NJ LIFE AND HEALTH INSURANCE
TEST QUESTIONS & VERIFIED
CORRECT SOLUTIONS
Agency Contract - CORRECT ANSWER A contract given that is held between an
insurer and an agent/producer, containing the expressed authority given to the
agent/producer, and the duties and responsibilities to
the principal.
An agent who is in violation of the agency contract may be held personally liable to the
insurer.
Agent/Producer - CORRECT ANSWER A person who acts for another person or entity
with regard to contractual arrangements with third parties; a legal representative of an
insurance company.
The classification of producer usually includes agents and brokers; agents are the
agents of the insurer.
Insurer is the principal.
Insurer - CORRECT ANSWER party who provides against losses. provides benefits or
other services
Applicant (proposed insured) - CORRECT ANSWER A person who requests or seeks
insurance from an insurer.
Beneficiary - CORRECT ANSWER The person who receives the benefits from the
policy of insurance.
Death Benefit (Face amount/face value/ coverage) - CORRECT ANSWER The amount
paid when a claim is issued against a policy of insurance.
Insurance Policy - CORRECT ANSWER A contract between a policy owner (and/or
insured) and an insurance company which agrees to pay the insured or the beneficiary
for loss caused by specific events.
Insured - CORRECT ANSWER the person covered by the policy of insurance who may
or may not be the applicant or policy owner.
, Insurer ( principal ) - CORRECT ANSWER the company who issues a policy of
insurance.
Life Insurance - CORRECT ANSWER A coverage upon a person's life, and granting,
purchasing or disposing of annuitirs
Policyowner - CORRECT ANSWER The person who is entitled to exercise the rights
and privileges in the policy and who may or may not be the insured.
Premium - CORRECT ANSWER The money paid to the insurance company for the
policy of insurance.
Solicitation of Insurance - CORRECT ANSWER An attempt to persuade a person to
buy an insurance poolicy
4 steps to completing application, underwriting, and delivering - CORRECT ANSWER
1. Solicitation and Slaes Presentations
2. Underwriting: Field and Company
3. Premium Determination
4. Policy Issue and Delivery
Disclosure statement - CORRECT ANSWER Will help the applicants to make more
informed and educated decisions about their choice of insurance.
Buyer's Guide - CORRECT ANSWER Provides basic, generic information about life
insurance policies that contains, and is limited to, language approved by the
Department of Insurance.
Explains how a buyer should go about choosing the amount and type of insurance to
buy, and how a buyer can save money by comparing the cots of similar policies.
Insurers must provide a buyer's guide to all prospective policy applicants prior to
accepting their initial premium.
Policy Summary - CORRECT ANSWER A written statement describing the features
and elements of the policy being issued.
Must include name and address of the agent, full name and home office or
administrative office address of the insurer, ad the generic name of the basic policy and
each rider
Must be provided when the policy is delivered.
TEST QUESTIONS & VERIFIED
CORRECT SOLUTIONS
Agency Contract - CORRECT ANSWER A contract given that is held between an
insurer and an agent/producer, containing the expressed authority given to the
agent/producer, and the duties and responsibilities to
the principal.
An agent who is in violation of the agency contract may be held personally liable to the
insurer.
Agent/Producer - CORRECT ANSWER A person who acts for another person or entity
with regard to contractual arrangements with third parties; a legal representative of an
insurance company.
The classification of producer usually includes agents and brokers; agents are the
agents of the insurer.
Insurer is the principal.
Insurer - CORRECT ANSWER party who provides against losses. provides benefits or
other services
Applicant (proposed insured) - CORRECT ANSWER A person who requests or seeks
insurance from an insurer.
Beneficiary - CORRECT ANSWER The person who receives the benefits from the
policy of insurance.
Death Benefit (Face amount/face value/ coverage) - CORRECT ANSWER The amount
paid when a claim is issued against a policy of insurance.
Insurance Policy - CORRECT ANSWER A contract between a policy owner (and/or
insured) and an insurance company which agrees to pay the insured or the beneficiary
for loss caused by specific events.
Insured - CORRECT ANSWER the person covered by the policy of insurance who may
or may not be the applicant or policy owner.
, Insurer ( principal ) - CORRECT ANSWER the company who issues a policy of
insurance.
Life Insurance - CORRECT ANSWER A coverage upon a person's life, and granting,
purchasing or disposing of annuitirs
Policyowner - CORRECT ANSWER The person who is entitled to exercise the rights
and privileges in the policy and who may or may not be the insured.
Premium - CORRECT ANSWER The money paid to the insurance company for the
policy of insurance.
Solicitation of Insurance - CORRECT ANSWER An attempt to persuade a person to
buy an insurance poolicy
4 steps to completing application, underwriting, and delivering - CORRECT ANSWER
1. Solicitation and Slaes Presentations
2. Underwriting: Field and Company
3. Premium Determination
4. Policy Issue and Delivery
Disclosure statement - CORRECT ANSWER Will help the applicants to make more
informed and educated decisions about their choice of insurance.
Buyer's Guide - CORRECT ANSWER Provides basic, generic information about life
insurance policies that contains, and is limited to, language approved by the
Department of Insurance.
Explains how a buyer should go about choosing the amount and type of insurance to
buy, and how a buyer can save money by comparing the cots of similar policies.
Insurers must provide a buyer's guide to all prospective policy applicants prior to
accepting their initial premium.
Policy Summary - CORRECT ANSWER A written statement describing the features
and elements of the policy being issued.
Must include name and address of the agent, full name and home office or
administrative office address of the insurer, ad the generic name of the basic policy and
each rider
Must be provided when the policy is delivered.
