All of the following statements are correct regarding credit life insurance EXCEPT Benefits are paid to the borrower's beneficiary. The amount of insurance permissible is limited per borrower. Premiums are usually paid by the borrower. Benefit

What is the fine for violating the Commissioner's cease and desist order? $10,000 $20,000 $1,000 $5,000

$5,000

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? Beneficiary clause Consideration clause Insuring clause Entire contract clause

Insuring Clause

In cases where a producer's license has been revoked, the producer must wait for how long before applying for reinstatement? 3 years 5 years 10 years Once a license has been revoked, it cannot be reinstated in this state.

5 years

An insurer cancelled a contract with a producer on April 1st. By what date must the insurer notify the Commissioner of this action? April 30th April 5th April 11th April 15th

April 15

If a credit life policy lapses for nonpayment before the debt is satisfied, within how many days must the creditor either refund the premium paid or apply it against the debt? 3 10 30 60

60

An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin? When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health On the designated effective date On the application date When the agent submits the application to the company and the company issues a conditional receipt

When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health

Which of the following licenses is required for a surplus lines producer? Life and Health Adjusters Property and Casualty Credit insurance

Property and Casualty

All of the following statements are correct regarding credit life insurance EXCEPT *Benefits are paid to the borrower's beneficiary. *The amount of insurance permissible is limited per borrower. *Premiums are usually paid by the borrower. *Benefits are paid to the creditor.

Benefits are paid to the borrower's beneficiary

What happens when a policy is surrendered for its cash value? The policy can be converted to term coverage. Coverage ends and the policy cannot be reinstated. Coverage ends but the policy can be reinstated at any time. The policy can be reinstated by paying back all policy loans and premiums

Coverage ends and the policy cannot be reinstated.

Which of the following would be the beneficiary in credit life insurance? Company Borrower Creditor Insured

Creditor

Which of the following is another term for the accumulation period of an annuity? Premium period Liquidation period Annuity period Pay-in period

Pay-In Period

Which nonforfeiture option provides coverage for the longest period of time? Accumulated at interest Reduced paid-up Extended term Paid-up option

Reduced paid-up

All of the following would be different between qualified and nonqualified retirement plans EXCEPT IRS approval requirements Taxation on accumulation Taxation of withdrawals Taxation of contributions

Taxation on withdrawals

What is the purpose of the buyer's guide? To list all policy riders To provide information about the issued policy To allow the consumer to compare the costs of different policies To provide the name and address of the agent/producer issuing the policy

To allow the consumer to compare the costs of different policies

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? If less than 2 years have passed since the policy issue date, it is acceptable for the application to be considered as evidence. State law prohibits applications from being used in litigation. Applications can only be used in court cases if they are attached to or endorsed upon the issued policy. Once the policy is issued, it is permissible to use the application in litigation, provided that the insured is notified.

Applications can only be used in court cases if they are attached to or endorsed upon the issued policy.

Which of the following settlement options in life insurance is known as straight life? Life with period certain Fixed amount Life income Single life

Life income

If a producer has been convicted of a crime, he or she must notify the Commissioner within 30 days. 10 days. 15 days. 20 days.

30 days

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries? *The beneficiary will receive 2/3 of the total benefit, with the final 1/3 payable when the first beneficiary dies. *One of the beneficiaries will receive 1/3 and the other 2/3 of the proceeds when the insured dies. *The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive. *The beneficiary will receive 2/3 of the lump sum up front, and the remaining 1/3 will be paid over time.

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

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 7 days. 10 days. 15 days. 30 days.

30 days

An individual has been diagnosed with Alzheimer's disease. He is insured under a life insurance policy with the accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefits? A portion of the benefit up to a limit is tax free; the rest is taxable income. Principal is tax free, but interest is taxed. The entire benefit will be received tax free. The entire living benefit is considered taxable income.

A portion of the benefit up to a limit is tax free; the rest is taxable income

During replacement of life insurance, a replacing insurer must do which of the following? Send a copy of the Notice Regarding Replacement to the Department of Insurance Obtain a list of all life insurance policies that will be replaced Guarantee a replacement for each existing policy Designate a new producer for a replaced policy

Obtain a list of all life insurance policies that will be replaced

All of the following are requirements for a nonresident license EXCEPT Holding an active license in the same line of authority in another state. Submitting a licensing application from the home state. Paying the required fees. Passing the New Jersey licensing examination.

Passing the New Jersey licensing examination

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

Taxable

A producer received a group master policy and certificates for delivery to the insured. Within how many days must the policy and certificates be delivered? 10 business days 10 calendar days 5 business days 5 calendar days

10 calendar days

Which of the following is TRUE regarding variable annuities? A person selling variable annuities is required to have only a life agent's license. The annuitant assumes the risks on investment. The funds are invested in the company's general account. The company guarantees a minimum interest rate.

The annuitant assumes the risks on investment.