Free NJ Life & Health Exam Flashcards

The state agency that licenses producers, regulates insurers, and enforces NJ insurance law. The Commissioner of Banking and Insurance has rulemaking, examination, and disciplinary authority over every producer transacting business in New Jersey.

The New Jersey statutory title covering life and health insurance, separate from Title 17 (property/casualty) and Title 11 (DOBI administrative regulations). Most NJ life, annuity, and health producer-conduct rules trace to Title 17B citations.

$170 application fee through NIPR for a NJ resident producer license in Life, Accident & Health, Variable, Property, Casualty, Personal Lines, Surplus Lines, or Title. Separate from the $47 PSI exam fee paid per line.

20 hours of DOBI-approved prelicensing required per line of authority. A candidate pursuing both Life Producer and Accident & Health Producer must complete 40 total hours and pass a 70% proctored course final before scheduling PSI.

24 hours of approved CE every 2 years, including 3 hours of ethics or consumer protection. At least 12 of the 24 hours must be classroom or classroom-equivalent. Up to 12 non-ethics credits may be carried over once.

NJ resident producer licenses renew biennially on the last day of the licensee's birth month. CE must be completed before that date or the license lapses; reinstatement requires meeting CE shortfalls and paying additional fees.

$47 per PSI exam appointment. Life Producer and Accident & Health Producer are separate exams, so candidates pursuing both lines pay $94 in PSI fees. The 70% passing score and 3-hour-30-minute time limit apply to each line independently.

A producer in NJ may not solicit, negotiate, or sell on behalf of an insurer until that insurer files an appointment with DOBI. Insurers must report appointments and terminations to DOBI within 30 days; terminations for cause must be reported within 15 days.

All NJ resident producer applicants must submit fingerprints through IdentoGO for a criminal-history background check before a license is issued. Non-resident applicants licensed elsewhere using NIPR reciprocity are exempt from the NJ fingerprint requirement.

10 days minimum after policy delivery to return a life insurance policy or annuity contract for a full premium refund. The free look is extended to 20 days for buyers age 65 and older on most individual life and annuity policies.

Replacement transactions (life insurance or annuity) trigger a 30-day free look in NJ. The applicant may return the new policy within 30 days of delivery for a full refund of premium paid, regardless of cause.

Producer must present a signed Notice Regarding Replacement at or before application, list every policy being replaced, submit replacement forms to the new insurer, and the new insurer must notify the existing insurer within 5 business days of receipt.

Individual life policies issued in NJ must include at least a 30-day grace period (one month) after each premium due date during which the policy remains in force. Death during the grace period pays the death benefit minus any unpaid premium.

Statutory backstop created under N.J.S.A. 17B:32A that protects NJ residents when a member life or health insurer becomes insolvent. Funded by assessments on member insurers; producers may not advertise NJLHIGA coverage when soliciting policies.

Per insolvent insurer per insured: up to $500,000 in life insurance death benefit, $250,000 in life insurance cash surrender or net cash withdrawal value, $250,000 in deferred annuity present value, and $500,000 in basic hospital, medical, and surgical or major medical insurance.

N.J.S.A. 17B:30 prohibits misrepresentation, false advertising, defamation, boycott, false statements, unfair discrimination, rebating, and twisting. Violations expose the producer to DOBI fines, license suspension, revocation, and restitution orders.

Offering any inducement, rebate, gift, or anything of value not specified in the policy as a condition of purchase is prohibited under NJ Title 17B. NJ permits only nominal advertising items of de minimis value; cash rebates of premium are never allowed.

Twisting: inducing replacement from one insurer to another by misrepresentation. Churning: replacing policies within the SAME insurer to generate new commissions. Both are unfair trade practices subject to DOBI license suspension or revocation.

NJ has adopted the NAIC Suitability in Annuity Transactions Model with the 2020 best-interest amendment. Producers must act in the consumer's best interest, document suitability information, and complete a 4-hour annuity training course before soliciting annuities.

Effective 2024, NJ requires producers recommending an annuity to disclose the source and types of cash and non-cash compensation they will receive before the consumer signs the application, satisfying the best-interest care obligation.

Schemes where third parties without insurable interest finance life policies on insureds intending to acquire the death benefit. NJ prohibits STOLI; insurable interest must exist at the time of application and policies issued without it are void.

NJ statute requiring managed-care plans (HMO, PPO) to provide disclosure of benefits, internal/external appeals, direct access to OB/GYN, continuity of care, and an independent utilization-review process for medical-necessity denials.

New Jersey's combined Medicaid and CHIP program providing free or low-cost health coverage to qualifying low-income children, parents, pregnant individuals, and adults. Funded jointly by the state and federal Medicaid program, administered by NJ DHS.

Pure protection coverage for a specified term (10, 20, 30 years). Pays the death benefit only if the insured dies during the term. No cash value accumulates and premiums increase sharply at renewal absent a guaranteed-renewable feature.

Permanent life policy with level premiums, guaranteed level death benefit, and guaranteed cash value growth at a contractual rate. Endows at age 100 or 121 depending on mortality table; loans against cash value bear interest set in the contract.

Permanent life policy with adjustable premium, adjustable death benefit, and a cash value crediting current interest above a contractual minimum (typically 2-3%). Has explicit mortality and expense charges deducted monthly from the accumulation value.

Permanent UL where cash value is invested in separate-account subaccounts chosen by the owner. No guaranteed minimum interest rate. Considered a security; producer must hold a NJ Variable Life/Variable Annuity authority and an active FINRA registration.

UL whose interest credits track a stock index (typically S&P 500) subject to a participation rate, cap, and minimum guaranteed floor (often 0%). Not a security because cash value is not held in a separate account.

Term life with a level premium and a death benefit that declines on a set schedule, typically used to cover an amortizing mortgage balance. Cash value is zero throughout; coverage ends when the scheduled face amount reaches zero.

After the policy has been in force for 2 years from issue during the insured's lifetime, the insurer may not contest statements in the application except for nonpayment of premium. NJ law requires this provision in individual life policies.

Standard NJ life policy provision excluding suicide death during the first 2 policy years; the insurer's liability is limited to a refund of premiums paid. After 2 years the death benefit is payable as a normal claim.

Lets a terminally ill insured (typically certified life expectancy of 12 to 24 months) collect up to 50-80% of the death benefit early. Amounts accelerated reduce the death benefit and any future cash-value account by the same amount.

A beneficiary whose designation cannot be changed without the beneficiary's written consent. The policyowner cannot take a loan, surrender, or assign the policy without that consent either. Contrasts with revocable beneficiary changeable at owner's discretion.

Per stirpes: a deceased beneficiary's share passes to their heirs by branch. Per capita: only living named beneficiaries share equally, with no pass-through to a deceased beneficiary's heirs.

Annuity purchased with a single premium that begins payout within 12 months, typically 30 days. Payments may be life-only, period-certain, or life-with-period-certain. Income is partly taxable based on the exclusion ratio.

Annuity with an accumulation phase before payouts begin. Earnings grow tax-deferred. Surrender during the accumulation phase typically triggers surrender charges declining over 5-10 years and a 10% IRS penalty on earnings if owner is under age 59 1/2.

Annuity that guarantees principal and credits a fixed interest rate set by the insurer (subject to a contractual minimum, usually 1-3%). Treated as an insurance product, not a security; not registered with the SEC.

Deferred annuity invested in separate-account subaccounts; account value and payouts fluctuate with investment performance. Considered a security: producer must hold FINRA Series 6 or 7 plus NJ Variable Annuity authority.

IRC Section 1035 tax-free exchange of one life or annuity contract for another like-kind contract without recognizing gain. Permitted directions: life-to-life, life-to-annuity, annuity-to-annuity, life-to-LTC, annuity-to-LTC. NOT annuity-to-life.

Managed-care plan requiring members to use network providers and obtain a referral from a PCP for specialist visits. Lowest premium of the major managed-care models; out-of-network care is generally not covered except emergencies.

Managed-care plan with a discounted in-network panel and partial coverage for out-of-network providers. No PCP referral required for specialists. Higher premium than HMO with broader provider choice and balance-billing risk out-of-network.

A High-Deductible Health Plan qualifies for an HSA when the deductible is at least $1,650 self-only or $3,300 family. 2026 HSA contribution caps: $4,400 self-only, $8,750 family, plus $1,000 catch-up at age 55+.

Hybrid managed-care plan combining HMO and PPO features: members select a PCP who coordinates in-network care HMO-style but can also see out-of-network providers at a higher cost-share PPO-style.

Waiting period (commonly 30, 60, 90, or 180 days) between the start of disability and the first benefit payment. Functions like a time-based deductible; longer elimination periods produce materially lower premiums.

Own occupation: insured is disabled if unable to perform their specific occupation, even if working elsewhere. Any occupation: insured must be unable to perform ANY occupation for which they are reasonably qualified by education, training, or experience.

Partial-disability provision paying a percentage of the full benefit when the insured returns to work but loses at least 20% (or 25%) of pre-disability income. Benefit is proportional to the percentage of income lost.

Federal law (1985) allowing qualified beneficiaries of employers with 20+ employees to continue group health coverage for 18 months after termination/reduction of hours, 29 months if disabled, or 36 months for divorce, death, or dependent age-out. Employee pays up to 102% of full premium.

Part A: hospital, SNF, hospice, home health; premium-free if 40+ work credits paid Medicare tax. Part B: physician, outpatient, durable medical equipment; standard 2026 premium $185.00/month, higher for IRMAA tiers above income thresholds.

Standardized private policies (Plans A through N) that pay Medicare cost-sharing. Plans C and F are unavailable to anyone newly Medicare-eligible on or after January 1, 2020. Guaranteed-issue during the 6-month Medigap Open Enrollment beginning at Part B enrollment.

Federal regulation under HIPAA requiring covered entities (insurers, providers, clearinghouses) to safeguard PHI, give a Notice of Privacy Practices, and disclose only the minimum necessary. NJ producers handling claims data must follow these standards.