insurance exam vocab
joint and survivor option
payments will continue until the death of the last beneficiary
fixed amount
pays a fixed specified amount in installments until the proceeds are exhausted
insurance application
primary source of information that an insurer uses to evaluate an insured's risk for life insurance
in a survivorship life insurance policy when does the insurer pay the death benefit
upon the last death
option A-universal life
IRS required corridor or gap
universal life
allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount
defamation
an agent or insurer makes an injurious comment about another with the intent of harming the person or company's reputation
material misstatements
an allowing reason an insurance company can contest a payment of a claimed based on statements in the application
third party ownership
contracts that are owned by someone other than the insured are known as
contract of adhesion
contracts that are prepared by one party and submitted to other party on a "take it or leave it basis"
decreasing term
death benefit decreases and premiums remain level
foreign
domiciled in one state and transacts insurance in another
sliding
falsely leading an applicant to believe that a specified additional coverage or product is required by law
transfers the risk to all persons insured
how does insurance distribute the financial consequences of individual losses
unilateral contract
only one of the contracts is legally bound to do anything
option B
the death benefit includes the annual increase in cash value so that death benefit gradually increases each year
taxation on accumulation
the difference between non qualified and qualified retirement plans
domestic
transacts insurance in the domicile place
insurance and cash account
two components of a universal life policy
alien
domiciled in one country and transacts insurance in another
30
if a licensee changes his or her residence address, within how many days must the department be notified
paying all claims
a consideration from an insurer on a contracts is
fixed annuities do not provide protection against inflation
a correct statement about annuities
insurer
all advertisements are the responsibility of the
the producer
the responsibility of making certain that an application for insurance is filled out completely, correctly, and to the best of his or her knowledge is the responsibility of whom?
reduced paid up
non-forfeiture option that provides coverage for the longest period of time
the office of insurance regulation
who is responsible for agent licensing and administrative supervision
twisting
a misrepresentation that persuades an insured or a policyowner, to his or her detriment, to cancel, lapse, or switch policies
material misrepresentation
a statement by the applicant that upon discovery would affect the underwriting decision of the insurance company
warranty
a statement that is guaranteed to be true, and if untrue may breach an insurance contract
convertible term insurance
a type of policy that can be changed from one that does not accumulate cash value to the one that does is
the length of time the coverage will last, the death benefit, the premium
adjustable life the owner could change all of the following
cash option
allows an insurer to send the policy holder an annual, nontaxable dividend check
guaranteed insurability option
allows the insured to purchase specific amounts of additional insurance at specific times without proving insurability
reduction of premium
allows the policyholder to apply policy dividends towards the next years premium
the underwriters approve the application
an applicant submits the initial premium with an application, which action constitutes acceptance
nonmedical insurance application
an application on which the medical information is completed by the applicant and agent only
a policy is reissued with a reduction in cash value
an example of policy replacement
the death protection component of universal life insurance is always
annually renewable term
rebating
any inducement offered to the insured in the sale of insurance products that is not specified in the policy
interest-sensitive whole life
cash values are generated by investments, interest rates will affect the amount of cash value
non-forfeiture values
cash values guarantees in a whole life policy are called
size of each installment
determines the length of time that benefits will be received under the fixed-amount settlement option
5 years
if a master contract is terminated the person can convert to individual if he or she was with the company for
the owner
in a life settlement contract whom does the life settlement broker represent
aleatory contract
in exchange of unequal amounts or values
return of premium
increasing term policy that pays an additional death benefit to the beneficiary equal to the amount of premiums paid
the medical information bureau was created to protect
insurance companies from adverse selection by high risk persons
fraud
intentional misrepresentation or deceit with the intent to induce a person to part with something of value
a simple plan
is available to small business only that employ not more than 100 employees receiving at least 5,000 in compensation
straight life policy has what type of premium
level annual premium and level guaranteed death benefit
any insured rider or spouse has what type of insurance
level term insurance
which of the following is an example of a limited-pay life policy
life paid-up at age 65
misrepresentation
making false or misleading statements with the intent to defraud another is
policy dividends are not guaranteed and not taxable
one thing from mutual insurers that they don't do is
annuity
protects a person against outliving his or her money
a buyers guide
provides basic generic information about life insurance policies
liquidity
refers to availability of cash to the insured through cash values
churning
replacing insurances policies for the sole purpose of making commissions
insurance is the transfer of
risk
has the highest amount of protection
the benefit of choosing extended term as a nonforfeiture option
stock insurers are owned by the shareholders and issue nonparticipating policies
the difference between stock and mutual insurers is
paid up addition
the dividend option that increases the death benefit
IRA direct transfer
the full amount gets reinvested from one plan to the other
false advertising
the illegal practice of advertising or circulating materials that are untrue, deceptive or misleading
interest only settlement option
the insurer retains policy proceeds and pays interest on the proceeds to the beneficiary at regular intervals
taxable
the interest earned on policy dividends is
conditional contract
type of agreement which both parties must perform certain duties and follows rules of conduct to make contract enforceable
single premium
type of life insurance policy generates immediate cash value
what policy allows withdrawals or partial surrenders
universal whole life
the office of financial regulation and the office of insurance regulation
what are the two offices of the financial services commission
3-6 months
what is the waiting period on a waiver of premium rider in a life insurance policy
both guarantee that the principal and interest will be fully paid out
what makes fixed amount and fixed period alike
extended term
when a whole life policy is surrendered for its non-forfeiture value what is the automatic option
31 days
when an employee terminates coverage under a group insurance policy
6 months
a life agents license may obtain a temporary license for a maximum period of
illustration in a life insurance policy refers to
a presentation of nonguaranteed elements of a policy
insurer
all advertisements, regardless of their source of creation are the responsibility of
viatical settlement
allow someone living with a life threatening condition to sell their existing life insurance policy and use the proceeds
cash value of a variable life policy
the performance of the policy portfolio
the annuity period
the period of time during which accumulated money is converted into income payments
tax deductible by the employer
the premiums paid by the employer in a business life insurance policy are
target premium in a universal life policy defines
the recommended amount to keep the policy in force throughout its lifetime
which of the following types of policies will provide permanent protection
whole life
a liability insurance company owned by its members
risk retention group
the earnings in the plan accumulate tax deferred
which of the following describes the tax advantage of a qualified retirement plan
the amount of premium payment
which of the following information will be stated in the consideration clause of a life insurance policy
department of financial services
which of the following revokes and grants insuring licenses
option A
which universal life option has a gradually increasing cash value and level death benefit
specific information about the policy
which will not be included in a buyers guide
the insurance company
who bears all of the investment risk in a fixed annuity
individuals aged 50 or older
who would be allowed catch-up contributions?
the payments on survivorship are lower or higher than joint life
lower
the least expensive first-year premium payment is found in
annually renewable term