1|Page
NJ Health Insurance Exam (XCEL Solutions) TEST FINAL EXAM
AND PRACTICE EXAM 20262027 BANK 2 VERSIONS
QUESTIONS WITH DETAILED VERIFIED ANSWERS EXAM
QUESTIONS WILL COME FROM HERE (100% CORRECT
ANSWERS A+ GRADED
Why are dividends from a mutual insurer not subject to taxation? -
ANSWERS--because dividends are considered to be a return of
premium
ABC insurance company transfers part of their risk to XYZ insurance
company. This situation is called - ANSWERS--reinsurance
A nonparticipating company is sometimes called a(n) - ANSWERS--stock
insurer
What is considered to be the primary reason for buying life insurance? -
ANSWERS--provide death benefits
A(n) _____ company is owned by its shareholders - ANSWERS--stock
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A plan in which an employer pays insurance benefits from a fund
derived from the employer's current revenues is called - ANSWERS--a
self-funded plan
What is the primary purpose of a rating service company such as A.M.
Best? - ANSWERS--determine financial strength of an insurance
company
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
A nonparticipating policy will - ANSWERS--not pay dividends
A life insurance company has transferred some of its risk to another
insurer. The insurer assuming the risk is called the - ANSWERS--
reinsurer
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
A type of insurer that is owned by its policyowners is called - ANSWERS-
-mutual
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Fraternal Benefit Society has each of the following characteristics
EXCEPT
incorporated
without capital stock
exists for profit
exists for the benefit of its members - ANSWERS--exists for profit
The Do Not Call Registry offers exemptions for calls placed from all of
the following EXCEPT
charities
political organizations
insurance sales calls
surveys - ANSWERS--insurance sales calls
What kind of life insurance policy issues by a mutual insurer provides a
return of divisible surplus? - ANSWERS--participating life insurance
policy
An insurer's ability to make unpredictable payouts to policyowners is
called - ANSWERS--liquidity
An insurer's claim settlement practices are regulated by the -
ANSWERS--state insurance departments
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Which of the following is NOT considered advertising?
a rating from a rating service company, such as A.M. Best
an illustration
a sales presentation
direct mailing from an agency - ANSWERS--a rating from a rating service
company, such as A.M. Best
The Fair Credit and Reporting Act's main purpose is to - ANSWERS--
protect consumers with guidelines regarding credit reporting and
distribution
When the principle gives the agent authority in writing, it's referred to
as - ANSWERS--express authority
What are an applicant's statements concerning occupation, hobbies,
and personal health history regarded as? - ANSWERS--representations
In an insurance contract, the element that shows each party is giving
something of value is called - ANSWERS--consideration
The term which describes the fact that both parties of a contract may
NOT receive the same value is referred to as - ANSWERS--aleatory
NJ Health Insurance Exam (XCEL Solutions) TEST FINAL EXAM
AND PRACTICE EXAM 20262027 BANK 2 VERSIONS
QUESTIONS WITH DETAILED VERIFIED ANSWERS EXAM
QUESTIONS WILL COME FROM HERE (100% CORRECT
ANSWERS A+ GRADED
Why are dividends from a mutual insurer not subject to taxation? -
ANSWERS--because dividends are considered to be a return of
premium
ABC insurance company transfers part of their risk to XYZ insurance
company. This situation is called - ANSWERS--reinsurance
A nonparticipating company is sometimes called a(n) - ANSWERS--stock
insurer
What is considered to be the primary reason for buying life insurance? -
ANSWERS--provide death benefits
A(n) _____ company is owned by its shareholders - ANSWERS--stock
,2|Page
A plan in which an employer pays insurance benefits from a fund
derived from the employer's current revenues is called - ANSWERS--a
self-funded plan
What is the primary purpose of a rating service company such as A.M.
Best? - ANSWERS--determine financial strength of an insurance
company
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
A nonparticipating policy will - ANSWERS--not pay dividends
A life insurance company has transferred some of its risk to another
insurer. The insurer assuming the risk is called the - ANSWERS--
reinsurer
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
A type of insurer that is owned by its policyowners is called - ANSWERS-
-mutual
,3|Page
Fraternal Benefit Society has each of the following characteristics
EXCEPT
incorporated
without capital stock
exists for profit
exists for the benefit of its members - ANSWERS--exists for profit
The Do Not Call Registry offers exemptions for calls placed from all of
the following EXCEPT
charities
political organizations
insurance sales calls
surveys - ANSWERS--insurance sales calls
What kind of life insurance policy issues by a mutual insurer provides a
return of divisible surplus? - ANSWERS--participating life insurance
policy
An insurer's ability to make unpredictable payouts to policyowners is
called - ANSWERS--liquidity
An insurer's claim settlement practices are regulated by the -
ANSWERS--state insurance departments
, 4|Page
Which of the following is NOT considered advertising?
a rating from a rating service company, such as A.M. Best
an illustration
a sales presentation
direct mailing from an agency - ANSWERS--a rating from a rating service
company, such as A.M. Best
The Fair Credit and Reporting Act's main purpose is to - ANSWERS--
protect consumers with guidelines regarding credit reporting and
distribution
When the principle gives the agent authority in writing, it's referred to
as - ANSWERS--express authority
What are an applicant's statements concerning occupation, hobbies,
and personal health history regarded as? - ANSWERS--representations
In an insurance contract, the element that shows each party is giving
something of value is called - ANSWERS--consideration
The term which describes the fact that both parties of a contract may
NOT receive the same value is referred to as - ANSWERS--aleatory
