Primerica Test. Life Producer
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
$2,500
What is the maximum value of a gift that an agent can give to an insured without violating the regulation on rebating?
$25
Provided that it is a first offense, what is the maximum penalty for failing to respond to a subpoena?
$5,000
Penalties for first, second, and any after violation of the NJ Fraud Prevention Act?
$5,000; $10,000; $15,000
An employee quits and has a balance of 10k in her qualified plans. If she decides to rollover her plan to a Traditional IRA, how much will she receive from the plan administrator and how long does she have to complete the tax-free rollover?
$8,000 (20% is taken); 60 days
Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statement concerning group life is CORRECT?
100% participation of members is required in noncontributory plans.
If an applicant's license is has lapsed within the past year, the applicant may apply for late renewal of the license within the maximum of how many months of expiration?
12 months
If an insurer cancels an agency contract, it must notify the Commissioner in writing within how many days?
15
What is the waiting period on a Waiver of Premium rider in life insurance policies?
6 months
Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds'd death?
A minor son of the insured
The accelerated benefits provision will provide for early payment of death benefit when the insured
Becomes terminally ill
When an insurance producer negotiates for an insurance contract on behalf of a client, the producer is acting as a
Broker
Which of the following would NOT be considered an exception of the National Do Not Call List?
Calls based from outside of the U.S.
If an insurer and insured have a dispute about whether a particular loss is covered under a policy, which authority will settle the dispute?
Court system
What happens when a policy is surrendered for its cash value?
Coverage ends and policy cannot be reinstated
Which of the following is NOT allowed in credit life insurance?
Creditor requiring the debtor buys insurance from a certain insurer
Which of the following is true regarding taxation of dividends in participating policies?
Dividends are not taxable
Which nonforfeiture option has the highest amount of insurance protection?
Extended Term
Using names or titles that have tendency to misrepresent the true nature of a policy is an example of what illegal practice?
False advertising
J applied for life insurance on Jan 10th. Policy issued on Jan 31st. He did not receive the policy until Feb 18th. J decides he does not want the policy; when would J need to return the policy to the insurer in order to receive a full refund of the premium paid?
Feb 28th, 10 days after the time the policy is delivered
A Universal Life insurance policy has two types of interest rates that are called
Guaranteed and Current
Applicants for surplus lines authority must fulfill all of the following requirements except
Hold a bond as a condition for licensure
An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?
If the primary and beneficiary predeceases the insured
An underwriter may obtain information on an applicant's hobbies, financial status, and habits by ordering an
Inspection Report
The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but the principal will be paid to their children when they reach a certain age. Which settlement settlement option should policyowner choose?
Interest only option
Which of the following best describes misrepresentation?
Issuing sales material with exaggerated statements about policy benefits
A life insurance policy has lapsed, and the policyowner would like to reinstate it. In order to initiate the reinstatement process, the must submit an application to his insurer. Which of the following is true?
It is the policyowner's responsibility to request the reinstatement application; the insurer must then deliver it within 30 days
Which of the following statement about the reinstatement provision is true?
It requires the policyowner to pay all overdue premiums with the interest before the policy is reinstated
What significance did Paul vs. Virginia have on the insurance industry?
It was decided that insurance was not interstate commerce and could not be regulated by the federal government
Which of the following statements is true concerning the Accidental Death Rider?
It will pay double or triple the face amount
Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?
Life income with period certain
If a settlement option is not chosen by the beneficiary or policyowner, which option will be used?
Lump Sum
Which of the following information about the application is not included on Part 1 on the application for insurance?
Medical background
Death benefits payable to a beneficiary under a life insurance policy are generally
Not subject to income taxation by the Federal Government
A life insurance policy insures against 5 different perils. If the policyowner wants to cancel the coverage of one of those perils, can that be done?
Only if the policy specifies that a separate premium for that peril coverage is separately cancelable
Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?
Paid-up option
A participating insurance policy may do which of the following?
Pay dividends to the policy owner
A participating insurance policy may do which of the following?
Pay dividends to the policyowner
An insured purchased a life policy in 2010 and died in 2017. The insurance company discovers at that time that the insured had concealed information during the application process. What can they do?
Pay the death benefit
In which of the following instances would the premium be tax deductible?
Premiums paid by an employer on a $30,000 group life term insurance plan for employees
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
Refund of premiums
Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?
Replacement rule
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
U.S. vs. South-Eastern Underwriters
Stands in full. Insurance is considered to be interstate commerce and is therefore subject to regulation by the federal government
Which of the following statements about a suicide clause in a life insurance policy is true?
Suicide is excluded for a specific period of years and covered thereafter
The premiums paid by the employer in a business life insurance policy are
Tax deductible by the employer
The National Do not Call Registry was created to regulate
Telemarketers
Children's riders attached to whole life policies are usually issued at what type of insurance?
Term
Which of the following describes the tax advantage of a qualified retirement plan?
The earnings in the plan accumulate tax deferred
All of the following statements concerning an employer sponsored nonqualified retirement plan are true except
The employer can receive a current deduction for any contributions made to the plan
An employee quits his job on May 15th and doesn't convert his Group Life policy to an individual policy for 2 weeks. He died in a freak accident on June 1st. Which of the following statements best describes what will happen?
The insurer will pay the full death benefit from the group policy to the beneficiary. (the employee has 31 days to exercise the conversion option)
What is the purpose of the buyer's guide?
To allow the consumer to compare the costs of different policies
What is the purpose of a disclosure statement in life insurance policies?
To explain features and benefits of a proposed policy to the consumer
The paid-up addition option used the dividend
To purchase a smaller amount of the same type of insurance as the original policy
Which of the following is included in the term "insurance-related conduct"?
Transmitting funds between producers and the insurance company
Which of the following Life Insurance policies would be considered interest sensitive?
Universal Life
A producer's appointment last for how long?
Until it is terminated
When would a 20-pay whole life policy endow?
When the insured reaches age 100
A group of skydivers cannot get group life insurance and are rejected because
the purpose of the group was to purchase life insurance
The term "illustration" in a life insurance policy refers to
A presentation of nonguaranteed elements of a policy
To be issued a business entity producer license by the Commissioner, the business entity must have how many partners or officers licensed as producers?
At least 1
A business owner was trying to obtain a loan to fund the purchase of a new business facility, but the rank 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?
Collateral assignment
Which authority has the power to deny someone an insurance producer's license?
Commissioner
In NJ, the minimum age age at which a person can purchase a life insurance policy on his ow her own life is
15
Which of the following would be considered an unfair claims settlement practice?
Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered
Who can make a fully deductible contribution to a traditional IRA?
An individual not covered by employee-sponsored plan who has earned income
What is a branch office?
An office in the state where the licensee conducts insurance business, other than a principal office
Which of the following premium payment modes will incur the lowest overall payment?
Annual
All other factors being equal, the least expensive first-year premium payment is found in
Annually Renewable Term
In accordance with the Administrative Procedure Act, what entity has the authority to make and enforce rules and regulations to implement and carry out the purposes of the Insurance Laws of NJ?
Commissioner
A 40 year old man buys a whole life policy and names his wife as his only beneficiary. His wife dies 10 years later. He never remarries and dies at age 61, leaving 2 grown-up children. If he did not change the beneficiary, the policy proceeds will go to
The insured's estate
Rebating is an unfair trade practice and is regulated by the law. All of the following would be considered rebating except
An agent misrepresents policy benefits to convince a policyowner to replace policies
Your customer doesn't mind paying a higher premium as long as he gets a life insurance protection that would allow for a faster growth of the cash value. What kind of policy would you recommend?
An endowment policy
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 in included in the policy?
Guaranteed insurability option
A man purchased a $90,000 annuity with a single premium, and began receiving payments 2 months after that. What type of annuity is it?
Immediate
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?
Insuring clause
The type of settlement option which pays throughout the lifetimes of two of more beneficiaries is called
Joint and Survivor
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of
Misrepresentation
Which of the following types of policies allows the policyowner to skip premium payments, provided there is enough cash value in the policy to cover the premium amount?
Universal Life
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 the amount of temporary insurance to cover the family members?
Term rider
Which of the following best describes the MIB?
It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance
Which of the following best describes annually renewable insurance?
It is level term insurance
Which of the following is an IRS qualified retirement program for the self-employed?
Keogh
Which of the following is not true regarding policy loans?
Money borrowed from the cash value is taxable
After a back injury, an insured is disabled for a year. His insurance policy carries a disability income benefit rider. Which of the following benefits will he receive?
Monthly premium waiver and monthly income
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
Required a premium increase each renewal
The ownership provision entitles the policyowner to do all of the following except
Set premium rates
What type of life insurance policy generates immediate cash value?
Single Premium