New Jersey Life Producer Law Practice Test

Which of the following activities does not require an insurance license?

1. Advertising insurance policies

2. Explaining policies to policyholders in response to their questions

3. Soliciting new clients

4. Discussing policy changes

The correct answer is: Explaining policies to policyholders in response to their questions

Explaining policies to policyholders in response to their questions does not necessitate an insurance license because this activity falls under the category of customer service and support, rather than the act of selling or soliciting insurance. Those who provide information or clarification about existing policies to policyholders are typically not engaging in transactional activities that require licensure. This practice allows policyholders to better understand their coverage and options without the intermediary needing a formal license that is typically required for selling or negotiating insurance contracts. The other activities, such as advertising insurance policies, soliciting new clients, and discussing policy changes in a way that could influence the terms or values of a policy, generally do require a licensed professional since they involve the promotion, negotiation, or selling of insurance products.