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NJ LIFE PRODUCER EXAM 2025-2026|ACTUAL 113
QUESTIONS AND ANSWERS|ALREADY GRADED A+
Under a Traditional IRA, interest earned is taxed Upon distribution Which of these statements regarding the annuitants is CORRECT? The annuitant's life expectancy determines the annuity payment What will the beneficiary receive is annuitant dies during the accumulation period? The greater the accumulated cash value or the total premium paid Which of the following actions is REQUIRED by an agent who is replacing an existing life insurance policy? Submit to to the replacing insurer a list of the policies to be replaced All pre-licensing course completion certificate are valid for a period of? 2 years A partial surrender is allowed in which of the following life policies?
Universal life What happens to interest earned if the annuitant dies before the payout start date? It is taxable How are annuities given favorable tax treatment? Gains are taxed at distribution Fixed period settlement options are considered to be a form of a(n) Annuity Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt's beneficiary if Matt Dies instantly from a car accident A modified insurance contract which accumulates cash values higher than the IRS will allow A life insurance contract which accumulates cash values higher than the IRS will allow
The coverage, conditions, and limitations in the master policy of a group contract can be found in which document? Certificate of coverage and benefits Which of the following policies does NOT build cash value? Term When the word "insurance" appears in a producer's business name, which of the following words cannot be approved? Company An example of an unfair method of competition is Overstating the benefits of an insurance company Under a Modified Endowment Contract, what are the likely tax consequences? Pre-death distributions will become taxable When a decreasing term policy is purchased, it contains a decreasing death benefit and level premiums
An immediate annuity has been purchased with a single premium. When does the annuitant typically begin receiving benefit payments? 1 month Which approach predicts a person's earning potential and determines how much of that amount would be devoted to dependents? Human Life Value Approach ABC Insurance Company transfers part of their risk to XYZ Insurance Company. This situation is called Reinsurance Which of the following would be considered an underwriting? Completing all applications and collecting initial premiums A renewable Term Life insurance policy allows the policyowner the right to renew the policy Without proof of insurability
Which of these will have the highest monthly payout upon annuitization? Straight life All of these are considered sources of information that can assist an underwriter in determining whether or not to accept a risk EXCEPT National Association of Insurance Underwriters Replacement regulation is designed to protect the interests of policyowner Who were Keogh plans designed to provide pension benefits for? The self-employed Johan the producer charged a fee to a sales prospect for analyzing insurance coverages. According to New Jersey law, as reasonable relationship must exist between the fee and the substance of the services performed When does a life insurance policy typically become effective?
when the completed application is signed and initial premium is collected Which of these is considered to be a document that describes the critical segments of a life insurance policy? Policy summary Jay the producer, is giving insurance advice regarding a prospects existing coverage. If Jay were to receive a fee for this advice (in addition his commission) he MUST obtain a signed memorandum from the prospect acknowledging the amount of compensation An agent is required to keep replacement forms on file for at least____ years 5 Which type of policy combines the flexibility of a universal life policy with investment choices? Variable universal life policy A waiver of premium rider allows an insured to waive premium wages if the the insured is
Maria the agent would like to advertise an annuity product on a highway billboard. Which of the following must be included in the advertisements? Her name A rollover from a traditional IRA to another must be done within ____ days to avoid tax consequences. 60 days Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death? Results An endorsement found in an insurance plan which modifies the provisions of the policy is called a(n) rider How are contributions made to a Roth IRA handled for tax purposes? Not tax deductible
Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequences. Section 1035 exchange A tax-free Section 1035 Exchange of a life insurance policy to a different policy is permitted if it occurs from insurer to insurer and no cash is received by the policyowner Of the following dividend options, which of these is taxable? accumulation at interest An insurance company needs to obtain personal information from a third party concerning an applicant. Which law do all insurers and their producers need to comply with? Fair Credit Reporting Act Which of the following is true concerning the proceeds of a life insurance policy? There is protection of proceeds against the insured's and the beneficiaries creditors
accidental death What kind of life insurance policy issued by a mutual insurer provides a return of divisible surplus? participating life insurance policy The free-look provision gives the policyowner the right to return the policy for a full refund within a specified number of days A debtor may receive Credit Life Insurance in which of the following forms? Group Term Life Carmen's individual life insurance policy has recently lapsed. She may reinstate her policy within _____ years 3 years When new Life Insurance is to be purchased, the solicitation will be considered a replacement transaction if, in conjunction with the sale, existing Life Insurance will be subject to borrowing for amounts exceeding which of the following?
10% of the policy's loan value 75% of the policy's loan value 25% of the policy's loan value 50% of the policy's loan value 25% of the policy's loan value An insurance company may only pay a sales commission to individuals licensed by the state The period in which there are no Social Security benefits for the surviving spouse is called the blackout period A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability is guaranteed insurability rider What is involved when a life insurance company policy has been backdated?
controlled business A type of group that has a constitution and by laws and has been organized for purposes other than obtaining insurance is called a(n) Association or labor groups Field underwriting performed by the producer involves completing the application and collecting initial premium In life insurance, replacing companies must keep records of all replacement materials on file for how long? 5 years, or until the next regular examination by the commissoner Proceeds from a life insurance policy are protected from the beneficiary's creditors by which clause? Spendthrift clause All of these are settlement options for life insurance policies EXCEPT Extended term
What is the automatic continuance of insurance coverage referred to as? renewal Statements made by an insurance applicant on an application are considered to be representations Karen is a producer who has obtained personal information about a client without having a legitimate reason to do so. Under the McCarran-Ferguson Act, what is the minimum penalty for this? $10, Which of the following is considered to be the period when the accumulated value in an annuity is paid out? Annuitization phase Why are dividends from a mutual insurer not subject to taxation? because dividends are considered to be a return of premiums
If the annuitant dies before the annuity start date, the premiums paid plus interest earned will be given to the beneficiary After a hearing, if the Commissioner determines that a person has willfully engaged in an unfair trade practice, the commissioner may impose a fine of which of the following? $5,000 for each violation What would be an expense factor in an insurance program? Mortality costs How does life insurance create an immediate estate? After first premium is paid, the face amount may be available to the beneficiary Fraternal Benefit Society has each of the following characteristics EXCEPT? Exist for profit In regards to a life insurance contract, which of the following statements is NOT true regarding the concept of insurable interest?
insurable interest can be established sufficiently by sentimental attachment alone The New Jersey Life and Health Insurance Guaranty Association is funded by assessments on member companies Shirley has a $500,000 10-year non-renewable level term life policy. If she dies 15 years after the policy's inception date, how much will her beneficiary receive? Nothing ! How often must an insurance producer's license in New Jersey be renewed? Every two years Shawn, Mike, and Dave are brothers who have a $100,000 "first to die" joint life policy covering all three of their lives. If Mike dies first, the policy proceeds will no longer provide insurance protection Where would policy proceeds be paid if both the insured and primary beneficiary were killed in the same accident?
