Download NJ LIFE INSURANCE TEST 2025 QUESTIONS WITH 100% CORRECT VERIFIED ANSWERS GRADED and more Exams Business Administration in PDF only on Docsity!
NJ LIFE INSURANCE TEST 2025 QUESTIONS WITH 100%
CORRECT VERIFIED ANSWERS GRADED
The principle that insurance is not a transaction of commerce and so should be regulated by the states was established by the A. the McCarran-Ferguson Act. B. Public Act 15. C. Paul v. Virginia. D. U.S. v. South Eastern Underwriters Association ANSWER HERE A A contract between two insurance companies that allows one company to transfer risk to a second company is known as A. Reinsurance B. coinsurance c. mutual insurance Answer A which of the following dividend options is taxable? A. Paid up additions. B. One-year term. C. Accumulation at interest. D. Retum of premium.
Answer C A licensed life or health producer who solicits insurance in New Jersey and who has not selected New Jersey as his home state but resides and maintains the principal office in another state is defined as A. a foreign producer. B. a nonresident producer. C. a reciprocal producer. D. an alien producer. Answer B After a New Jersey producer license has been revoked, the licensee may not reapply for a new license for a M IMUM of A. 5 years. B. 3 years. C. 1 year. D. 6 months. Answer A One of the major tax ADVANTAGES of life insurance is that A. the distribution of the annual earnings is tax free. B.annual earnings are not taxed on a state or Federal level.
Which type of insurance policy is characterized by premiums that are fully paid up within a stated period, after which no further premiums are REQUIRED? A. Lump sum insurance. B. Basic installment insurance. C. Prepaid premium insurance. D. Limited payment life insurance. Answer D A reinstatement clause outlines reinstatement conditions that include A. a higher premium charge. B. Layment of outstanding loans within the year. C. proof of insurability. D. a decrease in policy limits Answer C Insurance purchased on the life of a borrower to provide indemnity for a loan balance if the borrower dies is referred to as A. bank insurance. В.credit life insurance. C. ticket life insurance. D. liability indemnity insurance.
Answer B New Jersey replacement regulations, it is the duty of the replacing insurance company to take all of the following actions EXCEPT hire its producers to comply with the regulations. a list of all policies that will be replaced. a copy of the completed replacement Disclosure Statement. one underwriting until the existing insurer is notified. Answer B A policyowner CANNOT change the beneficiary if he has named A. a spouse. B. a revocable beneficiary. C. a permanent beneficiary. D. an irrevocable beneficiary. Answer D The policy feature that makes universal life different from whole life insurance policies is its A. fixed face amount. B. flexible premium schedule. C. assignment options.
A. a reciprocal company. B. a mutual company. C. an assessable company. D. a stock company. Answer D A published advertisement for a fixed annuity MUST contain all of the following information EXCEPT A. surrender period B. that it is insured by the state C. minimum rate of guaranteed interest D. the name of the insurance company Answer B Which of the following transactions would NOT be subject to income tax under a Modified Endowment Contract (MEC)? A. Policy withdrawals. B. Dividend surrenders. C. Policy loans. D. The death benefit. ANswer D Which of the following statements is CORRECT about an applicant whose producer license has been denied?
A. The applicant is entitled to a hearing before a committee of the applicant's peers. B. The applicant is entitled to a hearing before the Office of Administrative Law. C. The applicant may reapply a maximum of three times. D. The applicant may not reapply for one year. Answer B The 1944 U.S. vs. South-Eastern Underwriters Association case determined that A. insurance is commerce and should be subject to federal regulation. B. insurance is commerce and should be subject to state regulation. С. individuals who transact insurance business are subject to the same regulations as investment brokers. D.insurance companies that transact insurance business are subject to the same regulations as banks and savings and loan association ANswer A A group life face amount is sometimes written as an amount equal to an employee's A. net worth. B. age. C.salary. D.home value.
D. surplus lines insurance. Answer B Which type of insurance policy is characterized by premiums that are fully paid up within a stated period, after which no further premiums are REQUIRED? A. Lump sum insurance B. Basic installment insurance C. Prepaid premium insurance. D. Limited payment life insurance Answer D A reinstatement clause outlines reinstatement conditions that include A. a higher premium charge B. payment of outstanding loans within the year. C. proof of insurability. D. a decrease in policy limits Answer C Insurance purchased on the life of a borrower to provide indemnity for a loan balance if the borrower dies is referred to as
A. bank insurance B. credit life insurance C. ticket life insurance D. liability indemnity insurance. Answer B policv feature that makes universal life different from whole life insurance policies Is Its A. fixed face amount B. flexible premium schedule C. assignment options D. settlement options Answer B Which of the following represents a reduced paid-up nonforfeiture option? A. The new policy will have a decreased face amount. B. Further premiums must be paid on the reduced policy. C. The new protection is for the same amount as the original policy. D. A full share of expense loading must be included in the premium on the reduced coverage. Answer B A published advertisement for a fixed annuity MUST contain all of the following information EXCEPT
A reinstatement clause outlines reinstatement conditions that include A. a higher premium charge. B. payment of outstanding loans within the year. C. proof of insurability. D. a decrease in policy limits. Answer C All of the following are characteristics of the Accelerated Death Benefit option EXCEPT A. the maximum benefit is a percentage of the face amount of insurance, and there may also be a dollar limit B. specific conditions must exist before payment of the benefit may be made, such as suffering from a specific disease having only a very limited remaining lifetime due to illness, or being admitted to a nursing home under doctors orders. C. the face amount of insurance, the policy premium, and any cash value are unaffected by the payment. D. the benefit may be offered as a rider at a specific extra cost or may be at no cost, ot may be part of the policy itself Answer C
To renew an insurance producer license, a renewal applicant must earn 24 continuing education credits during the previous two years EXCEPT: A. Insurance brokers B. Resident producers C. Nonresident producers D. Insurance consultants Answer C After a New Jersey producer license has been revoked the licensee may not reapply for a new license for a MINIMUM of A. 5 years. B. 3 years. C. 1 year. D. 6 months. Answer 5 years All of the following statements about group life coverage are correct EXCEPT A. coverage may be provided through certificates to classes of employees. B. coverage may be sponsored by a trade union, professional association, or creditor. C. coverage is available to the general public through an association organized to take advantage of low group rates. D. arrangements may be made for bulk payment of premiums to the insurance company.
A. $100,
B. $150,
C. $200,
D. $250,
Answer A A beneficiary is protected from creditors' claims in all of the following situations EXCEPT when the beneficiary is the A. insured's estate. B. insured's spouse. C. insured's child. D. insured's business partner. Answer A Which of the following statements is TRUE regarding a Waiver of Premium Rider? A. There will be no change in the policy's rates, benefits, or options other than the premiums on the policy. B. The policy's cash value will continue to grow, but at a slower rate because the insured is no longer paying premiums. C. The death benefit will be reduced by the amount of the unpaid premiums. D. The insured will automatically become eligible for Accelerated Death Benefits.
Answer B A type of life insurance policy which provides for the payment of the face amount at the end of the specified period if the insured is still alive, is A. a universal life insurance policy. B. a modified life insurance policy. C. an endowment policy. D. a juvenile trust. Answer C The policyowners of a mutual insurance company take which of the following actions? A. Elect the governing body of the company. B. Contribute capital to purchase company stock. C. Determine the amount of dividends declared each year. D. Determine the premium rates on company policies. Answer ??? Which of the following statements is CORRECT about life insurance proceeds payed to a named beneficiary A. They are exempt from claims of the insured's creditor B. They are subject to excise taxes.
Answer B Which of the following is NOT one of the three forms of accelerated death benefit? A. Dread disease. B. Common disaster. C. Terminal illness. D. Nursing home. Answer D All of the following statements are correct about the Notice Regarding Registration of life insurance EXCEPT that it A. gives a prospective insured facts on which to base decisions about policy choices B. increases the opportunity for misrepresentation by an agent C. increases the opportunity for fair methods of competition by insurance companies D. reduces the opportunity for incomplete comparisons of polices B An insurance company that terminates a producer's agency contract is required to file a written notice of the termination with the Banking and Insurance Department at which of the following times? A. Immediately B. A maximum of 7 days after the termination date
C. A maximum of 15 days after the termination date D. A maximum of 30 days after the termination date Answer D One of the major tax ADVANTAGES of life insurance is that A. the distribution of the annual earnings is tax free. B. annual earnings are not taxed on a state or Federal level. C. employer contributions to an employee's life insurance policy are tax deductible to the employee. D. the beneficiary generally does not pay income tax on the proceeds. Answer D Which of the following statements is CORRECT about penalties imposed by the New Jersey Banking and Insurance Commissioner for violations of insurance regulations? A. The Commissioner must provide written notice and an opportunity for a hearing before imposing a penally. B. The Commissioner may not impose further penalties on a producer who already has been penalized by a criminal court.
