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NJ HEALTH INSURANCE EXAM (XCEL SOLUTIONS)
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NJ HEALTH INSURANCE EXAM (XCEL SOLUTIONS)
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NJ HEALTH INSURANCE EXAM (XCEL SOLUTIONS)Why are dividends from a mutual insurer not subject to taxation? - Answers -because
dividends are considered to be a return of premium
ABC insurance company transfers part of their risk to XYZ insurance company. This
situation is called - Answers -reinsurance
A nonparticipating company is sometimes called a(n) - Answers -stock insurer
What is considered to be the primary reason for buying life insurance? - Answers -
provide death benefits
A(n) _____ company is owned by its shareholders - Answers -stock
A plan in which an employer pays insurance benefits from a fund derived from the
employer's current revenues is called - Answers -a self-funded plan
What is the primary purpose of a rating service company such as A.M. Best? - Answers
-determine financial strength of an insurance company
Karen is a producer who has obtained personal information about a client without
having a legitimate reason to do so. Under the McCarran-Ferguson Act, what is the
minimum penalty for this? - Answers -$10,000
A nonparticipating policy will - Answers -not pay dividends
A life insurance company has transferred some of its risk to another insurer. The insurer
assuming the risk is called the - Answers -reinsurerAn insurer's claim settlement
practices are regulated by the - Answers -state insurance departments
Which of the following is NOT considered advertising?
a rating from a rating service company, such as A.M. Best
an illustration
a sales presentation
direct mailing from an agency - Answers -a rating from a rating service company, such
as A.M. Best
The Fair Credit and Reporting Act's main purpose is to - Answers -protect consumers
with guidelines regarding credit reporting and distribution
When the principle gives the agent authority in writing, it's referred to as - Answers -
express authority
What are an applicant's statements concerning occupation, hobbies, and personal
health history regarded as? - Answers -representations
,In an insurance contract, the element that shows each party is giving something of
value is called - Answers -consideration
Which of the following is an example of the insured's consideration? - Answers -a paid
premium
Intentional withholding of material facts that would affect an insurance policy's validity is
called a(n) - Answers -concealment
The term which describes the fact that both parties of a contract may NOT receive the
same value is referred to as - Answers -aleatory
In an insurance contract, the insurer is the only party who makes a legally enforceable
promise. What kind of contract is this? - Answers -unilateral
All of the following are elements of an insurance policy EXCEPT
definitions
other insurance
claim forms
conditions - Answers -claim forms
The authority granted to a licensed producer is provided via the - Answers -law of
agency
Insurable interest does not occur in which of the following relationships?
sister and brother
parent and children
business partners
business owner and business client - Answers -business owner and business client
Which of the following best describes a conditional insurance contract? - Answers -a
contract that requires certain conditions or acts by the insured individual
_____ is not an element of a valid contract - Answers -countersignature
Ambiguities in an insurance policy are always resolved in favor of the - Answers -
insured
The power given to the individual producer that is not specifically addressed in his/her
contract is considered what type of authority? - Answers -implied
In order for a contract to be valid, it must - Answers -contain an offer and acceptance
Bob and Tom start a business. Since each partner contributes an important element to
the success of the business, they decide to take life insurance policies out on each
, other, and name each other as beneficiaries. Eventually, they retire and dissolve the
business. Bob dies 12 months later. The policies continue in force with no change. Both
partners are still married at the time of Bob's death. In this situation, who will receive
Bob's policy proceeds? - Answers -Tom
A professional liability for which producers can be sued for mistakes of putting a policy
into effect is called - Answers -errors and omissions
Which contract element is insurable interest a component of? - Answers -legal purpose
Legal purpose is a term used in contract law meaning - Answers -there must be legal
reasons for entering a contract
Ken is a producer who has obtained Consumer Information Reports under false
pretenses. Under the Fair Credit Reporting Act, what is the maximum penalty that may
be imposed on Ken? - Answers -$5,000
A type of insurer that is owned by its policyowners is called - Answers -mutual
Fraternal Benefit Society has each of the following characteristics EXCEPT
incorporated
without capital stock
exists for profit
exists for the benefit of its members - Answers -exists for profit
The Do Not Call Registry offers exemptions for calls placed from all of the following
EXCEPT
charities
political organizations
insurance sales calls
surveys - Answers -insurance sales calls
What kind of life insurance policy issues by a mutual insurer provides a return of
divisible surplus? - Answers -participating life insurance policy
An insurer's ability to make unpredictable payouts to policyowners is called - Answers -
liquidity
What is implied authority defined as? - Answers -authority that is not specifically given
to an agent in the agency contract, but that an agent can reasonably assume to carry
out his/her duties
Under a contract of adhesion, - Answers -the terms must be accepted or rejected in full
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