NEW JERSEY LIFE INSURANCE COMPREHENSIVE EXAM
2026/2027 QUESTIONS AND SOLUTIONS RATED A+
✔✔Non-Medical Appplication - ✔✔if the amount of insurance is relatively small, the
agent and the proposed insured will complete all of the medical information
✔✔Agents Report - ✔✔provides the agents personal observations concerning the
proposed insured.
✔✔Required Signatures - ✔✔Both the agent and the proposed insured (usually the
applicant) must sign the application.
✔✔Consequences of Incomplete Applications - ✔✔If the insurer receives an incomplete
application, the insurer must return it to the applicant for complete
✔✔Consequences of Incomplete Applications - ✔✔If a policy is issued with questions
left unanswered, the contract will be interpreted as if the insurer waived its rights to
have an answer to the question
✔✔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
✔✔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.
✔✔Premium Receipt - ✔✔Receipt given to the applicant by the producer or insurer, as
proof of a premium payment.
✔✔Conditional Receipt - ✔✔used only when the applicant submits a prepaid application
✔✔Warranty - ✔✔An absolutely true statement upon which the validity of the insurance
policy depends.
✔✔Representations - ✔✔statements believed to be true to the best of one's knowledge,
but they are not guaranteed to be true
✔✔Misrepresentations - ✔✔Untrue statements on the application
✔✔Material Misrepresentation - ✔✔A statement that, if discovered, would alter the
underwriting decision of the insurance company.
✔✔Underwriting - ✔✔The risk selection process
,✔✔Insurable Interest - ✔✔To purchase insurance, the policy owner must face the
possibility of losing money or something of value in the event of loss.
✔✔Valid Insurance Interest - ✔✔1)Policy owner's own Life
2)the life of a family member
3) the life of a business partner, key employee, or someone who has a financial
obligation to the policy owner
✔✔Inevestigative Consumer Report - ✔✔general reports of the applicants finances,
character, work, hobbies and habits
✔✔Medical Examination Reasoning - ✔✔1) the insurer may only request a paramedical
report which is completed by a paramedic or registered nurse
2) the underwriter may require an Attending Physicians Statement from a medical
practitioner who treated the applicant for a prior medical problem
✔✔Medical Information Bureau - ✔✔a nonprofit trade organization which receives
adverse medical information from insurance companies and maintains confidential
medical impairment information on individuals
✔✔Health Insurance Portability and Accountability Act (HIPAA) - ✔✔A federal Law that
protects health information
✔✔Privacy Rule - ✔✔patients have the right to view their own medical records, as well
as the right to know who has accessed those records over the previous 6 years
✔✔Disclosure Authorization Notice - ✔✔states the insurers practice regarding the
collection of personal information
✔✔Fair Credit Reporting Act - ✔✔established procedures that consumer-reporting
agencies must follow in order to ensure that records are confidential, accurate, relevant,
and properly used
✔✔Consumer Reports - ✔✔Written and /or oral statements regarding a consumer's
credit, character, reputation, or habits collected by a reporting agency from employment
records, credit reports, and other public sources.
✔✔Investigative Consumer Report - ✔✔Similar to consumer reports in that they also
provide information on the consumer's character, reputation, and habits.
✔✔Preferred Risk - ✔✔are those individuals who meet certain requirements and qualify
for lower premiums than the standard risk
, ✔✔standard risk - ✔✔An applicant or insured who is considered to have an average
probability of a loss based on health, vocation and lifestyle.
✔✔Substandard (High Exposure) Risk - ✔✔applicants are not acceptable at standard
rates because of physical condition, personal or family history of disease, occupation, or
dangerous habits.
✔✔Declined Risks - ✔✔applicants who are rejected
✔✔When coverage begins - ✔✔If the initial premium is not paid with application, the
agent will be required to collect the premium at the time of the policy delivery.
If the full premium was submitted with application and the policy was issued as
requested, the policy coverage would generally coincide with the date of applciation
✔✔Replacement - ✔✔A practice of terminating an existing policy or letting it lapse, and
obtaining a new one.
✔✔National Do Not Call Registry (2003) - ✔✔Established by the Federal Trade
Commission to allow consumers to limit number of telemarketing calls they receive.
- Organizations must consul the registry every 31 days
✔✔Exceptions to the Do Not Call Registry - ✔✔1. Calls where a business relationship
already exists. (An agent whose listing has expired may call the seller for up to 18
months)
2. A consumer that has made an inquiry may be called for up to 3 months.
3. Callers that have granted written permission.
✔✔3 key factors for life insurance - ✔✔mortality, interest, and expense
✔✔Effective Date of Coverage - ✔✔if the premium is not paid with the application, the
agent must obtain the premium and a statement of continued good health at the time of
policy delivery
✔✔Term Insurance - ✔✔Temporary protection because it only provides coverage for a
specific period of time.
✔✔Pure Death Protection - ✔✔- if the insured dies during this term, the policy pays the
death benefit to the beneficiary
- if the policy is canceled or expires prior to the insured's death, nothing is payable at
the end of the term
- there is no cash value or other living benefits
✔✔Level Term Insurance - ✔✔the death benefit does not change throughout the life of
the policy
2026/2027 QUESTIONS AND SOLUTIONS RATED A+
✔✔Non-Medical Appplication - ✔✔if the amount of insurance is relatively small, the
agent and the proposed insured will complete all of the medical information
✔✔Agents Report - ✔✔provides the agents personal observations concerning the
proposed insured.
✔✔Required Signatures - ✔✔Both the agent and the proposed insured (usually the
applicant) must sign the application.
✔✔Consequences of Incomplete Applications - ✔✔If the insurer receives an incomplete
application, the insurer must return it to the applicant for complete
✔✔Consequences of Incomplete Applications - ✔✔If a policy is issued with questions
left unanswered, the contract will be interpreted as if the insurer waived its rights to
have an answer to the question
✔✔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
✔✔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.
✔✔Premium Receipt - ✔✔Receipt given to the applicant by the producer or insurer, as
proof of a premium payment.
✔✔Conditional Receipt - ✔✔used only when the applicant submits a prepaid application
✔✔Warranty - ✔✔An absolutely true statement upon which the validity of the insurance
policy depends.
✔✔Representations - ✔✔statements believed to be true to the best of one's knowledge,
but they are not guaranteed to be true
✔✔Misrepresentations - ✔✔Untrue statements on the application
✔✔Material Misrepresentation - ✔✔A statement that, if discovered, would alter the
underwriting decision of the insurance company.
✔✔Underwriting - ✔✔The risk selection process
,✔✔Insurable Interest - ✔✔To purchase insurance, the policy owner must face the
possibility of losing money or something of value in the event of loss.
✔✔Valid Insurance Interest - ✔✔1)Policy owner's own Life
2)the life of a family member
3) the life of a business partner, key employee, or someone who has a financial
obligation to the policy owner
✔✔Inevestigative Consumer Report - ✔✔general reports of the applicants finances,
character, work, hobbies and habits
✔✔Medical Examination Reasoning - ✔✔1) the insurer may only request a paramedical
report which is completed by a paramedic or registered nurse
2) the underwriter may require an Attending Physicians Statement from a medical
practitioner who treated the applicant for a prior medical problem
✔✔Medical Information Bureau - ✔✔a nonprofit trade organization which receives
adverse medical information from insurance companies and maintains confidential
medical impairment information on individuals
✔✔Health Insurance Portability and Accountability Act (HIPAA) - ✔✔A federal Law that
protects health information
✔✔Privacy Rule - ✔✔patients have the right to view their own medical records, as well
as the right to know who has accessed those records over the previous 6 years
✔✔Disclosure Authorization Notice - ✔✔states the insurers practice regarding the
collection of personal information
✔✔Fair Credit Reporting Act - ✔✔established procedures that consumer-reporting
agencies must follow in order to ensure that records are confidential, accurate, relevant,
and properly used
✔✔Consumer Reports - ✔✔Written and /or oral statements regarding a consumer's
credit, character, reputation, or habits collected by a reporting agency from employment
records, credit reports, and other public sources.
✔✔Investigative Consumer Report - ✔✔Similar to consumer reports in that they also
provide information on the consumer's character, reputation, and habits.
✔✔Preferred Risk - ✔✔are those individuals who meet certain requirements and qualify
for lower premiums than the standard risk
, ✔✔standard risk - ✔✔An applicant or insured who is considered to have an average
probability of a loss based on health, vocation and lifestyle.
✔✔Substandard (High Exposure) Risk - ✔✔applicants are not acceptable at standard
rates because of physical condition, personal or family history of disease, occupation, or
dangerous habits.
✔✔Declined Risks - ✔✔applicants who are rejected
✔✔When coverage begins - ✔✔If the initial premium is not paid with application, the
agent will be required to collect the premium at the time of the policy delivery.
If the full premium was submitted with application and the policy was issued as
requested, the policy coverage would generally coincide with the date of applciation
✔✔Replacement - ✔✔A practice of terminating an existing policy or letting it lapse, and
obtaining a new one.
✔✔National Do Not Call Registry (2003) - ✔✔Established by the Federal Trade
Commission to allow consumers to limit number of telemarketing calls they receive.
- Organizations must consul the registry every 31 days
✔✔Exceptions to the Do Not Call Registry - ✔✔1. Calls where a business relationship
already exists. (An agent whose listing has expired may call the seller for up to 18
months)
2. A consumer that has made an inquiry may be called for up to 3 months.
3. Callers that have granted written permission.
✔✔3 key factors for life insurance - ✔✔mortality, interest, and expense
✔✔Effective Date of Coverage - ✔✔if the premium is not paid with the application, the
agent must obtain the premium and a statement of continued good health at the time of
policy delivery
✔✔Term Insurance - ✔✔Temporary protection because it only provides coverage for a
specific period of time.
✔✔Pure Death Protection - ✔✔- if the insured dies during this term, the policy pays the
death benefit to the beneficiary
- if the policy is canceled or expires prior to the insured's death, nothing is payable at
the end of the term
- there is no cash value or other living benefits
✔✔Level Term Insurance - ✔✔the death benefit does not change throughout the life of
the policy
