NJ Life Final Exam Latest Update
2025/2026 GRADED A+
Which of these is a method of determining the level of funds required for ongoing
support in the event of the breadwinner's death?
Financial loss value
Human life value
Assessment value
Replacement value - correct answerHuman life value
The Guaranty Association Act provides that when a Court Order of Liquidation exists,
the insurer - correct answerIs insolvent
An individual most likely will have an insurable interest in insuring a person's life if -
correct answerAn economic interest exists for the continuance of the insured's life
An error was made on Mary's life insurance application. Which of the following areas
are errors commonly made on applications for which the incontestable clause does
NOT apply?
Marital status
Age
Address
Income - correct answerAge
Before conducting an HIV related test, an insurer is REQUIRED to obtain written
authorization from the - correct answerProposed insured
One of the roles of the Banking and Insurance Commissioner is to - correct
answerEstablish continuing education requirements
If an insured's age on a life insurance policy has been misstated, what is the insurer's
liability if the insured dies? - correct answerA prorated death benefit based on the
amount of insurance the insured's premiums would have been if purchased at the age
at the correct
,Under a group life policy, the insurer will issue an individual _____ to the policyowner
for delivery to each person insured - correct answerCertificate
Jerry voluntarily terminated his producer's license. If he changes his mind, his license
may be reinstated during the same license period if - correct answerHe completes a
new license application
A producer has recently died and leaves behind a spouse. In order for the producer's
insurance business to continue, the Department of Banking and Insurance may issue to
the producer's spouse a(n) - correct answerTemporary insurance license
In what part of an insurance policy are policy benefits found? - correct
answerDeclarations
A securities license is required for a life insurance producer to sell - correct
answerVariable life insurance
Barbara's policy includes a rider which allows her to purchase additional insurance at
specific dates or events without evidence of insurability. This rider is called a(n) - correct
answerGuaranteed insurability rider
Which type of life insurance is normally associated with a Payor Benefit rider? - correct
answerJuvenile Insurance
The conversion privilege under a group life plan allows an employee to convert to a(n) -
correct answerIndividual plan upon employment termination
Which of the following signatures is not required on an individual insurance application?
Producer
Applicant
Insured
Insurer - correct answerInsurer
After passing the state Producer licensing exam, application for the license must be
made within - correct answer12 months
Replacement regulation is designed to protect - correct answerPolicyowners from
misrepresentations and loss of benefits
An underwriter's primary responsibility to an insurer is to protect against - correct
answerAdverse selection
A beneficiary has just received a claim payment for a life insurance policy. Which of the
following is TRUE regarding the federal income tax liability owed?
,A flat tax of 10% is owed on all proceeds
Federal income tax is owed if proceeds exceed $250,000
No federal income tax is owed on life insurance proceeds
Tax liability owed depends on the type of insurance policy - correct answerNo federal
income tax is owed on life insurance proceeds
How does one qualify as a fully-insured individual under Social Security disability
coverage? - correct answerIndividual has been credited with the appropriate number of
quarters of coverage
Which of these factors is NOT taken into account when determining an applicant's life
insurance needs? - correct answerAutomobile
An insurer has a right to screen applicants for HIV in which of the following ways?
Blood test for HIV
Inquiring about risky sexual behavior
Inquiring about sexual orientation
Automatically declining an application due to sexual orientation - correct answerBlood
test for HIV
The NJ Life and Health Guaranty Association protects life insurance death benefit
claims up to - correct answer$500,000
Why are dividends from a mutual insurer not subject to taxation? - correct
answerBecause dividends are considered to be a return of premium
Which of these would limit a company's liability to provide insurance coverage? - correct
answerExclusion
A branch office registration form is required to be filed at least ___ days before selling
insurance out of that branch - correct answer30
How many months can a life insurance policy normally be backdated from the date of
application? - correct answer6
Which market index is normally associated with an indexed annuity's rate of return? -
correct answerS&P 500
Within how many days must a producer notify the Department of Banking and Insurance
of a change in address? - correct answer30
An insurance consultant is BEST defined as a(n) - correct answerProducer who charges
fees for advice
, A field underwriter's main task is - correct answerTo ensure an applicant's medical
information is accurate and complete
Which policy feature makes a universal life policy different from a whole life policy?
A fixed cash value
A flexible premium schedule
A fixed death benefit
The ability to take out a policy loan - correct answerA flexible premium schedule
A rider that assures premiums will be paid on a juvenile policy until the child reaches a
specific age is called a(n) - correct answerPayor rider
An agent has committed an insurance crime that violates US Code 1033 (interstate
commerce). Who would be responsible for the prosecution of this crime? - correct
answerUS Attorney General
Which of the following is an example of defamation?
Using intimidation in order to restrain or monopolize the business of insurance
Using derogatory statements about an insurance company's financial condition
Returning a portion of a premium as inducement to purchase insurance
Offering a client something of value not stated in the contract in exchange for their
business - correct answerUsing derogatory statements about an insurance company's
financial condition
Which of these factors would an insurer consider when determining whether to accept a
group life plan?
Number of dependents
Incontestable period
Average age
Grace period - correct answerAverage age
A limited payment whole life policy provides - correct answerLifetime protection
As of January 1, 2007, a producer's license expires - correct answerEvery two years on
the last day of the producer's birth month
An insured individual and the policy's beneficiary die from the same accident. The
common disaster provision states the insurer will continue as if - correct answerThe
insured outlived the beneficiary
What is the automatic continuance of insurance coverage referred to as? - correct
answerRenewal
2025/2026 GRADED A+
Which of these is a method of determining the level of funds required for ongoing
support in the event of the breadwinner's death?
Financial loss value
Human life value
Assessment value
Replacement value - correct answerHuman life value
The Guaranty Association Act provides that when a Court Order of Liquidation exists,
the insurer - correct answerIs insolvent
An individual most likely will have an insurable interest in insuring a person's life if -
correct answerAn economic interest exists for the continuance of the insured's life
An error was made on Mary's life insurance application. Which of the following areas
are errors commonly made on applications for which the incontestable clause does
NOT apply?
Marital status
Age
Address
Income - correct answerAge
Before conducting an HIV related test, an insurer is REQUIRED to obtain written
authorization from the - correct answerProposed insured
One of the roles of the Banking and Insurance Commissioner is to - correct
answerEstablish continuing education requirements
If an insured's age on a life insurance policy has been misstated, what is the insurer's
liability if the insured dies? - correct answerA prorated death benefit based on the
amount of insurance the insured's premiums would have been if purchased at the age
at the correct
,Under a group life policy, the insurer will issue an individual _____ to the policyowner
for delivery to each person insured - correct answerCertificate
Jerry voluntarily terminated his producer's license. If he changes his mind, his license
may be reinstated during the same license period if - correct answerHe completes a
new license application
A producer has recently died and leaves behind a spouse. In order for the producer's
insurance business to continue, the Department of Banking and Insurance may issue to
the producer's spouse a(n) - correct answerTemporary insurance license
In what part of an insurance policy are policy benefits found? - correct
answerDeclarations
A securities license is required for a life insurance producer to sell - correct
answerVariable life insurance
Barbara's policy includes a rider which allows her to purchase additional insurance at
specific dates or events without evidence of insurability. This rider is called a(n) - correct
answerGuaranteed insurability rider
Which type of life insurance is normally associated with a Payor Benefit rider? - correct
answerJuvenile Insurance
The conversion privilege under a group life plan allows an employee to convert to a(n) -
correct answerIndividual plan upon employment termination
Which of the following signatures is not required on an individual insurance application?
Producer
Applicant
Insured
Insurer - correct answerInsurer
After passing the state Producer licensing exam, application for the license must be
made within - correct answer12 months
Replacement regulation is designed to protect - correct answerPolicyowners from
misrepresentations and loss of benefits
An underwriter's primary responsibility to an insurer is to protect against - correct
answerAdverse selection
A beneficiary has just received a claim payment for a life insurance policy. Which of the
following is TRUE regarding the federal income tax liability owed?
,A flat tax of 10% is owed on all proceeds
Federal income tax is owed if proceeds exceed $250,000
No federal income tax is owed on life insurance proceeds
Tax liability owed depends on the type of insurance policy - correct answerNo federal
income tax is owed on life insurance proceeds
How does one qualify as a fully-insured individual under Social Security disability
coverage? - correct answerIndividual has been credited with the appropriate number of
quarters of coverage
Which of these factors is NOT taken into account when determining an applicant's life
insurance needs? - correct answerAutomobile
An insurer has a right to screen applicants for HIV in which of the following ways?
Blood test for HIV
Inquiring about risky sexual behavior
Inquiring about sexual orientation
Automatically declining an application due to sexual orientation - correct answerBlood
test for HIV
The NJ Life and Health Guaranty Association protects life insurance death benefit
claims up to - correct answer$500,000
Why are dividends from a mutual insurer not subject to taxation? - correct
answerBecause dividends are considered to be a return of premium
Which of these would limit a company's liability to provide insurance coverage? - correct
answerExclusion
A branch office registration form is required to be filed at least ___ days before selling
insurance out of that branch - correct answer30
How many months can a life insurance policy normally be backdated from the date of
application? - correct answer6
Which market index is normally associated with an indexed annuity's rate of return? -
correct answerS&P 500
Within how many days must a producer notify the Department of Banking and Insurance
of a change in address? - correct answer30
An insurance consultant is BEST defined as a(n) - correct answerProducer who charges
fees for advice
, A field underwriter's main task is - correct answerTo ensure an applicant's medical
information is accurate and complete
Which policy feature makes a universal life policy different from a whole life policy?
A fixed cash value
A flexible premium schedule
A fixed death benefit
The ability to take out a policy loan - correct answerA flexible premium schedule
A rider that assures premiums will be paid on a juvenile policy until the child reaches a
specific age is called a(n) - correct answerPayor rider
An agent has committed an insurance crime that violates US Code 1033 (interstate
commerce). Who would be responsible for the prosecution of this crime? - correct
answerUS Attorney General
Which of the following is an example of defamation?
Using intimidation in order to restrain or monopolize the business of insurance
Using derogatory statements about an insurance company's financial condition
Returning a portion of a premium as inducement to purchase insurance
Offering a client something of value not stated in the contract in exchange for their
business - correct answerUsing derogatory statements about an insurance company's
financial condition
Which of these factors would an insurer consider when determining whether to accept a
group life plan?
Number of dependents
Incontestable period
Average age
Grace period - correct answerAverage age
A limited payment whole life policy provides - correct answerLifetime protection
As of January 1, 2007, a producer's license expires - correct answerEvery two years on
the last day of the producer's birth month
An insured individual and the policy's beneficiary die from the same accident. The
common disaster provision states the insurer will continue as if - correct answerThe
insured outlived the beneficiary
What is the automatic continuance of insurance coverage referred to as? - correct
answerRenewal
