NJ PSI PRACTICE EXAM Questions and
Answers
1. all of the following are ownership rights EXCEPT:
A: changing the beneficiary of the
policy B: borrowing funds against cash
value
C: switching the policy from on insured to another
D: assigning all of the rights of the policy to another person:
ANS C: switching the policy from on insured to another
2. which of the following is characteristic of a non qualified
plan:
A: defined vesting schedule
B: plan established by the employer
C: plan does not meet federal guidelines for tax benefits
D: employer contributions are deductible business expense:
ANS C: plan does not meet federal guidelines for tax benefits
3. How do warranties differ from representations?
A: a warranty is guaranteed to be true, a representation is believed to
be true to the best of one's knowledge
B: a representation is guaranteed to be true, a warranty is believed to
be true to the best of one's knowledge
,C: a warranty is issued by the insurer, a representation is a statement
provided by the applicant
D: an incorrect representation automatically voids a contract, whereas an
in- correct warranty must be proven:
ANS A: a warranty is guaranteed to be true, a representation is believed to be true to the
best of one's knowledge
4. in which of the following must a beneficiary change request be filed in
writing to the insurer and is made effective by the insurance company:
A: designation
option B: recording
method
C: endorsement method
D: succession of beneficiaries:
ANS B: recording method
5. all of the following are required signature on a life insurance
application EXCEPT:
A: the agent
B: the applicant
C: the minor in a juvenile policy
D: the proposed insured:
ANS C: the minor in a juvenile policy
6. all of the following are features of the spendthrift clause
, EXCEPT: A: proceeds are paid in some other way than a
single premium
B: proceeds are protected by the insurer from the beneficiary's
creditors C: transfer of proceeds to creditors
D: the beneficiary may encumber the proceeds:
ANS D: the beneficiary may encumber the proceeds
7. Which type of annuity attempts to offset inflation by providing a
benefit linked to an underlying investment account:
A:
deferred
B: fixed
C: immediate
D: variable:
ANS D: variable
8. how does the per capita rule apply to proceeds from a life insurance
policy: A: the proceeds are divided equally among living primary
beneficiaries
B: the secondary beneficiary receives the proceeds if the primary
beneficiary is no longer living
C: the proceeds go to the policyholder's estate when no beneficiary is
living D: the proceeds go to the descendants of the primary beneficiaries:
ANS A: the proceeds are divided equally among living primary beneficiaries
Answers
1. all of the following are ownership rights EXCEPT:
A: changing the beneficiary of the
policy B: borrowing funds against cash
value
C: switching the policy from on insured to another
D: assigning all of the rights of the policy to another person:
ANS C: switching the policy from on insured to another
2. which of the following is characteristic of a non qualified
plan:
A: defined vesting schedule
B: plan established by the employer
C: plan does not meet federal guidelines for tax benefits
D: employer contributions are deductible business expense:
ANS C: plan does not meet federal guidelines for tax benefits
3. How do warranties differ from representations?
A: a warranty is guaranteed to be true, a representation is believed to
be true to the best of one's knowledge
B: a representation is guaranteed to be true, a warranty is believed to
be true to the best of one's knowledge
,C: a warranty is issued by the insurer, a representation is a statement
provided by the applicant
D: an incorrect representation automatically voids a contract, whereas an
in- correct warranty must be proven:
ANS A: a warranty is guaranteed to be true, a representation is believed to be true to the
best of one's knowledge
4. in which of the following must a beneficiary change request be filed in
writing to the insurer and is made effective by the insurance company:
A: designation
option B: recording
method
C: endorsement method
D: succession of beneficiaries:
ANS B: recording method
5. all of the following are required signature on a life insurance
application EXCEPT:
A: the agent
B: the applicant
C: the minor in a juvenile policy
D: the proposed insured:
ANS C: the minor in a juvenile policy
6. all of the following are features of the spendthrift clause
, EXCEPT: A: proceeds are paid in some other way than a
single premium
B: proceeds are protected by the insurer from the beneficiary's
creditors C: transfer of proceeds to creditors
D: the beneficiary may encumber the proceeds:
ANS D: the beneficiary may encumber the proceeds
7. Which type of annuity attempts to offset inflation by providing a
benefit linked to an underlying investment account:
A:
deferred
B: fixed
C: immediate
D: variable:
ANS D: variable
8. how does the per capita rule apply to proceeds from a life insurance
policy: A: the proceeds are divided equally among living primary
beneficiaries
B: the secondary beneficiary receives the proceeds if the primary
beneficiary is no longer living
C: the proceeds go to the policyholder's estate when no beneficiary is
living D: the proceeds go to the descendants of the primary beneficiaries:
ANS A: the proceeds are divided equally among living primary beneficiaries
