NEW JERSEY LIFE INSURANCE EXAM
SIMULATOR
200 Question Exam
Questions and Answers
1. Mortality is calculated by using a large risk pool of
A) people and time
B) hobbies and time
C) insurance companies and agents
D) family history and geographical area
ANS A) people and time
2. A policyowner may exercise which of these dividend options that
uses the dividend to pay all or part of the next premium due?
A) Reduction of premium dividend option
B) Extended term option
C) Paid-up option
D) Cash dividend option
ANS A) Reduction of premium dividend option
3. Pat is insured with a life insurance policy and Karen is his primary
beneficiary. They are both involved in an automobile accident where
,Pat dies instantly and Karen dies 5 days later. Which policy
provision will protect the rights of the contingent beneficiary to
receive the policy benefits?
A) Accident indemnity clause
B) Nonforfeiture clause
C) Common disaster clause
D) Spendthrift clause
ANS C) Common disaster clause
4. What is the primary feature of a viatical settlement?
A) Reduced death benefit prepayment
B) No interest on policy loans
C) Lower premiums
D) Longer contestable period
ANS A) Reduced death benefit prepayment
5. Which one of the following is NOT covered by Social Security
A) Self-employed worker
B) Business owner
C) Railroad worker
D) Insurance salesman
ANS C) Railroad worker
6. How is Social Security (OASDI) funded?
,A) Treasury Bonds
B) Sales taxes
C) Payroll taxes
D) Federal grants
ANS C) Payroll taxes
7. Individuals covered by Social Security include all of the following
EXCEPT
A) Federal employees (after 1984)
B) Railroad workers
C) Small business owners
D) State workers who are not covered by state pension plans
ANS B) Railroad workers
8. Under Social Security disability requirements, a worker is fully
insured on a permanent basis after having worked in a covered
occupation for
A) 40 quarters
B) 30 quarters
C) 10 quarters
D) 20 quarters
ANS A) 40 quarters
, 9. What is the formal name for Social Security?
A) Old Age Survivors Disability Insurance
B) Advanced Age Survivors Disability Insurance
C) Qualified Age Survivors Disability Insurance
D) Retirement Age Survivors Disability Insurance
ANS A) Old Age Survivors Disability Insurance
10. Craig purchased a life insurance policy for enabling his heirs
to pay estate taxes. What is this called?
A) Estate conservation
B) Survivor fund
C) Liquidity maintenance
D) Human value protection
ANS A) Estate conservation
11. When calculating the amount of life insurance needed for an
income earner, what has to be determined when using the Needs
Approach?
A) The income earner's credit score
B) The income earner's future projected income
C) The insurance company's financial rating
D) The family's financial objectives if the income earner were to die
or become disabled
ANS D) The family's financial objectives if the income earner were to die or become disabled
SIMULATOR
200 Question Exam
Questions and Answers
1. Mortality is calculated by using a large risk pool of
A) people and time
B) hobbies and time
C) insurance companies and agents
D) family history and geographical area
ANS A) people and time
2. A policyowner may exercise which of these dividend options that
uses the dividend to pay all or part of the next premium due?
A) Reduction of premium dividend option
B) Extended term option
C) Paid-up option
D) Cash dividend option
ANS A) Reduction of premium dividend option
3. Pat is insured with a life insurance policy and Karen is his primary
beneficiary. They are both involved in an automobile accident where
,Pat dies instantly and Karen dies 5 days later. Which policy
provision will protect the rights of the contingent beneficiary to
receive the policy benefits?
A) Accident indemnity clause
B) Nonforfeiture clause
C) Common disaster clause
D) Spendthrift clause
ANS C) Common disaster clause
4. What is the primary feature of a viatical settlement?
A) Reduced death benefit prepayment
B) No interest on policy loans
C) Lower premiums
D) Longer contestable period
ANS A) Reduced death benefit prepayment
5. Which one of the following is NOT covered by Social Security
A) Self-employed worker
B) Business owner
C) Railroad worker
D) Insurance salesman
ANS C) Railroad worker
6. How is Social Security (OASDI) funded?
,A) Treasury Bonds
B) Sales taxes
C) Payroll taxes
D) Federal grants
ANS C) Payroll taxes
7. Individuals covered by Social Security include all of the following
EXCEPT
A) Federal employees (after 1984)
B) Railroad workers
C) Small business owners
D) State workers who are not covered by state pension plans
ANS B) Railroad workers
8. Under Social Security disability requirements, a worker is fully
insured on a permanent basis after having worked in a covered
occupation for
A) 40 quarters
B) 30 quarters
C) 10 quarters
D) 20 quarters
ANS A) 40 quarters
, 9. What is the formal name for Social Security?
A) Old Age Survivors Disability Insurance
B) Advanced Age Survivors Disability Insurance
C) Qualified Age Survivors Disability Insurance
D) Retirement Age Survivors Disability Insurance
ANS A) Old Age Survivors Disability Insurance
10. Craig purchased a life insurance policy for enabling his heirs
to pay estate taxes. What is this called?
A) Estate conservation
B) Survivor fund
C) Liquidity maintenance
D) Human value protection
ANS A) Estate conservation
11. When calculating the amount of life insurance needed for an
income earner, what has to be determined when using the Needs
Approach?
A) The income earner's credit score
B) The income earner's future projected income
C) The insurance company's financial rating
D) The family's financial objectives if the income earner were to die
or become disabled
ANS D) The family's financial objectives if the income earner were to die or become disabled
