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NJ MN LIFE ACCIDENT & HEALTH
PRODUCER EXAM 2026 QUESTIONS
AND ANSWERS | A+ GRADED | WITH
EXPERT SOLUTIONS
Speculative Risk - correct answer-involves the chance of loss or
gain, and is not insurable
Pure Risk - correct answer-involves the chance of loss only, and
is insurable
Peril - correct answer-Something that causes a direct loss
Physical Hazard - correct answer-Visible (Black ice)
Moral Hazard - correct answer-dishonest tendencies (Fraud)
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Morale Hazard - correct answer-Carless, Irresponsible (leaving
keys in car)
Exposure - correct answer-susceptibility to loss
Adverse selection - correct answer-those with high risk situations
attempt to purchase insurance before those with average or
below- avg. risk
Insurance - correct answer-The transfer of risk from one to many
Pooling of Risk - correct answer-A large reserve of money
available to pay claims
Law of Large numbers - correct answer-the accuracy of the
insurance companies loss projections will increase, need large
numbers in order to predict accurate predictions
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Certificate of Insurance - correct answer-- used after policy is
issued
- contains summary of policy coverage & limits
- required in loan transactions and other matters
Deductibles - correct answer-Straight: the insured pays a certain
amount owe loss before the insurer is required to make a
payment
Aggregate: the insured pays for all losses until they exceed a
certain amount (apply per policy period)
Corridor: is applied before benefits under major medical plans are
paid, happens middle of deductible
Elimination period: used w/ disability income policies & long term
care insurance
Methods of Managing risk - correct answer-Avoidance: avoiding a
particular activity that could turn into a loss
Reduction: taking action to reduce the possibility of a loss
Retention: the insured accepts possibility of loss and assumes
part of risk, (a deductible is a form of retention)
Transfer: Shifting financial burden to one another
Sharing: chance of loss is shared among individuals (Pooling)
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Indemnity - correct answer--restoring the insured to approx. the
same position before there was a loss
- actual cash value= replacement-depreciation
- common exceptions
replacement cost: reimburses insured for damaged or destroyed
property w/o subtraction depreciation
valued policy: pays face amount of total loss regardless of actual
cash value
pro -rata-bility: insurer will pay proportional share of loss
Primary & excess indemnity - correct answer-primary insurer pays
first, then once exhausted, the excess insurer pays too
Coordination of benefits - correct answer-provisions apply when
more than one group health insurance policy covers the same
loss
Insurable interest - correct answer-property casualty: at time of
loss
life & health: at time of application
NJ MN LIFE ACCIDENT & HEALTH
PRODUCER EXAM 2026 QUESTIONS
AND ANSWERS | A+ GRADED | WITH
EXPERT SOLUTIONS
Speculative Risk - correct answer-involves the chance of loss or
gain, and is not insurable
Pure Risk - correct answer-involves the chance of loss only, and
is insurable
Peril - correct answer-Something that causes a direct loss
Physical Hazard - correct answer-Visible (Black ice)
Moral Hazard - correct answer-dishonest tendencies (Fraud)
, Page | 2
Morale Hazard - correct answer-Carless, Irresponsible (leaving
keys in car)
Exposure - correct answer-susceptibility to loss
Adverse selection - correct answer-those with high risk situations
attempt to purchase insurance before those with average or
below- avg. risk
Insurance - correct answer-The transfer of risk from one to many
Pooling of Risk - correct answer-A large reserve of money
available to pay claims
Law of Large numbers - correct answer-the accuracy of the
insurance companies loss projections will increase, need large
numbers in order to predict accurate predictions
, Page | 3
Certificate of Insurance - correct answer-- used after policy is
issued
- contains summary of policy coverage & limits
- required in loan transactions and other matters
Deductibles - correct answer-Straight: the insured pays a certain
amount owe loss before the insurer is required to make a
payment
Aggregate: the insured pays for all losses until they exceed a
certain amount (apply per policy period)
Corridor: is applied before benefits under major medical plans are
paid, happens middle of deductible
Elimination period: used w/ disability income policies & long term
care insurance
Methods of Managing risk - correct answer-Avoidance: avoiding a
particular activity that could turn into a loss
Reduction: taking action to reduce the possibility of a loss
Retention: the insured accepts possibility of loss and assumes
part of risk, (a deductible is a form of retention)
Transfer: Shifting financial burden to one another
Sharing: chance of loss is shared among individuals (Pooling)
, Page | 4
Indemnity - correct answer--restoring the insured to approx. the
same position before there was a loss
- actual cash value= replacement-depreciation
- common exceptions
replacement cost: reimburses insured for damaged or destroyed
property w/o subtraction depreciation
valued policy: pays face amount of total loss regardless of actual
cash value
pro -rata-bility: insurer will pay proportional share of loss
Primary & excess indemnity - correct answer-primary insurer pays
first, then once exhausted, the excess insurer pays too
Coordination of benefits - correct answer-provisions apply when
more than one group health insurance policy covers the same
loss
Insurable interest - correct answer-property casualty: at time of
loss
life & health: at time of application
