Insurance FEG

The payment of an accelerated death benefit is

Tax free to a recipient is the benefit payment is qualified

Which type of insurance is designed to provide life insurance protection only for a limited of time?

Term Life Insurance

Accelerated Benefit Rider

Terminal illness or injury

Conservation

The act of saving or keeping the existing policy and preventing it from being replaced.

In addition to the actual policy, an entire contract includes what?

The application

Which has the right to revoke license?

The commissioners of commerce

What is the primary purpose of the reinstatement provision

To put a policy back in force as if it had never lapsed

An applicant completes the application and submits it to the insurer along with a premium check. When is the applicants offer considered accepted?

When the insurer issues a policy

An insurer which is formed under the laws of another country is an?

Alien Insurer

An insurer which is formed under the laws of another country is an

Alien insurer

A proposed insured whose likelihood of loss is significantly less than the average is classified as:

Substandard risk

Beneficiary

Receive the policy proceeds or death benefits under the contract if the insured dies while the policy is in force.

Declined risks

Refusal to issue coverage

How long is a temporary license?

180 Days

Standard risks

Same health occupation as reflected in mortality

In Indiana what is true regarding the duties of insurers in a replacement situation

A civil penalty if 50k

In Indiana what could be the result of violating a cease and desist order

A civil penalty if not more than 25k per violation

A rider on a whole life policy that adds temporary for a spouse and children is:

A family term rider

Who would not be exempt from licensing

A person who receives a commission for selling group insurance

What best describes 3rd party ownership

A policy owned by one person I during the life of another person

Which is the flexibility of a whole life policy?

Adjustable whole life

When a policy owner make a change in the policy's coverage of other benefits if an irrevocable beneficiary has been named

After the irrevocable beneficiary dies

Who has the right to change the beneficiary?

Policy Owner

An insurer that is authorized to do business In this state must be

An admitted insurer

If the proposed insured dies while the policy is in forced the company will pay the death benefit to the beneficiary.

An insuring clause

Accidental and Dismemberment will pay the principle sum of death occurs:

As a result of an accident regardless of when the accident occurs

An immediate annuity making payment after the:

Policy has been in force for one year

Mutual insurance companies are owned by:

Policy holders

The individual who has the ownership rights of policy is called the

Policyowner

In Indiana foreign insurer

Can be from the US territory

Only the owner

Can surrender an annuity

What gives an insurer the authority to operate within this state

Certificate of authority

If the Insured and the Primary beneficiary are killed in the same accident, the policy proceed will pay the death benefit to who?

Contingent Beneficiary

Policyowner

Controls the policy and maintains the right to make all decisions regarding coverages.

A convertible term policy enables the policy owner to:

Convert a policy to a permanent policy

Life insurance policy premiums establish a

Cost basis in the policy for tax purposes

Who has the right to change the premium mode

Policyowner

Fair Credit Reporting Act

Protects the consumers right to the privacy of credit and financial information, ensuring that all collected data is confidential, accurate, relevant, and properly used.

Preferred risks

Qualify for lower premiums

Universal life provides for an increasing death benefit only if the applicant choose

Death benefit option B

If an applicant for life insurance misstated his age in the application, what would be the consequence if when it is discovered

Death benefit will be that premium paid would have purchased at insurance at the correct age. 2 years only to deny

An insured

is the person or entity that is covered by the Insurance policy.

What is a characteristic of contributory plan?

Eligible employees pay a portion of the premium

Annuity products linked to a market related index are called:

Equity Indexed Annuity

An insurance agency that is seeking to become a licensed business entity must meet with

Everyone who sells or solicits insurance for the agency must be individually licensed

An insurance agency that is seeking to become a licensed business entity must meet with?

Everyone who sells or solicits insurance for the agency must be individually licensed.

The states__branch enforced the existing status that have been put in place

Executive

What is insurable interest?

Exist between the owner (applicant) and insured before the policy will be issued. Example: Spouse, immediate family, business partner

Insurance interest

Exist between the owner and insured before the policy will be issued.

The commission of commerce may not issue the license if:

Fail to meet a court order for child support

Information from a 3rd party collected by the application for insurance and during underwriting of the policy may be subjected to the jurisdiction of what?

Fair Credit Reporting Act

Information from a 3rd party collected by the insurance company I the application for insurance and during underwriting of the policy may be subjected to the jurisdiction of what?

Fair Credit Reporting Act

Federal Regulation called the __protects consumer policy.

Fair credit reporting act

A federal regulation called the ___protects consumer policy.

Federal Credit Reporting Act

Insurers that are incorporated in another state but doing business in this state, are considered:

Foreign

A nonprofit corporation without capital stick formed solely for the benefit of its members is a:

Fraternal benefit society

A nonprofit corporation without capital stock formed solely for the benefit of it members is a:

Fraternal benefit society

Which rider would allow additional insurance at a specified date or event without evidence of insurability?

Guaranteed insurability

An owner

Has all of the contractual rights in an annuity contract

NAIC

Has no legal authority over insurance regulation

Part 2 of the application consist of

Hospitalization, Surgeries, past and present health

What does part 2 of the application consist of?

Hospitalization, health information

Under the fair credit reporting act

If denied coverage, they can request a copy of the report

Third Party Ownership

If the policy is owned by a person other than the insured.

What is 3rd party ownership?

If the policy is owned by a person other than the insured. Example: Spouse or parent

What is liquidity?

Immediate funds available upon death to pay creditor, taxes, and final expenses as well as cash values available for policy loans, withdrawals

What is an example of a nonqualified plan?

Individual Annuity

Insured

Individual whole life is covered under the policy.

What is insured?

Individual whose life is covered under the policy Example: I am insured.

Legal contract between 2 parties, purchased by the insured and stating that the insurance company promises to make payment for a loss arising from an unexpected event.

Insurance contract

An __is a person or entity that is covered by an insurance policy.

Insured

Replacing insurer

Insurer responsible for issuing the new policy that will replace the existing policy.

Existing insurer

Insurer that issued the current policy to be replaced

What is an existing insurer?

Insurer that issued the current policy to be replaced

Substandard risks

Issued rated policies

Which type of life insurance is written under a single contract for the spouse in which it is payable upon the first death.

Joint

Insurance contract

Legal contract between 2 parties

What is Insurance Contract?

Legal contract between 2 parties. Purchased by the insured.

Who has no legal authority over insurance regulations?

The NAIC

What is conservation?

The act of saving or keeping the existing policy and preventing It from being replaced.

Death benefits are paid to the estate of the policy owner/insured in what?

The beneficiary is the estate

When an insurer requires that an insured be subjected to a medical examination, who pays for the medical exam

The insurer

Viator definition:

The owner/insured of a life insurance policy who is entering into a viatical settlement because of terminal illness

The life insurance policy cost basis consists of:

The premiums paid in

The maximum amount the accidental death and dismemberment rider will pay out before it expires is:

The principle sum

What is the primary purpose of the reinstatement provision?

To put a policy back in force as it has never lapsed

John is named in a policy as the individual who is entitled to receive the policy upon the death of Tom. Which statement best applies to this scenario?

Tom is the insured in the policy and john Is the named beneficiary

Suicide is not covered in the policy for the first two years.

True

Who performs the functions of risk selection in determining an individual's insurability for policy issue?

Underwriter

A variable universal life is a combination of what?

Universal and variable life

When it comes to life insurance, insurable interest on one's own life is:

Unlimited

Which policies has cash value dependent on the investment performance of common stock?

Variable Life

An Insured wants to purchase a policy with 3 key elements Flexible Premium, Death Benefit, and the choice of how the cash value accumulates. Which Policy would fit the needs?

Variable Universal Life

When the structure and flexibility of a universal life policy are combined with investment choice is a:

Variable Universal Life Policy

USA patriot act and anti-money laundering

Was passed to help detect and prevent this illegal activity

What I the USA Patriot Act and anti-money laundering?

Was passed to help detect and prevent this illegal activity

All of the following are times in which life insurance policy cash values can become taxable:

- When policy is sold - Policy surrender - Policy fails to meet the IRS definition of life insurance

What are the 4 elements of a legal contract?

1. Competent parties 2. Legal purpose 3. Offer and acceptance (agreement) 4. Consideration

4 Elements of a Legal Contract

1. Competent parties 2. Legal purpose 3. Offer and acceptance 4. Consideration

Transacting insurance can involve any of 4 different phases in the sale of products what are they?

1. Solicitation 2. Negotiation 3. Execution of contract 4. Handling matters subsequent to a contract

What is the list of universal life?

- Flexible premium - 2 death benefit options - Guarantee minimum rate or return on cash value - Mortality charge for cost of pure insurance deducted monthly - Partial withdrawal or surrender available

Universal Life

- Flexible premium - 2 death benefit options to choose from - Guaranteed minimum rate of return on cash value - Mortality barge for cost of pure insurance is deducted monthly - Partial withdrawal or surrender available

What does part one of the application consist of?

- General questions about the applicant - Marital status - Residence - Occupation

An application for insurance is completed and submitted to an insurance company. In order for coverage to be effective immediately the policy:

- Is issued at a higher risk than the standard risk applied for

What is the fair credit reporting act?

- It protects the consumers right to privacy of credit and financial information. - Ensuring that all collected data is confidential, accurate, relevant, and properly used - Must provide post-notification to the applicant - The applicant Is entitled to be informed of anyone who requested a copy of the report in the prior 6 months.

What are the types of term life insurance policy?

- Level - Decreasing - Increasing

The insurer generally assumes the investment risk in all of the following annuities

- Market value adjustment - Fixed - Indexed

What does the policy contain?

- Name of the insurance company - Name of the insured and policy owner - Face amount of the policy - Basic description of the type of policy purchased - Policy number and anniversary date - Insurance company promise to pay the death benefit

Permanent insurance

- Policy matures or endows when cash value = face amount - Issued with a level face amount - Policy loans available - Designed to provide coverage for a life time - Premiums may be payable for life, limited period or lump. - Premium builds a reserve known as cash value

A life insurance applicant answers on the application indicate that hey in good health. In fact, the applicant actually has a disease that they are not aware of. This statement on the application is considered.

A representation

Term life insurance is designed to provide coverage for___

A specified period of time

Viatical settlement broker definition:

A licensed life insurance producer representing a terminally ill viator when transacting viatical settlement

Viatical settlement agent defnition:

A licensed life insurance producer representing the viatical settlement provider and solicits, offers, and attempts to negotiate a viatical settlement contract with the viator

Who would not be exempt from licensing?

A person who receives a commission for selling group insurance

What is the list of permanent insurance?

- Policy matures or endows when cash value=face amount - Issued with a level face amount - Policy loans available - Designed to provide coverage for a lifetime - Premium builds a reserve known as cash value - Premiums may be payable for life, limited period, or lump

Who are the parties in a 3rd party life insurance ownership situation?

- Policy owner - Insured - Insurer

HIPPAs privacy rules are implanted to:

- Protect the privacy of all individually identifiable health information

What is conditional receipt?

- Provides that coverage will become effective as of wither the date of application or the date of completion of required medical exam. - If the initial premium is paid at the time of application the producer will issue a conditional receipt

Income tax free

- Qualified accelerates death benefit - Policy dividend that is less than the premium paid - Group life insurance death benefit proceeds - Lump sun death benefit paid to a beneficiary

What is the requirement for an Indiana resident producer to renew their license?

- Reside or work in Indiana - Complete 24 hours of continuing education - Pay all required renewal fees

What are the violations of the Indiana producer licensing law?

- Using customers premiums for personal use - Failing to meet Indiana's CE requirement - Being 3 years behind on child support payments

USA Patriot Act and Anti-money laundering

- Was passed to help detect this illegal activity, - Transaction report must be filled with financial crimes network through the department of treasury for every cash transaction that exceeds $10,000 and wire transfer in excess of $3,000

Sam has $100.00 traditional whole life insurance policy with a $30.00 cash surrender value. What is the insurers net amount at risk?

$70

A $100.00 policy with a waiver of premium rider and $30,000 of cash value is in force. The base policy cost $750 and the rider is $50 what is the total premium annually the policy owner must pay to keep the policy force?

$800

Members of the ___include state and territorial insurance commissioners or regulators.

(National Association of Insurance Commissioners) NAIC

What are the underwriting factors?

- Age - Gender - Hobbies - Occupation - Health history - Tobacco use

True about policy loans

- Cannot exceed the amount in cash value - Not taxable so long as the policy remains in force - interest in a policy loan is not deductible

Universal life is similar to whole life in what ways?

- Cash values accumulate based on premium deposits and interest - Any internal cash value growth is tax deferred - It provides a death benefit

The owner of an annuity may do

- Change the annuity date - Select or change the settlement option prior to death - Name and change the beneficiary

Term Insurance

- Coverage may be convertible - Death benefits may be level, decreasing or increasing - Temporary protection - Coverage may be renewable - Written for a specified time period or to a specified age - Pure insurance

What is the list of term life insurance?

- Death benefits may be level, decreasing or increasing - Temporary protection - Coverage may be renewable - Written for a specific time period or specific age

What are the principle of indemnity?

- Designed to restore an insured to the same physical or financial condition - Means to compensate for a loss, or to make one whole again.

What is the list of variable life?

- Fixed premium - No guarantee - Policy owner bears all investments risk - Cash value in separate account fluctuates based on market - Death benefit varies - Sold by individuals

Once a policy has been Reinstated the Insured must wait what amount of time before coverage for sickness is available?

10 days

How many cried house of continuing education must a produced complete every renewal period

24

How many total hours of continuing education covering the subject for which the license must complete?

24

Which would be considered legally competent to enter into a contract?

25-year-old, self-employee

Life and health producers in Indiana must meet

3 hours of ethics every 2 years

Life and health producers in Indiana must meet?

3 hours of ethics every 2 years.

How many hours of training must be completed before a producer in Indiana can sell an annuity

4

How many hours of training must be completed before a producer in Indiana can sell an annuity?

4

The lowest monthly social security retirement benefit would occur if started at age

62

The lowest monthly social security retirement benefit would occur is started at age

62

The double indemnity rider requires that the insured die within __days of the accident

90

Viatical settlement provider definition:

A 3rd party that purchases and enters into a viatical settlement contract with a viator

Consistently violating the Indiana unfair claims settlement practices statue is considered an unfair competition law violation and could result in

A civil penalty of $50,000

In Indiana, what could be the result of violating a cease and desists order?

A civil penalty of not more than $25,000 per violation

What is buyers guide?

A generic brochure developed by the NAIC to assist prospective buyers of life insurance.

When the death of an insured occurs within a specified period causing the policy to pay double or triple benefits this policy must have which

Accidental death rider

The underwriter greatest concern when underwriting a group plan is __

Adverse selection

Underwriting factors

Age, gender, hobbies, physical condition, health history, occupation, tobacco use

What is Cash Accumulation?

An amount of cash accessible to pay the policy owner form within permanent life insurance policy

What is policy replacement?

Any transaction in which a new life policy or annuity is to be purchased and the producer knows or should know that existing contracts.

Fair Credit Reporting Act is entitled to

Be informed of anyone who request a copy of the report in the prior 6 months

Which is not required to sign a completed application?

Beneficiary

What is conditional contract?

Both parties must perform certain duties to make the contract enforceable

Universal life provides for an increasing death benefit only if the applicant chooses:

Death benefit option B

An insurer has issued a new policy and mailed it to the producer. The producer should

Deliver the policy to the insured in person and obtain a delivery receipt.

In Indiana, foreign insurerIn Indiana, foreign insurer

Can be from the US territory

What gives an insurer the authority to operate within this state?

Certificate of authority

What is written by one party, the insurance company, without any input from the applicant

Contract of adhesion

What is policy owner?

Controls the policy and maintains the right to make all decisions regarding coverages

Life insurance policy premium establish a __in the policy for tax purposes

Cost basis

An insurer has issued a new policy and mailed it to the producer. The producer should:

Deliver the policy to the insured in person and obtain a delivery receipt.

What refers to the jurisdiction where an insurer was formed or incorporated?

Domicile

Characteristics of contributory plan

Eligible employees pay a portion of the premium

What are the difference between Life Insurance and Annuity?

Life Insurance: - Provides benefits upon death of the insured. - Creates an estate - Pay a death benefit - Protects against premature death - Owner, insured, beneficiary - POLICY Annuity - Provides steady income until death of the annuitant - Liquidates an estate - Pays a living benefit - Protects against living to long - Owner, annuitant, beneficiary - CONTRACT

In personal insurance needs, what is Estate Creation?

Life insurance proceeds paid in lump sum provide financial assets to create an immediate estate the insured can pass on to survivors.

A producer provided a conditional receipt to an applicant on May 5 at any time of an application based on a standard risk. The insurer required a routine medical exam which was completed on May 15. The policy was issued a based on a substandard risk on May 20 and the producer delivered the policy on May 22. The effective date of charge is?

May 22

Competent Parties

Must have legal capacity to Emeterio into a contract

What is competent parties?

Must have legal capacity to enter into a contract Restricted parties include: o Minors o Mentally in component o Under the influence of drugs or alcohol

In an employee sponsored group life insurance plan, the employee has control over

Naming a beneficiary

In an employer sponsored group life insurance plan the employee has control over within:

Naming a beneficiary

Does the NAIC have authority over insurance regulation?

No

Contribution to a non qualified plan are

Not tax deductible

What is unilateral contract?

One party is legally bound to the contractual

In Indiana the insurance commissioner does not have the power to:

Overturn legislation

Who can surrender an annuity?

Owner

Who has all the contractual rights in an annuity contract?

Owner

A key person is typically what?

Part of the management term Respected by customers, creators, suppliers, or vendors More highly paid

Who has the right to change the premium mode?

Policy holder

The individual who has the ownership rights of policy is called the:

Policy owner

Collecting the initial premium and issuing the receipt:

Policy will not go into effect until the first premium has been paid off.

What is binding receipt?

Provides immediate coverage is the premium is paid at the time of application.

What is trial application?

Provides immediate coverage is the premium is paid at the time of application.

In personal insurance needs, what is the Estate Conservation?

Provides money to pay any estate taxes or loans

In personal insurance needs, what is Survivor Protection?

Providing funds for surviving spouse and dependents

What is preferred risks?

Quality for lower premiums

What is a beneficiary?

Receive the policy proceeds, or deaths benefits under the contract if the insured dies while the policy is in force.

The non forfeiture option that provides coverage for the longest period of the time is

Reduced paid up

The nonforfeiture option that provides coverage for the longest period of time is:

Reduced paid-up

What is declined risks?

Refusal to issue coverage

Under the Fair Credit Reporting Act, if an individual is denied coverage, they can:

Request a copy of the report

What is an replacing insurer?

Responsible for issuing the new policy that will replace the existing policy.

What are the standard risks?

Same health, occupation as reflected in mortality

The insurance industry is primarily regulated at the

State level

The insurance industry is primarily regulated at what level?

State level

Dividends issued by stock insurers are paid to:

Stockholders

In which policy is the Insured covered to age 100 and the premium payment are the same?

Straight Whole Life Policy

Submitted without premium.

Submitted without premium.

Generally, the payment of an accelerated death benefit is__to a recipient if the benefit payment is qualified.

Tax free

How does an option A death benefit feature of a universal life policy work?

it pays out the policy face amount