NJ HEALTH INSURANCE EXAM (XCEL S
k k k k k
OLUTIONS) | QUESTIONS &ANSWERS (V
k k k k k
ERIFIED) |LATESTUPDATE |GRADED A+
k k k k k k
Whykarekdividendskfromkakmutualkinsurerknotksubjectktoktaxation?
CorrectkAnswer: becausekdividendskarekconsideredktokbekakreturnkofkpremium
ABCkinsurancekcompanyktransferskpartkofktheirkriskktokXYZkinsurancekcompany.kThisksituationki
skcalled
CorrectkAnswer: reinsurance
Aknonparticipatingkcompanykisksometimeskcalledka(n)
CorrectkAnswer: stockkinsurer
Whatkiskconsideredktokbekthekprimarykreasonkforkbuyingklifekinsurance?
CorrectkAnswer: providekdeathkbenefits
A(n)k companykiskownedkbykitskshareholders
1
,CorrectkAnswer: stock
Akplankinkwhichkankemployerkpayskinsurancekbenefitskfromkakfundkderivedkfromkthekemployer'sk
currentkrevenueskiskcalled
CorrectkAnswer: akself-fundedkplan
WhatkiskthekprimarykpurposekofkakratingkservicekcompanyksuchkaskA.M.kBest?
CorrectkAnswer: determinekfinancialkstrengthkofkankinsurancekcompany
Karenkiskakproducerkwhokhaskobtainedkpersonalkinformationkaboutkakclientkwithoutkhavingk
aklegitimatekreasonktokdokso.kUnderkthekMcCarran-
FergusonkAct,kwhatkiskthekminimumkpenaltykforkthis?
CorrectkAnswer: $10,000
Aknonparticipatingkpolicykwill
CorrectkAnswer: notkpaykdividends
Aklifekinsurancekcompanykhasktransferredksomekofkitskriskktokanotherkinsurer.kThekinsurerkassu
mingkthekriskkiskcalledkthe
CorrectkAnswer: reinsurer
KenkiskakproducerkwhokhaskobtainedkConsumerkInformationkReportskunderkfalsekpretens
es.kUnderkthekFairkCreditkReportingkAct,kwhatkiskthekmaximumkpenaltykthatkmaykbekimpos
edkonkKen?
2
,CorrectkAnswer: $5,000
Aktypekofkinsurerkthatkiskownedkbykitskpolicyownerskiskcalled
CorrectkAnswer: mutual
FraternalkBenefitkSocietykhaskeachkofkthekfollowingkcharacteristicskEXCEPTkincorporated
withoutkcapitalkstockke
xistskforkprofit
existskforkthekbenefitkofkitskmembers
CorrectkAnswer: existskforkprofit
ThekDokNotkCallkRegistrykofferskexemptionskforkcallskplacedkfromkallkofkthekfollowingkEXC
EPT
charities
politicalkorganizations
k insuranceksaleskcallsk
surveys
CorrectkAnswer: insuranceksaleskcalls
Whatkkindkofklifekinsurancekpolicykissueskbykakmutualkinsurerkprovideskakreturnkofkdivisiblek
surplus?
CorrectkAnswer: participatingklifekinsurancekpolicy
3
, Ankinsurer'skabilityktokmakekunpredictablekpayoutsktokpolicyownerskiskcalled
CorrectkAnswer: liquidity
Ankinsurer'skclaimksettlementkpracticeskarekregulatedkbykthe
CorrectkAnswer: statekinsurancekdepartments
WhichkofkthekfollowingkiskNOTkconsideredkadvertising?
akratingkfromkakratingkservicekcompany,ksuchkaskA.M.kBestkank
illustration
aksaleskpresentation
directkmailingkfromkankagency
CorrectkAnswer: akratingkfromkakratingkservicekcompany,ksuchkaskA.M.kBest
ThekFairkCreditkandkReportingkAct'skmainkpurposekiskto
CorrectkAnswer:
protectkconsumerskwithkguidelineskregardingkcreditkreportingkandk
distribution
Whenkthekprinciplekgiveskthekagentkauthoritykinkwriting,kit'skreferredktokas
CorrectkAnswer: expresskauthority
Whatkarekankapplicant'skstatementskconcerningkoccupation,khobbies,kandkpersonalkhealt
hkhistorykregardedkas?
k k k k k
OLUTIONS) | QUESTIONS &ANSWERS (V
k k k k k
ERIFIED) |LATESTUPDATE |GRADED A+
k k k k k k
Whykarekdividendskfromkakmutualkinsurerknotksubjectktoktaxation?
CorrectkAnswer: becausekdividendskarekconsideredktokbekakreturnkofkpremium
ABCkinsurancekcompanyktransferskpartkofktheirkriskktokXYZkinsurancekcompany.kThisksituationki
skcalled
CorrectkAnswer: reinsurance
Aknonparticipatingkcompanykisksometimeskcalledka(n)
CorrectkAnswer: stockkinsurer
Whatkiskconsideredktokbekthekprimarykreasonkforkbuyingklifekinsurance?
CorrectkAnswer: providekdeathkbenefits
A(n)k companykiskownedkbykitskshareholders
1
,CorrectkAnswer: stock
Akplankinkwhichkankemployerkpayskinsurancekbenefitskfromkakfundkderivedkfromkthekemployer'sk
currentkrevenueskiskcalled
CorrectkAnswer: akself-fundedkplan
WhatkiskthekprimarykpurposekofkakratingkservicekcompanyksuchkaskA.M.kBest?
CorrectkAnswer: determinekfinancialkstrengthkofkankinsurancekcompany
Karenkiskakproducerkwhokhaskobtainedkpersonalkinformationkaboutkakclientkwithoutkhavingk
aklegitimatekreasonktokdokso.kUnderkthekMcCarran-
FergusonkAct,kwhatkiskthekminimumkpenaltykforkthis?
CorrectkAnswer: $10,000
Aknonparticipatingkpolicykwill
CorrectkAnswer: notkpaykdividends
Aklifekinsurancekcompanykhasktransferredksomekofkitskriskktokanotherkinsurer.kThekinsurerkassu
mingkthekriskkiskcalledkthe
CorrectkAnswer: reinsurer
KenkiskakproducerkwhokhaskobtainedkConsumerkInformationkReportskunderkfalsekpretens
es.kUnderkthekFairkCreditkReportingkAct,kwhatkiskthekmaximumkpenaltykthatkmaykbekimpos
edkonkKen?
2
,CorrectkAnswer: $5,000
Aktypekofkinsurerkthatkiskownedkbykitskpolicyownerskiskcalled
CorrectkAnswer: mutual
FraternalkBenefitkSocietykhaskeachkofkthekfollowingkcharacteristicskEXCEPTkincorporated
withoutkcapitalkstockke
xistskforkprofit
existskforkthekbenefitkofkitskmembers
CorrectkAnswer: existskforkprofit
ThekDokNotkCallkRegistrykofferskexemptionskforkcallskplacedkfromkallkofkthekfollowingkEXC
EPT
charities
politicalkorganizations
k insuranceksaleskcallsk
surveys
CorrectkAnswer: insuranceksaleskcalls
Whatkkindkofklifekinsurancekpolicykissueskbykakmutualkinsurerkprovideskakreturnkofkdivisiblek
surplus?
CorrectkAnswer: participatingklifekinsurancekpolicy
3
, Ankinsurer'skabilityktokmakekunpredictablekpayoutsktokpolicyownerskiskcalled
CorrectkAnswer: liquidity
Ankinsurer'skclaimksettlementkpracticeskarekregulatedkbykthe
CorrectkAnswer: statekinsurancekdepartments
WhichkofkthekfollowingkiskNOTkconsideredkadvertising?
akratingkfromkakratingkservicekcompany,ksuchkaskA.M.kBestkank
illustration
aksaleskpresentation
directkmailingkfromkankagency
CorrectkAnswer: akratingkfromkakratingkservicekcompany,ksuchkaskA.M.kBest
ThekFairkCreditkandkReportingkAct'skmainkpurposekiskto
CorrectkAnswer:
protectkconsumerskwithkguidelineskregardingkcreditkreportingkandk
distribution
Whenkthekprinciplekgiveskthekagentkauthoritykinkwriting,kit'skreferredktokas
CorrectkAnswer: expresskauthority
Whatkarekankapplicant'skstatementskconcerningkoccupation,khobbies,kandkpersonalkhealt
hkhistorykregardedkas?
