𝐊𝐞𝐲 𝐖𝐨𝐫𝐝𝐬🔑
When doing business in this state, an insurance company under another state is known as what?
A. Domestic
B. Alien
C. Foreign
What is C. Foreign
Insurance is regulated?
A. Mostly on a federal level
B. Evenly between state and federal
C. Mostly on a state level
What is C. Mostly on a state level
An employee has group life. After 5 years she decides to quit and work independently. How can she obtain an individual policy?
A. She can convert her group policy w/o proof of insurability within 31 days
B. She will still be covered but will have to pay an individual policy premium
C. She must apply for a new policy with proof of insurability
What is A. She can convert her group policy w/o proof of insurability within 31 days
Michael's license was revoked 2 years ago. How much longer will he have to wait in order to request his license be reinstated?
A. 2 years
B. 1 year
C. 3 years
What is C. 3 years
Reinstatement of License=5 years
What type of license represents the insurance company?
A. Agent
B. Broker
C. Consultant
What is A. Agent
Misrepresenting an insurance policy as a share of stock is an example of what?
A. False Advertising
B. Churning
C. Twisting
What is A. False Advertising
Life Insurance death proceeds are?
A. Taxed as a capital gain
B. Not taxed as income
C. Taxed as ordinary income
What is B. Not taxed as income
An insurer publishes intimidating brochures that portray the insurer's competition as financially unstable. Which of the following best describes this act?
A. Legal, provided that the information can be verified
B. Illegal under any circumstances
C. Illegal until endorsed by the Commissioner
What is B. Illegal under any circumstances
In NJ, what is the minimum age a person can buy life insurance?
A. 18 years old
B. 16 years old
C. 15 years old
What is C. 15 years old
Who is the owner and who is the beneficiary on a Key Person Life Insurance policy?
A. The key employee is the owner, and the employer is the beneficiary
B. The employer is the owner and beneficiary
C. The employer is the owner, and the key employee is the beneficiary
Who is B. The employer is the owner and beneficiary
If an agent knows a client is going to cash in an old policy and use the funds to purchase a new one. Which rule would apply?
A. Conversion Rule
B. Replacement Rule
C. Reinstatement Rule
What is B. Replacement Rule
Which of the following is TRUE about credit life insurance?
A. Creditor is the insured
B. Debtor is the policyowner
C. Creditor is the policyowner
What is C. Creditor is the policyowner
Beneficiary is the Debtor
Henry passed his licensing exam 6 months ago but has not applied for his license yet. Which is true?
A. He waited too long and has to retake the test
B. He has 6 more months to apply for his license
C. He does not need to apply for a license since he passed his pre-licensing
What is B. He has 6 more months to apply for his license
Must apply WITHIN 1 year
After its issuance, the temporary work authority expires after how many days?
A. 60 days
B. 30 days
C. 90 days
What is A. 60 days
How is an insurance consultant different from an insurance producer?
A. A consultant doesn't sell policies, but only offers advice
B. A consultant doesn't need an insurance license
C. A consultant represents the insurer
What is A. A consultant doesn't sell policies, but only offers advice
What is the official name for the Social Security program?
A. Qualified Pension Plan
B. Defined Benefit Retirement Insurance
C. Old Age Survivors Disability Insurance
What is C. Old Age Survivors Disability Insurance
(OSADI)
An employee quits her job where she has $10k in her qualified plan. If she decides to do a direct transfer to a Traditional IRA, how much will be transferred and what will be the tax consequence?
A. $8,000 tax on growth only
B. $10,000 no tax consequence
C. $10,000 tax on growth only
What is B.$10,000 no tax consequence
Rollover-full amount gets reinvested
A client has a 15-year policy for $100k. The annual premium of $2,000 was due March 1st; however, the client failed to pay. The client died on March 28th. How much would the beneficiary receive?
A. $100k
B. $98K
C. $0
What is B. $98k
An insurer must keep all sales material for how long?
A. 5 years
B. 3 years
C. 10 years
What is A. 5 years
All advertisements to life insurance policies are the responsibility of?
A. Commissioner
B. Insurer
C. Consumer Protection
Who is B. Insurer
Which of the following is INCORRECT on a noncontributory group plan?
A. The employee receives individual policies
B. They require 100% employee participation
C. The employee pays 100% of the premiums
What is A. The employee receives individual policies
Which of the following would NOT be rebating?
A. Sending a $150 gift to the insured's employee
B. Sharing commission
C. Giving a client a $50 pen with the insurers logo
What is C. Giving a client a $50 pen with the insurers logo
A group of 15 pilots began talking about life insurance, because it was too expensive to get individual policies (they thought), they decided to form a small group so that they could qualify for group life. After they applied, they were rejected. Why?
A. Their profession is too high of a risk
B. There are not enough people to qualify
C. The purpose of the group was to purchase life insurance
What is C. The purpose of the group was to purchase life insurance
What is the number of credits required for fully insured status for Social Security disability benefits?
A. 6
B. 30
C. 40
What is C. 40
The term 'fully insured' someone has earned 40 quarters of coverage (10 years of work x annual credits)
How must a replacing agent respond to a client wishing to replace their existing policy?
A. The agent must provide the client with a Notice Regarding Replacement
B. The agent must collect the existing policy and turn them over to the replacing insurer
C. The agent must request permission from the existing insurer
What is A. The agent must provide the client with a Notice Regarding Replacement