New Jersey Life Insurance Exam Practice Question
Replacement regulations apply to which of the following types of contracts?
Correct Answer: C
Rationale: Replacement regulations are designed to protect consumers from unnecessary policy switches that can lead to loss of benefits. Individual Paid-Up Life policies, which accumulate cash value and are fully paid for, are subject to these regulations to ensure that policyholders are making informed decisions about their coverage.
Group Annuities (A) and Group Term Life (B) typically do not fall under these regulations as they involve group contracts rather than individual policies. Individual Credit Life (D) is also exempt since it is often tied to a specific loan and not designed for long-term investment or accumulation.
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