(NJ) New Jersey Life Insurance Only Final Exam
Complete Questions and Guide Answers
100% Verified Graded A+
1. When new Life Insurance is to be purchased, the solicitation will be consid-
ered 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
Answer: 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
Answer: 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
Answer: 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
Answer: Accelerated death benefit rider
5. A provision that allows a policyowner to withdraw a policy's cash value
interest free is a(n)?
Partial surrender
Waiver of premium
automatic premium loan
Grace period
Answer: 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
Answer: 12 months
(To qualify, the disability must be expected to last, or have lasted, at least 12 months, or it must be expected to result in
death)
7. Who assumes the investment risk with a fixed annuity contract?
The owner
Complete Questions and Guide Answers
100% Verified Graded A+
1. When new Life Insurance is to be purchased, the solicitation will be consid-
ered 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
Answer: 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
Answer: 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
Answer: 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
Answer: Accelerated death benefit rider
5. A provision that allows a policyowner to withdraw a policy's cash value
interest free is a(n)?
Partial surrender
Waiver of premium
automatic premium loan
Grace period
Answer: 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
Answer: 12 months
(To qualify, the disability must be expected to last, or have lasted, at least 12 months, or it must be expected to result in
death)
7. Who assumes the investment risk with a fixed annuity contract?
The owner
