Free Types of Life Insurance Policies Study Guide
New Jersey Life exam — Types of Life Insurance Policies.
Term, whole life, universal, variable and the other policy types are explained in the national Types of Life Insurance Policies guide. New Jersey's state questions on this topic center on group life insurance, which New Jersey regulates in detail (N.J.S.A. 17B:27-68 to -75), and on the licensing rule for variable products.
Group life: who must be covered
- A noncontributory employer group policy (the employer pays the whole premium) must insure all eligible employees except those who reject coverage in writing. The insurer may still exclude people whose evidence of insurability isn't satisfactory (N.J.S.A. 17B:27-68a(2)).
- Insurance on a member's dependents can't exceed 100% of the amount on the employee or member (N.J.S.A. 17B:27-71c).
Required group life provisions (N.J.S.A. 17B:27-72)
| Provision | New Jersey rule |
|---|---|
| Grace period | 31 days. Coverage continues during it unless the policyholder gives advance written notice of discontinuance. |
| Incontestability | The policy's validity can't be contested, except for nonpayment, after 2 years from its date of issue. |
| Statements | Statements by the policyholder or insured persons are representations, not warranties. An insured's statement can't be used in a contest unless the insured was given a copy. |
| Conversion when employment or membership ends | The person may buy an individual policy without evidence of insurability by applying and paying the first premium within 31 days after group coverage ends. |
| Conversion when the group policy ends | People insured for at least 5 years before the group policy (or their class) terminates may convert, subject to a reduced maximum amount. |
| Death during the conversion period | If the person dies within the conversion period, the amount they could have converted is paid as a death claim, whether or not they applied. |
Late notice of the conversion right. If the person isn't told about the conversion right at least 15 days before the conversion period ends, they get extra time to convert: it ends 15 days after notice is given, but never more than 60 days after the original period ends. The extra time doesn't extend the group coverage itself (N.J.S.A. 17B:27-73).
Group life claim payment
Group life death benefits are payable within 60 days after due proof of death. If more investigation is needed, the claimant gets written notice by the 45th day (N.J.S.A. 17B:27-75a). Individual life policies follow the same 60/45/90-day pattern (N.J.S.A. 17B:25-11).
Variable life and variable annuities
- Variable contracts reflect the investment results of a separate account, so the owner bears the investment risk.
- In New Jersey, variable life and variable annuity is a separate line of authority. The producer must also hold the required securities license (N.J.S.A. 17:22A-33a(5); N.J.A.C. 11:17-2.2(c)).
Common exam traps
- Group grace period is 31 days. The individual life grace period is 30 days or one month (N.J.S.A. 17B:25-3).
- Conversion: 31 days, no evidence of insurability. A death within that window is paid as if the person had converted.
- Late conversion notice: 15 days after notice, capped at 60 extra days.
- 5 years of prior coverage is required to convert when the whole group policy ends.
- Dependents' coverage can't exceed the employee's amount.
- Variable products need two licenses: the New Jersey variable line and a securities license.
Practice Types of Life Insurance Policies questions All Life topics
Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.
