Chapter 6: LIFE

if a credit life policy lapsed for nonpayment before the debt is satisfied, within how many days must the creditor either refund the premium paid of apply it against the debt: A: 3 B: 30 C: 30 D: 60

D: 60

which of the following would be the beneficiary in credit life insurance: A: company B: borrower C: creditor D: insured

C: creditor

which rule would apply if an agent knows an applicant is going to cash an old policy and use the funds to purchase new insurance: A: conversion rule B: disclosure rule C: replacement rule D: reinstatement rule

C: replacement rule

by how many does the discontinuance of a group insurance policy reduce the time limit for providing notice of claim or proof of loss: A: 0 days B: 5 days C: 15 dyas D: 30 days

A: 0 days

which of the following statements about a life insurance policy would be allowed in an insurance advertisement: A: this is a term life insurance policy B: this life insurance policy is also an investment plan C: this is a group policy term D: this is a retirement savings plan

A: this is a term life insurance policy

all of the following could own group insurance EXCEPT: A: an alumni group B: a debtor group C: a group needing low- cost life insurance D: a group sponsored by an employer

C: a group needing low- cost life insurance

if an insurer requires an application in order to renew a life insurance policy, it is the insurer's responsibility to send one to the insured: A: within 30 days of the insured's request B: within 10 days of the insured's request C: 30 days in advance of renewal D: 90 days in advance of renewal

A: within 30 days of the insured's request

which of the following documents must be provided to the policy owner or applicant during policy replacement: A: buyers guide and policy's summary B: policy illustrations C: notice regarding replacement D: disclosure authorization form

C: notice regarding replacement

solicitation rules would apply to which of the following types of coverage: A: variable life B: group life C: whole life D: deferred annuity

C: whole life

agents who persuade insured to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of: A: defamation B: misrepresentation C: rebating D: twisting

D: twisting

all advertisements pertaining to life insurance policies are the: A: insurer B: commissioner C: agency that produces them D: consumer protection agency

A: insurer

misrepresenting an insurance policy as a share of stick is an example of which of the following: A: rebating B: twisting C: false advertising D: churning

C: false advertising

an insurer must keep all sales materials for at least how long: A: 5 years B: 6 years C: 8 years D: as long as the insurer remains in bsinee

A: 5 years

a small employee owns a group health insurance policy. the employer does not pay the premium by the premium due date and fails again to pay by the end of the grace period. the insurer cancels the policy. which of the following is true: A: the insurer will pay all losses only up to the premium due date B: the insurer will pay all losses through the end of the grace period C: the insurer will pay all losses continuing after the grace period ends D: this varies with every insurer, so there is not enough information to answer this question

B: the insurer will pay all losses through the end of the grace period

all of the following statements are correct regarding credit life insurance EXCEPT: A: benefits are paid to the borrower's beneficiary B: the amount of insurance permissible is limited per borrower C: premiums are usually paid by the borrower D: benefits re paid to the creditor

A: benefits are paid to the borrower's beneficiary

which of the following is correct regarding credit life insurance: A: it insures the life of a creditor B: it has a maximum term of 20 years C: it insurers the life of a debtor D: it is purchased on an installment basis

C: it insurers the life of a debtor

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 policy 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 it's general fund until it can come to a formal agreement with Fred

D: hold Fred's money in it's general fund until it can come to a formal agreement with Fred

proceeds from life insurance policies are protected from the beneficiary's debts under all of the following circumstances EXCEPT: A: some of the premiums were paid in an attempt to defraud creditors B: the amount of debt exceeds the policy's face value C: the amount of debt exceeds 50% of the policy's face value D: the are no circumstances under which proceeds are protected from the beneficiary's debts

A: some of the premiums were paid in an attempt to defraud creditors

the insurer must maintain copies of notice regarding replacement and the comparative information form, policy summary, and sales materials until the next regular examination by the department of banking and insurance or for at least: A: 3 years B: 5 years C: 8 years D: 10 years

B: 5 years

A small employer owns a group health insurance policy. the employer neglects to pay the premium by the payment due date. the employer fails to pay the premium yet again by the end of the grace period. which of the following will happen: A: the policy will terminate B: the policy will continue for the certificate holders only C: the certificate holders will be transferred to another policy D: the certificate holders will have to pay for all claims were incurred after the premium due date

A: the policy will terminate

a life insurance policy has lapsed, and the policy owner would like to reinstate it. in order to initiate the reinstatement process, he must submit and application to his insurer. which of the following is true: A: it is the insurer's responsibility to deliver this application to the policy owner within 30 days of the policy lapse. B: it is the insurer's responsibility to deliver this application to the policy owner within 10 days of the policy lapse. C: if the policy owner's responsibility to request the reinstatement application; the insurer must then deliver it within 30 days D: it is the policy owners responsibility to request the reinstatement application; the insurer must deliver it within 10 days

C: if the policy owner's responsibility to request the reinstatement application; the insurer must then deliver it within 30 days

all of the following actions can be described as twisting EXCEPT: A: embellishing the terms of the proposed policy in order to convince the insured switch B: making an incomplete comparison between the existing and proposed policies C: explaining to the client the advantages of permanent insurance over term and suggesting changing policies D: misrepresenting the terms and conditions of the existing policy to make the new one more attractive

C: explaining to the client the advantages of permanent insurance over term and suggesting changing policies

which of the following is TRUE about credit life insurance: A: debtor is the policy beneficiary B: creditor is the policy owner C: debtor is the annuitant D: creditor is the insured

B: creditor is the policy owner

during replacement of life insurance, a replacing insurer must do which of the following: A: send a copy of notice regarding replacement to the department of insurance B: obtain a list of all life insurance policies that will be replaced C: guarantee a replacement for each existing policy D: designate a new producer for replace policy

B: obtain a list of all life insurance policies that will be replaced

the initial amount of credit life insurance may NOT EXCEED: A: the borrowers annual income B: the amount to be repaid under the contract C: an amount set by statute and adjusted regularly for inflation D: the borrower's monthly income

B: the amount to be repaid under the contract

which of the following is TRUE regarding the insurance amount in a credit life policy: A: the creditor can only insure the debtor for the amount owed B: the creditor may insure the debtor for an unlimited amount of coverage C: allowable amount of coverage is determined by the state insurance commissioner D: the amount of coverage can be greater than the amount owed

A: the creditor can only insure the debtor for the amount owed

In NJ, the minimum age at which a person can purchase a life insurance policy on his or her ow life is: A: 13 B: 15 C: 16 D: 18

B: 15

in NJ, the public is protected by a notice of discontinuance when a policy is discontinued for nonpayment of premiums. when a policy is discontinued, all of the following are required EXCEPT: A: written notice to the policy holder B: a reminder of the date of discontinuance C: ceasing to collect premium payments from group participants unless the group policyholder remains fully responsible for the benefits D: refund of premiums

D: refund of premiums