NJ Life Insurance Exam Correct answers
latest update
Insurance is the ____ of risk
transfer
disclosure statements must be given to the applicant no later than
the time the application is signed
buyer's guide
provides general information about the types of life insurance policies available, in language that can
be understood by the average person.
buyers guide must be delivered by
before collecting premium or be delivered with the policy if given at least 10 days free look period
policy summary
a written statement describing the features and elements of the policy being issued
part 1 of the appplication
general information about the applicant such as name, age, address, occupation
field underwriter
The technical name given to the insurance producer of an insurer who does not have binding
authority to grant coverage.
part 2 of the application
medical information and family healthy history
is the agent's report part of the entire contract
no but it is a part of the application process
agent's report
A written report from the agent submitted to the insurer along with the application disclosing what
the agent knows, observed, or learned about the proposed insured's risks.
what signatures are required on the application
-agents
-insured
-policyowner (if different than insured)
policy coverage begins
on the later of the date of application (if prepaid policy) or the date of the medical exam
conditional receipt
,The producer issues a conditional receipt to the applicant when the application and premium are
collected.
applicant may be covered as early as the date of the application
warranty
An absolutely true statement upon which the validity of the insurance policy depends.
representations
are statements believed to be true to the best of one's knowledge but are not guaranteed to be true
material misreprestentation
a statement that, if discovered, would alter the underwriting decision
material misrepresentations are considered fraud when they are ___
intentional
underwriting
risk selection and classification process
insurable interest
An interest in the subject of an insurance policy that is not unduly remote and that would cause the
interested party to suffer financial loss if an insured event occurred.
insurable interest must exist at
the time of the application
adverse selection
A high-risk person benefits more from insurance, so is more likely to purchase it.
what is the key source of information underwriters use for information about the applicant
insurance application
Investigative consumer report
An extensive report that includes information on an individual's character, general reputation,
personal characteristics, and mode of living. information is obtained through an investigation and
interviews with friends and neighbors
can insurers refuse coverage solely on the basis of adverse information on an MIB report
no
Medical information bureau (MIB)
nonprofit trade organization which receives adverse medical information from insurance companies
and maintains confidential medical impairment information on individuals
, MIB protects
insurers
HIPPA Privacy rule
patients have the right to view their own medical records, as well as the right to know who has
accessed those records over the previous 6 years
Consumer reports cannot contain certain types of information if the report is requested in connection
with a life insurance policy of less than
150,000
prohibited information of consumer reports less than 150,00
bankruptcies more than 10 years old, civil suits, records of arrest, conviction, or other negative info
that is more than 7 years old
preferred risks
applicants with superior physical condition
lower premium
substandard risk
applicant is in poor risk
premium rated up=higher premium
declined risks
risks that are not insured by underwriters due to lack of insurable interest or poor health
Fair Credit Reporting Act
protects consumers against circulation of inaccurate or obsolete information
Three primary factors of premium determination
1) risk
2) interest
3) expense
if the initial premium is not paid with the application, the effective date is
when premium is collected
more frequent premium is paid
higher it is (more transaction costs)
replacement
a practice of terminating an existing policy or letting it lapse, and obtaining a new one. Insurance
producers must take special underwriting decisions to help policyowners to make informed decisions
latest update
Insurance is the ____ of risk
transfer
disclosure statements must be given to the applicant no later than
the time the application is signed
buyer's guide
provides general information about the types of life insurance policies available, in language that can
be understood by the average person.
buyers guide must be delivered by
before collecting premium or be delivered with the policy if given at least 10 days free look period
policy summary
a written statement describing the features and elements of the policy being issued
part 1 of the appplication
general information about the applicant such as name, age, address, occupation
field underwriter
The technical name given to the insurance producer of an insurer who does not have binding
authority to grant coverage.
part 2 of the application
medical information and family healthy history
is the agent's report part of the entire contract
no but it is a part of the application process
agent's report
A written report from the agent submitted to the insurer along with the application disclosing what
the agent knows, observed, or learned about the proposed insured's risks.
what signatures are required on the application
-agents
-insured
-policyowner (if different than insured)
policy coverage begins
on the later of the date of application (if prepaid policy) or the date of the medical exam
conditional receipt
,The producer issues a conditional receipt to the applicant when the application and premium are
collected.
applicant may be covered as early as the date of the application
warranty
An absolutely true statement upon which the validity of the insurance policy depends.
representations
are statements believed to be true to the best of one's knowledge but are not guaranteed to be true
material misreprestentation
a statement that, if discovered, would alter the underwriting decision
material misrepresentations are considered fraud when they are ___
intentional
underwriting
risk selection and classification process
insurable interest
An interest in the subject of an insurance policy that is not unduly remote and that would cause the
interested party to suffer financial loss if an insured event occurred.
insurable interest must exist at
the time of the application
adverse selection
A high-risk person benefits more from insurance, so is more likely to purchase it.
what is the key source of information underwriters use for information about the applicant
insurance application
Investigative consumer report
An extensive report that includes information on an individual's character, general reputation,
personal characteristics, and mode of living. information is obtained through an investigation and
interviews with friends and neighbors
can insurers refuse coverage solely on the basis of adverse information on an MIB report
no
Medical information bureau (MIB)
nonprofit trade organization which receives adverse medical information from insurance companies
and maintains confidential medical impairment information on individuals
, MIB protects
insurers
HIPPA Privacy rule
patients have the right to view their own medical records, as well as the right to know who has
accessed those records over the previous 6 years
Consumer reports cannot contain certain types of information if the report is requested in connection
with a life insurance policy of less than
150,000
prohibited information of consumer reports less than 150,00
bankruptcies more than 10 years old, civil suits, records of arrest, conviction, or other negative info
that is more than 7 years old
preferred risks
applicants with superior physical condition
lower premium
substandard risk
applicant is in poor risk
premium rated up=higher premium
declined risks
risks that are not insured by underwriters due to lack of insurable interest or poor health
Fair Credit Reporting Act
protects consumers against circulation of inaccurate or obsolete information
Three primary factors of premium determination
1) risk
2) interest
3) expense
if the initial premium is not paid with the application, the effective date is
when premium is collected
more frequent premium is paid
higher it is (more transaction costs)
replacement
a practice of terminating an existing policy or letting it lapse, and obtaining a new one. Insurance
producers must take special underwriting decisions to help policyowners to make informed decisions
