NJ Life Producer Test Questions and Answers All Correct
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NJ Life Producer
Institution
NJ Life Producer
NJ Life Producer Test Questions and Answers All Correct
Term Life Policy - Answer-Temporary coverage for set duration w/ death benefit ONLY (no cash value), offers largest $ for lowest premium. Cannot borrow.
Level Term Life Insurance Policy - Answer-A term life insurance policy in which the de...
NJ Life Producer Test Questions
and Answers All Correct
Term Life Policy - Answer-Temporary coverage for set duration w/ death benefit ONLY
(no cash value), offers largest $ for lowest premium. Cannot borrow.
Level Term Life Insurance Policy - Answer-A term life insurance policy in which the
death benefit remains unchanged throughout the life of the policy
Increasing Term Life Insurance - Answer-Term life insurance that provides a death
benefit that starts at one amount and increases by some specified amount or
percentage at stated intervals over the policy term. To keep up with inflation.
Decreasing Term Policy - Answer-A term insurance policy that maintains a level
premium throughout all periods of coverage while the amount of protection decreases.
Reason: Mortgage.
Renew a Policy - Answer-Higher premium, no underwriting.
Convertible Insurance - Answer-Term life that can be converted to whole life. Higher
premium.
Whole, Straight, Ordinary Life Insurance - Answer-Permanent, premiums do not
change, builds cash value, cash value not added to face value, matures between
100&120.
Single Premium Policy - Answer-A Life insurance policy on which the entire premium is
paid in one payment, which creates an immediate cash value.
Endowment Life Insurance - Answer-Life insurance that allows the insured, rather than
the beneficiary, to collect the face value of the policy upon maturity or to collect that
value in annual payments. High Premium.
Combination Policy - Answer-A policy that incorporates different types of insurance in a
single policy.
Family Maintenance Policy - Answer-A policy that combines Whole Life insurance and a
Level Term Rider, but both cover the same person (usually the breadwinner).
Family Income Policy - Answer-Combines Whole Life insurance with a Decreasing Term
Rider also written on the same person.
, Family Life policy or Family Plan Policy - Answer-1. Designed to cover all family
members under one policy
Children born later are covered at 15 days after birth without evidence of insurability
Joint Life Policy - Answer-Covers multiple lives and pays out when the first insured dies.
"1st to die policy".
Survivorship Life Policy - Answer-Pays the insured amount upon the death of the LAST
surviving insured. "Last to die policy".
Stock Insurer - Answer-publicly held company (anyone can buy), pays dividends to
stock holders
Mutual Insurer - Answer-Privately held company, no capital stock. Profits shares with
policy holders.
Domestic - Answer-operates in the same state it was incorporated
Foreign - Answer-Operates in a different state than it was incorporated
Alien - Answer-Operates in a different country than it was incorporated
Reinsurer - Answer-transfers risk to a different company
ceding company - Answer-The company transferring the risk
assuming company - Answer-(reinsuring company)
assumes all or part of the risk
Policy - Answer-a contract between the insurer and the applicant
A Valid Policy - Answer-competent, legal purpose, consideration
Consideration - Answer-Promise to pay claim/ Promise to pay premium
Offer - Answer-Applicant applies, pays premium
Invitation - Answer-Applicant applies but does not pay a premium
Rated Policy - Answer-Adjust the premium to reflect the increased risk of a individual
with high-risk
Unilateral Contract - Answer-A one-sided contract wherein one party makes a promise
so as to induce a second party to do something. The second party is not legally bound
to perform; however, if the second party does comply, the first party is obligated to keep
the promise.
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