NJ Life Exam
Which of the following statements is INCORRECT concerning business operations in a branch office in New Jersey?
A branch office certificate expires 2 years from the date of filing, regardless of the producer's own license expiration.
Who is considered a nonresident agent? A. An agent who does not earn commission B. An agent who resides in another state, but is licensed to write insurance in the state. C. An agent who is not a U.S. citizen. D. An agent whose license has been revoked.
An agent who resides in another state, but is licensed to write insurance in the state.
Which of the following would NOT trigger the payment of Accelerated Death Benefits? -Terminal Illness -Requiring an organ transplant for the insured to survive -Being permanently institutionalized -Being permanently disabled
Being permanently disables
Partners in a business want to make sure that if one of them were to pass away, their surviving family will receive a fair value for their portion in the business. what life insurance arrangement would be most suited for transitioning the business?
Buy-sell agreement
1. Under what circumstances will the contingent beneficiary receive the death benefit? A. If designated by the primary beneficiary B. If contingent beneficiary is the insured's estate C. If the primary beneficiary dies before the insured D. If designated by the insurer
C. If the primary beneficiary dies before the insured
In contrasting stock insurers with mutual insurers, which statement is true? A. Nonparticipating policies can pay out dividends to the policyholders B. Mutual insurers are owned by the shareholders and issue participating policies C. Stock insurer are owned by the shareholders and issue nonparticipating policies D. Stock dividends are tax free while policy dividends are taxable
C. Stock insurer are owned by the shareholders and issue nonparticipating policies
An agency wants to obtain license statistics on one of its new producers. It requests a document that the insurance department can produce, which lists the producer's license status, lines of license that the producer can transact, and other information. This report is called a
Certification of License Status
An insured and his spouse recently had a child. What rider would allow the couple to insure the child for a limited period of time at a specific amount?
Children's term rider
A lender who conditions approval of a loan on the condition that the borrower purchase insurance from that lender may be guilty of
Coercion
which of the following has the authority to make and enforce rules and regulations to implement and carry out he purposes of the insurance laws of New Jersey?
Commissioner
All of the following are true regarding credit life insurance, EXCEPT:
Credit life insurance is only sold through a group policy.
which of the following statements is INCORRECT: A: a minor, age 15 can purchase insurance in the state of NJ B: a minor, age 16, can be the beneficiary on a policy C: if an insurer receives written notification of a legal guardian of a minor's property, the insurer minor will not receive payment directly from the insurer D: a minor, age 17, is not allowed to purchase insurance in the state of NJ
D: a minor, age 17, is not allowed to purchase insurance in the state of NJ
During policy solicitation an insurer exaggerates the financial condition of one of its competitors and makes it sound worse than it is. This is an example of?
Defamation
An insurer mails an insurance policy to new policyowner. When the insurer relinquishes control of the policy, the policy is considered?
Delivered
Which of the following is not a standard exclusion in life insurance policies?
Disability
When a whole life insurance policy is surrendered for its nonforfeiture value, what is the automatic option?
Extended term
An important fact about the financial status of the insurer was deliberately withheld. Which of the following terms best describes this action?
False financial statement
A married couple wants to include the entire family in their whole life policy under one rider. Which of the following riders will help them achieve that goal?
Family term
An annuity owner receives the same guaranteed payment every month. What type of annuity is it?
Fixed
J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. What settlement option did J choose?
Fixed amount
An insurer incorporates under the laws of another state but doing business in this state is considered
Foreign Insurer
how long is the grace period for an individual life insurance policy 2 weeks 7 to 10 business days 3 months 1 month
I think 1 month
variable life insurance is regulated by all of the following entities except
I think SEC
To purchase insurance, the policy owner must face the possibility of losing money or something of value in the event of loss.
Insurable interest
The provision that sets forth the basic agreement between the insurer and the insured and states the insurers promise to pay the death benefit upon the insured's death is called
Insuring clause
How does insurance distribute the financial consequences of individual losses?
It transfers the risk to all persons insured
When comparing a joint life policy to two individual life policies of the same amount on the same insurance, which condition is true?
Joint life as a lower premium then the total of the two individual policies
Which of the following acts stated that the federal government would not regulate insurance as long as an adequate job of regulating the industry was done by the states?
Maybe McCarran Act
Cash Value guarantees in a whole life policy are called
Nonforfeiture values
Among people in the same class and life expectancy, which of the following factors can be used to influence premium rates?
Occupation
Which of the following best defines the unfair trade practice of rebating
Offering an inducement of something of value in the policy
Producer licenses will NOT be issued to business entities in which of the following cases
One partner's license was revoked in the pervious 5 years
When the owner of a participating whole life policy uses the dividend to provide more life insurance coverage, which of the following dividend options is being used?
Paid-up Additions
Policies written on a third-party ownership basis are usually written to cover what?
Policy-owner's minor children or business associates
The purpose of the Fair Credit Reporting Act is to: Option 1: Ensure consumers receive a copy of investigative consumer reports. Option 2: Ensure coverage for all applicants. Option 3: Protect consumers against the circulation of inaccurate or obsolete personal or financial information. Option 4: Protect the insurer from adverse selection.
Protect consumers against the circulation of inaccurate or obsolete personal or financial information
The guaranteed insurability rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following except:
Purchase of a new home
In life insurance, which of the following is NOT required to have an insurable interest in the insured?
The beneficiary
Which of the following is true regarding premium and a 10 year level premium policy?
The premium remain level for 10 years
What is the main purpose of requiring licenses for persons who transact insurance?
To protect the general public
An agent tells an insured that if he replaces his current insurance policy with a new one, his dividends will be higher and his premiums will be slightly lower. The policy, however, would not offer either one of these things. What type of misrepresentation is being committed?
Twisting
An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change or surrender a life insurance policy or annuity has committed an illegal practice known as
Twisting
In a noncontributory group policy
Typically require 100 percent of eligible employees to participate
Because of an injury an insured has been unable to work for 9 months he paid the policy premium for his life insurance for the first 6 months of disability
Waiver of premium rider
In which of the following scenarios will the life insurance proceeds be protected from the creditors
When the benefits are not paid out to the insured or any person affecting the insurance
If a loan request is for payment of due premiums on the policy, how soon must the insurer issue a loan? a) Immediately b) Within 10 days c) Within 30 days d) Within 90 days
a) immediately
When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to? a) Pay back all premiums owed plus interest. b) Receive payments for a fixed amount. c) Purchase a single premium policy for a reduced face amount. d) Purchase a term rider to attach to the policy.
c) Purchase a single premium policy for a reduced face amount.
What is the most common name for a single policy that is designed to insure two or more lives with a standard premium, and that pays the death benefit upon the first death? a) Second-to-Die b) Last Survivor c) Survivorship Life d) Joint Life
d) joint life
What is the maximum loan amount a policyowner may withdrawal from a variable universal life insurance policy? A. Nothing; loans are not allowed under variable universal life B. An amount not exceeding the cash value C. An amount up to the face amount of the policy D. An amount equal to the first year of premium payments
no idea
Which of the following statements is true regarding SIMPLE plans? A. The employer cannot contribute to the plan. B. The employer can contribute up to 5% of the employee's annual compensation. C. The employee cannot contribute to the plan. D. Contributions and earnings are tax-deferred until funds are withdrawn.
no idea
If an individual willfully violates provisions of the fair credit reporting act, what is the max civil penalty?
$2,500
An IRA owner who is 57 years old wants to Make a withdrawal from her traditional IRA, what penalty will be imposed
10%
An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial review?
3 days
Sue's license was revoked 1 year ago. she would like to reinstate it. how much longer will she have to wait before she can apply for reinstatement: A: 1 more year B: 2 more years C: 3 more years D: 4 more years
4 more years
all of the following are abilities of the New Jersey Life and Health Guaranty Association in the event of insurer insolvency EXCEPT: A: guardianship of all physical properties, documents, and effects of the insurer B: issuing moratoriums on payment C: imposition of contract liens D: assumption of payment of insurer's contractual obligations
A: guardianship of all physical properties, documents, and effects of the insurer
Which of the following is not an example of a company's location of incorporation?
Authorized
In Credit Life Insurance, who is responsible for paying the policy premiums?
Borrower only
Which of the following would be TRUE of both the fixed-period and fixed-amount settlement options?
Both guarantee that the principal and interest will be fully paid out
The entire contract in health insurance includes all of the following EXCEPT: A)buyer's guide. B)endorsements to the policy. C)riders attached to the policy. D)the policy itself.
Buyer's guide
What must an applicant do before being admitted to the state licensing examination
COMPLETE 20 HOURS of education for each line of insurance which the applicant intends to transact including education regarding state specific regulations.
An insurance agent visits a potential client and explains various types of policies. The customer displays a lack of interest, so the agent guarantees higher dividends than he knows would be possible. Which term describes what the agent has done?A.) Rebating B.) Twisting C.) Defamation D.) Misrepresentation
D.) Misrepresentation Misrepresentation is the act of portraying sales material that is false, misleading or deceptive as to policy benefits or terms, the payment of dividends, etc. This refers to all forms of communication.
According to the Fair Credit Reporting Act, all of the following statements are true EXCEPT
If an applicant is declined for an insurance policy, he or she has no right to know what was in the report
A life insurance policy qualifies a Modified Endowment Contract (MEC) if the amount of premium paid exceeds the amount that would have provided paid-up insurance in how many years?
If the policy's premium paid in its first 7 years exceed what would have been paid into a life policy with level annual premiums that would be paid-up in 7 years, the policy fails the 7-pay test and becomes a Modified Endowment Contract.
Under which of the following conditions would life insurance proceeds be taxable by the federal government
If there is a transfer for value
If a soliciting producer suspects that there could be misrepresentation on the part of the applicant for insurance, what must the producer do?
Inform the insurance company
An annuitant pays the annuity premium on the 14th of each month. Which best describes the arrangement ?
Level
When one insurer buys insurance from another company to minimize effects of catastrophic losses, they are
Reinsuring
An applicant for a disability insurance policy has a heart condition of which they are unaware and therefore they answer "no" to the question pertaining to heart problems. Their answer is considered to be a:
Representation
Which of the following will not be included in the buyers guide?
Specific Information about the policy
Which risk classification is representative of the majority of people in a certain group and with similar lifestyles? a) Standard b) Substandard c) Declined d) Preferred
Standard
When the term insurance is added to the main policy to enhance the policy or provide added benefit or coverage, it is called a
Term rider
If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur?
The change must be reported to the commissioner
who can request changes of premium payments, face value, loans, and policy plans?
The policyowner
All of the following are true regarding survivorship life insurance policies, EXCEPT: A. They pay a death benefit only when the first party dies B. They are usually written to cover both husband and wife C. They are purchased mainly to pay taxes D. They are less expensive than buying two separate policies
They pay a death benefit only when the first party dies
When an insured terminates membership in the insured group, the insured can convert to
Whole life without proof of insurability
A loss resulting from which of the following would qualify for the accidental death rider coverage? a. a health condition b. a disability c. a hazardous hobby d. an automobile accident
d. an automobile accident
when an agent delivered an insurance policy
he collected the initial premium, as well as a document verifying that the insured had not had any injuries or illness since the application date.
Which of the following is guaranteed under a variable whole life insurance policy
no idea
what does the state life and health insurance guaranty association guard against
no idea
Which of the following could most likely be issued a resident producer license? 1. Sally lives in a neighboring state but has an office in New jersey 2. Sam lives and works in a neighboring state. 3. Julie recently moved from new jersey to a neighboring state and will no longer work in her New Jersey Office 4. Joe is actively licensed in his home state and applies for a nonresident license in New Jersey
1. Sally lives in a neighboring state but has an office in New Jersey
