NJ LIFE INSURANCE EXAM STUDY
1. Adverse Selection: insuring of risks that are more prone to losses than the average risk
2. lapse: policy termination due to nonpayment of premium
3. Insurance: transfers risk of loss from an individual or business entity to an insurance company
which in turn
spreads the costs of unexpected losses to many individuals
4. Life Insurance: protects against loss associated with an insured's death, and pays a death
benefit to beneficiaries upon death of the insured
5. solicitation of Insurance: an attempt to persuade a person to buy an insurance policy
6. Buyers Guide: provides basic, generic information about life insurance policies that contains
language
approved by the Department of Insurance
-Explains how a buyer should go about choosing the amount and type of insurance to buy
-Explains how a buyer can save money comparing the costs of familiar policies
7. Policy Summary: a written statement describing the features and elements of the policy
being issued Must provide:
-name and address of agent
,-full name and home oflce or administrative oflce of the insurer
-generic name of the basic policy
-each rider
8. Illustrations: a presentation or depiction that includes non guaranteed elements of a policy of
individual or group life insurance over a period of years
9. Life Insurance Illustration: Distinguish between guaranteed and projected amounts
-clearly state that an illustration is not a party of the contract
-identify those values that are not guaranteed as such
10. Field Underwriter: An insurance agent who conducts an initial policy solicitation and
application. (The company's front line of underwriting)
11. Application: starting point and basic source of information used by the company in the risk
selection process
12. Application Part 1- General Info: includes general questions about the applicant
such as name,
address, age, birth date, gender, income, marital status, and occupation
-inquires about the existing policies and if the proposed insurance will replace them
13. Application Part 2- Medical Info: includes information on the prospective insureds
medical back- ground, present health, any medical visits in recent years, medical status of living
, relatives and causes of death of deceased relatives
14. Non-Medical Appplication: if the amount of insurance is relatively small, the agent and
the proposed insured will complete all of the medical information
15. Agents Report: provides the agents personal observations concerning the proposed
insured.
16. Required Signatures: Both the agent and the proposed insured (usually the applicant)
must sign the
application.
17. Consequences of Incomplete Applications: If the insurer receives an incomplete
application, the insurer must return it to the applicant for complete
18. Consequences of Incomplete Applications: If a policy is issued with questions
left unan- swered, the contract will be interpreted as if the insurer waived its rights to have an
answer to the question
19. Consequences of Incomplete Applications: the insurer will not have the right to
deny coverage based on any information that the unanswered question might have contained
20. Premiums with the application: Agents attempt to collect the initial premium and
submit to insurer. Collecting initial premium at the time of the application increases the chance that the
applicant will accept the policy once issued.
21. Premium Receipt: Receipt given to the applicant by the producer or insurer, as proof of a
premium
payment.
22. Conditional Receipt: used only when the applicant submits a prepaid application
1. Adverse Selection: insuring of risks that are more prone to losses than the average risk
2. lapse: policy termination due to nonpayment of premium
3. Insurance: transfers risk of loss from an individual or business entity to an insurance company
which in turn
spreads the costs of unexpected losses to many individuals
4. Life Insurance: protects against loss associated with an insured's death, and pays a death
benefit to beneficiaries upon death of the insured
5. solicitation of Insurance: an attempt to persuade a person to buy an insurance policy
6. Buyers Guide: provides basic, generic information about life insurance policies that contains
language
approved by the Department of Insurance
-Explains how a buyer should go about choosing the amount and type of insurance to buy
-Explains how a buyer can save money comparing the costs of familiar policies
7. Policy Summary: a written statement describing the features and elements of the policy
being issued Must provide:
-name and address of agent
,-full name and home oflce or administrative oflce of the insurer
-generic name of the basic policy
-each rider
8. Illustrations: a presentation or depiction that includes non guaranteed elements of a policy of
individual or group life insurance over a period of years
9. Life Insurance Illustration: Distinguish between guaranteed and projected amounts
-clearly state that an illustration is not a party of the contract
-identify those values that are not guaranteed as such
10. Field Underwriter: An insurance agent who conducts an initial policy solicitation and
application. (The company's front line of underwriting)
11. Application: starting point and basic source of information used by the company in the risk
selection process
12. Application Part 1- General Info: includes general questions about the applicant
such as name,
address, age, birth date, gender, income, marital status, and occupation
-inquires about the existing policies and if the proposed insurance will replace them
13. Application Part 2- Medical Info: includes information on the prospective insureds
medical back- ground, present health, any medical visits in recent years, medical status of living
, relatives and causes of death of deceased relatives
14. Non-Medical Appplication: if the amount of insurance is relatively small, the agent and
the proposed insured will complete all of the medical information
15. Agents Report: provides the agents personal observations concerning the proposed
insured.
16. Required Signatures: Both the agent and the proposed insured (usually the applicant)
must sign the
application.
17. Consequences of Incomplete Applications: If the insurer receives an incomplete
application, the insurer must return it to the applicant for complete
18. Consequences of Incomplete Applications: If a policy is issued with questions
left unan- swered, the contract will be interpreted as if the insurer waived its rights to have an
answer to the question
19. Consequences of Incomplete Applications: the insurer will not have the right to
deny coverage based on any information that the unanswered question might have contained
20. Premiums with the application: Agents attempt to collect the initial premium and
submit to insurer. Collecting initial premium at the time of the application increases the chance that the
applicant will accept the policy once issued.
21. Premium Receipt: Receipt given to the applicant by the producer or insurer, as proof of a
premium
payment.
22. Conditional Receipt: used only when the applicant submits a prepaid application
