Missed questions on EF Exams

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? 1. Revocation of license 2. $2,500 3. $1,000 4. $100 per violation

$2,500

In New Jersey, the minimum age at which a person can purchase a life insurance policy on his or her own life is A) 13 B) 15 C) 16 D) 18

15

If an insurer cancels an agency contract, it must notify the Commissioner in writing within how many days? 1. 10 2. 15 3. 20 4. 30

15 days

If a producer dies or is rendered severely disabled, an unlicensed person can contract with another insurance producer to continue this person's insurance transactions for 1. 90 days. 2. 100 days. 3. 180 days. 4. 365 days.

180 days

An insurer is closing a branch office in this state. Within how many days of the office closing must the insurer notify the Department? 1. 10 days 2. 15 days 3. 30 days 4. 90 days

30 days

Within how many days must a producer report claims to the insurer? 1. 3 business days 2. 5 calendar days 3. 5 business days 4. 3 calendar days

5 business days

All of the following could own group life insurance EXCEPT a) A debtor group. b) A group needing low-cost life insurance. c) A group sponsored by an employer. d) An alumni group.

A group needing low-cost life insurance.

Through which branch(es) of the government is insurance currently regulated? 1. Legislative 2. Judicial 3. Executive 4. All of the above

All of the above

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered 1. A required disclosure. 2. A legal representation of the Association. 3. An unfair trade practice. 4. A misrepresentation.

An unfair trade practice

Giving a client an inducement to a sale not stated in the policy is an unlawful practice known as A) Rebating B) Twisting C) Unlawful distribution of dividends D) Coercion

Rebating

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy A) Built Cash Values B) Required proof of insurability every year C) Decreased death benefit at each renewal D) Required a premium increase each renewal

Required a premium increase each renewal

A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the 1. Secondary beneficiary. 2. Primary beneficiary. 3. Irrevocable beneficiary. 4. Revocable beneficiary.

Revocable beneficiary

Proceeds from life insurance policies are protected from the beneficiary's debts under all of the following circumstances EXCEPT 1. The amount of debt exceeds 50% of the policy's face value. 2. There are no circumstances under which proceeds are protected from the beneficiary's debts. 3. Some of the premiums were paid in an attempt to defraud creditors. 4. The amount of debt exceeds the policy's face value.

Some of the premiums were paid in an attempt to defraud creditors.

Which of the following best describes what the annuity period is? 1. The period of time from the effective date of the contract to the date of its termination 2. The period of time during which accumulated money is converted into income payments 3. The period of time from the accumulation period to the annuitization period 4. The period of time during which money is accumulated in an annuity

The period of time during which accumulated money is converted into income payments

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) 30 Days in advance of renewal B) 90 days in advance of renewal C) within 30 days of the insured's request D)Within 10 days of the insured's request

Within 30 days of the insured's request

Upon policy delivery, the producer may be required to obtain any of the following except: A. payment of premium B. Delivery receipt C. Signed Waiver of Premium D. Statement of good health

signed waiver of premium

Which of the following is NOT allowed in credit life insurance? a)Creditor requiring that a debtor buys insurance from a certain insurer b)Creditor having a collateral assignment on the policy c)Creditor requiring that a debtor has a life insurance d)Creditor becoming a policy beneficiary

Creditor requiring that a debtor buys insurance from a certain insurer

Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated? 1. Those who have no history of claims 2. Those who have been insured under the plan for at least 5 years 3. Those who have worked in the company for at least 3 years 4. Those who have dependents

Those who have been insured under the plan for at least 5 years

Which of the following would be considered false advertising? 1. Failing to include premiums in sales materials 2. Implying that the agent is the insurer 3. Stating the differences in benefits between Whole Life Insurance and Term Life Insurance 4. Stating that a policy has limitations and exclusions

Implying that the agent is the insurer

A Universal Life Insurance policy is best described as a/an 1. Flexible Premium Variable Life policy. 2. Annually Renewable Term policy with a cash value account. 3. Variable Life with a cash value account. 4. Whole Life policy with two premiums: target and minimum.

Annually Renewable Term policy with a cash value account.

The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the A) One-year term option B) Paid-up Option C) Accelerated Endowment D) Paid-up additions

One-year term option

Methods used to pay the death benefits to a beneficiary upon the insured's death are called 1. Designation options. 2. Beneficiary provisions. 3. Death benefit options. 4. Settlement options.

Settlement Options

Traditional IRA contributions are 1. Never tax deductible. 2. Partially tax deductible depending on the income level. 3. Tax deductible. 4. Deducted based on the income level.

Tax deductible

All of the following statements concerning an employer sponsored nonqualified retirement plan are true EXCEPT 1. The plan is a legal method of accumulating money for retirement needs. 2. The plan can discriminate as to who may participate. 3. The plan is not approved for favorable tax treatment by the IRS. 4. The employer can receive a current tax deduction for any contributions made to the plan.

The employer can receive a current tax deduction for any contributions made to the plan.

All of the following are considered limited lines of authority EXCEPT 1. Bail bonds. 2. Surplus lines. 3. Credit insurance. 4. Travel insurance.

Surplus lines

Which of the following best describes fixed-period settlement option? 1. Only the principal amount will be paid out within a specified period of time. 2. The death benefit must be paid out in a lump sum within a certain time period. 3. Income is guaranteed for the life of the beneficiary. 4. Both the principal and interest will be liquidated over a selected period of time.

Both the principal and interest will be liquidated over a selected period of time.

Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance? 1. Slandering 2. Defamation 3. Undercutting 4. Twisting

Defamation

Which is TRUE about the cash surrender nonforfeiture option? A. The policy remains active for some time after the policyholder opts for cash surrender b) The policyholder receives the original cash value of the policy. c) Funds exceeding the premium paid are taxable as ordinary income. d) After the cash surrender, the insured is covered for a grace period of 1 month.

Funds exceeding the premium paid are taxable as ordinary income

Which of the following is INCORRECT concerning a noncontributory group plan? A) They help to reduce adverse selection against the insurer B) They require 100% employees participation C) The employer pays 100% of the premiums D) The employees receive individual policies

The employees receive individual policies

The insured had his wife names as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT A) Face amount of the policy B) The insured age at death C) The beneficiary's life expectancy D) Projected Interest Rates

The insured's age at death

Which of the following would NOT be considered an exception to the National Do Not Call List? 1. Calls by or on behalf of tax-exempt nonprofit organizations 2. Calls based from outside of the United States 3. Calls for which the consumer has given prior written permission 4. Calls which are not commercial or do not include unsolicited advertisements

Calls based from outside of the United States

According to the entire contract provision, what document must be made part of the insurance policy? A. Copy of the original application B. Buyers Guide C. Agent's Report D. Outline of coverage

Copy of the original application

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? 1. Hold Fred's money in its general fund until it can come to a formal agreement with Fred 2. 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 3. Execute the terms of the proposed agreement, since Fred did not formally disagree 4. Hold Fred's money in a segregated fund until it can come to a formal agreement with Fred

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

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a 1. Cost of living provision. 2. Nonforfeiture option. 3. Guaranteed insurability rider. 4. Paid-up additions option.

Guaranteed insurability rider

An organization licensed as a producer business entity based in New York would like to transact insurance in New Jersey. Which of the following is true? a) The organization will not have to obtain a nonresident license, unless more than 50% of its business is conducted in New Jersey. However, its producers will need to obtain nonresident licenses. b) The organization will not have to obtain a nonresident license, since it is a business entity. However, all of its producers will need to have nonresident licenses. c) The organization will need to obtain a nonresident business entity license, which will secure nonresident status for the business itself and all of its producers. d) The organization will need to obtain a nonresident business entity license, and its producers will need to obtain nonresident licenses

The organization will need to obtain a nonresident business entity license, and its producers will need to obtain nonresident licenses

A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250,000 life insurance policy to secure the loan. Which provision makes this possible? A) Ownership provision B) Collateral Assignment C) Insurable Interest D) Modification Clause

Collateral Assignment

All of the following are among the Commissioner's broad powers EXCEPT a) Appoint and remove officers employed within the Department. b) Report to the Governor about the Department's operations. c) Formulate and adopt rules and regulations of companies and licensees. d)Have interest in insurance companies regulated by the Department.

Have interest in insurance companies regulated by the Department.

To sell variable life insurance policies, an agent must receive all of the following EXCEPT 1. A securities license. 2. A life insurance license. 3. SEC registration. 4. FINRA registration.

SEC registration

If a violation of the New Jersey insurance code were to occur, a cease and desist order and/or penalty may be issued. Who may issue a cease and desist order? a) Department of Banking and Insurance b) Insurance Company c) Governor d) Commissioner

Commissioner

A nonresident licensed producer decides to conduct business under an assumed name. Which of the following is true? 1. The assumed name must be filed with the NAIC, the Commissioner of the domicile state, and the Commissioner of the state for which the nonresident producer is licensed. 2. Nonresident producers may not conduct business under any name besides legal names. 3. The assumed name must be submitted on the Uniform Assumed Title form, with the appropriate fee. 4. Nonresident producers need to take no action before conducting business under an assumed name.

Nonresident producers may not conduct business under any name besides legal names.

A Certification of License Status must include all of the following information EXCEPT a) License reference number b) Number of years a licensee has been in the business c) Licensee's date of birth d) Types of insurance for which the licensee is authorized

Number of years a licensee has been in the business

Which of the following is true regarding license cancellation and reinstatement? 1. The license needs to be returned to the Insurance Department. It can be reinstated by filling out an application and paying a fee. 2. The producer must allow it to lapse. After that point, it can be reinstated any time within the next 2 years, provided that the continuing education requirements have been met. 3. The license needs to be returned to the Insurance Department. Once this occurs, it cannot be reinstated. 4. The producer must complete a brief interview with the Commissioner's Office. The license may then be reinstated within 1 year.

The license needs to be returned to the Insurance Department. It can be reinstated by filling out an application and paying a fee.

Which of the following is included in the term "insurance-related conduct"? a) Insurer's acting with the scope of the Insurance Code b) Producer's ethical behavior c) Producer licensing d) Transmitting funds between producers and the insurance company

Transmitting funds between producers and the insurance company