NJ Life Producer Exam Life Insurance Questions &
Answers 2026 | Latest Review Guide
1. A process by which an originating insurer (ceding) procures insurance for
itself with another insurer (assuming) regarding all or part of a risk is called?
Assumption
Negotiation
Reinsurance
Authorization
2. Describe the importance of discussing a rate-up with a client in life insurance.
Discussing a rate-up is important to ensure the client understands
the reasons for the increased cost and its impact on their coverage.
Discussing a rate-up is unnecessary as clients do not need to know
about premium changes.
Discussing a rate-up is only relevant if the client requests it.
Discussing a rate-up is primarily for the insurance company's internal
records.
3. If a life insurance company publishes an advertisement that misrepresents the
benefits of its policies, which entity would likely take action against the
company?
Federal Trade Commission
National Association of Insurance Commissioners
State insurance department
Consumer Financial Protection Bureau
,4. What is the required retention period for policy summaries and buyer's
guides used with the public in life insurance transactions?
Three years
Indefinitely
One year
Five years
5. If an applicant for a life insurance policy misstates their health history but the
policy has been in force for two years, what is the likely outcome regarding a
claim made after the applicant's death?
The claim will be denied because of the misstatements.
The claim will be reviewed but is likely to be denied regardless of the
time elapsed.
The insurer can cancel the policy immediately upon discovering the
misstatements.
The claim is likely to be honored due to the incontestability clause.
6. What legal consequence may arise from noncompliance with a subpoena
issued by the Commissioner?
Criminal charges
License suspension
Civil penalty
Contempt of court
7. If an individual wants to ensure their heirs can pay estate taxes without
liquidating assets, which type of insurance should they consider purchasing?
, Travel insurance
Long-term care insurance
Disability insurance
Life insurance
8. How are dividends classified for tax purposes?
Capital gains
Tax-exempt income
Taxable income
Deductions
9. The responsibility for regulating the insurance continuing education
requirements and approving insurance continuing education courses belongs
to the
Federal Department of Commerce and Insurance
Continuing Education Administration Board
Department of Insurance
National Association of Insurance Commissioners
10. Describe the purpose of a credit insurance policy in the context of loans.
A credit insurance policy protects lenders by ensuring loan
repayment in case of borrower default due to unforeseen
circumstances.
A credit insurance policy is designed to cover medical expenses.
A credit insurance policy is used to fund retirement plans.
, A credit insurance policy provides benefits to the policyholder's
family after death.
11. Premium payments on a 20 pay life (20PL) insurance policy will continue until:
Age 100
20 years or death of insured, whichever comes later
20 years or death of insured, whichever comes first
Age 65
12. Which of the following is true regarding Branch Offices:
All of the above.
At least one licensed insurance producer assigned to that office.
At least one licensed insurance producer is present during business
hours except when engaged in branch activities elsewhere.
The office is accessible to the public during normal business hours
13. Describe the role of the beneficiary in a credit insurance policy and how it
differs from other types of life insurance policies.
In a credit insurance policy, the beneficiary is the lender, which is
different from other life insurance policies where the insured's
family or dependents are usually the beneficiaries.
In credit insurance, the beneficiary is the government, while in other
policies, it is the insured.
The beneficiary in a credit insurance policy is the insured's family,
unlike in term life insurance where it is the insurance company.
The beneficiary in a credit insurance policy is the insurance company,
which is not the case in whole life insurance.
Answers 2026 | Latest Review Guide
1. A process by which an originating insurer (ceding) procures insurance for
itself with another insurer (assuming) regarding all or part of a risk is called?
Assumption
Negotiation
Reinsurance
Authorization
2. Describe the importance of discussing a rate-up with a client in life insurance.
Discussing a rate-up is important to ensure the client understands
the reasons for the increased cost and its impact on their coverage.
Discussing a rate-up is unnecessary as clients do not need to know
about premium changes.
Discussing a rate-up is only relevant if the client requests it.
Discussing a rate-up is primarily for the insurance company's internal
records.
3. If a life insurance company publishes an advertisement that misrepresents the
benefits of its policies, which entity would likely take action against the
company?
Federal Trade Commission
National Association of Insurance Commissioners
State insurance department
Consumer Financial Protection Bureau
,4. What is the required retention period for policy summaries and buyer's
guides used with the public in life insurance transactions?
Three years
Indefinitely
One year
Five years
5. If an applicant for a life insurance policy misstates their health history but the
policy has been in force for two years, what is the likely outcome regarding a
claim made after the applicant's death?
The claim will be denied because of the misstatements.
The claim will be reviewed but is likely to be denied regardless of the
time elapsed.
The insurer can cancel the policy immediately upon discovering the
misstatements.
The claim is likely to be honored due to the incontestability clause.
6. What legal consequence may arise from noncompliance with a subpoena
issued by the Commissioner?
Criminal charges
License suspension
Civil penalty
Contempt of court
7. If an individual wants to ensure their heirs can pay estate taxes without
liquidating assets, which type of insurance should they consider purchasing?
, Travel insurance
Long-term care insurance
Disability insurance
Life insurance
8. How are dividends classified for tax purposes?
Capital gains
Tax-exempt income
Taxable income
Deductions
9. The responsibility for regulating the insurance continuing education
requirements and approving insurance continuing education courses belongs
to the
Federal Department of Commerce and Insurance
Continuing Education Administration Board
Department of Insurance
National Association of Insurance Commissioners
10. Describe the purpose of a credit insurance policy in the context of loans.
A credit insurance policy protects lenders by ensuring loan
repayment in case of borrower default due to unforeseen
circumstances.
A credit insurance policy is designed to cover medical expenses.
A credit insurance policy is used to fund retirement plans.
, A credit insurance policy provides benefits to the policyholder's
family after death.
11. Premium payments on a 20 pay life (20PL) insurance policy will continue until:
Age 100
20 years or death of insured, whichever comes later
20 years or death of insured, whichever comes first
Age 65
12. Which of the following is true regarding Branch Offices:
All of the above.
At least one licensed insurance producer assigned to that office.
At least one licensed insurance producer is present during business
hours except when engaged in branch activities elsewhere.
The office is accessible to the public during normal business hours
13. Describe the role of the beneficiary in a credit insurance policy and how it
differs from other types of life insurance policies.
In a credit insurance policy, the beneficiary is the lender, which is
different from other life insurance policies where the insured's
family or dependents are usually the beneficiaries.
In credit insurance, the beneficiary is the government, while in other
policies, it is the insured.
The beneficiary in a credit insurance policy is the insured's family,
unlike in term life insurance where it is the insurance company.
The beneficiary in a credit insurance policy is the insurance company,
which is not the case in whole life insurance.
