Life Insurance and Annuities: Understanding Policies, Regulations, and Procedures, Exams of Life Sciences

Download Life Insurance and Annuities: Understanding Policies, Regulations, and Procedures and more Exams Life Sciences in PDF only on Docsity! NJ Life Producer Exam 109 Questions with Verified Solutions Graded A+. 1. Which of the following amounts must decrease in a decreasing term? - ANS Death benefit 2. In life insurance, insurable interest must exist at the time the... - ANS Producer writes an on a proposed insured 3. An applicant makes an offer to the insurer when they - ANS pay an initial premium with the application 4. Which of the following makes Universal Life insurance different from other forms of permanent insurance? - ANS Premium Schedule 5. An insurer that shares its profits with it’s' policy owners is known as... - ANS A mutual insurer 6. Statements made by an applicant for insurance on the application are considered to be... - ANS Representations 7. In which of the following are proceeds left with the insurer and earnings sent to the beneficiary? - ANS Interest-Only 8. The primary purpose of an annuity is to... - ANS Provide income for retirement 9. Which of the following provisions in a life policy specifies the manner in which proceeds will be paid to a beneficiary on the death of insured? - ANS settlement options 10.An insurance producer takes an application for a life policy but does not collect the initial premium. On delivery of policy to the proposed insured, the producer must collect the initial premium and which of the following? - ANS The insured's signed statement of continued good health 11.A report of previously submitted life insurance applications to other insurers is known as: - ANS a Medical Information Bureau report 12.A company decides to purchase Key Employee life insurance for its vice president of operations. All of the following statements are correct EXCEPT the... - ANS Employee names the beneficiary 13.Which of the following features allows an insurance policy to remain in force for a specified number of days beyond the premium due date? - ANS Grace period provision Page 1 of 8 14.Which of the following prevents the producer from unilaterally amending a policy? - ANS Entire contract 15. Interest paid on a policy loan is... - ANS not tax deductible 16.An employer paid life insurance policy is called - ANS Non-contributory group life 17.A tax free exchange of one life insurance policy or annuity for another is called... - ANS 1035 exchange 18.Which of the following group life plans require at least 75% of the eligible members to participate? - ANS Contributory 19.Two business partners own life insurance on each other. If one partner dies, which of the following contracts will allow the other partner to buy 100 percent of the business interest? - ANS Buy and Sell agreement 20.Under a traditional IRA, owners must begin to receive payments from their accounts by the time they reach age... - ANS 70 1/2 21.Social security retirement benefits are determined by all of the following except? - ANS sex 22.A modification to a life policy is called a... - ANS Rider 23.The right to change a beneficiary is reserved for the... - ANS policyownerw 24.Which of the following statements regarding a revocable beneficiary is CORRECT? - ANS the policy owner may change the beneficiary without his or her knowledge or approved 25.R has just graduated from law school. R knows that R's future earnings will be much higher than they are now, but wants to purchase a permanent policy now to cover future needs. Which of the following policies would BEST suit R's needs? - ANS modified whole life 26.A policy that provides lifetime protection for an insured with premiums payable for 20 years is called a... - ANS 20 pay-life 27.All of the following are modes of payment in a life policy EXCEPT - ANS bi- weekly 28.A payer benefit rider provides which of the following benefits? - ANS A waiver of premium should the payer die, until the insured reaches a predetermined age Page 2 of 8 57. In order to receive fees other than commissions, a life insurance producer acting as a consultant must first - ANS obtain a written memorandum from the prospect stating the amount of compensation 58.A producer acting as an agent may take all the following actions EXCEPT: - ANS Place insurance with a company the producer does not represent 59.A producer wishing to appeal the final order of the Commissioner would appeal to... - ANS The superior court 60.Which of the following producers does NOT need to satisfy CE credits? - ANS nonresident 61.Continuing education credit may be earned for completing which of the following courses? - ANS CLU designation courses 62.A New Jersey producer who resides in Pennsylvania but maintains a principal place of business in New Jersey and who has selected New Jersey as their home state is referred to as which of the following? - ANS resident 63.What is the MINIMUM age requirement for licensure as a nonresident producer? - ANS 18 64.When applying for a producer's license, an applicant must have passed the state licensing exam within how long from the date of their application for license? - ANS 12 months 65.When applying for a producer's license, an applicant must have completed a pre- licensing course of education within how long from the date of their license application? - ANS 24 months 66.After an applicant successfully passes the state exam in the line of authority they are applying for, they can be issued a temporary certificate that expires no more than HOW MANY days after insurance? - ANS 60 days 67.Upon cancellation of an agency contract with a producer, the insurer must give written notice to the Commissioner within how many days? - ANS 15 days 68.A temporary work authority to act as a producer is issued at which of the following times? - ANS When an applicant passes a licensing examination and responds negatively to all background questions 69. If a producer allows his license to lapse, how long before he has to meet all standard pre-licensing requirements again? - ANS 12 months 70.A producer's license is considered the property of - ANS the State of New Jersey Page 5 of 8 71.A voluntarily terminated producer license may be reinstated during the same period if the producer takes which of the following actions? - ANS completes a new license application 72.A producers certification of license status contains all of the following information EXCEPT: - ANS place of birth 73.The Banking and Insurance Commissioner may revoke the license of a producer who... - ANS uses the license primarily to obtain insurance for his or her family 74. If a producer's license is revoked, he must wait how long before applying for reinstatement? - ANS 5 years 75.The New Jersey Life and Health Guaranty Association is derived from... - ANS Assessment on member companies 76. If a producer's license is suspended, he must wait how long before applying for reinstatement? - ANS Immediately after the period of suspension 77.The act of using misrepresentations to induce an insured person to terminate an existing policy and purchase a new policy is referred as... - ANS twisting 78.A producer who shares commission with a client may be found guilty of... - ANS rebating 79.A producer who knowingly engages in a prohibited trade practice, can be issued a fine not to exceed... - ANS $5,000 for the first offense; $10,000 for each subsequent offenses 80.A producer who UN-knowingly engages in a prohibited trade practice, can be issued a fine not to exceed... - ANS $1,000 81. If an insurer or producer violates a cease and desist order, the Commissioner could assess a penalty not to exceed... - ANS $5,000 82.Making statements which are false and derogatory about the financial condition of the insurer is: - ANS defamation 83.When the beneficiary of a life insurance policy is a minor, the insurer can pay the proceeds - ANS if legal guardian has been appointed 84.A branch office of registration form must be filed with the Banking and Insurance Commissioner a MINIMUM of how many days before conducting business at the branch office? - ANS thirty Page 6 of 8 85. If the Guaranty Association assumes management of an insolvent insurer, the maximum amount of death benefits for which they are liable to is... - ANS $500,000 per person 86. If a producer changes their address, how many days do they have to notify the Department? - ANS 30 87.Which of the following activities does not require a license? - ANS Scheduling appointments for producers to sell insurance 88.An insurer who is placed under an order of liquidation by a court of competent jurisdiction is defined under the terms of the New Jersey Life and Health Insurance Guaranty act as... - ANS an insolvent insurer 89.The first violation of the NJ Fraud Prevention Act can result in a fine of - ANS $5,000 90.A producer assists an insured in converting a life policy to a reduced paid-up insurance in order to buy a new policy. This action is best known as... - ANS replacing 91.Which of the following MUST an agent do when replacing a life insurance policy? - ANS submit to the replacing insurer a list of all the life insurance policies or annuity contracts proposed to be replaced 92.All of the following actions can be taken by the Commissioner against a producer if he violates the rules of replacement EXCEPT: - ANS redirect any commission earned to the insured 93.Replacement rules apply to which of the following products? - ANS individual life policies 94.A Buyer's guide must be provided to all purchases of which of the following types of insurance? - ANS Ten year level term 95.Life insurance advertisements - ANS all of the above: must be truthful and not misleading; cannot use the terms "investment" or "savings; are designed to persuade the public to purchase life insurance 96.The replacement of an existing policy requires all of the following EXCEPT: - ANS notice that the owner can return the policy within 90 days for a full refund 97.Which of the following statements is CORRECT? - ANS creditors may attach the death benefits payable to insured's estate Page 7 of 8