NEW JERSEY LIFE STUDY GUIDE 2026/2027 QUESTIONS
AND SOLUTIONS RATED A+
✔✔Hazard - ✔✔A circumstance that increases the likelihood of a loss
moral-The effect of a person's reputation, character, living habits, etc. on his/her
insurability.
morale- The effect a person's indifference concerning loss has on the risk to be insured.
physical- A type of hazard that arises from the physical characteristics of an individual,
such as a physical disability due to either current circumstance or a condition present at
birth.
✔✔implied authority - ✔✔Authority that is not expressed or written into the contract, but
which the agent is assumed to have in order to transact the business of insurance for
the principal
✔✔indemnify - ✔✔To restore the insured to the same condition as prior to loss with no
intent of loss or gain.
✔✔insolvent organization - ✔✔A member organization which is unable to pay its
contractual obligations and is placed under a final order of liquidation or rehabilitation by
a court of competent jurisdiction.
✔✔insurability - ✔✔The acceptability of an applicant who meets an insurance
company's underwriting requirements for insurance.
✔✔insurable interest - ✔✔A financial interest in the life of another person; a possibility
of losing something of value if the insured should die. In life insurance, insurable interest
must exist at the time of policy application or policy issue.
✔✔insurance - ✔✔A contract whereby one party (insurer) agrees to indemnify or
guarantee another party (insured) against a loss by a specified future contingency or
peril in return for payment of a premium.
✔✔insured - ✔✔The person or organization that is protected by insurance; the party is
to be indemnified.
✔✔insurer - ✔✔An entity that indemnifies against losses, provides benefits, or renders
services (also known as "company" or "insurance company").
✔✔insuring clause - ✔✔A general statement that identifies the basic agreement
between the insurance company and the insured, usually located on the first page of the
policy
, ✔✔intentinal Injury - ✔✔An act that is intended to cause injury. Self-inflicted injuries are
not covered under accident insurance; intentional injuries inflicted on the insured by
another are covered.
✔✔Investigative Consumer Reports - ✔✔A report similar to consumer report, but one
that also provides information on the consumer's character, reputation and habits.
✔✔Issue Age - ✔✔
✔✔Joint Life - ✔✔The individual's age when a policy is issued
✔✔Juvenile Life - ✔✔Any life insurance written on the life of a minor.
✔✔Lapse - ✔✔Termination of a policy because the premium has not been paid by the
end of the grace period.
✔✔Law of Large Numbers - ✔✔A principle stating that the larger the number of similar
exposure units considered, the more closely the losses reported will equal the
underlying probability of loss.
✔✔Level Premium - ✔✔A policy premium that remains the same over the period of time
premiums are paid.
✔✔Life Expectancy - ✔✔Average number of years remaining for a person of a given
age to live, as shown on the mortality table.
✔✔Life Settlement - ✔✔An arrangement that allows the policyowner sell their existing
life insurance policy to a third party for compensation
✔✔Limited pay whole life - ✔✔A variation of whole life insurance that charges a level
annual premium and provides a level, guaranteed death benefit to the insured's age 100
and will endow for the face amount if the insured lives to age 100. Limited-pay life is
designed so that the premiums for coverage will be completely paid-up well before age
100
✔✔liquidation - ✔✔Selling assets as a method of raising capital
✔✔living benefits rider - ✔✔A rider attached to a life insurance policy that provides LTC
benefits or benefits for the terminally ill by using available life insurance benefits
✔✔Lloyd's associatins - ✔✔Organizations that provide support facilities for underwriters
or groups of individuals that accept insurance risk
AND SOLUTIONS RATED A+
✔✔Hazard - ✔✔A circumstance that increases the likelihood of a loss
moral-The effect of a person's reputation, character, living habits, etc. on his/her
insurability.
morale- The effect a person's indifference concerning loss has on the risk to be insured.
physical- A type of hazard that arises from the physical characteristics of an individual,
such as a physical disability due to either current circumstance or a condition present at
birth.
✔✔implied authority - ✔✔Authority that is not expressed or written into the contract, but
which the agent is assumed to have in order to transact the business of insurance for
the principal
✔✔indemnify - ✔✔To restore the insured to the same condition as prior to loss with no
intent of loss or gain.
✔✔insolvent organization - ✔✔A member organization which is unable to pay its
contractual obligations and is placed under a final order of liquidation or rehabilitation by
a court of competent jurisdiction.
✔✔insurability - ✔✔The acceptability of an applicant who meets an insurance
company's underwriting requirements for insurance.
✔✔insurable interest - ✔✔A financial interest in the life of another person; a possibility
of losing something of value if the insured should die. In life insurance, insurable interest
must exist at the time of policy application or policy issue.
✔✔insurance - ✔✔A contract whereby one party (insurer) agrees to indemnify or
guarantee another party (insured) against a loss by a specified future contingency or
peril in return for payment of a premium.
✔✔insured - ✔✔The person or organization that is protected by insurance; the party is
to be indemnified.
✔✔insurer - ✔✔An entity that indemnifies against losses, provides benefits, or renders
services (also known as "company" or "insurance company").
✔✔insuring clause - ✔✔A general statement that identifies the basic agreement
between the insurance company and the insured, usually located on the first page of the
policy
, ✔✔intentinal Injury - ✔✔An act that is intended to cause injury. Self-inflicted injuries are
not covered under accident insurance; intentional injuries inflicted on the insured by
another are covered.
✔✔Investigative Consumer Reports - ✔✔A report similar to consumer report, but one
that also provides information on the consumer's character, reputation and habits.
✔✔Issue Age - ✔✔
✔✔Joint Life - ✔✔The individual's age when a policy is issued
✔✔Juvenile Life - ✔✔Any life insurance written on the life of a minor.
✔✔Lapse - ✔✔Termination of a policy because the premium has not been paid by the
end of the grace period.
✔✔Law of Large Numbers - ✔✔A principle stating that the larger the number of similar
exposure units considered, the more closely the losses reported will equal the
underlying probability of loss.
✔✔Level Premium - ✔✔A policy premium that remains the same over the period of time
premiums are paid.
✔✔Life Expectancy - ✔✔Average number of years remaining for a person of a given
age to live, as shown on the mortality table.
✔✔Life Settlement - ✔✔An arrangement that allows the policyowner sell their existing
life insurance policy to a third party for compensation
✔✔Limited pay whole life - ✔✔A variation of whole life insurance that charges a level
annual premium and provides a level, guaranteed death benefit to the insured's age 100
and will endow for the face amount if the insured lives to age 100. Limited-pay life is
designed so that the premiums for coverage will be completely paid-up well before age
100
✔✔liquidation - ✔✔Selling assets as a method of raising capital
✔✔living benefits rider - ✔✔A rider attached to a life insurance policy that provides LTC
benefits or benefits for the terminally ill by using available life insurance benefits
✔✔Lloyd's associatins - ✔✔Organizations that provide support facilities for underwriters
or groups of individuals that accept insurance risk
