Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

NJ Life Insurance > Questions > Flashcards

Questions Flashcards

1
Q

Which nonforfeiture option has the highest amount of insurance protection?

A

Extended term

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Agents selling variable life products must be registered and have what licenses?

A

Registered with FINRA, have a securities license, and must be license within the city to sell life insurance. SEC registration is for securities not agents

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

How are contributions to a tax sheltered annuity treated with regards to taxation?

A

Funds contributed are excluded from the employees current taxable income, but are taxable upon withdrawal

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

True or false

nonforfeiture values are required by state law to be included in the policy.

A

True. Nonforfeiture values are required by state law to be included in the policy, and cannot be altered by the policy owner. A table showing the nonforfeiture values for the next 20 years must be included in the policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Who bears the risk in a fixed annuity

A

Insurance company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Who bears the risk of a variable insurance policy

A

Policy owner

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

True or false.

Surplus lines agent do not have to have a certificate of authority

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Cash value guarantees =

A

Nonforfeiture options

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Taxation on lump sum payments

A

None

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

The originating company that procures insurance on itself and another insurer is called?
What is the other insurer called?

A

Ceding insurer

The other insure is called assuming insurer = reinsurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What Is key person insurance?

A

Should a key person die, the benefit is treated as a reimbursement to the business for loss of services from that key person

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Who regulates consumer reports?

A

The federal fair credit reporting act regulates consumer reports, also known as consumer investigative reports, or credit reports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

How do you cancel a life insurance license?

A

A license can be canceled at any time, simply by returning the license to the insurance department and requesting cancellation. A license can be reinstated by completing an application and paying a fee.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

In credit life insurance:
who is the policy owner,?
Who is the beneficiary?
And who is the insured?

A

The creditor is the policy owner and the beneficiary

The debtor is the insured

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Reinstatement provision

A

Allows the policy owner and opportunity to put a lapsed policy back in force, subject to providing continued insurability. The policy owner elects to reinstate the policy, as opposed to purchasing a new policy, the reinstated policy is restored to its original status

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What kind of insurance maybe used to fund a buy-sell agreement?

A

Any form of life insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Reduced paid up nonforfeiture option

A

Provides Provides coverage for the longest period of time.

a life insurance policy nonforfeiture benefit option to use the cash surrender value of the policy to purchase a fully paid-up life permanent insurance policy for a lesser amount of coverage. The new policy coverage amount is based on the insured’s age and the policy cash surrender value. Also known as reduced paid-up insurance.

Provides protection until the insured reaches 100, but the face amount is reduced to what the cash would buy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

How are annuities characterized?

A

By how they can be paid for:
Either a single payment (lump sum) or through periodic payments in which the premiums are paid in installments over a period of time.


How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Periodic payment annuities can be level in which the annuitant pays a _______ installment, or the payments can be __________, in which the amount and frequency of each installment varies

A

Fixed

Flexible

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Who owns a mutual insurer?

A

Policy owners

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Are accelerated benefits paid to a chronically ill insured tax free?

A

They are tax-free up to a certain limit. Any amount received an excess of this dollar amount must be included in the insured gross income.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

True or false:

New Jersey requires a bond as a condition for licensure in surplus lines

A

False. New Jersey does not require a bond as a condition for licensure in surplus lines 

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

If an insurer and insured have a dispute about whether a particular loss is covered under a policy what system is asked to interpret the contract

A

Court system

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Under which law does it assume that the beneficiary dies first in a common disaster?

A

Under the uniform simultaneous death

The law will assume that beneficiary dies first in a common disaster. This provides that the proceeds will be paid to the contingent beneficiary or to the insurance to see if none is designated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Any cash value life insurance policy that develops cash value faster than a 7- pay whole life contract is called what??

A

Modified endowment contract.

It loses the benefits of a standard life contract.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

All withdrawls for a modified endowment contract are subject to taxation and if withdrawals are made earlier than age of 59 1/2 a ___% penalty is imposed

A

10%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

By how many days does the discontinuance of a group insurance policy reduce the time limit for providing notice of claim or proof of loss?

A

0 days
Discontinuance of the group policy or contract does not reduce the required time limit for providing notice of claim or proof of loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

The Supreme Court stated that insurance is interstate commerce and is therefore subject to regulation by federal government in the decision of what case?

A

That U.S vs. the south eastern underwriters association

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

If a credit life policy lapses for nonpayment before the debt is satisfied within how many days must the creditor either refund the premium paid or applied against the debt?

A

60 days

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

What universal life option has a gradually increasing cash value and a level death benefit?

A

Option a

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Whose life expectancy is taking into consideration for annuity

A

The annuitant

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

What does the term “level” refer to in a level term insurance?

A

Face amount or death benefit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

What type of annuity is suitable for someone who wants to select the benefit option that will pay the largest amount only as long as annuitant lives?

A

Straight life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

What type of insurance policy offers pure death benefit protection?

A

Term

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

In an annuity, the accumulated money is converted into a stream of income during which phase?

A

Annuitization period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

In variable universal life insurance, to what policy component does the term “variable” refer to?

A

Cash value and death benefit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

What type of annuity requires an agent to have a securities license

A

Variable annuity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

What annuity settlement option provides income payments to the annuitant for the duration of his or her life, and also guarantee payment for specified number of years?

A

Life income with period certain 

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Under a 20 pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid for what time period?

A

For 20 years or until the insured death whichever occurs first

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

What are the death benefit options in universal life policies?

A

Option A- level death benefit

Option B - increasing death benefit (death benefit includes annual increase in cash value so death benefit increases by cash value amount)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

During partial withdrawal from a universal life policy, what portion, if any, will be taxed?

A

Interest earned on the withdrawn cash value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

What is the main reason for purchasing an annuity?

A

To provide an income that the annuitant cannot outlive

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

When does an adjustable life policy accommodate cash value?

A

When the premiums paid or more than the cost of the policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

What type of life insurance policy is life paid up at age 65?

A

Limited pay whole life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

A whole life policy that requires of the policy owner to only pay premiums for specified number of years is known as what kind of policy?

A

Limited pay whole life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

What are the two classifications of annuities according to the time when annuity payments begin?

A

Immediate and deferred

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

Interest sensitive insurance

A

Universal life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

What type of insurance is a level fixed premium investment based product?

A

Variable whole life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

A policy that can be modified to accommodate life changes

A

Adjustable life

(must provide proof of insurability)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

How is the premium determined in a joint life insurance policy?

A

The premium is based on the average age of the insureds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

How soon can income payments begin in an immediate annuity?

A

No later than one year from the time of the annuity purchase

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

Who bears the investment risk in a fixed annuity?

A

The insurer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

The death protection component of a universal life policy is expressed as what type of coverage?

A

Annually renewable term

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
54
Q

An individual has a contract that will provide him with a certain amount of income for the rest of his life. However this is not an insurance policy. What type of contract does this person have?

A

Annuity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
55
Q

Under option B in a universal life policy, what happens to the death benefit?

A

The death benefit increases each year by the amount of the cash value increase 

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
56
Q

When would a 20 pay whole life policy endow?

A

When insured reaches 100

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
57
Q

An annuity purchased with multiple payments that begin income payments after one year from the moment of purchase is known as what type of annuity?

A

Flexible premium deferred annuity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
58
Q

With a single premium deferred annuity, when will the annuity payments become available?

A

No sooner than one year after the annuity purchase

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
59
Q

What type of whole life insurance policy only requires a payment of premium at inception, and in addition to providing insurance protection for the life of the insured, and endows at age 100

A

Single premium whole life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
60
Q

How long will a life annuity with a 15 year period Certain pay?

A

For the life of the annuitant unless he or she dies within the first 15 years of the new association.; Then the payments will last for 15 years

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
61
Q

What type of annuity credit is interest based upon an index such as S & P 500?

A

Equity indexed annuity

(earn higher interest rates than fixed annuities, both guarantee specific minimum interest rate)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
62
Q

In what type of life insurance policy can the policy owner skip premium payments without the policy lapsing?

A

Universal life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
63
Q

What is the difference between a single premium and a flexible premium payment option and deferred annuity?

A

The number of payments that purchase the annuity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
64
Q

What type of premium is charged on a straight life policy?

A

A level premium for the life of the insured

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
65
Q

What type of annuity can be purchased with a single premium?

A

Immediate annuity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
66
Q

What type of whole life insurance policy generates immediate cash value?

A

Single premium whole life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
67
Q

If the annuitant dies before the annuitization period starts what will the beneficiary receive?

A

Either the amount paid in the annuity or the cash value, which ever is greater

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
68
Q

Insurance department can issue a certificate of license status of any producer within how many years?

A

4 years

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
69
Q

Applicants license has lapsed, late renewal within how many months of expiration?

A

12 months

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
70
Q

If an insurer cancels an agency contract, it must notify the commissioner and writing within how many days?

A

15 days

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
71
Q

Producer must notify the commissioner within how many days of conviction of a crime?

A

30 days Of a conviction of a crime

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
72
Q

How long is a temporary work Authority valid?

A

It expires no more than 60 days after it is issued

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
73
Q

Closing of any branch office, they must advise the department in writing and how many days?

A

30 calendar days

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
74
Q

Individual who willfully violate the act enough to constitute a general pattern will pay up to?

A

Up to $2500

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
75
Q

How many days to notify about change of address?

A

30 days

76
Q

How many hours of continuing education credits are needed?

A

24 hours

77
Q

How long can credit insurance coverage last?

A

Term of coverage cannot extend more than 15 days beyond the scheduled maturity date of the loan

78
Q

When must loan requests for payment be paid?

A

Immediately

79
Q

How many days notice must the insurer provide to insured regarding a lapse of policy due to loans?

A

7 days

80
Q

Policy loan request can be deferred for how many months?

A

6 months

81
Q

The incontestibility clause prevents an insurer from denying a claim due to statements in the application after the policy has been in force for how many years?

A

Two years. Even if there has been a material misstatement of fax or concealent of a material fact

82
Q

The replacing insurer must provide how many days for insured to return policy and receive a refund?

A

 30 days

83
Q

How many days does the consumer have to be advised in writing after request for investigative consumer report?

A

Within three days of request

84
Q

Credit life insurance term of coverage

A

Seven years

85
Q

Premiums must be remitted to insurer within how many days after receipt of funds?

A

5 business days

86
Q

All premiums due to the insured must be paid or credited within how many days?

A

5 business days

87
Q

Permissible hours for telemarketers

A

8 AM to 9 PM

88
Q

Policies, certificates, or other evidence of insurance that are received by producer must be delivered or mailed to insured within how many days of the receipt by producer?

A

10 calendar days

89
Q

Insurer must supply reinstatement application within how many days upon the insurance request?

A

30 days

90
Q

Claims must be reported to insurer no later than how many days after the receipt of the notice of claim by producer?

A

Five business days

91
Q

Insurer must either refund or apply the premium against debt within how many days of the date the policy terminate?

A

Within 60 days of the date the policy terminates

92
Q

IRA withdrawal penalty

A

10%

93
Q

During policy replacement, the replacing insurer must notify existing insurers within how many days?

A

5 Business days

94
Q

Under what nonforfeiture option does the company pay the surrender value and have no further obligations to the policy owner?

A

Once the cash surrender value is paid the contract is over

95
Q

What is the benefit of choosing extended term as a nonforfeiture option?

A

It has the highest amount of insurance protection.
(Under this option the insurer user the policy cast value to convert to term insurance for the same face amount as a former permanent policy. The duration of the new term coverage last for as long as Long a period as the amount of cash value will purchase)

96
Q

What is the waiting period on a waiver of premium in life insurance policies?

A

Six months

97
Q

When a reduced paid up nonforfeiture option is chosen, what happened to the face amount of the policy?

A

It is reduced to the amount of what the cash value would buy as a single premium. 

98
Q

The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified number of time is known as what?

A

Incontestability clause. If an insurer wishes to contest any statements on an application, they must do so within the first two years

99
Q

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest on a settlement option, what does this mean?

A

The beneficiary will only receive payments on the interest earned on the death benefit

100
Q

Which rider is often used in business life insurance policies when the policy owner needs to change the insured under the policy?

A

Substitute insured rider

101
Q

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed time period . During which, if you original recipient dies the payments will continue to a designated beneficiary?

A

Life income with period certain

102
Q

What type of insurance is to be used for a return of premium rider?

A

Increasing term

103
Q

A rider attached to a life insurance policy that provides coverage on the insured family members is called what?

A

Other insured rider

104
Q

If a settlement option is not chosen by the policy owner or beneficiary what option will be used?

A

Lump sum

105
Q

Which policy component contains the companies promise to pay?

A

Insuring clause

106
Q

Which settlement option in Life Insurance is also known as straight life

A

Life income
This option provides the recipient with an income that he or she cannot outlive. It pays the benefit while the beneficiary is alive; however, the payment stop at the beneficiaries death

107
Q

What is the advantage of reinstating a policy instead of applying for a new one?

A

The original age is used to determine premium

108
Q

An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option would she choose?

A

Paid up option
With the paid up option, the insurer can accumulate dividends at interest and then use them, in addition to interest in the policies cash value, to pay the policy earlier than planned

109
Q

If a life insurance policy allows the policy owner to make periodic additions to the face amount at standard rates without providing insurability, the policy includes what?

A

Guaranteed insurability rider

110
Q

The dividend option in which the policy owner uses dividends to purchase a term policy for one year is referred to as the?

A

One year term option

111
Q

The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called?

A

Joint and survivor

112
Q

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?

A

Equal to the original policy for as long as the cash values will purchase

113
Q

The commissioner may waive the prelicensing education and examination requirement if the applicant holds a professional designation or a license in:

A

The kind of insurance for which the applicant seeks authority.

114
Q

True or false
Property and casualty producers applying for life insurance license would be waived from taking Prelicensing education and examination

A

FALSE

Property and casualty producers applying for a life insurance license would not qualify for the exam

115
Q

True or False

 Surplus lines is not considered a limited line insurance

A

True

116
Q

True or false

Surplus lines is not considered a limited line insurance

A

True

117
Q

Applicants for a surplus lines authority must be ________ residence and hold a _______________ license 

A

New Jersey

Property and casualty license

118
Q

Allowed to write business in New Jersey for insurance companies that are not authorize New Jersey and chores. No authorized insurer in New Jersey can offer the specific type of insurance in question



A

Surplus lines

119
Q

True or false

When settling claims negotiation can come in to play

A

True

120
Q

Stock insurance companies are owned and controlled by?

A

Stockholders

121
Q

Who can write Bail bonds, car rental insurance, credit insurance, ticket insurance, travel insurance, group mortgage cancellation, legal insurance, and self storage personal property insurance?

A

Limited lines agent

122
Q

What is required in order to transact insurance in the state

A

A certificate of authority

123
Q

If a producer dies or is rendered disabled, a family member, associate, can enter an agreement with another producer to continue the business. This agreement can last no longer than how many days?

A

180 days

124
Q

An insurance producer negotiates for an insurance contract on behalf of a client

A

Broker

125
Q

If the master contract is terminated for group life, every individual who has been on the plan for at least how many years will be allowed to convert to an individual insurance of the same coverage?

A

5 years

126
Q

Group insurance is written as what kind of insurance?

A

Annually renewable term

127
Q

SIMPLE plans are for:

A

Groups no larger than 100

128
Q

What portion is taxed upon surrender of life insurance policy?

A

Only the portion in excess of the premiums paid of the cash value is tax upon surrender of life insurance policy

129
Q

Personal uses of life insurance

A

Survivor protection, estate creation and conservation, cash accumulation and liquidity 

130
Q

Liquidity

A

Availability of cash value

131
Q

Used to pay state inheritance taxes and federal estate taxes eliminating the need to sell assets from the estate



A

Estate creation and conservation

132
Q

What part of life insurance is taxable?

A

Only interest is taxable

133
Q

Who qualifies for tax-sheltered annuity‘s or 403(b) plans?

A

Employees of nonprofit organizations under section 501(c) and employees of public school systems

134
Q

What are dividends

A

Return of unused premium

135
Q

Are The premiums that an employer pays for life insurance on an employee, whereby the policy is for the employees benefit tax deductible?

A

Yes

136
Q

True or false

Cash value increases are tax deferred

A

True

137
Q

True or false

Contributions are tax deferred and earnings on the money in the plan accrue on a tax deferred basis

A

True

138
Q

What is the penalty for excessive contributions to a traditional IRA?

A

6%

139
Q

What is a direct transfer?

A

The distribution is made directly from the trustee of the first plan to the trustee or administrator of the new IRA plan

140
Q

Can individuals who are not covered by an employer sponsored plan deduct the amount of their IRA contributions regardless of their income level?

A

Yes

141
Q

How are traditional IRA contributions taxed?

A

Traditional IRA contributions are tax deductible, but may be limited if the owners income exceeds a certain level and must be made in cash

142
Q

During an IRA direct transfer or direct rollover how much gets reinvested?

A

The full amount gets reinvested from one plan to the other

143
Q

How are distributions from 401(k) plans taxed?

A

Distributions from 401(k) plans are taxable as ordinary income in the year of the distribution.

However if the distribution is rolled over to a traditional IRA, taxes are deferred until the required minimum IRA distribution begin. Since the client actually took a distribution instead of making a trustee to trustee rollover, the distribution is subject to a 20% withholding tax

144
Q

What is a qualified plan?

A

Approved by the IRS, which then gives the employer and employee benefits and deductibility of contributions and tax referral of growth

145
Q

Examples of qualified plans

A

HR 10, 401(k), IRA, SEP, SIMPLE

146
Q

Which qualified plan can a self-employed and individual contribute?

A

HR-10

147
Q

Which qualified plan provides retirement income?

A

401(k)

148
Q

Which qualified plan is designed to be provided by a small employer for the benefit of the employees?

A

SEP

149
Q

Which qualified plan is available to small businesses that employ not more than 100 employees receiving at least $5000 in compensation from the employer during the previous year

A

SIMPLE

150
Q

If a retirement plan is qualified it has what kind of tax treatment and who was it designed for?

A

It has favorable tax treatment and is designed for the employees benefit

151
Q

Funds and a qualified plan accumulate on what tax basis?

A

Tax deferred basis; however at distribution any amount received by the employee will be treated as ordinary income for tax purposes

152
Q

How are funds taxed in a qualified plan at distribution?

A

At distribution any amount received by the employee will be treated as ordinary income

153
Q

Qualified plans for self-employed

A

HR-10 Keogh

154
Q

What must qualified plans have?

A

Vesting requirement

155
Q

How are employer contributions taxed to qualified plans?

A

Employer contributions are not taxed as income to employees

156
Q

Non-qualified retirement plan

A

Do not meet the IRS requirements for favorable tax treatment of deductions and and contributions; therefore they do not need to be approved by the IRS

157
Q

Individual annuities and deferred compensation plans for highly paid executives, split dollar insurance arrangements, and section 162 executive bonus plans

A

Non qualified plans

158
Q

Employers do not receive a current tax deduction for any contributions

A

Non-qualified retirement plan

159
Q

What is the seven pay test used for?

A

Used to determine if a life insurance policy is a modified endowment contract

160
Q

What is a modified endowment contract?

A

Any cash value life insurance policy that develops cash value faster than a seven pay whole life contract

161
Q

How are modified endowment contracts taxed?

A

Any distributions from MECs are taxable, including withdrawals and policy loans

162
Q

Three types of Social Security benefits

A

Retirement, survivors, disability

163
Q

The term fully employed versus someone who is not is how many quarters of coverage?

A

40

164
Q

To be considered partially insured, an individual must have earned how many credits?

A

Six credits during the last 13 quarter period 

165
Q

The waiting, or elimination period for Social Security disability benefits is how many months?

A

5 months

166
Q

The transfer of some or all of the death benefits of the policy to a creditor of security for a loan, but does not give the creditor the rights of ownership.

A

Collateral assignment
In the event of the enjoyed stuff the creditor would only be able to recover that portion of the policies proceeds equal to the creditors remaining interest on a loan

167
Q

Buy sell agreement

A

Legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled

168
Q

How many days does an employee have under the conversion privilege to convert to an individual policy?

A

31 days

169
Q

The employer will contribute monies into an employees retirement plan when the company shows a profit.

A

Profit sharing plan

170
Q

A participating insurance policy will pay dividends to the owner based upon what?

A

Actual mortality cost, interest earned and costs

171
Q

Created to protect policy owners, insurance, and beneficiaries under life insurance policies, health insurance policies, annuity contracts, and supplemental contracts when ensures fail to perform contractual obligations due to financial impairment

A

The New Jersey life and health Guaranty association

172
Q

If a resident license producer wants to conduct insurance business under a name other than its actual name what must they do?

A

File with the department

173
Q

All premiums collected on insurance policies must be held by a producer in what capacity? And must not be misappropriated, illegally withheld or improperly converted to the producers owns funds

A

Fiduciary capacity

174
Q

Insurers who meet the states financial requirements and are approved to transact business in the state are considered what?

A

Authorized or admitted

175
Q

If a person violates a cease and desist order, the commissioner may assess a fine of up to how much for each violation?

A

$5000

176
Q

Issuing, publishing or circulating any illustration or sales material that is false, misleading or deceptive as to policy benefits or terms, the payment of dividends,. This includes oral statements

A

Misrepresentation

177
Q

Funds not paid out after paying claims and other operating cost I return to the policy owners in the form of?

A

Dividends

178
Q

The insurance guaranty association will not pay more than how much for life insurance stuff benefits?

A

$500,000

179
Q

a specified period of years is selected, and equal installments are paid to the recipient. Their payments will continue for the specified. Even if the recipient dies before the end of that.

A

Fixed - period Installments option or period certain

180
Q

Interest only option

A

Policy proceeds are retained by the insurance company; only the interest is paid to beneficiary

181
Q

Allows the policyholder to apply policy dividends towards next year‘s premium



A

 Reduction of premium

182
Q

The dividend option that can increase the death benefit.

The dividends are used to purchase a single premium policy in addition to the face amount of the permanent policy

A

Paid up additions 

183
Q

If policy owner does not choose a dividend option which option will be chosen by the company?

A

Paid up additions

184
Q

The dividend option in which the policy owner uses dividends to purchase a term policy for one year

A

One year term option

185
Q

If policy owner does not choose a non-forfeiter option, what option will be chosen by insurer?

A

Extended term

186
Q

Guarantees payments for the lifetime of the recipient, but also specifies a guarantee amount. During which, if the original recipient dies, the payments will continue to the designated beneficiary

A

 Life income with period Certain

187
Q

What happens to a policies cash value under an extended term nonforfeiture option?

A

Cash value is converted to the same face amount as a whole life policy

NJ Life Insurance (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions