NEW JERSEY LIFE INSURANCE FINAL EXAM
Questions and Answers
1. When new Life Insurance is to be purchased, the solicitation will
be
considered a replacement transaction if, in conjunction with the
sale, existing Life Insurance will be subject to borrowing for
amounts exceeding which of the following?
10% of the policy's loan
value 75% of the policy's
loan value 25% of the
policy's loan value
50% of the policy's loan value
ANS 25% of the policy's loan value
(If a client keeps an existing policy but borrows more than 25% of it's cash value in order to use that
money for a new policy, replacement has occurred)
2. Of the following dividend options, which of these is taxable?
Reduction of
premium One year
term
,Paid-up additions
Accumulation at interest
ANS Accumulation at interest
3. The suicide clause of a life insurance policy states that if an insured
commits suicide within a stated period from the policy's inception,
the insurer will only be liable for a return of premiums paid?
minus indebtedness and with
interest during the last 12
months
minus indebtedness and without interest
during the last 6 months
ANS minus indebtedness and without interest
4. Which of the following is considered to be an alternative to a life
settlement?
Accelerated death benefit
rider Waiver of premium
rider Extended term option
Decreasing term insurance
ANS Accelerated death benefit rider
, 5. A provision that allows a policyowner to withdraw a policy's cash
value inter- est free is a(n)?
Partial surrender
Waiver of
premium
automatic premium loan
Grace period
ANS Partial surrender
6. How long must an individual be unable to engage in ant
gainful activity due to physical or mental disability in order to
qualify for Social Security Total Disability?
3 months
6 months
12 months
18 months
ANS 12 months
(To qualify, the disability must be expected to last, or have lasted, at least 12 months, or it must be
Questions and Answers
1. When new Life Insurance is to be purchased, the solicitation will
be
considered a replacement transaction if, in conjunction with the
sale, existing Life Insurance will be subject to borrowing for
amounts exceeding which of the following?
10% of the policy's loan
value 75% of the policy's
loan value 25% of the
policy's loan value
50% of the policy's loan value
ANS 25% of the policy's loan value
(If a client keeps an existing policy but borrows more than 25% of it's cash value in order to use that
money for a new policy, replacement has occurred)
2. Of the following dividend options, which of these is taxable?
Reduction of
premium One year
term
,Paid-up additions
Accumulation at interest
ANS Accumulation at interest
3. The suicide clause of a life insurance policy states that if an insured
commits suicide within a stated period from the policy's inception,
the insurer will only be liable for a return of premiums paid?
minus indebtedness and with
interest during the last 12
months
minus indebtedness and without interest
during the last 6 months
ANS minus indebtedness and without interest
4. Which of the following is considered to be an alternative to a life
settlement?
Accelerated death benefit
rider Waiver of premium
rider Extended term option
Decreasing term insurance
ANS Accelerated death benefit rider
, 5. A provision that allows a policyowner to withdraw a policy's cash
value inter- est free is a(n)?
Partial surrender
Waiver of
premium
automatic premium loan
Grace period
ANS Partial surrender
6. How long must an individual be unable to engage in ant
gainful activity due to physical or mental disability in order to
qualify for Social Security Total Disability?
3 months
6 months
12 months
18 months
ANS 12 months
(To qualify, the disability must be expected to last, or have lasted, at least 12 months, or it must be
