio has been calculated
exclusion ratio has been calculated
Underwriters can acquire information from all of the following sources EXCEPT Medical Information Bureau (MIB) consumer reports attending physician's statements genetic testing
genetic testing
Level premium term life insurance policies build cash value in a separate account automatically convert to permanent insurance at a predetermined date automatically renew at predetermined dates have premiums that are averaged over the policy period
have premiums that are averaged over the policy period
Index whole life insurance contains a securities component that acts as a(n) hedge against inflation premium stabilizer means to lowering taxes on earnings incentive to purchase more coverage
hedge against inflation
Simon has purchased a fixed immediate annuity. His payment amount will be dependent upon principal, interest, and the contract's surrender charge death benefit cash refund income period
income period
The focus of major medical insurance is providing coverage for critical illnesses only preventative care medical and hospitalization expenses doctor's visits
medical and hospitalization expenses
The New Jersey Individual Health Coverage Program is designed to provide comprehensive health benefits for low income residents of New Jersey senior citizens residing in New Jersey medically uninsurable New Jersey residents children of low-income New Jersey residents
medically uninsurable New Jersey residents
The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid minus indebtedness and with interest during the last 12 months minus indebtedness and without interest during the last 6 months
minus indebtedness and without interest during the last 6 months
The gatekeeper's role when used by an HMO is establishing out-of-network providers obtaining referrals to specialists from primary care physicians taking applications for enrollment into an HMO processing the subscriber's payments
obtaining referrals to specialists from primary care physicians
The difference between pre-certification and concurrent review is that pre-certification costs more to the patient costs less to the patient is considered a cost containment measure occurs before the treatment is provided
occurs before the treatment is provided
The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of any interest payable from an outstanding policy loan balance past due premiums that have not been paid by the end of the grace period the outstanding policy loan balance any surrender charges owed by the policyowner
past due premiums that have not been paid by the end of the grace period
States that have "no loss no gain" laws require a replacing policy to keep the same type of coverage as the policy it replaces not charge a different premium from the policy it replaces pay for half of any ongoing claims under the policy it replaces pay for ongoing claims under the policy it replaces
pay for ongoing claims under the policy it replaces
In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST -remit all past-due premiums within the grace period -provide evidence of insurability to the insurer -resubmit a new life insurance application -provide a valid reason for the lapse
provide evidence of insurability to the insurer
Term insurance is appropriate for someone who seeks living benefits for themselves seeks a policy that builds cash value seeks temporary protection and lower premiums seeks permanent protection and higher premiums
seeks temporary protection and lower premiums
If the Commissioner determines that an individual has engaged in an act violating state insurance laws, the Commissioner may issue an order requiring the violator to pay restitution to his or her victims stop engaging in those acts appear before a jury of his or her peers perform community service
stop engaging in those acts
The elimination period under a hospital indemnity plan is -the period in which pre-existing conditions are not taken into consideration -the period in which all deductibles are eliminated -the specified number of days after an insurance policy's issue date during which coverage is not afforded for sickness -the specified number of days an insured must wait before becoming eligible to receive benefits for each hospitalization
the specified number of days an insured must wait before becoming eligible to receive benefits for each hospitalization
Legal purpose is a term used in contract law meaning there must be an offer and acceptance the contract must be aleatory there must be legal reasons for entering into the contract the contract must be a contract of adhesion
there must be legal reasons for entering into the contract
Knowingly making misleading statements that would cause an insured to lapse, assign, or terminate an insurance policy in order to switch companies is an example of rebating defamation intimidation twisting
twisting
The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to as twisting subrogation a life settlement coercion
twisting
