Key Concepts in Insurance Policies and Coverage

insurance Question Typically, Long-Term Disability benefits are coordinated with which benefit plan? The focus of major medical insurance is providing coverage for An insured has a stop-loss limit of $5,000 and an 80/20 coinsurance. The insured incurs $25,000 of covered losses. How much will the insured pay? Which type of plan would be the most appropriate for an individual on Medicare and concerned that Medicare will NOT pay for charges exceeding the approved amount? Answer Level premium term life insurance policies have premiums have averaged over the policy period What happens to the coverage under a children's term rider when that child reaches a certain specified age? the treasurer of xyz insurance company discovers that the treasurer company is being investigated by the banking and insurance commissioner pre-death distributions from a modified endowment contract receive different tax treatment than other life insurance policies because An insurance broker is someone who represents which of the following? The state of new jersey requires completion of a total of how many continuing education credits upon renewal of a producer's license how often must an insurance producers license in new jersey be renewed Coverage is eliminated Social Security medical and hospitalization expenses $5,000 Medicare supplement Plan F Making false financial statements the mec tends to be an investment vehicle an insured or prospective insured 24 credits of 3 of which ethics every two years Life Insurance provides coverage for two A life insurance policy written on one contract for two people in Joint or more persons with the death benefit payable which it is payable upon the first death is called at the first death. Which of the following are retained at the expense of an insurance buyer to give advice on insurance needed by the Brokers and consultants buyer? An agent has committed an insurance crime that violates US Code 1033 (interstate commerce). Who would be responsible US Attorney General for the prosecution of this crime? Upon policy delivery, which of the following must a producer have an applicant sign if no initial premium was collected with A good health statement the life insurance application? What is the purpose of the medical information bureau to help underwriters evaluate risk what is the primary reason for buying an annuity to provide a future economic security Kathy's annuity is currently experiencing tax deferred growth Accumulation period until she retires. Which phase is this annuity in? the premium paid plus interest will be earned If the annuitant dies before the annuity start date and given to the beneficiary An example of a tax qualified retirement plan would be an defined contribution plan Under a traditional IRA, interest earned is taxed upon distribution The commissioner may establish continuing education requirements policy owners from misrepresentations and loss Replacement regulation is designed to protect of benefits. Nina just passed her New Jersey insurance licensing examination. She is required to apply for a producers license 12 within ____ months Which of the following would be considered an unfair claim misrepresenting insurance policy provisions practice affecting a loss what content is approved by the insurance commissioner or contains content approved by the commissioner after advertisements are last used insurers are required to keep copies of the ad on file for how many years The new jersey life and health insurance guaranty association is An insurance consultant is best defined as The guaranty association act provides that when a court order of liquidation exists, the insurer A document providing basic information about life insurance policies, in general, is called a Which of the following are retained at the expense of an insurance buyer to give on insurance needed by the buyer An insurance broker is someone who represents which of the following The new jersey life and health insurance guaranty association is An insurance consultant is best defined as The guaranty association act provides that when a court order of liquidation exists, the insurer Which of the following are retained at the expense of an insurance buyer to give on insurance needed by the buyer An insurance broker is someone who represents which of the following Which of the following may be used as continuing education credit During the solicitation of a life policy, when must an insurer furnish a prospective buyer with a buyer's guide and a policy summary A buyer's guide 5 years funded by assessments on member companies a producer who charges fees for advice is insolvent. buyer guide brokers and consultants 5 years funded by assessments on member companies a producer who charges fees for advice is insolvent. brokers and consultants An insurance broker is someone who represents which of the following completing a CLU designing course Prior to, or at the time of the policy delivery. An agent is an licensed producer who has a written contract to represent an insurer An ______ insurance company is one that was formed under the laws of a state other than New jersey In order to be eligible for a non resident producer license an individual must do which of the following Each of the following about Branch offices is true to expect foreign Advertising regulations exist in order to Twisting is Which of the following is an example of defamation She may reinstate her policy within Who would make the final determination on whether or not an insurance advertisement is misleading The amount of credit life insurance may at no time Someone who sells solicits or negotiates insurance contracts for compensation on behalf of an insurer is called The purpose of the life and health insurance guaranty association is to An insurance company may only pay a sales commission to the licensee shall advise the department of banking and insurance of the closing of a branch office within how many days which of the following designation is regulated by the department of banking and insurance when replacing group insurance the replacing policy must cover ongoing claims from the former policies under which of the following insurers are required to keep copies of policy summaries and buyer guide on file for at least which of the following is not a duty of the commissioner an example of an unfair method of competition is hold a comparable license in another state the office must be open 9-5 5 days a week. demonstrate full and truthful disclosures to the public an unfair trade practice using derogatory statements about an insurance company financial condition 3 years banking and insurance commissioner be greater than the amount of debt an insurance producer ensure that claims filed against insolvent insurance companies will be paid individuals license by the state 30 days in writing certified insurance counselor. no loss no gain three years after the doc is used. establish insurer rates overstating the benefits of an insurance policy Which of the following is true concerning the proceeds of a life insurance policy The insurance commissioner may revoke a producer license for What is an insurer required to do when faced with an error made under the Misstatement of Age provision? What will the beneficiary receive if an annuitant dies during the accumulation period In the advertising of individual life and insurance policies Which policy feature makes a universal life policy different from a whole life policy? In which of the following relationships would there NOT be an insurable interest? All of these statements concerning whole life insurance are false EXCEPT an agent is required to keep replacement forms on file for at least in advertisements of life insurance and annuities, all of the following are true except What is an insurance policy grace period The commissioner must approve The principle of insurable interest, in regards to a life insurance contract, is accurately described in which statement Which of the following are the premium payments for a universal life policy not used for? Which of the following is true concerning the proceeds of a life insurance policy? An example of rebating would be which of these is a method of determining the level of funds required for ongoing support in the event of the breadwinner's death? a life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situation expect shirley has a $500,000 10-year non-renewable level term life policy. if she dies 15 years after the policy's inception date, how much will her beneficiary recieve? which of the following actions is required by an agent who is replacing an existing life insurance policy? Which settlement option involves having the proceeds remain with the insurer and earnings paid on a monthly basis to the beneficiary? Where would policy proceeds be paid if both the insured and primary beneficiary were killed in the same accident? how many months can a life insurance policy normally be backdated from the date of application? An error was made on Mary's life insurance application. Which of the following areas are errors commonly made on applications for which the incontestable clause does NOT apply? An interest-sensitive life insurance policyowner may be able to withdraw the policy's cash value interest free. The provision that allows this is called which type of life insurance is normally associated with a payor benefit rider? The department of banking and insurance can make information pertaining to a producer license available through there is a protection of proceeds against the insured and the beneficiary's creditors engaging primarily in controlled business sales Pay age-corrected benefits the greater of the accumulated cash value or the total premium paid 3 months a flexible premium schedule Business owner to a business customer When a whole life policy is surrendered, income taxes may be owed 5 years advertisements must include training materials provided to the producer. period of time after the premium is due but the policy remains in force. continuing education courses insurable interest can be based on the love and affection of individuals related by blood or law. separate account investments there is protections of proceeds against the insured creditors a producer who shares commissions with a client Human life value fare-paying passenger nothing submit to the replacing insurer a list of the policies to be replaced interest only contingent beneficiary 6 months Age partial surrender juvenile insurance certificate of license status report. it allows for cash advances to be paid against the What is the purpose for having an accelerated death benefit on a dead benefit if the insured becomes terminally life insurance policy ill The fair credit and reporting act main purpose is to protect consumers with guidelines regarding credit reporting and distribution What is the automatic continuance of insurance coverage referred to as? In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST renewal when does a life insurance policy typically become effective? provide evidence of insurability to the insurer when initial premium is collected and policy is issued A branch office registration form is required to be filed at least _______ days before selling insurance of that branch A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called an When a decreasing term policy is purchased, it contains a decreasing death benefit and which of these is not considered to be a purpose of an annuity? How are survivorship life insurance policies helpful in estate planning? 30 Which type of life insurance offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested? Universal life, a form of permanent life insurance provides policyholders with flexibility on paying premiums, a cash savings component, and a death benefit. which of these is not subject to income taxation under a modified endowment contract (MEC)? An annuitant dies during the distribution period. What kind of annuity will return to a beneficiary the difference between the annuity value and the income payments already made? Maria would like an annuity that provides a guaranteed accumulation or payout. The type of annuity she is seeking is called Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is this? ABC insurance company transfers part of their risk to XYZ insurance company. The situation is called which of these describes the result of a modified endowment contract that failed to meet the seven-pay test? Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. What kind of policy is this? an insurance company needs to obtain personal information from a third party concerning an applicant which law do all insurers and their producers need to comply with? which of the following is not part of an insurance contract? An annuity is primarily used to provide? All of these are settlement options for life insurance policies EXCEPT carmen individual life insurance policy has recent lapsed. she may reinstate her policy within ____ year(s) which of the following designations is regulated by the department of banking and insurance the coverage, conditions, and limitations in the master policy of a group contract can be found in which document? which of these factors helped determine an insured's life insurance premium? An annuitant is guaranteed to NOT outlive their benefits with a(n) When new Life Insurance is to be purchased, the solicitation will be considered a replacement transaction if, in conjunction with Death Benefit nonforfeiture provision level premiums annuities are intended to create an estate provide funds to help pay taxes refund annuity annuity certain universal life policy reinsurance pre-death distributions are typically taxable equity index whole life fair credit reporting act certificate of authority retirement income extended term 3 certified insurance counselor certificate of coverage and benefits avocation (hobby) Guaranteed lifetime withdrawal benefit 25% of the policy's loan value the sale, existing Life Insurance will be subject to borrowing for amounts exceeding which of the following? Converting a group plan to permanent life insurance requires the conversion being applied for within 31 days of termination which policy feature makes a universal life policy different from a flexible premium schedule a whole life policy must be delivered with or prior to policy A buyer's Guide and policy summary delivery which of the following protects a policyowner from a incontestable clause misrepresentation caused by an innocent mistake? the conversion privilege under a group life plan allows an individual plan upon employment termination employee to convert to an the license shall advise the department of banking and insurance 30 days in writing of the closing of a branch office within how many days? when replacement of individual life insurance is involved, an agent must furnish a notice regarding replacement of life the applicant only insurance to which of the following? the commissioner of insurance may take which of the following actions when a producer has engaged in an unfair trade issue a cease and desist order practice? which of the following would disqualify company's retirement it is temporary plan from receiving favorable tax treatment? the suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's minus indebtedness and without interest inception, the insurer will only be liable for a return of premiums paid the amount of credit life insurance may at no time be greater than the amount of debt a life insurance policy that is subject to a contact interest rate is universal life referred to as All of the following statements are correctly describe the it provides a source of income for a meaningful purpose of social security except standard of living during retirement How soon can the benefit payments begin with a deferred a minimum of 12 months after date of purchase annuity? Krissa purchases a 10-year level term life insurance policy that the face amount and premium will remain has a death benefit of $200,000. Which of these statements is constant over the 10-year period true? an individual most likely will have an insurable interest in an economic interest exists for the continuance insuring a person's life if of the insured's life Ownership of a life insurance policy may be temporarily collateral assignment transferred with a(n) which of the following sells reinsurance? The assuming insurer Which of these ensures that proceeds of a life insurance policy will be free from attachment or seizure by the beneficiary's spendthrift clause creditors? An insured individual and the policy's beneficiary die from the same accident. The common disaster provision states the the insured outlived the beneficiary insurer will continue as if which type of rider will waive the premium on a child's life payor benefit insurance policy if the parent paying premium dies? what happens to the total amount of premium paid for an inscreases insurance policy when the payment frequency increases? which of the following policies does not build cash value? term Dorian exercised a nonforfeiture option by using his life policy's cash value to purchase an extended term insurance option. the protection ends when the term insurance expires which situation accurately describes a reduced paid-up policy has a decreased face amount nonforfeiture option? An applicant's character and personal habits can be obtained for investigative consumer report underwriting purposes from which source? Which settlement option pays a stated amount to an annuitant, life income but no residual value to a beneficiary? the two major actions required for a policyholder to comply with the reinstatement clause are a renewable term life insurance policy allows the policyowner the right to renew the policy what is the primary feature of a viatical settlement? Which type of beneficiary should be named if the insured wants to give explicit directions on how the policy proceeds should be paid? an insurance producer is often responsible for field underwriting during the application process. all of these are possible field underwriting roles expect what is involved when a life insurance policy has been backdated? a guaranteed issue insurance policy has no fraternal benefits society has each of the following characteristics except provide evidence of insurability, pay past due premiums without producing proof of insurability reduced death benefit prepayment individual providing commission information to the applicant making the policy effective on an earlier date than the present medical underwriting exist for profit allows for cash advances to be paid against the what is the purpose for having an accelerated death benefit on a it death benefit if the insured becomes terminally life insurance policy ill Donald is the primary insured of a life insurance policy and adds can be converted to permanent coverage a children's term rider. what is the advantage of adding this without evidence of insurability rider? which of these statements concerning traditional IRAs is correct? What kind of life insurance policy issued by a mutual insurer provides a return of divisible surplus? Level premium permanent insurance accumulates a reserve that will eventually All of these are characteristics of a universal Life policy EXCEPT what happens when an insurance policy is backdate? A renewable term life insurance policy can be renewed all of the following are characteristics of a group life insurance plan expect Naming a contingent beneficiary as "all surviving children" is described by which term? ABC life insurance company's home office is located in Massachusetts and is incorporated in Massachusetts. in New Jersey they are considered to be Shawn, Mike, and Dave are brothers who have a $100,000 "first to die" joint life policy covering all three of their lives. If Mike dies first, the policy proceeds which of these premium payment frequencies is not typically available to a policyowner? a limited payment whole life policy provides an applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of Which of these annuities require premium payments that vary from year to year? the statement which best describes the relationship between the premiums of a whole life policy and the premium payment period is a type of group that has a constitution and bylaws and has been organized for purposes other than obtaining insurance is called an? a life insurance policy written on one contract for two people in which it is payable upon the first death is called A beneficiary has just received a claim payment for a life insurance policy. Which of the following is TRUE regarding the federal income tax liability owed? earrings are taxable when withdrawn participating life insurance policy equal the face amount of the policy fixed surrender value the policy's effective date is earlier than the present at a predetermined date or age individual underwriting Class designation Foreign will no longer provide insurance protection Bi-weekly lifetime protection fraud flexible premium deferred annuity the shorter the payment period, the higher the premium association or labor group joint no federal income tax is owed on a life insurance proceeds which of the following is considered to be an alternative to a life settlement? which of the following employers is required to follow ERISA regulations? the commissioner issues a subpoena to a producer. the producer decides not to respond. which course of action must be taken by the commissioner? which of the following must contain a statement of policy cost and benefit information? in regards to a life insurance contract, which of the following statements is not true regarding the concept of insurable interest? Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She would like to borrow $15,000 against the cash value. Which of the following statements is true? which of these is affected by the frequency of an insurance policy's premium payments? Statements made by an insurance applicant on an application are considered to be who assumes the investment risk with a fixed annuity contract? Applicants for surplus lines authority must fulfill all of the following requirements except? When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount? Accelerated death benefit rider A local electrical supply company with 12 employees commissioner may impose an administrative penalty policy summary insurable interest can be established sufficiently by sentimental attachment alone. Net death benefit will be reduced if the loan is not repaid cost representations the insurer hold a bound as a condition for licensure equal to the original policy for as long as the cash values will purchase