NJ Life Producer Exam

Which of the following amounts must decrease in a decreasing term?

Death benefit

In life insurance, insurable interest must exist at the time the..

Producer writes an on a proposed insured

An applicant makes an offer to the insurer when they

pay an initial premium with the application

Which of the following makes Universal Life insurance different from other forms of permanent insurance?

Premium Schedule

An insurer that shares its profits with its' policyowners is known as..

A mutual insurer

Statements made by an applicant for insurance on the application are considered to be..

Representations

In which of the following are proceeds left with the insurer and earnings sent to the beneficiary?

Interest-Only

The primary purpose of an annuity is to..

Provide income for retirement

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?

settlement options

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?

The insured's signed statement of continued good health

A report of previously submitted life insurance applications to other insurers is known as:

A Medical Information Bureau report

A company decides to purchase Key Employee life insurance for its vice president of operations. All of the following statements are correct EXCEPT the..

Employee names the beneficiary

Which of the following features allows an insurance policy to remain in force for a specified number of days beyond the premium due date?

Grace period provision

which of the following prevents the producer from unilaterally amending a policy?

Entire contract

interest paid on a policy loan is..

not tax deductible

An employer paid life insurance policy is called

Non-contributory group life

A tax free exchange of one life insurance policy or annuity for another is called..

1035 exchange

Which of the following group life plans require at least 75% of the eligible members to participate?

Contributory

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?

Buy and Sell agreement

Under a traditional IRA, owners must begin to receive payments from their accounts by the time they reach age..

70 1/2

social security retirement benefits are determined by all of the following except?

sex

A modification to a life policy is called a..

Rider

the right to change a beneficiary is reserved for the..

policyownerw

Which of the following statements regarding a revocable beneficiary is CORRECT?

the policyowner may change the beneficiary without his or her knowledge or approved

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?

modified whole life

A policy that provides lifetime protection for an insured with premiums payable for 20 years is called a..

20 pay-life

All of the following are modes of payment in a life policy EXCEPT

bi-weekly

A payor benefit rider provides which of the following benefits?

A waiver of premium should the payor die, until the insured reaches a predetermined age

The termed used to indicate that a policy beneficiary cannot be changed is..

Irrevocable

Which of the following states the terms of coverage during the underwriting process?

the conditional receipt

The provision that addresses misstatements made by applicant on an application is..

Incontestability clause

The grace period in a life insurance policy begins

when the premium is due

which of the following would best be used for estate planning purposes?

survivorship life

if an insurer wants to obtain an HIV test from an applicant

they must obtain the applicant's written consent

standard non-forfeiture benefits include

reduced paid up insurance

Reinstatement of a life insurance policy requires an insured to take all of the following actions EXCEPT:

make collateral assignment to the insurer

A contract that promises to pay an income to an insured until their death is called?

Life annuity

In a life policy, a special benefit that prepays a portion of a death benefit during the lifetime of an insurer in the event of a specified illness:

an acceleration of life insurance benefit

All of the following are true about a stock insurance company EXCEPT:

Their policy holders vote for the members of the board of directors

If a policy contains a Guaranteed Insurability rider, the insured has the right to purchase:

coverage on the insurer's children within 15 days after they are born

All of the following are true statements regarding representation EXCEPT:

a statement that is guaranteed to be true

An insurance company incorporated in Indiana, with its home office in Texas, is licensed to conduct business in all states except Pennsylvania. in Texas, this company would best be described as which of the following?

Foreign

A life insurance policy that fails to meet the 7-pay test is called a..

a Modified Endowment Contract

All of the following are true statements regarding policy dividends paid on on a life insurance contract EXCEPT:

They are considered to be taxable income

The McCarran-Ferguson Act was passed y Congress to

Redefine the authority of the state and federal government to regulate the insurance industry

The principle that insurance is not a transaction of commerce and so should bed regulated by state was established in:

Paul vs. Virginia

In New jersey, a producer who violates a New Jersey insurance law for the first time may be fined up to

$5,000

The New Jersey banking and insurance Commissioner has the authority to do all of the following actions EXCEPT:

Establish insurance rates and schedules

Which of the following statements is correct about an employment agreement between two producers?

it must be in writing

The New jersey banking and Insurance Commissioner may issue which of the following documents to an insurance producer as evidence of authority?

a license

A producer who employs another producer must take which of the following actions?

enter into a written employment agreement with the employee producer

For a New Jersey insurance producer to charge a prospective insured for analyzing coverages, there must be a reasonable relationship between the fee and..

the nature of the services performed

A person failing to comply with a subpoena from the Commissioner, may be charged with..

contempt

To be eligible for a resident producers license an individual must meet which of the following requirements?

complete a course of education approved by the Banking and Insurance Commissioner unless a waiver is obtained from the department

What is issued to an insurer, by the Commissioner, demonstrating it's authority to transact insurance business in the state?

certificate of authority

When an insurer procures insurance for itself from another insurer it is called..

reinsurance

In order to receive fees other than commissions, a life insurance producer acting as a consultant must first

obtain a written memorandum from the prospect stating the amount of compensation

A producer acting as an agent may take all the following actions EXCEPT:

Place insurance with a company the producer does not represent

A producer wishing to appeal the final order of the Commissioner would appeal to..

The superior court

which of the following producers does NOT need to satisfy CE credits?

nonresident

Continuing education credit may be earned for completing which of the following courses?

CLU designation courses

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?

resident

What is the MINIMUM age requirement for licensure as a nonresident producer?

18

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?

12 months

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?

24 months

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 then HOW MANY days after insurance?

60 days

Upon cancellation of an agency contract with a producer, the insurer must give written notice to the Commissioner within how many days?

15 days

A temporary work authority to act as a producer is issued at which of the following times?

When an applicant passes a licensing examination and responds negatively to all background questions

If a producer allows his license to lapse, how long before he has to meet all standard pre-licensing requirements again?

12 months

A producer's license is considered the property of

The State of New Jersey

A voluntarily terminated producer license may be reinstated during the same period if the producer takes which of the following actions?

completes a new license application

A producers certification of license status contains all of the following information EXCEPT:

place of birth

The Banking and Insurance Commissioner may revoke the license of a producer who..

uses the license primarily to obtain insurance for his or her family

If a producer's license is revoked, he must wait how long before applying for reinstatement?

5 years

The New Jersey Life and Health Guaranty Association is derived from..

Assessment on member companies

If a producer's license is suspended, he must wait how long before applying for reinstatement?

Immediately after the period of suspension

The act of using misrepresentations to induce an insured person to terminate an existing policy and purchase a new policy is referred as..

twisting

A producer who shares commission with a client may be found guilty of..

rebating

A producer who knowingly engages in a prohibited trade practice, can be issued a fine not to exceed..

$5,000 for the first offense; $10,000 for each subsequent offenses

A producer who UN-knowingly engages in a prohibited trade practice, can be issued a fine not to exceed..

$1,000

If an insurer or producer violates a cease and desist order, the Commissioner could assess a penalty not to exceed..

$5,000

Making statements which are false and derogatory about the financial condition of the insurer is:

defamation

When the beneficiary of a life insurance policy is a minor, the insurer can pay the proceeds

if legal guardian has been appointed

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?

thirty

If the Guaranty Association assumes management of an insolvent insurer, the maximum amount of death benefits for which they are liable to is..

$500,000 per person

If a producer changes their address, how many days do they have to notify the Department?

30

Which of the following activities does not require a license?

Scheduling appointments for producers to sell insurance

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..

an insolvent insurer

The first violation of the NJ Fraud Prevention Act can result in a fine of

$5,000

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..

replacing

Which of the following MUST an agent do when replacing a life insurance policy?

submit to the replacing insurer a list of all the life insurance policies or annuity contracts proposed to be replaced

All of the following actions can be taken by the Commissioner against a producer if he violates the rules of replacement EXCEPT:

redirect any commission earned to the insured

Replacement rules apply to which of the following products?

individual life policies

A Buyer's guide must be provided to all purchases of which of the following types of insurance?

Ten year level term

Life insurance advertisements

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

The replacement of an existing policy requires all of the following EXCEPT:

notice that the owner can return the policy within 90 days for a full refund

Which of the following statements is CORRECT?

creditors may attach the death benefits payable to insured's estate

A producer is in violation of the Replacement regulation by doing which of the following?

advising the applicant to directly contact their existing insurer to cancel their existing policy

What information is NOT required to be included in advertising material for a life product?

the agent's compensation

The purpose of advertising regulation is to..

assure full and truthful disclosure to the public