NJ Life Producer Exam with Complete Solutions
Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequences. - Answer-Section 1035 exchange
An insurance company needs to obtain personal information from a third par...
Which of the following enables a life policy to be replaced with another life policy and
results in the postponement of the tax consequences. - Answer-Section 1035 exchange
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? - Answer-Fair Credit Reporting Act
Which of the following is true concerning the proceeds of a life insurance policy? -
Answer-There is protection of proceeds against the insured's and the beneficiaries
creditors
What types of life insurance companies are normally used for key employee
indemnification? - Answer-Term, whole, and universal
Which settlement options pays a stated amount to an annuitant, but no residual value to
the beneficiary? - Answer-Life income
All of these are valid policy dividend options for a life insurance policyowner EXCEPT -
Answer-Accumulate without interest
Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following
statements is true? - Answer-The policy may be paid up early by using a policy dividend
All of these are common exclusions to a life insurance policy except - Answer-accidental
death
What kind of life insurance policy issued by a mutual insurer provides a return of
divisible surplus? - Answer-participating life insurance policy
The free-look provision gives the policyowner - Answer-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? - Answer-
Group Term Life
Carmen's individual life insurance policy has recently lapsed. She may reinstate her
policy within _____ years - Answer-3 years
, Under a Traditional IRA, interest earned is taxed - Answer-upon distribution
Which of these statements regarding the annuitants is CORRECT? - Answer-The
annuitant's life expectancy determines the annuity payment
What will the beneficiary receive is annuitant dies during the accumulation period? -
Answer-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? - Answer-Submit to to the replacing insurer a list of the policies to
be replaced
A tax-free Section 1035 Exchange of a life insurance policy to a different policy is
permitted if it occurs - Answer-from insurer to insurer and no cash is received by the
policyowner
Of the following dividend options, which of these is taxable? - Answer-accumulation at
interest
All pre-licensing course completion certificate are valid for a period of ? - Answer-2
years
A partial surrender is allowed in which of the following life policies? - Answer-Universal
life
What happens to interest earned if the annuitant dies before the payout start date? -
Answer-It is taxable
How are annuities given favorable tax treatment? - Answer-gains are taxed at
distribution
Fixed period settlement options are considered to be a form of a(n) - Answer-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 - Answer-dies instantly
from a car accident
A modified insurance contract which accumulates cash values higher than the IRS will
allow - Answer-A life insurance contract which accumulates cash values higher than the
IRS will allow
A(n) _____ insurance company is one that was formed under the laws of a state other
than New Jersey. - Answer-Foreign
An example of a tax-qualified retirement plan would be a(n) - Answer-defined
contribution plan
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