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Insurance Fundamentals: New Jersey Law and Regulations, Exams of Sociology of Health and Illness

Bellin College of NursingSociology of Health and Illness

A comprehensive overview of various insurance concepts, focusing on new jersey laws and regulations. Topics covered include life insurance, health insurance, disability income, errors and omissions, and more. It explains key terms, benefits, and provisions, as well as the responsibilities of producers and insurers. It is a valuable resource for students, professionals, and lifelong learners interested in insurance.

Typology: Exams

2023/2024

Available from 04/22/2024

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New Jersey Life and Health Final Exam Questions with Verified
Solutions.
1. Which type of long-term care benefit would be most appropriate for a stroke victim who
requires speech therapy administered at her home? - Correct answer Home health care
2. Which of the following is NOT a federal requirement of a qualified plan? - Correct answer
Employee must be able to make unlimited contributions
3. Why are dividends from a mutual insurer not subject to taxation? - Correct answer
because dividends are considered to be a return of premium
4. The treasurer of XYZ Insurance Company discovers that the treasurer's company is
being investigated by the Banking and Insurance Commissioner... - Correct answer
making false financial statements
5. Which type of rider will waive the premium on a child's life insurance policy if the parent
paying the premium dies? - Correct answer Payer benefit
6. Which of these premium payment frequencies is not typically available to a policy
owner? - Correct answer Bi-weekly
7. Maria the agent would like to advertise an annuity product on a highway billboard. Which
of the following must be included in the advertisement? - Correct answer her name
8. Which disability policy provision would address any concerns of the value of the benefits
decreasing over time? - Correct answer Cost of living benefit
9. Which of these is NOT a characteristic of the Accelerated Death Benefit option? -
Correct answer the benefit can be offered as a rider at a specific extra cost or may be at
no cost
10. All of the following are included as part of a contract in the entire contract provision
EXCEPT the - Correct answer Changes made by the producer
11. The power given to an individual producer that is not specifically addressed in his/her
contract is considered what type of authority? - Correct answer Implied
12. Pat is insured with a life insurance policy and Karen is his primary beneficiary. They are
both involved in an automobile accident where Pat dies instantly and Karen dies 5 days
later... - Correct answer Common disaster clause
13. Key Person Disability Insurance pays benefits to the - Correct answer Employer
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Download Insurance Fundamentals: New Jersey Law and Regulations and more Exams Sociology of Health and Illness in PDF only on Docsity!

New Jersey Life and Health Final Exam Questions with Verified

Solutions.

  1. Which type of long-term care benefit would be most appropriate for a stroke victim who requires speech therapy administered at her home? - Correct answer Home health care
  2. Which of the following is NOT a federal requirement of a qualified plan? - Correct answer Employee must be able to make unlimited contributions
  3. Why are dividends from a mutual insurer not subject to taxation? - Correct answer because dividends are considered to be a return of premium
  4. The treasurer of XYZ Insurance Company discovers that the treasurer's company is being investigated by the Banking and Insurance Commissioner... - Correct answer making false financial statements
  5. Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies? - Correct answer Payer benefit
  6. Which of these premium payment frequencies is not typically available to a policy owner? - Correct answer Bi-weekly
  7. Maria the agent would like to advertise an annuity product on a highway billboard. Which of the following must be included in the advertisement? - Correct answer her name
  8. Which disability policy provision would address any concerns of the value of the benefits decreasing over time? - Correct answer Cost of living benefit
  9. Which of these is NOT a characteristic of the Accelerated Death Benefit option? - Correct answer the benefit can be offered as a rider at a specific extra cost or may be at no cost
  10. All of the following are included as part of a contract in the entire contract provision EXCEPT the - Correct answer Changes made by the producer
  11. The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? - Correct answer Implied
  12. Pat is insured with a life insurance policy and Karen is his primary beneficiary. They are both involved in an automobile accident where Pat dies instantly and Karen dies 5 days later... - Correct answer Common disaster clause
  13. Key Person Disability Insurance pays benefits to the - Correct answer Employer
  1. Under a disability income policy, which provision would be payable if the cause of an injury is unexpected and accidental? - Correct answer Accidental bodily injury provision
  2. What will the beneficiary receive if an annuitant dies during the accumulation period? - Correct answer the greater of the accumulated cash value or the total premium paid
  3. Written notice for a health claim must be given to the insurer ___ days after the occurrence of the loss. - Correct answer 20
  4. Craig submits a $500 claim for medical expenses. With a past due premium of $100, the insurer pays $400. Which of the Uniform Optional Provisions covers this situation? - Correct answer Unpaid premium
  5. How many employees must an employer have for a terminated employee to be eligible for COBRA? - Correct answer 20
  6. A licensed producer is required to file notice of any change of address within how many days? - Correct answer 30
  7. Advertising material for a life insurance policy does NOT need to contain which of the following? - Correct answer Agent's commission rate
  8. What is the maximum fine for a producer violating a New Jersey Insurance law for the first time? - Correct answer $5,
  9. How long must an individual be unable to engage in any gainful activity due physical or mental disability in order to qualify for Social Security Total Disability? - Correct answer 12 months
  10. Sonya applied for a health insurance policy on April 1. Her agent submitted the information to the insurance company on April 6. She paid the premium on May 15 with the policy indicating the effective date being May 30. On which date would Sonya have coverage? - Correct answer May 30
  11. Under a life insurance policy, what does the insuring clause state? - Correct answer the insurer's obligation to pay a death benefit upon an approved death claim
  12. Jennifer is required to pay a specific sum out of pocket before any benefits are paid in a year. Her health policy most likely contains a (n) - Correct answer deductible
  13. How often must an insurance producer's license in New Jersey be renewed? - Correct answer every two years
  1. A _____ insurance company is one that was formed under the laws of a state other than New Jersey - Correct answer foreign
  2. All of the following are typically included in a life insurance policy illustration EXCEPT - Correct answer Names of the beneficiary
  3. Claims payable to a Disability Income insured, even when the insured can continue to work, are the result of a - Correct answer Presumptive disability
  4. XYZ Corp pays the tax-deductible insurance premiums for a key employee disability policy. Which of the following would be the appropriate tax consequence? - Correct answer Benefits are fully taxable
  5. What is the purpose of the Medical Information Bureau (MIB)? - Correct answer to help underwriters evaluate risk
  6. In the advertising of Individual Life Insurance policies, an "introductory" or "special enrollment" may not be made available until any previous enrollment period for the same policy has been closed for at least how long? - Correct answer Three months
  7. An insurance producer is issued a _____ as evidence of authority - Correct answer License
  8. An individual can enroll in a Part C Medicare Advantage Plan at what time? - Correct answer when becoming eligible for Medicare
  9. In accordance with New Jersey law, a Producer must remit health insurance premiums to the insurer within what period? - Correct answer 7 business days
  10. Which of the following situations would be suitable for a temporary work authority? - Correct answer when an applicant passes a licensing examination and answers all background questions negatively
  11. Where policy proceeds would be paid if both the insured and primary beneficiary were killed in the same accident? - Correct answer Contingent beneficiary
  12. When are group disability benefits considered to be tax-free to the insured? - Correct answer when the recipient pays the premiums
  13. An agent is required to keep replacement forms on file for at LEAST _____ years - Correct answer 5
  14. When a Medicare supplement policy is purchased during the open enrollment period - Correct answer the policy must be issued regardless of health status
  1. A Buyer's Guide MUST - Correct answer Have its content approved by the Insurance Commissioner
  2. A doctor who accepts Medicare Assignment agrees to which of the following? - Correct answer Doctor cannot charge more than Medicare's scheduled coverage
  3. Health insurance advertisements that mention statistical information are required by New Jersey law to - Correct answer accurately convey all pertinent facts
  4. Which of these may NOT be used in a health insurance advertisement? - Correct answer an insurance company's trademark instead of the company's actual name
  5. Twisting is best defined as - Correct answer Using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy
  6. Field underwriting performed by the producer involves - Correct answer Completing the application and collecting initial premium
  7. How many months can a life insurance policy normally be backdated from the date of application? - Correct answer 6
  8. Loss of income insurance provides - Correct answer an individual the means to replace wages
  9. An insurer must furnish to a claimant forms for filing proof of loss within ___ days upon receiving a notice of claim. - Correct answer 15
  10. After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? - Correct answer File written proof of loss
  11. Johan the producer charged a fee to a sales prospect for analyzing insurance coverage’s... - Correct answer Substance of the services performed
  12. A written statement describing the elements of a policy is called - Correct answer Policy Summary
  13. All of the following are considered appropriate uses of life insurance for business purposes EXCEPT - Correct answer protecting the business by covering entry level employees with life insurance
  14. An insured individual and the policy's beneficiary die from the same accident. The common disaster provision states the insurer will continue as if - Correct answer the insured outlived the beneficiary
  1. All of the following are core benefits of Medicare Supplement Plan a EXCEPT - Correct answer Deductible payments for the first 60 days of hospitalization under Medicare hospitalization under Medicare hospitalization insurance
  2. Statements made by an insurance applicant on an application are considered to be - Correct answer Representations
  3. What is the purpose of having an accelerated death benefit on a life insurance policy? - Correct answer it allows for cash advances to be paid against the death benefit if the insured becomes terminally ill
  4. Who assumes the investment risk in a variable insurance contract? - Correct answer the insurer
  5. _____ is NOT an element of valid contract - Correct answer Countersignature
  6. The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value at the amount of - Correct answer Past due premiums that have not been paid by the end of the grace period
  7. How soon can the benefit payments begin with a deferred annuity? - Correct answer a minimum of 12 months after date of purchase
  8. Which of the following MUST contain a "Statement of Policy Cost and Benefit Information"? - Correct answer Policy Summary
  9. Which of these is NOT subject to income taxation under a Modified Endowment Contract (MEC)? - Correct answer Death benefit
  10. Disability Income plans which require that the insurer can NEVER change or alter premium rates are usually considered - Correct answer No cancellable
  11. HIPPA considers which of the following as "individually identifiable health information"? - Correct answer a person's health claim information
  12. The policyholder for a group health benefit plan is considered to be the - Correct answer Employer
  13. A Medicare Supplement policy can be cancelled by the insurer for - Correct answer Nonpayment
  14. As of January 1, 2007, producer's license expires - Correct answer every two years on the last day of the producer's birth month
  1. An insurer has the right to recover payment made to the insured from the negligent party. These rights are called - Correct answer Subrogation
  2. A producer who intentionally makes an untrue or incomplete statement in the course of an insurance transaction may be guilty of - Correct answer Misrepresentation
  3. Which dividend option would an insurer invest the policy owner’s money and add any interest earnings as the dividends accrue? - Correct answer Accumulation at Interest Option
  4. Over the course of a year, which premium payment mode is most expensive? - Correct answer monthly
  5. Jay the producer is giving insurance advice regarding a prospect's existing coverage. If Jay were to receive a fee for this advice (in addition to his commission), he MUST - Correct answer Obtain a signed memorandum from the prospect acknowledging the amount of compensation
  6. If an insured's age on a life insurance policy has been misstated, what is the insurer's liability if the insured dies? - Correct answer a prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at the correct age
  7. A guaranteed issue insurance policy has no - Correct answer Medical underwriting
  8. A single premium cash value policy can be described as - Correct answer a policy that is paid up after only one payment
  9. The time limit for filing claim disputes is addressed in which provision of an accident and health policy? - Correct answer Legal actions
  10. The premium for a Modified whole life policy is - Correct answer Lower than the typical...
  11. How long is the Contestable Period for health insurance policies sold in New Jersey - Correct answer 2 years?
  12. An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of - Correct answer Fraud
  13. Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She would like to borrow $15,000 against the cash value. Which of the following
  1. Who is the individual paid on a fee-for-service basis? - Correct answer Provider
  2. The New Jersey Life and Health Insurance Guaranty Association is - Correct answer Funded by assessments on member companies
  3. Which of these is NOT considered to be a no forfeiture option in a whole life insurance policy? - Correct answer Interest only
  4. Replacement regulation is designed to protect the interests of - Correct answer Policy owners
  5. A health insurance policy that allows an insurer to change the policy owner’s premiums, but NOT cancel the policy is called - Correct answer Guaranteed renewable policy
  6. A debtor may receive Credit Life insurance in which of the following forms? - Correct answer Group Term Life
  7. A person who is a nonsmoker, of average weight, and in excellent health would most likely be in which risk classification? - Correct answer Preferred
  8. When a qualified plan starts making payments to its recipient, which portion of the distributions is taxable? - Correct answer Gains
  9. An example of a primary care physician would be an - Correct answer Internist
  10. A fee for service health insurance plan will normally cover - Correct answer A disease
  11. Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? - Correct answer $4,
  12. Barbara's policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. This rider is called a (n) - Correct answer Guaranteed insurability rider
  13. Which of these gaps in Medicare coverage is addressed with Medicare Supplemental Insurance? - Correct answer Medicare in-hospitable deductible
  14. Which of the following statements is CORRECT regarding an individual applying for life or health insurance? - Correct answer the applicant's medical history may be analyzed and reported
  1. Which of the following MUST contain a "Statement of Policy Cost and Benefit Information" - Correct answer Policy Summary
  2. Mark continues working after the age of 65 and is covered through his employer's group health plan. Which of the following statements is TRUE? - Correct answer Medicare is the secondary payer
  3. Medicare Part A does not pay for medical benefits provided for treatment in a skilled nursing facility beyond - Correct answer 100 days
  4. Which situation accurately describes a reduced paid-up no forfeiture option? - Correct answer Policy has a decreased face amount
  5. Before conducting an HIV related test, an insurer is REQUIRED to obtain written authorization from the - Correct answer Proposed insured
  6. All Medicare Supplement policies MUST contain which provision? - Correct answer Pre-existing conditions may only be excludes from coverage for a maximum of 6 months
  7. The reinstatement provision in a health insurance policy is - Correct answer Mandatory
  8. The type of policy where the insurer can send a notice to the insured that the policy has been cancelled in the middle of the term is called - Correct answer Cancelable
  9. Naming a contingent beneficiary as "all surviving children" is describing by which term - Correct answer Class designation
  10. The entire contract includes the actual policy and the - Correct answer Applicant
  11. The taxable portion of each annuity payment is calculated using which method? - Correct answer Exclusion Ratio
  12. The coverage, condition, and limitations in the master policy of a group contract can be found in which document? - Correct answer Certificate of coverage benefits
  13. How much does Medicare Part B pay for physician fees? - Correct answer 80%
  14. In advertisements of life insurance and annuities, all of the following are true EXCEPT - Correct answer Advertisements must include training materials provided to the producer
  1. If an insured dies during the grace period with no premiums paid - Correct answer the policy would be payable, minus the premium amount
  2. A 10% excise tax is normally applied to an early withdrawal from an IRA. According to HIPPA, this tax will not be applied if the withdrawal is used for medical expenses that exceed _____ of the individual's adjusted gross income - Correct answer 7.5%
  3. Frank is shopping for a disability income policy. Which of the following would have the HIGHEST premium? - Correct answer 14 day waiting period / 10 year benefit period
  4. A master contract and certificate of coverage can be found in which type of policy? - Correct answer Group
  5. Premium mode is a term used to describe the - Correct answer Frequency of the premium payment
  6. A newborn is required to be covered for _____ days from the moment of birth - Correct answer 30
  7. A clause that allows an insurer the right to terminate coverage at any anniversary date is called - Correct answer Optional renewability clause
  8. Which of the following is NOT a required provision in an accident and health insurance policy? - Correct answer Change of occupation
  9. An insurance company may ONLY pay a sales commission to - Correct answer Individuals licensed by the state
  10. Continuous 24-hour care provided by licensed medical professionals under the direct supervision of a physician is called - Correct answer skilled nursing care
  11. Which of the following actions is REQUIRED by an agent who is replacing an existing life insurance policy? - Correct answer Submit to the replacing insurer a list of the policies to be replaced
  12. In which of the following relationship would there NOT be an insurable interest? - Correct answer Business owner to business customer
  13. The law that established insurance transactions regulated by the states is called - Correct answer McCarran-Ferguson Act
  1. If credit life insurance is terminated before the scheduled maturity date of the debt, any unearned premium held by the insurer will be? - Correct answer Refunded to the creditor
  2. A provision in a whole life policy that allows a policy owner to terminate the policy in return for a reduced paid-up policy of the same type is called - Correct answer No forfeiture provision
  3. A type of group that has a constitution and bylaws and has been organized for purposes other than obtaining insurance is called - Correct answer Association or labor group
  4. Which of the following is present when an applicant stands to lose value if the insured dies? - Correct answer Insurable interest
  5. Tara the producer is delivering a specified disease insurance policy to a new policy owner. Upon delivery, she may be expected to collect all of the following EXCEPT a (n) - Correct answer Modified application with a new signature
  6. All of these are valid policy dividend options for a life insurance policy owner EXCEPT - Correct answer Accumulate without interest
  7. Which of the following is NOT a duty of the Commissioner? - Correct answer Establish insurer rates
  8. A long-term care policy typically provides all of the following levels of care EXCEPT - Correct answer acute care
  9. A life insurance policy that has premiums fully paid up within a stated time period is called - Correct answer Limited payment insurance
  10. A securities license is required for a life insurance producer to sell - Correct answer Variable life insurance
  11. In contrast to a guaranteed renewable policy, a no cancellable policy - Correct answer May never raise premiums
  12. What is the contract called that is issued to an employer for a Group Medical Insurance plan? - Correct answer Master Policy
  13. A disability income policy can prevent an insured from earning a higher income than if he/she were working by utilizing - Correct answer Benefit limits
  1. What happens to the coverage under a children's term rider when that child reaches a certain specified age? - Correct answer Coverage is eliminated
  2. A policy owner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision? - Correct answer Partial disability
  3. A beneficiary has just received a claim payment for a life insurance policy. Which of the following is TRUE regarding the federal income tax? - Correct answer No federal income tax is owed on life insurance proceeds
  4. A non-contributory health insurance plan helps the insurer avoid - Correct answer adverse selection
  5. States that have "no loss no gain" laws require a replacing policy to - Correct answer Pay for ongoing claims under the policy it replaces
  6. How is Medicare Part B funded? - Correct answer General tax revenue and user premiums
  7. Which market index is associated with an indexed annuity's rate of return? - Correct answer S&P 500
  8. The names of the insurance companies represented by the producer - Correct answer is available to the public
  9. The Commissioner must approve - Correct answer Continuing education courses
  10. An attending physician's statement would be appropriate for which life insurance purpose? - Correct answer at the request of the insurer to assist in the underwriting decision
  11. Maria is a Preferred Provider Organization (PPO) subscriber and received care from an out-of-network provider. Which of the following is the likely result? - Correct answer Care is covered
  12. A policy owner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due? - Correct answer Reduction of premium dividend option
  13. In regards to a life insurance contract, which of the following statements is NOT true regarding the concept of insurable interest? - Correct answer Insurable interest can be established sufficiently by sentimental attachment alone
  1. A life insurance policy written on one contract for two people in which it is payable upon the first death is called - Correct answer Joint
  2. Which of the following is true concerning the proceeds of a life insurance policy?
- Correct answer There is protection of proceeds against the insured's and the beneficiary's creditors
  1. Susan is insured through her Group Health Insurance plan and changed her coverage to an individual plan with the same insurer after her employment was terminated. This change is called a (n) - Correct answer Conversion
  2. Which of the following does Medicare Part D cover? - Correct answer Prescription drugs
  3. Which settlement options pays a stated amount to an annuitant but no residual value to a beneficiary? - Correct answer Life income
  4. What does the word "level" in Level Term describe? - Correct answer the face amount
  5. A Medicare supplement plan can be canceled by the insurer - Correct answer for nonpayment of premiums
  6. Small employers who are sponsored by an insurer to provide group benefits to its employees are called - Correct answer MEWA
  7. Health insurance involves two perils, accident and _____ - Correct answer Sickness
  8. When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates? - Correct answer Change of occupation provision
  9. Which of these will typically authorize treatment from a specialist? - Correct answer Gatekeeper
  10. A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called - Correct answer A self-funded plan
  11. Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence? - Correct answer Section 1035 exchange
  1. An indemnity plan - Correct answer provides the insured a specific dollar amount for services
  2. An example of an unfair method of competition is - Correct answer Overstating the benefits of an insurance policy
  3. A pharmacy benefit covers prescription drugs derived from a list called - Correct answer Drug formulary
  4. The type of policy which pays on the death of the last person is called - Correct answer Survivorship life
  5. Converting a group plan to permanent life insurance requires - Correct answer the conversion being applied for within 31 days of termination
  6. Ownership of a life insurance policy may be temporarily transferred with a (n) - Correct answer Collateral assignment
  7. Which of these is likely to occur when life or health insurance is being applied for? - Correct answer Medical history from the insured may be reviewed and reported
  8. If an insurer receives a notice of claim under an individual health policy, and fails to provide proof of loss forms within 15 days, the insured must - Correct answer File a written proof of loss, detailing the occurrence, character and extent of loss
  9. Which of the following is Medicare Part B also known as? - Correct answer Medical insurance
  10. Benefits provided by a Medicare Supplement policy must NOT - Correct answer Duplicate Medicare benefits
  11. Funding for Medicare Part B is partially provided by - Correct answer User premiums
  12. Which of the following is NOT part of an insurance contact? - Correct answer Certificate of Authority
  13. In what form do disability income policies typically pay benefits? - Correct answer Periodic income
  14. When an insured has a major medical plan with first dollar coverage, how does this impact the benefits paid? - Correct answer No deductible payment is required
  1. Level premium permanent insurance accumulates a reserve that will eventually - Correct answer equal the face amount of the policy 258.Ambiguities in an insurance policy are always resolved in favor of the - Correct answer Insured