Free New Jersey life insurance practice test.

Answer D. The premiums are paid for the child's policy until a stated age

A payor benefit rider on a juvenile policy waives premiums if the paying adult (the payor) dies or becomes disabled, so the child's coverage continues until a stated age. It does not double the death benefit, trigger an immediate payout, or cancel coverage. It simply keeps the child's policy in force.

Answer A. The benefit is adjusted to what the premiums paid would have purchased at the correct age

Misstatement of age adjusts the benefit to the amount the premium paid would have bought at the true age. It does not void the policy or deny the claim, since the error is simply corrected. Paying the full face amount ignores the adjustment. Returning premiums applies to suicide, not age misstatement.

Answer D. An impairment or hazard exclusion rider

An exclusion rider added for a specific risky hobby is an impairment or hazard exclusion rider that removes coverage for that named activity. A suicide clause addresses self-inflicted death, an accidental death rider adds benefits, and a guaranteed insurability rider lets the insured buy more coverage later; none of those describe excluding skydiving.

Answer A. Giving the applicant required informational documents such as a buyer's guide and policy summary at or before the time of sale

Point-of-sale disclosures require that consumers receive key informational materials like a buyer's guide and policy summary at or before delivery so they can compare and understand the purchase. Reading the whole contract aloud is not the requirement. Disclosing only the premium leaves out required information. Delivering documents long after issuance defeats the purpose of a point-of-sale disclosure.

Answer D. To make sure the insured understands the policy's provisions, riders, and exclusions

The delivery interview is meant to explain the policy so the policyowner understands what was purchased, including provisions, riders, and any exclusions or ratings. Collecting the first premium usually happens at application, not delivery, so that is wrong. Underwriting is completed before the policy is issued, not at delivery. Producer appointment has nothing to do with delivering a policy to a client.

Answer D. Contact an existing customer for a limited period even if that number is registered

An established business relationship lets a producer contact an existing customer for a limited time even if the number is on the registry. It does not waive registry checks for everyone, does not remove calling-time limits, and does not permit sharing the customer's number.

Answer C. An endowment pays the face amount if the insured survives to a stated maturity date, while whole life pays at death

An endowment matures and pays the face amount to the living insured at a set date or age, whereas whole life pays the face amount at death. Endowments do build cash value, cover more than accidental death, and can name beneficiaries, so those options are wrong.

Answer A. Issuing an insurance policy is not interstate commerce and is regulated by the states

Paul v. Virginia held that issuing an insurance policy was not a transaction of interstate commerce, leaving regulation to the states. It did not say insurance was interstate commerce, that came later in South-Eastern Underwriters. It did not address premium taxes. Antitrust application came through the 1944 decision, not Paul.

Answer A. Domestic insurer

A domestic insurer is one formed under the laws of the state in which it operates, so a company chartered in New Jersey is domestic there. A foreign insurer is formed under the laws of another US state. An alien insurer is formed in another country. Admitted refers to having a certificate of authority, not to where the company was organized.

NJSA 17B:17-6 (domestic, foreign, alien insurer definitions)

Answer D. The producer must notify the Commissioner of the change

New Jersey requires a licensed producer to notify the Commissioner of a change of address. No notice at all would leave the regulator unable to contact the licensee. Notifying only the insurer is insufficient because the state must have current records. Surrendering and reapplying is not required for a simple address change.

Answer D. Maximum dollar limits set by statute for each type of coverage

Guaranty association protection is capped by statutory dollar limits that vary by the kind of benefit, such as death benefits, cash values, and health claims. Coverage is not unlimited, and it does not pay every benefit in full. There is no rule cutting off all claims after thirty days. Coverage also excludes certain policy types entirely, so it is not full reimbursement for everything.

Answer B. Civil and criminal penalties, including fines

Misappropriating funds is a serious violation that can bring civil and criminal penalties plus fines, in addition to license action. A verbal warning is far too lenient, license renewal would not be automatic for such conduct, and a mere CE course would not be the sole response to theft of funds.

N.J.S.A. 17:22A-45 (penalties for producer violations)

Answer B. To protect consumers by making sure they get information before replacing an existing policy

The replacement rules exist so a consumer receives disclosures and time to compare before dropping or changing an existing policy for a new one, reducing the risk of a bad switch. Replacement is not prohibited, so the first choice is wrong. Replacement does not always lower premiums, so the third is wrong. There is no per-replacement state fee, so the fourth is wrong.

N.J.A.C. 11:4-2 (Replacement of Life Insurance and Annuities)

Answer A. A prelicensing education requirement and passing the licensing examination

New Jersey requires applicants to complete prelicensing education and pass the qualifying examination for the requested lines of authority. There is no apprenticeship requirement to obtain the license. Owning a physical office is not a licensing condition. Prior sales contracts are not required and would be impossible before licensure.

N.J.S.A. 17:22A-30 (examination) and prelicensing requirements

Answer B. Guaranteed insurability lets the insured buy more coverage at set dates without health proof, while cost of living automatically raises the benefit for inflation

A guaranteed insurability rider allows the insured to purchase additional coverage at specified option dates without proving insurability, and the added coverage requires added premium. A cost of living rider automatically increases the benefit to match inflation. The first choice is wrong because guaranteed insurability specifically waives new health evidence. The third is wrong because increases are not free of premium. The fourth reverses the two riders.

Answer B. The policy and the attached application together make up the whole contract

The entire contract provision says the policy plus the attached application form the complete agreement, so nothing outside those documents can be used against the insured. The first choice is wrong because the application is included. The third is wrong because the insurer cannot unilaterally change the contract. The fourth is wrong because the entire policy is binding, not just the insuring clause.

Answer B. Excludes death caused by acts of war or military service

A war exclusion removes coverage for death resulting from war or active military service. It does not exclude all foreign deaths, all accidental deaths, or law enforcement work generally; those are unrelated to the war clause.

Answer A. Provide the required replacement notices and disclosures to the applicant

New Jersey's replacement regulation requires the producer to give the applicant the proper replacement notices and disclosures so the consumer can make an informed decision. Disclosures must be made at the time of application, not after issuance. The producer does not cancel the old policy; that decision belongs to the owner and follows proper procedures. Hiding a replacement violates the regulation.

Answer A. On the date the policy is delivered to the owner

The free look period starts when the policy is delivered to the owner, giving them time from that point to review it. The application date is too early and is before the policy even exists. Approval by the insurer does not start the review period. A premium due date is unrelated to when the free look begins.

Answer A. Check each number against the National Do Not Call Registry and avoid registered numbers

A producer making unsolicited sales calls must scrub the call list against the National Do Not Call Registry and not call numbers that are registered. Insurance sales are not blanket exempt, calling at odd hours actually violates calling-time rules, and no commissioner permission is required to make lawful calls.