Life Quiz 2.0

The Commissioner believes that an insurance rule or regulation has been violated, and decides to call a disciplinary hearing. How many days before a hearing must the Commissioner issue a notice to the person charged with a violation? a) 10 days b) 20 days c) 30 days d) 7 days

a) 10 days

Which of the following factors determines the amount of each installment paid in a Life Income Option arrangement? a) Projected life insurance and health insurance b) Recipient's life expectancy and amount of principal c) Projected income d) Recipient's health and death benefits

b) Recipient's life expectancy and amount of principal

An Adjustable Life policyowner can change which of the following policy features? a) The insured b) The coverage period c) The mortality expense d) The investment account

b) The coverage period

Provided that it is a first offense, what is the maximum penalty for failing to respond to a subpoena? a) $100 b) $10,000 c) $5,000 d) $500

c) $5,000

Which nonforfeiture option has the highest amount of insurance protection? a) Decreasing Term b) Reduced Paid-up c) Extended Term d) Conversion

c) Extended Term

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? a) As of the policy delivery date b) As of the first of the month after the policy issue c) As of the policy issue date d) As of the application date

d) As of the application date

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy? a) Dividend options b) Guaranteed renewable option c) Nonforfeiture options d) Guaranteed insurability option

d) Guaranteed insurability option

Z falls from the roof of his house while fixing it and damages his spinal column enough to render him disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will Z receive? a) Percentage of medical costs paid by the insurer b) Payments for life c) Yearly premium waiver and income d) Monthly premium waiver and monthly income

d) Monthly premium waiver and monthly income

Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a a) Warranty. b) Premium receipt. c) Statement of good health. d) Backdated receipt.

b) Premium receipt.

A producer agent must do all of the following when delivering a new policy to the insured EXCEPT a) Collect any premium due. b) Explain the rating procedures if the policy is rated differently than applied for. c) Disclose commissions earned from the sale of the policy. d) Explain the policy provisions, riders, and exclusions.

c) Disclose commissions earned from the sale of the policy.

The automatic premium loan provision is activated at the end of the a) Elimination period. b) Policy period. c) Grace period. d) Free-look period

c) Grace period.

An insured purchases a policy in 2008 and died in 2013. The insurance company discovers at that time that the insured concealed information during the application process. What can they do? a) Sue for the right to not pay the death benefit b) Pay the death benefit c) Refuse to pay the death benefit because of the fraud d) Pay a decreased death benefit

b) Pay the death benefit

Which of the following would be considered a nonmedical insurance application? a) An application on which the medical information is completed by the applicant and the agent only b) An application that does not ask any questions about the applicant's medical history c) An application submitted with the Agent's Report d) Any application for life insurance

a) An application on which the medical information is completed by the applicant and the agent only

The Commissioner believes that a licensee has violated an insurance regulation and decides to conduct a hearing. How long of a notice must the Commissioner provide the licensee? a) 31 days b) 10 days c) 14 days d) 20 days

b) 10 days

What is the minimum licensing age for nonresident insurance producers in New Jersey? a) 25 b) 18 c) 20 d) 21

b) 18

Which of the following is NOT an example of insurable interest? a) Child in parent b) Debtor in creditor c) Business partners in each other d) Employer in employee

b) Debtor in creditor

Which of the following statements is TRUE concerning the Accidental Death Rider? a) It is only available in group insurance. b) It will pay double or triple the face amount. c) It is also known as a triple indemnity rider. d) This rider is only available to insureds over the age of 65.

b) It will pay double or triple the face amount.

Under which of the following circumstances would a nonresident producer NOT required to complete CE hours in New Jersey? a) Under no circumstances: all producers must meet CE requirements in this state b) If a waiver is received from the Commissioner c) If the producer's home state has the same CE requirements and the producer satisfies them d) Any time nonresident producers satisfy CE requirements in their home state

c) If the producer's home state has the same CE requirements and the producer satisfies them

Which of the following statements regarding HIV testing for insurance purposes is NOT true? a) The testing practices must meet the criteria of the U.S. Department of Health and Human Services. b) HIV testing is regulated at the state level. c) Insurers are barred from requesting HIV testing. d) Positive test results will be forwarded to the state's Department of Health if a physician is not selected by the applicant.

c) Insurers are barred from requesting HIV testing.

Insurance is regulated a) Only on the level of social medicine, which is on both state and federal levels. b) Mostly on a federal level. c) Mostly on a state level. d) Evenly between the state and federal levels.

c) Mostly on a state level.

The Ownership provision entitles the policyowner to do all of the following EXCEPT a) Assign the policy. b) Designate a beneficiary. c) Set premium rates. d) Receive a policy loan.

c) Set premium rates.

The interest earned on policy dividends is a) Tax deductible. b) 40% taxable, similar to a capital gain. c) Taxable. d) Nontaxable.

c) Taxable.

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? a) Guaranteed insurability rider b) Change of insured rider c) Term rider d) Accidental death and dismemberment rider

c) Term rider

Fred is the owner of a whole life insurance policy. Some of the details involving benefit payments are not expressed in the policy, but the insurer proposed an arrangement 10 years ago. Fred has still not agreed formally to the terms of the proposal. When the policy matures, what will the insurer do? a) Execute the terms of the proposed agreement, while charging Fred a penalty of no more than 2.5% of the monthly payout until an agreement is established b) Execute the terms of the proposed agreement, since Fred did not formally disagree c) Hold Fred's money in a segregated fund until it can come to a formal agreement with Fred d) Hold Fred's money in its general fund until it can come to a formal agreement with Fred

d) Hold Fred's money in its general fund until it can come to a formal agreement with Fred

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 a) Negotiate a reduced settlement with the beneficiary due to the unusual circumstances involved. b) Return the premium to Y's estate, since it has no obligation to pay the death claim. c) Keep the premium and reject the risk on the basis that the applicant died before the policy could be issued. d) Issue the policy anyway and pay the face value to the beneficiary.

d) Issue the policy anyway and pay the face value to the beneficiary.

Part 2 of the application for life insurance provides questions regarding all of the following EXCEPT a) Family health history. b) Alcohol and tobacco consumption. c) Recent surgeries. d) Other insurance coverages.

d) Other insurance coverages.

All of the following professional designations are recognized by the Department as acceptable substitutes for education and examination requirements EXCEPT a) Chartered Property/Casualty Underwriter (CPCU) b) Chartered Financial Consultant (ChFC) c) Chartered Life Underwriter (CLU) d) Professional Insurance Agent (PIA)

d) Professional Insurance Agent (PIA)