NJ Life Insurance Exam 2024 Questions and Answers
Three types of term policies - Answer-level, increasing and decreasding
level term insurance - Answer-most common type of term insurance
level premium and death benefit
annually renewable term - Answer-benefit remains level each year, gua...
NJ Life Insurance Exam 2024
Questions and Answers
Three types of term policies - Answer-level, increasing and decreasding
level term insurance - Answer-most common type of term insurance
level premium and death benefit
annually renewable term - Answer-benefit remains level each year, guaranteed
renewable each year without proof of insurance, but premium increases each year
according to attained age
decreasing term - Answer-level premium
death benefit decreases each year
commonly used to insure payment of mortgage or other debts
increasing term - Answer-level premiums and increasing death b
renewable provision - Answer-allows the policyowner the right to renew coverage
without evidence of insurability. premium is based on current age
convertible provision - Answer-provides the policy owner with the right to convert the
policy to a permanent policy without evidence of insurability
key characteristics of whole life insurance - Answer--level premium
-level and guaranteed death benefit
-cash value
-can loan against cash value
cash value accumulates at - Answer-the end of the third polocy year and grows tax
deferred
also called nonforfeiture value
three basic forms of whole life insurance - Answer-1) single premium
2) straight life
3) limited pay whole life
straight (ordinary) life - Answer-level premium for life and level death benefit, cash value
increases with time
,lowest annual premium of whole life policies
limited pay life - Answer-level premium for fixed period (say up to age 65), cash value
builds up faster due to premiums being paid sooenr
single premium whole life - Answer-provide a level death benefit to the insured's age
100 for a one-time, lump sum payment. Completely paid up after one premium and
generates immediate cash
adjustable life - Answer-allows the policyowner to increase or decrease the premium
amount, face amount, or period of protection
universal life - Answer-flexible premium adjustable life, allows the policyowner to
change premium amount or even skip payments
-two components, insurance component and cash account
universal life premium only lapses when - Answer-cash value is less than cost of
insurance
target premium - Answer-recommended amount that should be paid on a universal life
policy in order to cover the cost of insurance protection and keep the policy in force
throughout its lifetime
Insurance is the ____ of risk - Answer-transfer
disclosure statements must be given to the applicant no later than - Answer-the time the
application is signed
buyer's guide - Answer-provides general information about the types of life insurance
policies available, in language that can be understood by the average person.
buyers guide must be delivered by - Answer-before collecting premium or be delivered
with the policy if given at least 10 days free look period
policy summary - Answer-a written statement describing the features and elements of
the policy being issued
part 1 of the appplication - Answer-general information about the applicant such as
name, age, address, occupation
field underwriter - Answer-The technical name given to the insurance producer of an
insurer who does not have binding authority to grant coverage.
part 2 of the application - Answer-medical information and family healthy history
, is the agent's report part of the entire contract - Answer-no but it is a part of the
application process
agent's report - Answer-A written report from the agent submitted to the insurer along
with the application disclosing what the agent knows, observed, or learned about the
proposed insured's risks.
what signatures are required on the application - Answer--agents
-insured
-policyowner (if different than insured)
policy coverage begins - Answer-on the later of the date of application (if prepaid policy)
or the date of the medical exam
conditional receipt - Answer-The producer issues a conditional receipt to the applicant
when the application and premium are collected.
applicant may be covered as early as the date of the application
warranty - Answer-An absolutely true statement upon which the validity of the insurance
policy depends.
representations - Answer-are statements believed to be true to the best of one's
knowledge but are not guaranteed to be true
material misreprestentation - Answer-a statement that, if discovered, would alter the
underwriting decision
material misrepresentations are considered fraud when they are ___ - Answer-
intentional
underwriting - Answer-risk selection and classification process
insurable interest - Answer-An interest in the subject of an insurance policy that is not
unduly remote and that would cause the interested party to suffer financial loss if an
insured event occurred.
insurable interest must exist at - Answer-the time of the application
adverse selection - Answer-A high-risk person benefits more from insurance, so is more
likely to purchase it.
what is the key source of information underwriters use for information about the
applicant - Answer-insurance application
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