New Jersey Life Insurance Exam
Question 1 of 5.
Which of the following is a characteristic of conversion from group to permanent life insurance?
A. Premium for the new policy will be based on the age when first covered by the group policy.
B. Conversion must be to term insurance.
C. Proof of insurability is required.
D. Conversion must be applied for within 1 month of termination.
Explanation: Conversion from group to permanent life insurance must occur within 31 days of group coverage termination. Choice D is correct. Choice A is incorrect as premiums are based on current age. Choice B is incorrect as conversion is to permanent insurance. Choice C is incorrect as proof of insurability is not required.
Question 2 of 5.
The McCarran-Ferguson Act was passed by Congress to
A. redefine the authority of state and federal governments to regulate the insurance industry.
B. redefine the authority of insurance companies to issue policies.
C. establish that the regulation of insurance company advertising lies solely within the jurisdiction of the Federal Communications Commission (FCC).
D. establish that the process of transacting insurance is not interstate commerce.
Explanation: The McCarran-Ferguson Act (1945) grants states primary authority to regulate the insurance industry, limiting federal oversight unless state regulation is absent or inadequate. Choice A is correct. Choice B is incorrect as the Act does not address insurance companies' authority to issue policies. Choice C is incorrect as the FCC does not regulate insurance advertising. Choice D is incorrect because, while the Act clarifies insurance is not interstate commerce for certain regulatory purposes, its primary focus is state vs. federal authority.
Question 3 of 5.
Which rider allows the wife of the insured to be added to the primary insured's coverage?
A. Spouse Term Rider.
B. Family Income Rider.
C. Decreasing Term Rider.
D. Cost of Living Rider.
Explanation: The Spouse Term Rider adds the spouse to the policy with term coverage. Choice A is correct. Choice B provides income to the family upon the insured's death, not spouse coverage. Choice C reduces the death benefit over time, typically for loans. Choice D adjusts benefits for inflation, not adding a spouse.
Question 4 of 5.
Which of the following is NOT an option in an Adjustable Life Policy?
A. The policyowner can increase the death benefit by using one of the nonforfeiture options.
B. The policy's face amount can be increased or decreased.
C. The policyowner can increase or decrease the premium or the payment period.
D. The policy's protection period can be extended or reduced.
Explanation: Adjustable Life Policies allow flexibility in face amount, premiums, and protection period, making B, C, and D correct features. Choice A is incorrect as nonforfeiture options are separate from adjusting the death benefit. Thus, A is the correct answer as it is NOT an option.
Question 5 of 5.
The McCarran-Ferguson Act was passed by Congress to
A. redefine the authority of state and federal governments to regulate the insurance industry.
B. redefine the authority of insurance companies to issue policies.
C. establish the regulation of insurance company advertising lies solely within the jurisdiction of the Federal Communications Commission (FCC).
D. establish that the process of transacting insurance is not interstate commerce.
Explanation: Repeat of question 1. Choice A is correct for the same reasons. Choices B, C, and D are incorrect as explained in question 1.
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