NEW JERSEY ACCIDENT AND HEALTH INSURANCE
EXAM QUESTIONS WITH 100% CORRECT ANSWERS
\Q\.what is considered to be the primary reason for buying life insurance? - ANSWERS✔-provide
death benefits
\Q\.ABC insurance company transfers part of their risk to XYZ insurance company. this situation
is called - ANSWERS✔-reinsurance
\Q\.a nonparticipating policy will - ANSWERS✔-not pay dividends
\Q\.a plan in which an employer pays insurance benefits from a fund derived from the
employers current revenues is called - ANSWERS✔-a self-funded plan
\Q\.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? - ANSWERS✔-10,000
\Q\.what kind of life insurance policy issued by a mutual insurer provides a return of divisible
surplus ? - ANSWERS✔-participating life insurance policy
\Q\.a(n) _____ company is owned by its shareholders. - ANSWERS✔-stock
\Q\.a type of insurer that is owned by its poly owners is called - ANSWERS✔-mutual
\Q\.what is the primary purpose of a rating service company such as A.M Best? - ANSWERS✔-
determine financial strength of an insurance company
,\Q\.which of the following is NOT considered adverting? - ANSWERS✔-a rating from a rating
service company, such as A.M Best
\Q\.the fair credit and reporting acts main purpose is to - ANSWERS✔-protect consumers with
guidelines regarding credit reporting and distribution
\Q\.a life insurance company has transferred some of its risk to another insurer. The insure
assuming the risk is called the - ANSWERS✔-reinsurer
\Q\.the DO NOT CALL registry offers exemptions for calls placed from all of the following EXCEPT
- ANSWERS✔-insurance sales calls
\Q\.Ken is a producer who has obtained Consumer Information Reports under false pretenses.
Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed on
Ken? - ANSWERS✔-5,000
\Q\.Why are dividends from a mutual insurer not subject to taxation? - ANSWERS✔-because
dividends are considered to be a return of premium
\Q\.a nonparticipating company is sometimes called a(n) - ANSWERS✔-stock insurer
\Q\.Fraternal Benefit Society has each of the following characteristics EXCEPT - ANSWERS✔-
exist for profit
\Q\.An insurer's ability to make unpredictable payouts to policyowners is called - ANSWERS✔-
liquidity
,\Q\.An insurer's claim settlement practices are regulated by the - ANSWERS✔-state insurance
departments
\Q\.In an insurance contract, the insurer is the only party who makes a legally enforceable
promise. What kind of contract is this? - ANSWERS✔-unilateral
\Q\.insurable interest does NOT occur in which of the following relationships? - ANSWERS✔-
business owner and business client
\Q\.what makes an insurance policy a unilateral contract? - ANSWERS✔-only the insurer is
legally bound
\Q\.the deeds and actions of a producer indicate what kind of authority? - ANSWERS✔-
apparent
\Q\.Legal purpose is a term used in contract law meaning - ANSWERS✔-there must be legal
reasons for entering into the contract
\Q\.the authority granted to a licensed producer is provided via the - ANSWERS✔-law of agency
\Q\.In an insurance contract, the applicants consideration is the - ANSWERS✔-statements made
in the application and the premium
\Q\.Which contract element is insurable interest a component of? - ANSWERS✔-legal purpose
\Q\.which of the following is present when an applicant stands to lose value in the insured dies?
- ANSWERS✔-insurable interest
, \Q\.according to the principle of Utmost Good Faith, the insured will answer questions on the
application to the best of their knowledge and pay the required premium, while the insure will
deal fairly with the insured and it's - ANSWERS✔-promises made
\Q\.Intentional withholding of material facts that would affect an insurance policy's validity is
called a(n) - ANSWERS✔-concealment
\Q\.The term which describes the fact that both parties of a contract may NOT receive the same
value is referred to as - ANSWERS✔-Aleatory
\Q\.in an insurance contract, the element that shows each party is giving something of value is
called - ANSWERS✔-consideration
\Q\.who is responsible for assembling the policy forms for insureds - ANSWERS✔-insurance
carries
\Q\.Bob and Tom start a business. Since each partner contributes an important element to the
success of the business, they decide to take life insurance policies out on each other, and name
each other as beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12
months later. The policies continue in force with no change. Both partners are still married at
the time of Bob's death. In this situation, who will receive Bob's policy proceeds? - ANSWERS✔-
tom
\Q\.Under a contract of adhesion, - ANSWERS✔-the terms must be accepted or rejected in full
\Q\.what is implied authority defined as? - ANSWERS✔-Authority that is not specifically given to
an agent in the agency contract, but that an agent can reasonably assume to carry out his/her
duties
EXAM QUESTIONS WITH 100% CORRECT ANSWERS
\Q\.what is considered to be the primary reason for buying life insurance? - ANSWERS✔-provide
death benefits
\Q\.ABC insurance company transfers part of their risk to XYZ insurance company. this situation
is called - ANSWERS✔-reinsurance
\Q\.a nonparticipating policy will - ANSWERS✔-not pay dividends
\Q\.a plan in which an employer pays insurance benefits from a fund derived from the
employers current revenues is called - ANSWERS✔-a self-funded plan
\Q\.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? - ANSWERS✔-10,000
\Q\.what kind of life insurance policy issued by a mutual insurer provides a return of divisible
surplus ? - ANSWERS✔-participating life insurance policy
\Q\.a(n) _____ company is owned by its shareholders. - ANSWERS✔-stock
\Q\.a type of insurer that is owned by its poly owners is called - ANSWERS✔-mutual
\Q\.what is the primary purpose of a rating service company such as A.M Best? - ANSWERS✔-
determine financial strength of an insurance company
,\Q\.which of the following is NOT considered adverting? - ANSWERS✔-a rating from a rating
service company, such as A.M Best
\Q\.the fair credit and reporting acts main purpose is to - ANSWERS✔-protect consumers with
guidelines regarding credit reporting and distribution
\Q\.a life insurance company has transferred some of its risk to another insurer. The insure
assuming the risk is called the - ANSWERS✔-reinsurer
\Q\.the DO NOT CALL registry offers exemptions for calls placed from all of the following EXCEPT
- ANSWERS✔-insurance sales calls
\Q\.Ken is a producer who has obtained Consumer Information Reports under false pretenses.
Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed on
Ken? - ANSWERS✔-5,000
\Q\.Why are dividends from a mutual insurer not subject to taxation? - ANSWERS✔-because
dividends are considered to be a return of premium
\Q\.a nonparticipating company is sometimes called a(n) - ANSWERS✔-stock insurer
\Q\.Fraternal Benefit Society has each of the following characteristics EXCEPT - ANSWERS✔-
exist for profit
\Q\.An insurer's ability to make unpredictable payouts to policyowners is called - ANSWERS✔-
liquidity
,\Q\.An insurer's claim settlement practices are regulated by the - ANSWERS✔-state insurance
departments
\Q\.In an insurance contract, the insurer is the only party who makes a legally enforceable
promise. What kind of contract is this? - ANSWERS✔-unilateral
\Q\.insurable interest does NOT occur in which of the following relationships? - ANSWERS✔-
business owner and business client
\Q\.what makes an insurance policy a unilateral contract? - ANSWERS✔-only the insurer is
legally bound
\Q\.the deeds and actions of a producer indicate what kind of authority? - ANSWERS✔-
apparent
\Q\.Legal purpose is a term used in contract law meaning - ANSWERS✔-there must be legal
reasons for entering into the contract
\Q\.the authority granted to a licensed producer is provided via the - ANSWERS✔-law of agency
\Q\.In an insurance contract, the applicants consideration is the - ANSWERS✔-statements made
in the application and the premium
\Q\.Which contract element is insurable interest a component of? - ANSWERS✔-legal purpose
\Q\.which of the following is present when an applicant stands to lose value in the insured dies?
- ANSWERS✔-insurable interest
, \Q\.according to the principle of Utmost Good Faith, the insured will answer questions on the
application to the best of their knowledge and pay the required premium, while the insure will
deal fairly with the insured and it's - ANSWERS✔-promises made
\Q\.Intentional withholding of material facts that would affect an insurance policy's validity is
called a(n) - ANSWERS✔-concealment
\Q\.The term which describes the fact that both parties of a contract may NOT receive the same
value is referred to as - ANSWERS✔-Aleatory
\Q\.in an insurance contract, the element that shows each party is giving something of value is
called - ANSWERS✔-consideration
\Q\.who is responsible for assembling the policy forms for insureds - ANSWERS✔-insurance
carries
\Q\.Bob and Tom start a business. Since each partner contributes an important element to the
success of the business, they decide to take life insurance policies out on each other, and name
each other as beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12
months later. The policies continue in force with no change. Both partners are still married at
the time of Bob's death. In this situation, who will receive Bob's policy proceeds? - ANSWERS✔-
tom
\Q\.Under a contract of adhesion, - ANSWERS✔-the terms must be accepted or rejected in full
\Q\.what is implied authority defined as? - ANSWERS✔-Authority that is not specifically given to
an agent in the agency contract, but that an agent can reasonably assume to carry out his/her
duties
