life insurance

unintentional violations are up to how much each and no more than

1,000 each no more than 100,000

intentional violations are up to how much each and no more than

25,000 each no more than 250,000

the waiting period to waiver the premium of disability is how long

6 months

USA Patroit Act

A federal law (Public Law 107-56) enacted in response to terrorist attacks on the World Trade Center and the Pentagon

who is a third party owner

A policyowner who is not the insured

Fair Credit Reporting Act

Act that protects privacy of background information and ensures that information supplied is accurate.

who must be licensed as an insurance producer

Anyone who solicits insurance and receives commissions from insurance transactions

what is a feature of a variable annuity

Benefit payment amounts are not guaranteed

Not consideration in a policy

The application given to a prospective insured

what is another term for authorized user?

admitted

what are 4 required elements of an insurance contract?

agreement, consideration, competent parties, legal purpose

once mec

always mec

policyowner fails to pay payment after the grace period, but its still in force. what is this

automatic premium loan

employee quits but she has group life ins, how can she keep it

convert it within 31 days

Accelerated Benefit

early payment of part of death benefit to the insured from the insurer for qualifying medical expenses

in group life insurance, who receives the master contract

employer

joint life is

first to die

a variable universal life policy has

flexible premium and variable investment

a buyers guide provides?

generic info on various types of policies

what two parts make up a life application?

generic information and medical information

the death benefit under the universal option b does what

gradually increases

what best describes annually renewable term insurance

level term insurance

what are 3 basic terms of life insurance

level, decreasing, and increasing

applicant who receives preferred risk means?

lower premium than someone who receives standard risk

name unfair trade practices

misrepresentation, rebating, defamation, discrimination

Does term insurance have cash value?

no

childrens term rider has how many premiums per child

one total for any amount of children

what is another term for limited pay life

paid up policy

Deferred Annuity

payments begin after one year

Gramm-Leach-Bliley Act

requires financial institutions to ensure the security and confidentiality of customer data

insurance is the transfer of

risk of loss

survivorship life is

second to die

policy loans from the cash value are not ?

taxable

the interest from a settlement is

taxable

absolute assignment is

the complete and permanent transfer of ownership rights

Best reason to purchase life insurance rather than annuities

to create an estate

what requires a securities license

variable annuity

contributions made to a roth ira are?

with after tax dollars (not tax deductible)

contributions to a triditional ira are?

with pre tax dollars (tax Deductible)

When must insurable interest exist?

At the time of application

Purpose of a conditional receipt

It is intended to provide coverage on a date earlier than the age of the issuance of the policy

not true regarding a certificate of authority?

It is issued to group insurance participants.

Who is an annuitant?

The person on whose life expectancy the annuity is written and who receives benefits from the annuity

If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?

The policy will be interpreted as if the insurer waived its right to have an answer on the application

When would a whole life insurance policy mature?

When the insured dies or turns age 100, whichever is sooner

When would a 20-pay whole life policy endow?

When the insured reaches age 100

in a life settlement the owner sells an existing life policy to

a third party

Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be

adjusted to the insureds age at renewal

insured pays 100.00 every month, the insurer promises to pay 100,000 what characteristic is this?

aleatory

the concept that the insured pays a small amount if premium for a large amount of risk on the company?

aleatory

the least expensive first year premium is found in

annually renewable term

group insurance is written as

annually renewable term insurance

best describes universal life policy

annually renewable term policy with cash value amount

what is a short term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated

annuity certain

dividends are a return of excess premiums therefore they

are not taxable when paid to policyholder

which describes a legal document who dictates who can buy a deceased partners shares of business and the amount

buy sell agreement

what are two types of refund life annuities?

cash refund and installment refund

example of liquidity in a life ins contract

cash value available to the policyholder

In a case where the primary beneficiary predeceases the insured, in the event of the insured's death, the death benefit proceeds will be paid to

contingent aka secondary

a key person life policies covers

costs to train a replacement

What is NOT an essential element?

counteroffer

Intrest Sensitive Whole Life

current assumption life

which is not an example of valid insurable interest?

debtor in the life of the creditor

producer agent must do all except?

disclose commissions earned

If an annuitant dies before annuitization occurs, what will the beneficiary receive?

either the amount paid into the plan or cash value, whichever is higher

what does level refer to in level term insurance

face amount

payable death benefit means

face amount - amount withdrawn- earnings lost by insurer in interest

A MEC is an overfunded life insurance policy =

failed the 7-pay test

someone is purchasing a term policy for 25,000 because its all he can afford, what additional coverage should he have

guaranteed insurability option

why is equity indexed annuity considered fixed annuity

has guaranteed minimum interest rate

traditional iras and roth iras are for?

individuals with earned income

which settlement option allows the wife to get proceeds annually but the principal will be paid to their children when they reach the age

interest only

when would a whole life policy be tax free

is you get paid a lump sum

insured applied by aug 14th died on aug 22nd ina wreck, but the policy wasn't issued?

issue the policy and pay the face value

married couple gets 250.00 per month. husband dies, wife gets 125.50 per month until she dies. what did they select?

joint and survivor

straight life policy has what type of premium aka whole life

level annual premium

a policy period will pay if insured dies during the 20 year premium pay period, and if nothing if death occurs after the 20 year period, what type of policy is this

level term

is a lump sum cash payment taxable?

no

when converting group life to to individual policy does the insured have to prove insurability?

no

403b plans are made for

non profits and public school systems

adhesion means?

one party prepares te contract, the other must accept as is

collateral assignment is

partial and temporary transfer of rights

another term for accumulation period of an annuity

pay in period

Immediate Annuity

payments begin within 1 year

In terms of parties to a contract, which of the following does NOT describe a competent party?

person must completed secondary education

policy loans are only available to

policies that have cash value (whole life)

entire contract consist of

policy, copy of application, any riders or amendments

all are true regarding variable products except

premiums invested in general account

what defines targeted premium in a universal life policy

recommended amount to keep the policy in force

Which nonforfeiture option provides coverage for the longest period of time?

reduced paid up

to sell variable life insurance policies, an agent must receive all except

sec registration

generates immediate cash value

single premium

Common Disaster Clause protects what

the contingent beneficiary

in group insurance the master contract is for?

the employer

in group insurance the certificates are for?

the individual insured

The policyowner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as

the policy contains sufficient cash value to cover the cost of insurance

Why should the producer personally deliver the policy when the first premium has already been paid?

to help the insured understand the policy

what is the main use of an annuity

to provide a retirement income

examples of a qualified retirement plan

traditional ira, roth ira, simple, sep, 401k

which policy allows the policyowner to pay more or less than planned premium

universal life