Tennessee Life Insurance

Glass-Steagall Act

(Banking Act of 1933) - Established the Federal Deposit Insurance Corporation and included banking reforms, some designed to control speculation. Repealed in 1999, opening the door to scandals involving banks and stock investment companies.

Personal Producing General Agency System

(PPGA) - The agent supplies his own working environment. Agents hired by a PPGA are considered employees of the PPGA, not the insurance company, and are supervised by the regional salary.

self-insurer

*Assumes the financial risk one's self. *Generally an option only for large companies.

Insuring Clause

- Appears on first page of contract - has a summary of all the main points of the contract like the "promise to pay" death benefit

Variable Universal Life

- Death Benefit is Variable & Adjustable - Two death benefit options - Premium is Flexible - Mortality Rates are current & guaranteed maximum - Cash Value is variable, and no Guarantee - Yes, investment options - Yes, partial surrenders

variable universal life

- Death Benefit is Variable & Adjustable - Two death benefit options - Premium is Flexible - Mortality Rates are current & guaranteed maximum - Cash Value is variable, and no Guarantee - Yes, investment options - Yes, partial surrenders

misstatement of age or sex provision

- Designed to enable the insurer to make the adjustment between the death benefit at the misstated rate and what the death benefit should have been if the age and/or sex had not been misstated.

automatic premium loan provision

- Enables the insurer to withdraw funds from the policy if any cash value has accumulated within the contract

mandatory provisions

- Entire Contract - Time Limit on Certain Defenses - Grace Period - Reinstatement - Notice of Claims - Claims Forms - Proof of Loss - Time of Payment of Claims - Payment of Claims - Physical Exams and Autopsy - Legal Actions - Change of Beneficiary

Depreciation Period

- If lease transfers ownership, depreciate asset over the economic life of the asset. - If the lease does not transfer ownership, depreciate over the term of the lease.

NAIC

- National Association of Insurance Commissioners - No legal power of its own - Encourages uniformity in state insurance laws and regulations

State Guaranty Funds

- Protects against insurance company insolvency - Pays claims if company declared insolvent - Funded by assessments against all insurance companies - Assessment based on market share - Maximum limit per claim is $300,000

STOLI

- Stranger-Orignated Life Insurance - Typically target seniors

STOLI

- Stranger-Orignated Life Insurance - Typically target seniors -

ordinary life insurance

- Term, Whole Life, Universal Life, Endowment - The most common

Notice of Claim

- The policyowner's obligation to the insurer to provide notification of loss within 20 days after the occurrence (or as soon as is reasonably possible). - 20 days

Reduced Paid-Up Insurance

- the policyowner may request the cash value of the policy to be used to pay for itself. - It's the same type of insurance as the original policy except all riders, including those for disability and accidental death

annually renewable term

-Renews each year without proof of insurability -Premiums increase due to attained age

NAIC Fundamental Insurance Objectives

1. Protect the public interest 2. Promote competitive markets 3. Facilitate fair and equitable treatment of insurance consumers 4. Promote reliability, solvency, and financial solidity of insurance institutions 5. Support and improve state regulation of insurance

Free Look Period

10 days

N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?

30 pay life

30 pay life

40 year old wants to retire at 70; wants level premiums, permanent protection and be paid up at retirement

straight life

A basic policy that charges a level annual premium for the lifetime of the insured and provides a level, guaranteed death benefit.

Buyer's Guide

A booklet that describes insurance policies and concepts, and provides general information to help an applicant make an informed decision.

the buyer's guide

A booklet that describes insurance policies and concepts, and provides general information to help an applicant make an informed decision.

Proof of Loss

A claim form that a claimant must submit after a loss occurs.

universal life

A combination of a flexible premium and adjustable life insurance.

Stock Company

A company or corporation whose capital is divided into shares.

a void contract

A contract having no legal force or binding effect.

aleatory

A contract in which participating parties exchange unequal amounts. Insurance contracts are aleatory in that the amount the insured will pay in premiums is unequal to the amount the insurer will pay in the event of a loss.

Voidable Contract

A contract that may be legally avoided at the option of one or both of the parties.

a conditional contract

A contract that one or more parties must perform only under certain conditions.

a unilateral contract

A contract that results when an offer can be accepted only by the offeree's performance.

unilateral contract

A contract that results when an offer can be accepted only by the offeree's performance.

is not renewable since the death benefit is zero at the end of the policy terms

A decreasing term policy

Annual Statement

A detailed financial report that an insurance company must submit every year to the insurance department of state(s) in which it conducts business.

Medicaid

A federal and state assistance program that pays for health care services for people who cannot afford them.

Fair Credit Reporting Act

A federal law that established procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant and properly used.

risk retention group

A group captive formed under the requirements of the Liability Risk Retention Act of 1986 to insure the parent organizations.

stockholders

A group of people that make up a corporation by sharing ownership in a certain company

HMO

A group plan offering prepaid medical care to its members

Medicaid

A health care payment program sponsored by federal & state government's

estoppel

A legal impediment to denying a fact or restoring a right that has been previously waived.

survivorship life

A life insurance contract which pays policy proceeds only upon the death of the last of two or more insureds covered by a combination plan.

Group Life

A life insurance policy that is offered to a group of people under a master policy and that does not require medical examinations if purchased during the initial eligibility period. It is usually issued to an employer for its employees or to members of an association.

variable whole life

A life insurance policy which contains cash values that vary according to its investment performance of stocks is called _________.

Concealment

A means of hiding

Reduced Paid-Up Insurance Option

A non-forfeiture option under which the insured uses the cash value of his present policy to purchase a single-premium Whole Life policy, at attained-age rates, for a reduced face amount. The policy will then stay in force to age 120.

pay dividends to the policy owner

A participating insurance policy may do which of the following?

Rated Policy

A policy issued at a higher premium to cover a person classified as a greater-than-average risk, usually due to impaired health or a dangerous occupation.

nonforfeiture option

A policy provision that allows the insured to receive surplus cash value if the policy lapses.

accidental death benefits

A policy rider that states that the cause of death will be analyzed to determine if it complies with the policy description of accidental death.

utmost good faith

A principle of insurance which states that the insurance company must be able to rely on the honesty and cooperation of the insured, and the insured must rely on the company to fulfill its obligations in good faith.

Medicare

A program added to the Social Security system in 1965 that provides hospitalization insurance for the elderly and permits older Americans to purchase inexpensive coverage for doctor fees and other health expenses.

pay the policy proceeds only if it would have issued the policy

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will

pay the policy proceeds only if it would have issued the policy.

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will

Notice of Claim

A provision that spells out an insured's duty to provide the insurer with reasonable notice in the event of a loss.

a life income annuity

A pure life annuity is also known as a:

currency transaction report

A report that documents a physical currency transaction that exceeds a certain monetary threshold. A CTR can also be filed on multiple currency transactions that occur in one day exceed the required reporting amount. Some countries, including the U.S., have requirements addressing when CTRs should be filed with government authorities.

Adjuster

A representative of an insurance company who investigates and acts on the behalf of the company to obtain agreements for the amount of the insurance claim.

Living Benefits Rider

A rider attached to a life insurance policy LTC benefits or benefits for the terminally ill by using available life insurance benefits.

Proof of Loss

A statement of facts about a loss for which the insured is making a claim.

Attending Physician's Statement (APS)

A statement usually obtained from the applicant's doctor.

captive insurer

A subsidiary formed to insure the loss exposures of its parent company and the parent's affiliates.

independent agency system

A system for marketing, selling, and distributing insurance in which independent brokers are not affiliated with any one insurer but represent any number of insurers.

adhesion contract

A take-it-or-leave-it offer made by a party who holds most of the power in a bargaining session

level term life insurance

A term life insurance policy in which the death benefit remains unchanged throughout the life of the policy

certificate of authority

A third party that acts as a trusted intermediary between computers (and companies) by issuing digital certificates and verifying the worth and integrity of the certificates.

casualty liability insurance

A third-party insurance that covers the insured's legal responsibilities in an accident or negligent act.

Grace Period

A time period during which no finance charges will be added to your account

absolute assignment

A transfer by the policyholder of all control and rights to a third party

Mutual Company

A type of insurance company that returns part of the profits of the company to its policyholders.

Decreasing Term

A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.

straight life

A whole life policy under which premiums are paid throughout the life of the insured, and the face value is paid at death

Agent's Report

A written report from the agent submitted to the insurer along with the application disclosing what the agent knows, observed, or learned about the proposed insured's risks.

inspection report

A written report that details the existing conditions of the house and property.

ad&d

Accidental Death and Dismemberment insurance. A limited form of Health insurance that covers accident only. It is the only type of Health insurance that covers death. AD&D policies do not follow the Principle of Indemnity, in that they pay in addition to any other coverage the insured has.

Fair credit reporting act

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

the Fair credit reporting act

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

interest only does not systematically liquidate

All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT Fixed Period Interest Only Fixed Amount Life Income

variable universal whole life

Allows the client to self direct the cash value investment

Deductible

Amount you must pay before you begin receiving any benefits from your insurance company

mortgage redemption insurance

An additional requirement in obtaining a loan which is to pay off the loan or outstanding obligation upon the death of the borrower

personal contract

An agreement between an insurance company and an individual that states that insurance policies cover the individual's insurable interest.

business continuation agreement

An agreement in which owners of a business make plans to buy the ownership interest of a deceased associate from his or her heirs.

the entire contract

An agreement that is made up of two or more parts, in which each part is dependent upon the others.

policy rider

An amendment to an insurance policy that becomes part of the insurance contract and either expands or limits the benefits payable under the contract

Free Look Period

An amount of time provided to an insured in order to examine the insurance policy.

return of Premium

An amount, equal to a fraction of the premium, which is given back to the insured in the case of a cancellation

return of premium

An amount, equal to a fraction of the premium, which is given back to the insured in the case of a cancellation

Standard Risk

An applicant or insured who is considered to have an average probability of a loss based on health, vocation and lifestyle.

lloyds of London

An association of individuals and companies that underwrite insurance on their own accounts and provide specialized coverages.

Self-Insurer (INSURANCE)

An employer who can meet the state legal and financial requirements to assume by him or herself all of its risk and pay for the losses, although the employer may contract with an insurance carrier or others to provide certain essential services.

fiduciary responsibility

An ethical and legal obligation to perform a person's duties in a trustworthy manner.

incontestability period

An incontestability clause is a clause in most life insurance policies that prevents the provider from voiding coverage due to a misstatement by the insured after a specific amount of time has passed. A typical incontestability clause specifies that a contract will not be voidable after two or three years due to a misstatement. 2 year policy, don't care if you lie and die from a disease you didn't tell them about, they don't care about suicide either, the family needs to file for life insurance to get the $. Annuity payment stop at death, so they want you to pay unless you ask

the date of medical exam

An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?

administrator

An individual appointed by a court as a fiduciary to settle the financial affairs and estate of a deceased person.

agent

An individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of an insurer.

Admitted Insurer

An insurance company authorized and licensed to transact business in a particular state.

Alien Insurance Company

An insurance company incorporated outside the country

Multi-line insurer

An insurance company selling more than one insurance is called what?

multi-line insurer

An insurance company selling more than one line of insurance

Domestic Insurer

An insurance company that is incorporated in the state.

Alien Insurer

An insurance company that is incorporated outside the United States.

endowment policy

An insurance product that pays out a lump sum after a specified term or if the insured person dies before the end of the term. Endowment policies are often used as a way of saving over the long term.

Full face amount minus any past due premiums

An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period?

mutual

An insured purchase an insurance policy 5 years ago. last year, she received a dividend check from the insurance company that was not taxable. this year, she did not receive a check from the insurer period from what type of insurer did the insured purchase the policy?

long term care

An insured's inability to perform two or more activities of daily living may trigger which type of policy rider? Waiver of premium Long term care Accelerated death benefit Accidental

domestic insurance

An insurer doing business in the jurisdiction in which it is incorporated.

underwriter

An insurer employee who evaluates applicants for insurance, selects those that are acceptable to the insurer, prices coverage, and determines policy terms and conditions.

utmost good faith

An obligation to act in complete honesty and to disclose all relevant facts.

Life Income Period Certain

Annuity is payable for life, or for a specified period of time, whichever is longer. If the annuitant lives beyond the stated period, benefits continue for life of the annuitant. If the annuitant dies prior to the end of the period, certain a beneficiary receives the balance of the payments for the remaining time period.

Modified Endowment Contract (MEC)

Any cash value policy that builds cash value faster than a Seven-Pay Whole Life Contract and therefore loses the tax advantages of life insurance.

contract of adhesion

Any contract in which one party must either accept the agreement as written by the other party or reject it.

decreasing term policies

Are issued typically for a certain amount and decreased until the policy gets to a 0 at policy expiration

strong assessment mutual insurers

Assessment mutual companies are classified by the way in which they charge premiums

collateral assignment

Assignment of part of the proceeds of an insurance policy to a bank as collateral to settle the loan balance that may exist at the insured's death.

before accepting the initial premium

Assuming that a policy does not contain an unconditional refund provision of at least 10 days, when must a Buyer's Guide and policy summary be provided?

implied authority

Authority that is created not by an explicit oral or written agreement but by implication. In agency law, implied authority (of the agent) can be conferred by custom, inferred from the position the agent occupies, or implied by virtue of being reasonably necessary to carry out express authority.

implied authority

Authority that is not expressed or written into the contract, but which the agent is assumed to have in order to transact the business of insurance for the principal.

automatic premium loan provision

Authorizes insurer to automatically pay any premium in default at the end of the grace period and charge the amount so paid against the life insurance policy as a policy loan.

Cost-of-living adjustment (COLA)

Automatic adjustments of nominal income to the rate of inflation

Liquidity

Availability of resources to meet short-term cash requirements.

self-insured

Clients who obtain benefits on a self-funded basis. The company assumes all of the financial risk and liability that would normally be covered by an insurance company.

Authorized Insurer

Company that meets a state insurance department's standards and is authorized to do business in that state

Grace Period Provision

Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.

a joint life policy

Covers two or more lives and provides for the payment of the proceeds at the death of the first among those insured, at which time the policy automatically terminates.

joint life policy

Covers two or more lives and provides for the payment of the proceeds at the death of the first among those insured, at which time the policy automatically terminates.

FINRA

Created in July 2007 through the consolidation of NASD and the member regulation, enforcement and arbitration functions of the New York Stock Exchange, FINRA is the largest non-governmental regulator for all securities firms doing business in the United States.

ex-wife

D is the policyowner and insured for a $50,000 life insurance policy. The beneficiary is D's wife. D and his wife divorce and D remarries, transferring ownership of his policy to his new wife. If D dies without making any further changes, to whom will the policy proceeds be paid to?

The full face amount

D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive?

Seven-Pay Test

Determines whether a life insurance policy is a modified endowment contract, which it is if cumulative amounts paid under the contract at any time during the first seven contract years exceeds the cumulative amount that would have been paid had the policy's annual premium equaled the net level premium for a seven-pay life policy of the same type, using certain required assumptions

fiduciary responsibility

Duty of management to safeguard a company's assets and handle its funds in a trustworthy manner.

F

E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to?

12 Mandatory Provisions

Eddie (entire Contract;changes); The (time limit of certain defenses); Gardener (grace period); Raided (reinstatement); Nana's (Notice of Claim); Cookies (Claim Forms); Prior (proof of loss); To (time of payment of claims); Publicly (payment of claims); Performing (physical exam and autopsy); Last (legal actions); Christmas (change of beneficiary)

e&o

Errors and Omissions

State Guaranty Funds

Established in all states to protect policyholders and claimants from loss due to insurer insolvency.

decreasing term Policy

F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?

FDIC

Federal Deposit Insurance Corporation

FDIC

Federal Deposit Insurance Corporation: A federal guarantee of savings bank deposits initially of up to $2500, raised to $5000 in 1934, and frequently thereafter; continues today with a limit of $100,000

regulates consumer reports

Federal Fair Credit Reporting Act

Cash Surrender Value

For life insurance, the quantity that the owner is able to get if the policy does not remain in force until the insured's death. For annuities, the amount of a deferred annuity's accrued value that the contract holder is able to get if the policy is relinquished during its accumulation period.

warranties

Formal statements of expected product performance by the manufacturer

McCarran-Ferguson Act (1945)

Gave states the authority to regulate insurance

annually renewable term

Group life insurance policies are written as what type of insurance?

old age insurance

Guarantees a pension to the retired

Medicare and Medicaid

Health benefits for the elderly and poor

commercial insurance

Health insurance that covers medical expenses and disability income for the insured that is not paid for by the government. These policies are sold individually or as part of a group plan through an employer.

through mutual funds, stocks and bonds

How does a typical Variable Life Policy investment account grow?

Age 100

How long does the coverage normally remain on a limited-pay life policy?

age 100

How long does the coverage normally remain on a limited-pay life policy?

Fixed Period

If a beneficiary wanted a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what option would a beneficiary select?

Fixed Period

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

erase the incorrect answer and record the correct answer

If a change needs to be made to the application for insurance, the agent may do all of the following EXCEPT

Grace Period Provision

If a policyowner fails to pay his or her life insurance policy's premium by the date stated in the contract, the policy's grace period will prevent the policy from lapsing. Typically, a life insurance policy grace period extends for either 30 or 31 days after the date in which the premium is normally due.

hazardous occupation or hobby

If the insured dies as a result of a hazardous occupation or hobby, the insurer will not pay the claim.

misstatement of age or sex provision

If the insured's age or sex is misstated in an application for insurance, the benefit payable usually is adjusted to what the premiums paid should have purchased.

stranger-originated life insurance

In Stranger-Originated Life Insurance, or STOLI, a consumer purchases a life insurance policy with the agreement that a third party agent/broker or investor will purchase the consumer's policy and receive the proceeds as a profit upon the consumer's death.

Policy Summary

In life insurance, document explaining the coverage purchased and the names of the insurer and agent.

a policy summary

In life insurance, document explaining the coverage purchased and the names of the insurer and agent.

premium amounts and surrender values

Included in a policy summary

option b

Increasing death benefit option

mutual company

Insurance company owned by its policyholders.

industrial insurer

Insurance is also sold through a special branch of the industry known as home service or "debit" insurers. These companies specialize in a particular type of insurance called industrial insurance, which is characterized by relatively small face amounts (usually $1,000 to $2,000) with premiums paid weekly.

whole life insurance

Insurance that is kept in force for a person's entire life and pays a benefit upon the person's death, whenever that may be.

professional liability insurance

Insurance that protects directors, officers, employees, and organizations against claims of negligence in the performance of professional services.

term life insurance

Insurance that provides financial protection from losses resulting from a death during a definite period, or term.

Renewable Term

Insurance which can, at the election of the policyowner, be renewed at the end of a term without evidence of insurability.

Claims forms

Insurer's duty to supply the forms to the insured within a specified number of days after notice of claim

ioli

Investor-Originated Life Insurance

avocation ( hobby)

Is an allowable underwriting factor in life insurance

yearly renewable term

Issued for one-year period Renewable Premiums increase with renewal Convertible

modified whole life

K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?

B. L's spouse dies at age 66

L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They purchase a Family Policy that covers L's spouse to age 65. A death benefit will NOT be paid in which of the following circumstances? A. L's spouse dies at age 62. B. L's spouse dies at age 66. C. Their natural child dies at age 18. D. Their adopted child dies at age 18.

Tort Law

Law that deals with harm to a person or a person's property.

option A

Level death benefit

limited pay whole life

Level premiums limited to certain time period, less than life.

annual renewable term

Level term insurance which has a level face amount and increasing premiums.

Term Insurance

Life insurance coverage for a specified period of time, less expensive than whole

buy sell agreements

Life insurance is used to help fund it Based on legal contracts that set a value on each person's portion of ownership in the business Another person must purchase the deceased owner's interest in the business (funded through insurance) Can be used for any form of business: 1) Sole Proprietorship 2) Partnership 3) Corporation Proceeds are not taxed; Premiums are NOT tax deductible

accelerated benefit rider

Life insurance rider which allows the insured to receive a portion of the death benefit prior to death if the insured has a terminal illness.

Adjustable Life

Life insurance that permits changes in the face amount, premium amount, period of protection, and the duration of the premium payment period.

straight life insurance

Life insurance that requires the payment of premiums until the face value is reached or the insured is deceased; also called ordinary life or whole life

Adjustable Life

Life insurance which permits changes in the face amount, premium amount, period of protection, and the duration of the premium payment period.

mortgage redemption insurance

MRI means

applicants with incomes that tend to fluctuate

May benefit most from purchasing and adjustable whole life policy

fraternal benefit societies

Must be nonprofit, have a lodge system, and offer insurance to its members only

30 pay life

N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?

claim will be denied

N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take?

Claim will be denied

N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take? -Claim will be denied -Claim will be paid in full -Claim will be partially paid -Claim will be decided by an arbitrator

the national association of insurance commissioners

NAIC

NAIC

National Association of Insurance Commissioners

Medicare

National Health Insurance program for the elderly and disabled.

Reduced Paid-Up Insurance

Nonforfeiture option where cash value is used to make a single premium payment to purchase as much of the same type of insurance as possible. Face amount of the new policy would be less than the original policy but no further premium payments would be necessary. Policy can be reinstated.

State Guaranty Funds

Nonprofit, unincorporated associations established in all states to pay the outstanding claims of insolvent primary insurers.

OASDI

Old-Age, Survivors, and Disability Insurance

property and casualty insurance

One of the two main sectors of the insurance industry, encompassing numerous types of insurance, most of which cover the financial consequences of damage to one's own property or legal liability to others.

General Agent

One who is authorized by a principal to represent the principal in a specific range of matters.

Term Policies

Only effective for a short period after which period the insurer cancels the policy. Term health coverages include travel accident policies and short term medical plans.

hazardous occupation or hobby

Optional life insurance provision stating that if the insured dies as a result of a hazardous occupation or hobby, the insurer will not pay the claim.

P will still receive declared dividends

P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability?

$50,000 minus any outstanding policy loans

P purchases a $50,000 term life insurance policy in 2005. One of the questions on the application ask if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary? -Premiums paid plus interest -Nothing. Claim will be denied -$50,000 minus any outstanding policy loans -$100,000 because the cause of death was accidental

single premium whole life

Paid up for life with one large premium payment

Survivors Insurance

Part of Social Security that provides death benefits to dependents of workers who die

accelerated benefit rider

Pays a portion of the death benefit if the insured is diagnosed with a terminal illness.

Grace Period

Period of time after a borrower graduates, leaves school or drops below half-time enrollment where they are not required to make certain federal loan payments.

Adjustable Life

Permanent + Term Combines permanent and term life policies allowing changes to face amount, period payments, and term during policy lifetime.

the guaranteed insurability rider

Permits Insured to buy specific amounts of additional insurance at specified intervals (usually 3 years) without evidence of insurability

ppga

Personal Producing General Agency System

reduced paid up

Peter wants to utilize the cash value from his life insurance policy to buy another policy. He opts to use the cash value as a single premium to buy a policy that has a lesser face amount than the original, which will accumulate in cash value until it matures or Peter dies. What type of policy does Peter have?

Juvenile Life (aka Jumping Juvenile) policy

Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.

return of premium

Policy refunds every penny of the premiums if one outlives the defined term

equity index universal life insurance

Policyholders to link accumulation values to an outside equity index, like the S&P 500 Minimum guaranteed fixed interest rate If the return on the index exceeds the policy's guaranteed rate of return, the cash value will reflect that of the index

PPO

Preferred provider organization. A prepaid health insurance plan in which providers agree to deliver services for discount fees; patients can go to any provider, but using nonparticipating providers results in higher costs to the patient

Seven-Pay Test

Premiums paid cannot cause a policy to be paid-up after seven years.

interest sensitive whole life

Premiums vary to reflect the insurer's changing assumptions with regard to death investment and expense factors.

the convertible provision

Provides the policyowner with the right to convert the policy to a permanent insurance policy without evidence of insurability

survivor protection

Providing funds for surviving spouses and dependents

change of beneficiary

Provision in individual health insurance policies stating that unless the policyowner makes an irrevocable designation of beneficiary, the right to change a beneficiary is reserved to the policyowner and does not require the consent of the beneficiary.

Industrial (Home Service) Life Insurance

Referred to as Burial Insurance, industrial life insurance provides minimal life insurance coverage (usually less than $2,000 and without requiring a medical exam) in the event the insured dies, providing the beneficiary with enough money to cover basic final expenses such as funeral costs.

the return of Premium rider

Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!

accelerated benefits

Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses.

Return of premium rider

S buys a $10,000 whole life policy in 2003 and pays an annual premium of $100. if s dies 5 years later in 2008 in the insurer pays the beneficiary $10,500. what kind of writer did s include on the policy?

$50,000

S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?

serviceman's group life insurance

SLGI

Family Income Policy

Same as WL but w/ Decreasing Term rider; upon death, pays monthly income for REMAINING term AFTER which pays full death benefit.

family maintenance policy

Same as WL but w/ Level Term rider; upon death, pays monthly income for FULL term AFTER which pays full death benefit.

SEC

Securities and Exchange Commission

Payor Provision

Someone dies within 3 years of purchasing a life insurance policy on infant daughter can have policy premiums paid under this

Agent's Authority

Special powers granted to an agent by his or her agency contract.

Concealment or Fraud

Specifies that the policy may be voided if there is material concealment, misrepresentation, or fraud on the part of the insured.

McCarran-Ferguson Act (1945)

Stipulates that insurance companies are to be regulated at the state level

Insuring clause/provision (aka Insuring Agreement)

Summary of coverage including premium & mode of payment, death benefit, beneficiary(ies), exclusions, & promise to pay.

annual renewable term

Term coverage that provides a level face amount that renews annually. This type of coverage is guaranteed renewable annually without proof of insurability.

Renewable Term

Term insurance where at the end of the specified term the policyowner has the right to continue the policy for another term without proof of insurability. Premiums will be determined by the new attained age.

Level Term Insurance

Term insurance where the face value of policy remains the same from the date the policy is issued until the date the policy expires.

insurance companies from adverse selection by high-risk persons

The Medical Information Bureau (MIB) was created to protect

Attained Age

The age of the insured at a determined date.

Apparent Authority

The appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.

apparent authority

The appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.

Express authority

The authority a principal deliberately gives to its agent

apparent authority

The authority an agent is believed by third parties to have because of the behavior of the principal.

Express authority

The authority granted to an agent by means of the agent's written contract.

avoid a policy lapse

The automatic premium loan provision is designed to

on a 20 pay life,

The cash value will equal the face amount at maturity

Reduced Paid-Up Insurance Option

The cash-surrender value is applied as a net single premium to purchase a reduced paid-up policy

annually renewable term

The death protection component of Universal Life Insurance is always..

Aleatory Contract

The exchange of value is unequal.

as of the application date

The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?

Insuring Clause

The heart of an insurance policy. It contains the company's promise to the policyowner and describes the coverage provided and the policy limits.

Reinsurer

The insurer that assumes some or all of the potential costs of insured loss exposures of the primary insurer in a reinsurance contractual agreement.

war or military service

The insurer will not pay the claim if the insured dies while in active military service or due to an act of war.

Law of Agency

The law that governs the relationship between a principal and his or her agent.

Depreciation Period

The number of years the equipment is owned

the annuitant

The party receiving the benefits of an annuity, similar to the insured on an insurance policy. The annuitant usually also owns the annuity, although you can buy an annuity to benefit another party, who would then be the annuitant.

an annuitant

The person that buys an annuity; may or may not be an annuity's policyowner.

Reduced Paid-Up option

The policy owner pays no more premiums but the face amount is decreased

collateral assignment

The policyowner temporarily assigns a life insurance policy to a creditor as collateral for a loan

in a level term Policy

The premium and the amount of coverage are level throughout the term

Target Premium

The premium in a universal life policy that builds policy cash value.

Viatical Settlement

The purchase of an insurance policy before its maturity date by an investor for a percentage of its face value. Often the policyholder is terminally ill.

the insuring agreement

The section of an insurance policy containing the insurer's promise to pay, the description of coverage provided and perils insured against.

Accumulation Period

The time before an annuitant's retirement during which the annuitant is making payments or investments in an annuity.

Survivors Insurance

This part of Social Security provides death benefits to dependents of workers who die

Mode of Premium

This provision addresses the frequency of premium payments (monthly, quarterly, semiannually or annually), and to whom the premiums are payable. The more frequent the payment, the greater the cost. The policyowner has the right to change the premium mode.

Demutualization

Transformation of a mutual insurer into a stock insurer.

Mutualization

Transformation of a stock insurer into a mutual insurer.

offer and acceptance

Two essential components of a valid contract; a "meeting of the minds."

industrial home service life insurance

Type of life insurance in which policies are sold in small amounts and the premiums are collected weekly or monthly by a debit agent at the policyholder's home. See also Home service life insurance.

gradually increases each year by the amount that the cash value increases

Under Option B the death benefit includes the annual increase in cash value so that the death benefit...

Life Income Settlement Option

Upon maturity of an insurance policy, the policy proceeds are used to purchase an immediate Life Annuity payable in periodic payments to the beneficiary for the rest of his/her life.

signed waiver of premium

Upon policy delivery, the agent must make sure that all of the following are obtained from the applicant EXCEPT

signed waiver of premium

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

VUL

Variable Universal Life

level fixed

Variable life insurance is based on what kind of premium?

level, increasing, and decreasing

What are the three basic types of term coverage available, based on how the face amount (death benefit) changes during the policy term:

federal government, the SEC, the insurance department

What entity is regulate variable life policies?

limited pay life

What is the type of whole life insurance that is covered for your entire life but premiums are paid for a limited time?

Increasing Term

What type of insurance would be used for a Return of Premium rider?

option A

What universal life option has a gradually increasing cash value and a level death benefit?

issue the policy anyway and pay the face value to the beneficiary.

When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will

exclusion

When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n) elimination exclusion limitation exception

fixed amount

When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?

Extended Term

Which nonforfeiture option has the highest amount of insurance protection?

Reduced Paid-Up

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

notice regarding replacement

Which of the following documents must be provided to the policyowner or applicant during policy replacement?

medical background

Which of the following information about the applicant is NOT included on Part 1 of the application for insurance?

Depreciation Period

Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?

benefit payment amounts are not guaranteed

Which of the following is a feature of a variable annuity?

Life Paid-up at Age 65

Which of the following is an example of a limited-pay life policy?

Conversion Provision

Which of the following provisions give an employee the right to exchange group insurance for an individual policy within 60 days from the group insurance?

Policy Loan

Which of the following provisions would NOT be found in Term Life Insurance?

premium amounts and surrender values

Which of the following will be included in a policy summary

Investor-Originated Life Insurance

Which of these arrangements allows one to bypass insurable interest laws?

investor originated life insurance

Which of these arrangements allows one to bypass insurable interest laws?

a life income annuity

Which of these is NOT considered to be a common life insurance nonforfeiture option?

modified whole life

Which of these life products is NOT considered interest-sensitive? Modified Whole Life Variable Universal Life Interest Sensitive Whole Life Variable Life

Evidence of insurability is required when the option is exercised

Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE?

option b

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

variable life

Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling? A. Variable Life B. Credit Life C. Universal Life D. Interest-Sensitive Whole Life

policyholders

Who elects the governing body of a mutual insurance company?

family income policies

Whole life and decreasing term insurance (begins date of purchase). Provides monthly income to a beneficiary if death occurs during a specified period after date of purchase. If the insured dies after the specified period, only the face value is paid to the beneficiary since the decreasing term insurance expired.

Age 100

Whole life policies provide protection until the insured reaches what age?

The accelerated benefits rider

Will pay proceeds prior to death for those with a terminal illness. the proceeds are not taxable

Self-Insurer Bonds

Workers compensation bonds that required in the states that permit employers to self-insure compensation benefits

universal life

a 42 year old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his or her needs change period which of the following policies will best meet this need?

Reinsurer

a company that provides financial protection to insurance companies. they handle risks that are too large for insurance companies to handle on their own and make it possible for insurance to obtain more business than they would otherwise be able to..

the entire contract

a contract in which each component of the contract is dependent on every other component

Adhesion

a contract offered on a take it or leave it basis by an insurer, which is the insurance only option to either accept or reject the contract

annuity

a contract that provides a regular income for as long as the person lives

Aleatory Contract

a contract where the values exchanged may not be equal but depend on an uncertain event

aleatory contract

a contract where the values exchanged may not be equal but depend on an uncertain event

15 days

a copy of termination notification must be provided by the insurer to the producer within

the benefit is received tax-free

a corporation is the owner and beneficiary of the key person life policy if the corporation collects the policy benefit, then

the excess funds, which the ensure invest, provide the cash for the returned premiums

a healthy 30 year old male pays $380 annually for a $250,000 30-year term policy period at the end of the 30 years, he has paid a total of $11,400 in premiums which will be returned to him if he is still alive. the insurance company has determined that $250 per year or $7,500 over 30 years will cover the actual cost of protection.

investor originated life insurance

a life insurance arrangement which circumvents insurable interest that suits is called

the full death benefit

a life insurance policy does not have a war clause period if the insured is killed during a time of war what will the beneficiary receive from the life policy

insurable interest

a life insurance policy would be considered a wagering contract without

premium payments limited to a specific number of years

a limited pay life policy has

premium payments limited to a specific number of years

a limited pay life policy has:

immediate annuity

a lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years period what type of annuity products are they likely to use to provide these benefits?

immediate

a man purchased a $90,000 annuity with a single premium, and began receiving payments two months after that period which type of annuity isn't.

joint life policy

a married couple owns a permanent policy which covers both of their lives and pays the death benefit upon only the first death period which policy is that?

Risk Retention Group (RRG)

a mutual insurance company formed to insure people in the same business, occupation, or profession

hmos

a network of providers for which costs are covered inside but not outside the network

a fraternal benefit society

a nonprofit or Incorporated society that is not have Capital stock and operates for the sole benefit of its members is known as

FINRA (Financial Industry Regulatory Authority)

a not-for-profit entity that regulates securities firms for the purpose of protecting investors. Licensed individuals and firms, such as brokerage houses, must adhere to FINRA guidelines

annual dividend

a part of the company's profits divided to shareholders

a competent party

a person of legal age and at least normal mentality who is considered by law to be capable of understanding the meaning of a contract and is permitted to enter into a valid contract

agent

a person who acts or does business for another

Life Settlement Broker

a person who, for compensation, solicits, negotiates, or offers to negotiate a life settlement contract

the cash value provision

a policy loan is made possible by which of these life insurance policy features?

the guaranteed dividend rate

a policy summary must include all of the following except

permanent life insurance

a policy that provides a death benefit and builds cash value

20 pay life accumulates cash value faster than straight life

a potential client, at age 40, would like to purchase a whole life policy that will accumulate cash value at a faster rate in the early years of the policy period which of the statements made by the producer would be correct?

for 6 months from the course completion date

a pre-licensing training course completion certificate is good

survivor protection

a producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely period This is a personal use of life insurance known as

during the first 120 days of licensure

a producer must follow special rules when engaging in a replacement transaction

for 24 months

a producer's license is good

whole life and increasing term

a return of Premium life insurance policy is

has an immediate cash value

a single premium policy

deductible

a specified amount of money that the insured must pay before an insurance company will pay a claim

Proof of Loss

a sworn statement that must usually be furnished by the insured to an insurer before any loss under a policy can be paid

180 days

a temporary license is good for at most

Survivors Insurance

a type of social insurance where survivors of a person eligible for benefits under the system may also receive benefits

Variable Universal Life

a universal policy where the premiums are invested in variable rate earning assets

universal life insurance policy

a whole life policy that combines term insurance and investment elements

Broker

a wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiations

other insured Rider

a writer attached to a life insurance policy that provides coverage on the insurance family members is called the

fraternal benefits societies

a. Fraternal societies are primarily social organizations that engage in charitable and benevolent activities that provide insurance, primarily life insurance, to its members. b. Membership is typically drawn from members of a given lodge, order, or society. c. They are usually organized on a nonprofit basis.

fraternal benefits societies

a. are primarily social organizations that engage in charitable and benevolent activities that provide insurance, primarily life insurance, to its members. b. Membership is typically drawn from members of a given lodge, order, or society. c. They are usually organized on a nonprofit basis.

cash values

accredited to the policy on a regular basis and have a guaranteed interest rate

policy rider

additional insurance coverage to cover things such as jewelry or valuable heirlooms that are often not fully covered by a typical insurance policy.

3 years

all documents used in the solicitation of insurance must be maintained by an insurer for at least

a single sum of all guaranteed and nonguaranteed benefits

all materials used in the solicitation of life insurance just provide the following except

a fine of no more than $300,000

all of the following actions may be brought against an insurance agency found guilty of withholding knowledge of an appointed licenses violation of the insurance code except

estate creation, cash accumulation, survivor protection, conservation and liquidity

all of the following are personal uses of Life insurance

if I sell agreement

all of the following are personal uses of life insurance except

policy loans can be made on policies that do not accumulate cash value

all of the following are true regarding insurance policy loans except

the Guaranty association

all of the following entities regulate variable Life policies except

the guarantee association

all of the following entities require variable Life policies except

claim settlement practices

all states require prompt, Fair and equitable______

a fine of no more than $300,000

all the following actions may be brought against an insurance company found guilty of withholding knowledge of an appointed licenses violation of the insurance code except

long-term care insurance

all the following are considered limited lines of insurance except

the payable premium amounts steadily declines throughout the duration of the contract

all the following are true regarding a degreasing term Policy except

an agent misrepresents policy benefits to convince a policy owner to replace policies

all the following would be considered rebating except

Term Riders

allow for an additional amount of temporary insurance to be provided on the insured without the need to issue another policy. they are usually attached to a whole life policy to provide greater protection at a reduced cost.

Option to Renew

allows policyowner to renew the term policy before its termination date without having to provide evidence of insurability/good health.

a long-term care rider

allows the insured to take money out of a policies cash value to pay for qualifying nursing home care or home health Care Services

the renewable provision

allows the policy owner the right to renew the coverage at the expiration date without evidence of insurability

Cash Surrender

allows the policyowner to receive the policy's cash value. Policyowner no longer has coverage at this point. Normally, the maximum length of time a life insurance company may legally defer paying the cash value of a surrendered policy is 6 months (Delayed Payment provision).

straight life

also referred to as ordinary life or continuous premium whole life is the basic whole life policy

the USA Patriot act

also requires financial institutions to report wire transfers that are in excess of $3,000

coverage does not begin until the applicant meets all the conditions and the application is approved

although a conditional receipt may be issued,

he or she is not a party to the contract

although the producer must sign the application

S&P 500 (Standard & Poor's 500)

an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ.

FINRA

an agent must be registered with ____ in order to sell a variable product

implied authority

an agent's authority to do things not specifically authorized in order to carry out express authority

Underwriting

an arrangement under which an investment banker agrees to purchase all shares of a public offering at an agreed-upon price

Fair credit reporting act

an insurance applicant must be informed of an investigation regarding his reputation and character according to the

false advertising

an insurance company has produced a brochure that inaccurately portrays the advantages of a particular insurance policy. this is an example of

foreign

an insurance company is domiciled in Montana and transacts insurance in Wyoming period which term best describes the insurance classification in Wyoming

15 days

an insurance producer must be appointed as an agent of the insurer within _____ from the date of agency contract or the date that the first insurance application is submitted.

the insurer

an insurance producer represents

material misrepresentation

an insurance stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she saw medical attention period which of the following will explain the reason a death benefit claim is denied?

adjustment of the amount of the death benefit

an insured Mistates her age at the time of the life insurance application is taken. this misstatement may result in

full face amount minus any past due premiums

an insured is past due on his life insurance premium, but is still within the grace.. what will the beneficiary receive if the insure dies during the grace.

universal life

an insured owns a life insurance policy period to be able to pay some of her medical bills, she withdraws a portion of the policies cash value period there is a limit for draw and the insurer charges a fee period what type of policy does the insured most likely have?

written pre-authorization

an insurer must have ____ in order to pull an applicant's credit report

Alien Insurer

an insurer that is chartered by a foreign country, but is licensed to operate in the state

Foreign Insurer

an out-of-state insurer that is chartered by another state, but licensed to operate in the state

captive insurer

and ensure established and owned by a parent firm for the purpose of ensuring the parents firms loss exposure is known as

Premium policy

and increasing term Policy is sometimes called a return of

$50,000

and insured owns a $50,000 whole life policy period at age 47, the insured decides to cancel his policy and exercise the extended term option for the policies cash value, which is currently $20,000. what would be the face amount of the new term Policy

universal life

and insured owns a life insurance policy period to be able to pay some of her medical bills, she withdraws a portion of the policies cash value. there's a limit for withdrawal and the insurance charges a fee period what type of policy does the insured most likely have ?

viatical settlement

and insured under a life insurance policy has been diagnosed with a terminal illness and has 6 months to live. the insured knows that his financial state will worsen even more with the upcoming medical expenses. what option could the insured utilize?

reinstatement provision

and insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. which policy provision allows this?

rated

another name for a substandard risk classification is

$1,000

any licensed person in this state may be assessed a civil penalty for unintentional violation of State insurance statutes up to

must be licensed as a producer

anyone who solicits, negotiates or sell insurance

mandatory provisions

are designed to protect the insured

fraternal benefits societies

are nonprofit benevolent organization that provide insurance to its members. producers or agents who only sell within their society, do not receive commission, and stay under a specific premium threshold often have less stringent licensing requirements.

property and casualty insurance

are often referred to collectively as property and casual insurance because the things you own have the potential to harm people in ways that could cause them to sue you. the main kinds of property and casualty insurance include Auto insurance, homeowners insurance, renters insurance and umbrella insurance

funds not paid out after paying claims and other operating costs

are return to the policy owners in the form of a dividend

ROP policies

are structured to consider the low risk factor of the term policy but at a significant increase in premium cost, sometimes as much as 25% to 50% more

Annuities

are the opposite of Life insurance

limited pay whole life

are well suited for those insurance who do not want to be paying premiums beyond a certain point in time

Free Look Period

at the minimum of 10 days, but no longer than 20 days

upon completion of the application

at what point must a life insurance applicant be informed of their rights that fall under the Fair credit reporting act?

Express authority

authority declared in clear, direct, and definite terms

original-age method

bases the premiums on the age of the insured when the term insurance was first acquired

Free Look Period

begins when the policy is delivered (10 days for non replacement) (30 days for replaced)

Living Benefits

benefits that allow the policyholder to receive a portion of death benefits prior to death

actuarial

calculating; pertaining to insurance statistics According to recent actuarial tables, life expectancy is greater today than it was a century ago.

an annuitant

cannot outlive the income from an annuity

industrial insurance

characterized by comparatively small issue amounts, such as $1,000, with premiums collected on a weekly or monthly basis by the agent at the policyowner's home. Quite often it is marketed and purchased as burial insurance.

Cost-of-living adjustment (COLA)

clause during the period of the contract ties future wage increases to increases in the cost of living

medical information bureau report

companies that belong to this trade association report any health impairments, which are recorded and made available to member companies

contract of adhesion

contract offered by a dominant party to a party with inferior bargaining power on a take-it-or-leave-it basis

COLA

cost of living adjustment

joint survivor or last survivor Life policies

cover the lives of two individuals and saves on premium costs by averaging the ages of the two insurance

until the premium has been paid

coverage can never begin

cash value

created by the accumulation of premium, is scheduled to equal the face amount of the policy when the insurer reaches age 100 and is paid out to the policy owner

life insurance

creates an estate, while annuities systematically liquidate in a state over a period of time

Decreasing Term

credit life insurance is typically issued with which of the following types of coverage?

CTR

currency transaction report

Reserves

deposits that banks have received but have not loaned out

not cancellation of the policy

discovery of a misstated age results in adjustment of benefit amount,

are not guaranteed

dividends

An annuity

does not involve underwriting

interest

during partial withdrawal from a universal life policy, which portion will be taxed?

interest

during partial withdrawal from universal Life policy, which portion will be taxed?

within three years

elapsed policy maybe reinstated ____ by paying back premiums, with interest, and proving insurability

Glass-Steagall Act

established the Federal Deposit Insurance Corporation (FDIC) and included banking reforms, some of which were designed to control speculation

Death benefits that are received by a beneficiary are generally

exempt from federal income tax

Concealment

failure by the applicant to disclose a known material fact when applying for insurance.

decreasing term policies

feature a level premium and a death benefit that decreases each year over the duration of the policy terms

increase or decrease the premium or premium paying period -increase or decrease the face amount -change the period of production

for adjustable life the policy owner has the following options

coercion

forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as

Reserve

funds held by the company to help fulfill future claims period minimum reserves are usually set by the State department of insurance

part one

general information of the application

option to convert

gives the insured the right to convert or exchange the term policy for a whole life(or permanent) plan without evidence of insurability.

Fixed Annuities

guarantee a fixed rate of return and are backed by the state guaranty fund

a universal life insurance policy

has a choice of death benefits option A or B

an irrevocable beneficiary

has a vested interest in the policy, and the policy cannot be changed without his or her consent

a life income annuity

has no beneficiary and is the most risky option for the annuitant

term insurance

has no cash value

a refund annuity

has the least amount of risk to the annuitant

a joint and survivor life policy

he's only when the second insured dies

HMO

health maintenance organization

interest on accumulations is taxed

how are policy owner dividends treated in regards to income tax?

Deducted when the policy is discontinued.

how are surrender charges deducted in a life policy with a rear end loaded provision?

the insurers domicile or location of incorporation will determine whether a company is domestic, foreign, or alien.

how is it determined whether an insurer is allowed to write business in a state?

3

how many hours of continuing education must be completed in ethics each licensing.

12 mandatory policy provisions

how many mandatory policy provisions are there?

2 months

how soon must the insurer pay a death benefit after receiving the proof of death?

a qualified plan for small business

if a company has a simplified employee pension plan what type of plan is it?

insured

if a contract of adhesion contains complicated language, to whom would the interpretation be in favor of?

modified endowment contract

if a life insurance policy develops cash value faster than a seven pay whole life contract, it becomes an

no dividends are paid

if all funds are paid out,

alcohol - narcotics

if the insurance dies or is injured as a result of alcohol or narcotics the insurer will not pay the claim

the free look starts on the date of mailing known as constructive delivery

if the policy is mailed to the policy owner by the company,

a statement of good health from the applicant at the time of policy delivery

if the premium was not collected at the time of the application, the producer may also be required to get

proceeds will go into the estate, which may be attached by creditors

if there is no beneficiary,

insuring Clause

in a life insurance contract, an insurance companies promise to pay stated benefits is called the

the owner

in a life settlement contract whom does the life settlement broker represent

Waiver

in agreement waving the company's liability for a certain type or types of risk ordinarily covered in the policy

Unilateral Contract

in an insurance contract, the insurer is the only party who makes a legally enforceable promise. what kind of contract is this ?

unilateral

in an insurance contract, the insurer is the only party who makes illegally enforceable promise. what kind of contract is this ?

investigations

in order to enforce the insurance code, the commissioner has the power to conduct which of the following?

group life

in this life insurance plan, the insurance typically does not own the policy. the group employer owns and controls the policy

if the insured lives to age 100

in which of the following cases will there be able to receive the full face amount from a whole life policy?

unfair trade practices

include false advertising, defamation and boycotting

part one

includes the general questions about the applicant, including name, age, address, birth date, gender, income, marital status, and occupation

universal life insurance policy

incorporates flexible premiums and an adjustable death benefit. the investment gains from a universal life policy usually go toward the cash value.

S&P 500

index that shows the price changes of 500 different stocks

have 6 months

insurance companies _____ to defer a request for a loan or cash surrender, although they usually do not exercise this right.

medical expense

insurance pays benefits for non-surgical doctors fees commonly rendered in a hospital. sometimes pays for home and office calls

Annuity tables are different than mortality tables since there is no what?

insurance protection

captive insurer

insurer owned by a parent firm for the purpose of insuring the parent firm's loss exposures

the buyer's guide and policy summary for 3 years

insurers must maintain copies of

single premium whole life

involves a large one-time-only premium payment at the beginning of the policy period and from that point on the policy is completely paid for.

permanent life insurance

is a general term used to refer to various forms of life insurance policies that build cash value and remain in effect for the entire life of the insured or until age 100 as long as the premium is paid . the most common type of permanent insurance is whole life

health insurance

is a general way of describing insurance against loss through sickness or accidental bodily injury.

Term Life policy

is a life insurance policy that offers a death benefit for a defined period (the term) Term-from 1 to 30 years When term ends, so does your coverage

Proof of Loss

is a mandatory health insurance provision stating that the insured must provide a completed claim form to the insurer within days of the date of loss.

Whole Life

is a permanent level insurance protection for their life until death

an insurance declaration page

is a piece of paper which provides basic information about an insurance policy. typically the first page of an insurance policy is a declaration page. the declaration page normally specifies the name insured, address, policy., location of property, policy limits, and other key information

a participating plan

is a plan under which the policy owner receives shares, commonly called dividends, of the divisible surplus of the company.

absolute assignment

is a policy assignment under which the assignee receives full control over the policy and also full rights to its benefits.

Notice of Claim

is a policy provision that describes the policy owner's obligation to provide notification of loss to the insurer within a reasonable period of time. it only requires the insurance company be notified of a loss, it does not require that proof of loss is provided

convertible term

is a provision that allows policy owners to convert their term insurance into permanent policies without showing proof of insurability

Target Premium

is a recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime.

waiver of premium

is a rider that can be added to a life insurance policy, and not something to be obtained from the applicant

Target Premium (Universal Life)

is a suggested premium used in universal life policies. it does not guarantee there will be adequate funds to maintain the policy to anytime, especially to life.

mortgage redemption insurance

is a type of decreasing term life insurance policy. it's purpose is to provide policy holders a way to have their mortgage paid off if they die before it is fully paid

group life

is a type of life insurance in which a single contract covers an entire group of people. most often the group is an employer employee group. those covered under a group life policy may or may not pay a portion of the premium and can usually choose their beneficiary.

SEP

is a type of qualified plan suited for the small owner or for self-employed

A PRODUCER

is allowed to share an insurance commission with another person if that person is licensed in the same line of insurance as that producer at the time of sale

SEP

is an employer sponsored ira with an expanded contribution rate up to 25% of compensation or a specified maximum contribution amount

a surcharge

is an example of a counter offer period there is no coverage until the applicant accepts the policy at the higher rate and pays the increased premium.

property insurance

is an insurance policy that provides financial reimbursement to the owner or renter of a structure and its contents in the event of damage or theft

offering a return of part of a commission as an inducement to buy

is an unfair trade practice called rebating unless it is stated in the contract

modified endowed contract

is best described as a policy that exceeds the maximum amount of Premium that can be paid into a policy and still have it recognized as a life insurance contract.

survivorship life

is commonly purchased to fund estate taxes

survivorship life

is commonly used in estate planning so the death benefit of the policy can be used to pay a state taxes when due

limited pay whole life

is designed so that the premiums for coverage will be completely paid up well before age 100

single premium whole life

is designed to provide a level death benefit to the insurance age 100 for a one-time lump sum payment. the policy is completely paid up after one premium and generates immediate cash.

Death Benefit

is guaranteed and also remains level for life

a non-participating plan

is insurance under which the insured is not entitled to share in the divisible surplus of the company

casualty liability insurance

is insurance which broadly encompasses insurance not directly concerned with life insurance, health insurance, or property insurance

stranger orientated life insurance

is life insurance arrangements where investors persuade consumers usually seniors to take out new life insurance policies with the investors named as beneficiary

marital status

is not an allowable underwriting factor in life insurance

a standard risk

is one with an average lifespan

Decreasing Term

is primarily used when the amount of needed protection is time sensitive, or decreases over time. is commonly used to ensure the payment of a mortgage or other debts if the insurer dies prematurely

Term Insurance

is renewable without a physical examination, up to a certain age

reinstatement

is the act of putting a lapsed policy back and forth by producing satisfactory evidence of insurance ability and paying any past due premiums required.

apparent authority

is the appearance or assumption of authority based on the actions, words, or deeds of the principal period it can also exist because of circumstances the principle created.

cash value

is the equity amount or savings accumulation in a whole life policy

level term insurance

is the most common type of temporary protection purchase

Consideration

is the part of an insurance contract setting for the amount of initial and renewal premiums and frequency of future payments.

the insuring agreement

is the portion of the insurance policy in which the insurer promises to make payment to or on behalf of the insured . it states the scope and limits of coverage.

annually renewable term

is the purest form of term insurance

implied authority

is the unwritten authority that is not expressly granted, but which the agent is assumed to have in order to transact the business of the principal

industrial life insurance

issues very small face amounts, such as $1,000 or $2,000. premiums are paid weekly and collected by debit agents. they were designed for burial coverage

legal

it is _____ to pay an unlicensed person a renewal commission if that person was properly licensed at the time of the sale, solicitation and/or negotiation

variable whole life is an insurance and securities product

it is regulated on the state level by the department of insurance and on the federal level by the SEC

charge individuals of the same class and same hazard different premiums

it is unfair discrimination

modified endowment contract

it loses the benefits of a standard life contract

consideration

it's often said to include the initial premium and completed application for insurance. in other words, the applicant is saying, "please consider me for insurance, here's my initial premium, my completed application, and how much/how often I agree to pay in the future. please consider me'

level

k is looking to purchase renewable term insurance. which of these types of term insurance may be renewable?

unfair trade practices act

laws that prohibit wholesalers and retailers from selling below cost

third party owner

legal term used to identify an individual or entity that is not an insured under the contract, but that has a legally enforceable right under it

unilateral contracts

life and health insurance policies are :

generally not taxed as income

life insurance death proceeds are

return of premium

life insurance is an increase in term insurance policy that pays an additional death benefit to the beneficiary equal to the amount of the premiums paid

Term Insurance

life insurance protection for a specified period of time; sometimes called temporary life insurance

limited pay life

life insurance that covers and insurance whole life with level premiums paid over a limited time is called

travel insurance, credit life, credit health, or unemployment insurance, mortgage guarantee insurance, cop hail insurance, title insurance, portable electronics insurance, self-service storage insurance and personal property insurance sold to a debtor

limited lines of insurance include

S&P 500

market index of U.S. equities based on the performance of 500 large-cap stocks representing various sectors of the overall equities market

Surcharges (rate-ups)

maybe accomplished by using a rate charge for a higher age, a different sex, a flat fee, or percentage of adjustment to the manual rate

Term Insurance

maybe converted to whole life, but not the reverse period conversion is based on the insurance current age.

policy loans

maybe taken during the grace.

viator

means the owner of a life insurance policy who enters into or seeks to enter into a viatical settlement contract

Part two

medical information

Medicare Part B

medical insurance

cannot sign a legal document

minors, the mentally and firm, those under the influence of alcohol or narcotics

not competent

minors, the mentally and firm, those under the influence of alcohol or narcotics

MEC

modified endowed contract

are renewable convertible or renewable and convertible

most term insurance policies

currency transaction report

must be filed within 15 days of a cash deposit in excess of $10,000

lloyds of London

not an insurer, but a society of members who underwrite insurance in syndicates

Claims

notice by the insured to the insurance company that a loss has occurred and demand for payment for the loss

apparent authority

occurs when the powers of the agent are created by law or circumstance.

traditional term policies

offer a low cost, simple death benefit for a specified term but have no investment component or cash value

HMOs

offer a wide range of healthcare services to member subscribers. they provide for healthcare Plus the healthcare itself. they are known for stressing preventative healthcare and early treatment programs.

An ROP policy

offers the pure protection of a term policy, but if the insured remains healthy and is still alive once the term limit expires, the insurance company guarantees a return of premium. however, since the amount returned equals the amount paid in, The returned premiums are not taxed deductible

when the application is made

one must insurable interest be present in order for a life insurance policy to be valid?

inception of the contract

one must insurable interest exist for a life insurance contract to be valid?

a joint life policy

only pays when they first insured dies

Stock Companies

our insurance companies owned and controlled by a group of stockholders whose investment in the company provides the safety margin necessary and issuance of guaranteed, fixed premium, non participating policies

mutual companies

our insurance company's characterized by having no Capital stock. it is owned by its policy owners and usually issues participating insurance

any form of life insurance

partners in a business enter into a buy sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner period what type of insurance policy may be used to fund this agreement?

family income policies

pay and income beginning at the insurance death and continues for a period specified from the date of policy issue period for example, g purchased a family income policy at age 40, with a 20-year rider period. if g were to die at age 50, g's family would receive an income for 10 years

joint survivor

payment to two or more annuitants and if one dies, the other still gets payments

he accidental death benefit rider

pays an additional some to the beneficiary if the insurance dies due to an accident. the amount paid is a multiple of the policy face amount such as double or triple the original benefit.

increasing term insurance

pays an increasing death benefit and has increasing premium as the policyholder ages.

policy riders- return of premium

pays the total amount of premiums paid into the policy in addition to the face value, as long as the insured dies within a certain time period specified in the policy. It also returns premiums to the living insured at the end of a specified period of time, as long as the premiums have been paid.

of not less than $100 and up to $1,000 for each violation

penalties for failure to follow these requirements include license suspension, revocation, and or civil penalty of not less than

declaration page

personalizes the policy...the name, address, policy number, car model and make, deductibles & limits, effective dates ***who, what, when & how much***

are not required to be licensed

persons who perform clerical tests that are not related to soliciting or negotiating insurance contracts

PPO

preferred provider organization

original-age method

premium charged is based on the insured's original age when the term insurance was first purchased

Level Premium

premium remains the same throughout the duration of the contract

may not be attached by creditors

proceeds of life policy left to a beneficiary

are required to complete a one-time for credit hour annuities training course

producers who solicit annuities

State Guaranty Association

protect policy owners in the event of any insurance company going out of business, becoming insolvent, or the in ability to pay claims

State guaranty association

protect policy owners in the event of any insurance company going out of business, becoming insolvent, or the in ability to pay claims

property and casualty insurance

protects against property damage, personal injury and liability associated with specific events

Errors and Omissions Insurance

protects broker if the seller misrepresents property condition, the broker is unaware, and could not have detected by visual inspection

Term Policies

provide the greatest amount of coverage for the lowest premium as compared to any other form of protection. there is usually a maximum age above which coverage will not be offered or which coverage cannot be renewed

level term insurance

provides a level amount of protection for a specified period, after which the policy expires. Level premium and level death benefit

Buyer's Guide

provides general information about the types of life insurance policies available, in language that can be understood by the average person.

single premium whole life

provides lifetime protection with a single premium

only the amount of the death benefit May fluctuate, depending on the type of term insurance

regardless of the type of term insurance purchased, the premium is level throughout the term of the policy;

variable life insurance policies

require a producer to have proper finra and national association of securities dealers securities registration prior to selling any variable policy contract

USA Patriot act

requires financial institutions to file a currency transaction report with fincen part of the department of the treasury for each cash transaction that exceeds $10,000

1970 Fair Credit Reporting Act

requires the fair and accurate reporting of information about consumers. Insurers must inform applicants about any investigations being made and if the report is used to deny coverage or charge higher rates, the insurer must provide the applicant the name of the credit reporting agency conducting the investigation.

beneficiary's age

s would like to use dividends from her life insurance policy to purchase paid up additions. all of these would be factors that determine how much coverage can be purchased except

the conditional receipt

says that coverage will be affected either on the day of the application or the date of the medical exam, whichever occurs last, as long as the applicant is found to be insurable as a standard risk, and policy is issued exactly as applied for

the benefit is treated as a reimbursement to the business for loss of services from that key person

should a key person die,

old age insurance

social security

OASDI (Old Age, Survivors, and Disability Insurance)

social security, medicare, medicaid

Free Look Period

starts upon policy delivering

representations

statements made by the applicant for insurance

warranties

statements made on an application for insurance that are warranted to be true. they are the exact in every detail as opposed to representations.

McCarran-Ferguson Act (1945)

states that continued regulation and taxation of the insurance industry by the states are in the public interest

Suicide Clause

states that if the insured commits suicide within two years after the policy is issued, the face amount of insurance will not be paid; there is only a refund of the premiums paid

insurable interest

stranger originated life insurance policies are in direct opposition to the principle of

the insuring agreement

summarizes the major promises of the insurer

fiduciary responsibility

taking receipt of premiums and holding them for the insurance company is an example of:

must include three hours of ethics

the 24 hours of continuing education

if an annuitant dies during the accumulation period of annuity

the account value will be paid to the annuitants beneficiary or the annuitants estate

the insurance total loan value

the amount of coverage on a group credit life policy is limited to

paid by the insurer

the appointment fees are

Express authority

the authority of an agent, stated in the document or agreement creating the agency

Agent Appointment

the authorization of an agent to act for or represent an insurer

avoid a policy lapse

the automatic premium loan provision is designed to

non-forfeiture value

the cash value is also called ____ and does not usually accumulate until the third policy year and it grows tax deferred

misstatement of age or sex provision

the company can make an adjustment due to a misunderstanding of age or sex at any time and adjust the payout or premiums accordingly.

amount of premiums and when they are due

the consideration clause on a life insurance contract contains what pertinent information

annually renewable term

the death benefit remains level in the sense that it's a level term Policy and the policy may be guaranteed to be renewable each year without proof of insurability, but the premium increases annually according to the attained age, as the probability of death increases

employees receive a certificate of insurance

the employer receives a master policy, and

the quicker the cash value grow

the higher the premium amount,

interest only settlement option

the insurance company retains the policy proceeds and pays interest on the proceeds to the recipient at regular intervals monthly quarterly semi-annually or annually

100 years old

the insured is also a policy owner of a whole life policy. what age must he insured attain in order to receive the policies face amount?

Notice of Claim provision

the insured must give written notice to the insurer within 20 days after a covered loss occurs

aviation

the insurer will not play the claim if the insured dies or is injured due to involvement with aviation, such as a military pilot flying a jet aircraft

self-insured

the insurer, often an employer, assumes the risk of paying directly for medical services

in a stoli or ioli

the investor potentially profits upon the death of the insured

the larger the cash values

the larger the face amount of the policy,

do not apply to credit life, group life, or group annuity

the life insurance replacement rules

the greater the buildup in cash values

the longer the policy has been enforced,

warranty

the part of a life insurance policy guaranteed to be true is called an

Survivorship

the percentage of members of a group that are likely to survive to any given age

guaranteed rate

the policy must contain all of the following except

converting

the policy owner also has the option of _____ from term to whole life or vice versa. however, increases in the death benefit or changing to a lower premium type of policy will usually require proof of insurability.

living benefits

the policy owner can borrow against the cash value while the policy is in effect or can receive the cash value when the policy is surrendered

declaration page

the policy page that lists the insurance company's name and address, the policyholder, the coverage dates, and the contracted coverage amounts

Fixed Period Option

the policy proceeds are paid to a beneficiary over some fixed period of time

attained-age method

the premium charged for the new policy is based on the insured's attained age at the time of conversion

the renewable provision

the premium for the new term Policy will be based on the insurance current age

level premium

the premium for whole Life policies is based on the issue age, therefore it remains the same throughout the life of the policy

Level Premium

the premium that does not change throughout the life of a policy

the convertible provision

the premium will be based on the insurance attained age at the time of conversion

Underwriting

the process of selecting, classifying, and pricing applicants for insurance

in a replacement transaction

the producer must leave a copy of the notice as well as a copy of any written or printed communication used for presentation with the applicant

Reinstatement

the provision that can be used to put an insurance policy back and forth after it has lapsed due to non-payment is called

Actual Cash Value

the required amount to pay damages or for property loss. this is calculated based on the properties current replacement minus depreciation

the producer

the responsibility of making certain that an application for insurance is filled out completely, correctly, into the best of his or her knowledge is the responsibility of home?

the original policy is allowed to lapse

the rules regarding life insurance replacement apply to which of the following situations?

the quicker the cash value grows

the shorter the premium payment period,

Street life, limited payment, and single premium

the three basic forms of whole life

assignment

the transfer of contractual rights to a third party

joint and survivor

the type of settlement option which pays throughout the lifetime of two or more beneficiaries is called

cost of insurance

the universal life policy is called an unbundled life policy because the policy holder can see the expenses charges, the interest earned and the

cash value

the___of an adjustable life policy only develops when the premium paid are more than the cost of the policy

in a replacement transaction

then notice must be signed by both the applicant and the producer

Investor-Originated Life Insurance

these arrangements are used to circumvent state insurable interest statutes

Reserves

they stated amount or percent of liquid assets that an insurer must have on hand that will satisfy obligations to its policyholders is called

unilateral contract

this means that only one party the insurer, makes any kind of enforceable promise

the initial premium

thn consideration clause and a life insurance policy indicates that a policy owners consideration consists of a completed application and

circumvent

to get around; to bypass

24 hours of continuing education must be completed and renewal fees must be paid

to renew producer's license

Boycotting

to try to create a monopoly or restrict fair trade transactions of insurance is an unfair trade practice called

FinCEN (Financial Crimes Enforcement Network)

treasury department agency that focuses on money laundering

discrimination

two individuals are in the same risk and age class yet they are charge different rates for their insurance policies due to an insignificant Factor period what is this called

viators

typically receive a percentage of the policies face value from the person who purchases the policy

insolvent

unable to pay debts owed

reciprocal insurers

unincorporated groups of people that provide insurance for one another through individual indemnity agreements

and suicide clauses start over

upon reinstatement, both the incontestability

the beneficiary will only receive payments of the interest earned on the death benefit

upon the death of the insured, the primary beneficiary discovers that the insured shows the interest only settlement option. what does this mean

hold a life insurance license and a securities license

variable Life products require a producer to

a life policy with the death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to

variable life

universal life

variable life in variable - universal life are all interest sensitive whole Life products

both an insurance and securities products

variable whole life insurance can be described as

USA Patriot Act (2001)

was designed to detect international money laundering and the financing of terrorism

Adjustable Life

was developed in an effort to provide the policy owner with the best of both worlds ( term and permanent coverage.)

straight life

we'll have the lowest annual premium of the common whole Life policies

Maturity at age 100

well some people live beyond age 100, the number of people who do live to that is not statistically significant portion of the population. the premium rate for whole life insurance is based on the assumption that the policy owner will be paying premiums for the insurance whole life.

Face Amount

what does the level refer to in level term insurance?

Who the policyowner is and what rights the policyowner is entitled to

what does the ownership clause in a life insurance policy state?

viator

what is the name of the insured who answers into a viatical settlement?

$10,000 or up to one year in jail

what is the penalty for any person who violates the McCarran Ferguson act?

level

what kind of Premium does a whole life policy have?

whole life

what kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100?

both a insurance license and a securities license

what license or licenses are required to sell variable annuities?

Grace Period

what provision in an insurance policy extends coverage beyond the premium due date

Increasing Term

what type of insurance would be used for a return of Premium Rider

term life

what type of life insurance gives the greatest amount of coverage for a limited period of time

Survivorship

what type of life policy covers two people and pays upon the death of the last insured?

treaty reinsurance

what type of reinsurance contract involves two companies automatically sharing their risk exposure?

void the policy only if it is discovered during the contestable period and proven to be material

when a misrepresentation on a life insurance policy application is discovered

conversion provision

when a policyowner exchanges a term Policy for a whole life policy without providing proof of good health, which of these apply?

purchase a single premium policy for a reduced face amount

when a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to

within 30 days

when an insurer terminates a producer's appointment for any reason, the insurer must notify the insurance commissioner

when the insurer dies or at the policy's maturity date, whichever happens first

when is the face amount of a whole life policy paid?

equal to the original policy as long as the cash values will purchase

when the insurance selects the extended term non-fortunator option the cash value will be used to purchase term insurance with what face amount?

discrimination

when twin brothers applied for life insurance from company a, the company found that while neither of them smoked and both had a very similar lifestyle, one of the brothers was in a much stronger financial position than the other period because of this, the company charged him a higher rate for his insurance. this practice is considered

application

which is the primary source of information used for insurance underwriting?

reduced paid up

which non-forfeiture option provides coverage for the longest period of time?

domestic

which of the following best describes an insurance company that has been formed under the laws of the state?

selection, classification, rating of risks

which of the following best details the underwriting process for life insurance?

contract

which of the following consists of an offer, acceptance, and consideration?

Buyer's Guide

which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process?

the cash value available to the policy owner

which of the following is an example of liquidity in a life insurance contract?

survivorship life

which of the following is called a second to die policy?

the employees receive individual policies

which of the following is incorrect concerning a non-contributory group plan?

develop insurance rates

which of the following is not a duty of the commissioner?

increasing term

which of the following is not a type of whole life insurance?

the seller must be terminally ill

which of the following is not true of life settlements?

admitted

which of the following is the closest term to an authorized insurer?

a person who negotiates insurance contracts

which of the following persons is required to hold a producer license?

variable universal life

which of the following policies combined investment choices whether it's form of term coverage?

variable universal life

which of the following policies is characterized by a flexible premium and death benefit and allows the policy owner control of the investment aspect of the plan?

insuring clause

which of the following policy components contains the company's promise to pay

buy sell agreements are normally funded with a life insurance policy

which of the following statements concerning buy sell agreements is true?

life expectancy

which of the following terms means a result of calculation based on the average number of months the insured projected to live due to the medical history and mortality factors

AD&D

which of the following types of policies pays a benefit if the insured goes blind?

buy sell agreement

which of the following would describe a legal document which would dictate who can buy a deceased partner share a business and for what amount

Target Premium

which of the following would help prevent a universal life policy from lapsing?

variable universal life

which of the types of Life policies contains a monthly mortality charge as well as a self-directed investment choices

premiums are payable for as long as there is insurance coverage in force

which of these characteristics is consistent with a straight life policy?

policy owners are entitled to receive dividends

which of these describe a participating life insurance policy?

premiums are payable for as long as there is insurance coverage in force

which of these is characteristics is consistent with a straight life policy

principal

which of these is not a type of agent authority?

negotiating

which of these is not considered to be an element of an insurance contract?

reduced paid up

which of these non-forfeiture options continue a buildup of cash value?

premiums are payable throughout the insurance lifetime/coverage last until death of the insured

which statement is correct regarding the premium payment schedule for whole life policies?

pass through interest on a policy loan is added to the total debt

which statement is true in regards to a policy loan?

universal life

which type of life insurance policy allows the policy owner to pay more or less than the planned premium?

Modified Endowment Contract

which type of policy is considered to be overfunded as stated by IRS guidelines

Family Term Rider

which writer when attached to a permanent life insurance policy provides an amount of insurance on every family member

the underwriter, not the producer

who determines the final rating classification

a policy owner who is not the insured

who is the third party owner?

the insurance company

who makes the legally enforceable promises in a unilateral insurance policy?

the commissioner

who reviews rates to make sure that they are fair, adequate, and not unfairly discriminating?

First 20 years

whole Life policies must contain a table showing their guaranteed cash value at the end of each year anniversary date for the the

child

whose life is covered on a life insurance policy that contains a pay or benefit clause?

Producer

whose responsibility is it to explain the policy provisions, writers, and exclusions to the policy owner and or insured?

It has a guaranteed minimum interest rate

why is an equity indexed annuity considered to be a fixed annuity?

distribution starts within one year of purchase

with an immediate annuity,

a joint and survivor annuity

would pay while either party is alive