New Jersey Mortuary Science Practice Exam

Which of the following is NOT a requirement for newly issued funeral insurance policies?

1. The issuer must be licensed to sell insurance

2. They must comply with state insurance laws

3. They can be sold by anyone without licensing

4. Sales must follow all relevant insurance regulations

The correct answer is: They can be sold by anyone without licensing

In the context of funeral insurance policies, it is essential that all entities involved in selling or issuing these policies adhere to specific regulations and licensing requirements. The choice that states "they can be sold by anyone without licensing" is correct because it highlights a significant deviation from the established standards in the insurance industry. Funeral insurance policies, like all types of insurance, require the issuer to hold an appropriate license to conduct business legally. This licensing ensures that the seller has the necessary training and understanding of industry regulations, which protects consumers from misinformation and promotes ethical sales practices. Furthermore, the laws in place require compliance with state insurance regulations to ensure that policies are issued correctly, protect consumer interests, and maintain the integrity of the insurance market. Sales of these policies must also follow all relevant insurance regulations, which encompasses aspects such as disclosures to consumers and fair pricing. Therefore, declaring that anyone can sell these policies without a license contradicts the strict regulatory framework governing the sale of insurance. This framework is established to ensure professionalism and accountability in the industry.