NJ Health Insurance Exam (XCEL Solutions) 2025
EXAM QUESTIONS |FREQUENTLY TESTED QUESTIONS
||VERIFIED SOLUTIONS (100% CORRECT)
Why are dividends from a mutual insurer not subject to taxation? -
(ANSWER)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 - (ANSWER)reinsurance
A nonparticipating company is sometimes called a(n) - (ANSWER)stock insurer
What is considered to be the primary reason for buying life insurance? -
(ANSWER)provide death benefits
A(n) _____ company is owned by its shareholders - (ANSWER)stock
A plan in which an employer pays insurance benefits from a fund derived from the
employer's current revenues is called - (ANSWER)a self-funded plan
What is the primary purpose of a rating service company such as A.M. Best? -
(ANSWER)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? - (ANSWER)$10,000
,A nonparticipating policy will - (ANSWER)not pay dividends
A life insurance company has transferred some of its risk to another insurer. The
insurer assuming the risk is called the - (ANSWER)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? - (ANSWER)$5,000
A type of insurer that is owned by its policyowners is called - (ANSWER)mutual
Fraternal Benefit Society has each of the following characteristics EXCEPT
incorporated
without capital stock
exists for profit
exists for the benefit of its members - (ANSWER)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 - (ANSWER)insurance sales calls
What kind of life insurance policy issues by a mutual insurer provides a return of
divisible surplus? - (ANSWER)participating life insurance policy
An insurer's ability to make unpredictable payouts to policyowners is called -
(ANSWER)liquidity
An insurer's claim settlement practices are regulated by the - (ANSWER)state
insurance departments
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 - (ANSWER)a rating from a rating service company,
such as A.M. Best
The Fair Credit and Reporting Act's main purpose is to - (ANSWER)protect
consumers with guidelines regarding credit reporting and distribution
When the principle gives the agent authority in writing, it's referred to as -
(ANSWER)express authority
, What are an applicant's statements concerning occupation, hobbies, and personal
health history regarded as? - (ANSWER)representations
In an insurance contract, the element that shows each party is giving something
of value is called - (ANSWER)consideration
Which of the following is an example of the insured's consideration? -
(ANSWER)a paid premium
Intentional withholding of material facts that would affect an insurance policy's
validity is called a(n) - (ANSWER)concealment
The term which describes the fact that both parties of a contract may NOT receive
the same value is referred to as - (ANSWER)aleatory
In an insurance contract, the insurer is the only party who makes a legally
enforceable promise. What kind of contract is this? - (ANSWER)unilateral
All of the following are elements of an insurance policy EXCEPT
definitions
other insurance
claim forms
conditions - (ANSWER)claim forms
EXAM QUESTIONS |FREQUENTLY TESTED QUESTIONS
||VERIFIED SOLUTIONS (100% CORRECT)
Why are dividends from a mutual insurer not subject to taxation? -
(ANSWER)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 - (ANSWER)reinsurance
A nonparticipating company is sometimes called a(n) - (ANSWER)stock insurer
What is considered to be the primary reason for buying life insurance? -
(ANSWER)provide death benefits
A(n) _____ company is owned by its shareholders - (ANSWER)stock
A plan in which an employer pays insurance benefits from a fund derived from the
employer's current revenues is called - (ANSWER)a self-funded plan
What is the primary purpose of a rating service company such as A.M. Best? -
(ANSWER)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? - (ANSWER)$10,000
,A nonparticipating policy will - (ANSWER)not pay dividends
A life insurance company has transferred some of its risk to another insurer. The
insurer assuming the risk is called the - (ANSWER)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? - (ANSWER)$5,000
A type of insurer that is owned by its policyowners is called - (ANSWER)mutual
Fraternal Benefit Society has each of the following characteristics EXCEPT
incorporated
without capital stock
exists for profit
exists for the benefit of its members - (ANSWER)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 - (ANSWER)insurance sales calls
What kind of life insurance policy issues by a mutual insurer provides a return of
divisible surplus? - (ANSWER)participating life insurance policy
An insurer's ability to make unpredictable payouts to policyowners is called -
(ANSWER)liquidity
An insurer's claim settlement practices are regulated by the - (ANSWER)state
insurance departments
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 - (ANSWER)a rating from a rating service company,
such as A.M. Best
The Fair Credit and Reporting Act's main purpose is to - (ANSWER)protect
consumers with guidelines regarding credit reporting and distribution
When the principle gives the agent authority in writing, it's referred to as -
(ANSWER)express authority
, What are an applicant's statements concerning occupation, hobbies, and personal
health history regarded as? - (ANSWER)representations
In an insurance contract, the element that shows each party is giving something
of value is called - (ANSWER)consideration
Which of the following is an example of the insured's consideration? -
(ANSWER)a paid premium
Intentional withholding of material facts that would affect an insurance policy's
validity is called a(n) - (ANSWER)concealment
The term which describes the fact that both parties of a contract may NOT receive
the same value is referred to as - (ANSWER)aleatory
In an insurance contract, the insurer is the only party who makes a legally
enforceable promise. What kind of contract is this? - (ANSWER)unilateral
All of the following are elements of an insurance policy EXCEPT
definitions
other insurance
claim forms
conditions - (ANSWER)claim forms
