If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be
Authorized
A
... [Show More] participating insurance policy may do which of the following?
Pay dividends to the policy owner
An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?
Universal life
All of the following are examples of third-party ownership of a life insurance policy EXCEPT
An insured borrows money from the back and makes a collateral assignment of a part of the death benefit to secure the loan.
Which statement is NOT true regarding a Straight Life policy?
Its premium steadily decreases over time, in response to its growing cash value.
An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?
$100,000
A person takes out a loan in order to pay off his house. He dies several years later, having paid off only a small portion of the debt. Which of the following is true?
If the lender has credit insurance, this amount will be paid to the lender.
Two individuals are in the same risk and age class; yet, they are charged different rates of their insurance policies die to an insignificant factor. What is this called?
Discrimination
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.
If a consumer requests additional information concerning an investigation consumer report, how long does the insurer or reporting agency have to comply?
5 days
How is the Insurance Guaranty Association funded?
By its members-authorized insurers
An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
Decreasing term
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
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT
Dividends from a mutual insurer.
The type of policy that can be changed from one that does not accumulate cash value to the one that does is a
Convertible Term Policy.
After its issuance, the temporary work authority expires after how many days
180 days not 60
All of the following would be considered an insurance transaction EXCEPT
Obtaining an insurance license.
The requirement that agents must account for all insurance funds collected, and are not permitted to comingle those funds with their own is known as
Fiduciary responsibility.
What is the purpose of a fixed-period settlement option?
To provide a guaranteed income for a certain amount of time
During policy replacement, the replacing insurer must notify existing insurers within what time period?
5 business days
What significance did U.S. vs. South-Eastern Underwriters have on the insurance industry?
It reversed the decision of Paul vs. Virginia, determining that insurance is interstate commerce and should be regulated federally.
Items stipulated in the contract that the insurer will not provide coverage for are found in the
Exclusions clause.
When a life insurance policy is cancelled and the insured has selected the extended term nonforfeiture option, the cash value will be used to purchase term insurance that has a face amount
Equal to the original policy for as long a period of time that the cash values will purchase.
All of the following are characteristics of group life insurance EXCEPT
Premiums are determined by the age, sex and occupation of each individual certificate holder.
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?
The date of medical exam
For a retirement plan to be qualified, it must be designed for the benefit of
Employees.
Which of the following statements about a life insurance policy would be allowed in an insurance advertisement?
This is a term life insurance policy.
Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process?
Buyer's Guide
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?
Those who have been insured under the plan for at least 5 years
The interest earned on policy dividends is
taxable
A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called
Cost of living rider.
According to the Entire Contract provision, a policy must contain
A copy of the original application for insurance.
Which is NOT true about beneficiary designations?
The beneficiary must have insurable interest in the insured.
Which of the following factors determines the amount of each installment paid in a Life Income Option arrangement?
Recipient's life expectancy and amount of principal
An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe?
Reduction of Premium
Who is the owner and who is the beneficiary on a Key Person Life Insurance policy?
The employer is the owner and beneficiary.
What is reinsurance?
An agreement between a ceding insurer an assuming insurer
The McCarran Act stated that the federal government would not regulate insurance as long as an adequate job of regulating the industry was done by the
States
On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are
Not taxable since the IRS treats them as a return of a portion of the premium paid.
When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of
Defamation
Which of the following determines the cash value of a variable life policy?
The performance of the policy portfolio
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
Which of the following types of insurance policies is most commonly used in credit life insurance?
Decreasing term
If a producer has been convicted of a crime, he or she must notify the Commissioner within
30 days
Traditional IRA contributions are
tax deducted
What do individuals use to transfer their risk of loss to a larger group?
Insurance
If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about
Whether an insurable interest exists between the individuals.
Proceeds from life insurance policies are protected from the beneficiary's debts under all of the following circumstances EXCEPT
Some of the premiums were paid in an attempt to defraud creditors.
Which of the following is TRUE about the 10-day free look period in the Life Insurance Policy>
It begins when the policy is delivered
The National Do Not Call Registry was created to regulate
telemarketers
The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in this case, what will the policy beneficiary receive?
$100,000
All of the following are unfair claims settlement practices EXCEPT
Suggesting negotiations in settling a claim
All of the following information about the applicant is identifies in the General Information section of a life Insurance application Except
Education
Which of the following statements is TRUE about the policy assignment?
It transfers rights of ownership from the owner to another person
Life insurance death proceeds are
Generally not taxed as income
What describes the specific information about a policy?
Policy summary
Death benefits payable to a beneficiary under a life insurance policy are generally
Not subject to income taxation by Federal Government
Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policy owner?
Cash surrender
Which of the following types of insurance would be written by a limited lines agent?
Credit Insurance
if an insurer issued a policy based on the application that held unanswered questions, which of the following will be TRUE?
The policy will be interpreted as if the insurer waived its right to have an answer on the application
A producer's license was revoked as a result of the Insurance Code violation. Which the following is TRUE?
The producer will have to wait 5 years before applying for license reinstatement
Which of the following would be considered false advertisement?
Implying that the agent is the insurer
If an insurance company wished to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information
EXCEPT the applicants
Ancestry
A life insurance policy does not have a war clause. Of the insured is killed during a time of war, what will the beneficiary receive from the policy?
The full death benefit
Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?
Family Term Rider
Which Universal Life option has a gradually increasing cash value and a level death benefit?
Option A
If a telemarketer wants to make an unsolicited sales call to a potential customer whaat is the earliest time the telemarketer can call the prospects residence?
8 am
Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a
Premium receipt
Why is an equity indexed annuity considered to be a fixed annuity?
It has a guaranteed minimum interest rate
Which of the following are NOT fundable by annuities?
Death benefits
Which of the following best describes an insurance company that as been formed under the laws of this state?
Domestic
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 beneficiary predeceases the insured
The insurer must maintain copies of Notice Regarding Replacement and the comparative information form, policy summary, and all sales materials until the next regular examination by the Department of Banking and Insurance or for at least
5 years
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of
Twisting
At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called
Guaranteed Insurability
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?
Commissioner
Provided that it is a first offense, what is the maximum penalty for failing to respond to a subpoena?
$5000
What method do insurers use to protect themselves against catastrophic losses?
Reinsurance
In order to become a producer in New Jersey, after submitting a licensing applicatoin, candidates must pass a licensing examination with
1 year
What is the fine for violating the Commissioner's cease and desist order?
5000
Which of the following describes the tax advantage of a qualified retirement plan?
The earnings in the plan accumulate tax deferred. [Show Less]