Insurance Key Notes

***Annuities (Principles and Concepts) 1) Define Annuity 2) Why are annuity tables different than mortality tables? 3) What happens to the money of an annuitant if they die too soon? -if they live too long? 4) If an insured dies during the accumulation period of an annuity, what happens to the account value and whos responsible for responsible for its taxes on interest earned? 5) The rights of ownership on an annuity become effective when? 6) The annuitant is who? 7) Although annuity benefits paid to a beneficiary are usually taxable upon the death of the owner/annuitant, how do beneficiaries that are spouses continue the contract? 8) What do Endowments provide that Annuities do not? 9) What is the opposite of life insurance? Life insurance creates an immediate? What do Annuities do to an Estate over time? 10) Are annuities insurance products? Who are they often sold by? 11) What are Annuities most often used as?

***Annuities (Principles and Concepts) 1) A contract that will pay a specific indemnity to its owner over a period of time is an annuity. 2) Annuity tables are different than mortality tables since there is no insurance protection. 3) Insurers take the money from annuitants who die too soon and pay it to those who live too long. 4) If an insured dies during the accumulation period of an annuity, the account value will be paid to the insured's beneficiary, who is responsible for taxes on interest earned. 5) The rights of ownership on an annuity become effective as of the contract date. 6) The annuitant is the party whose life the benefits are based upon. 7) Although annuity benefits paid to a beneficiary are usually taxable upon the death of the owner/annuitant, beneficiaries who are spouses may continue the contract on a deferred basis as the contingent owner. 8) Endowments provide life insurance protection. Annuities do not. 9) Annuities are the opposite of Life Insurance. Life insurance creates Estate. Annuities systematically liquidate an estate over a period of time. 10) All annuities are insurance products, although often sold by bankers with Life insurance licenses. 11) Annuities are often used as life insurance settlement options.

***Beneficiaries 1) What is a class designation? 2) What do Life insurance proceeds immediately create? 3) What is the age of majority? and can proceeds be directly paid to a minor? -why? 4) What happens to the if the insured names an individual as their irrevocable beneficiary? 5) When can a revocable beneficiary be changed? 6) What kind of vested rights does a revocable beneficiary under a life policy? 7) What kind of beneficiaries have a vest interest in the policy? 8) What will a contingent beneficiary receive? 9) What are the assumptions under the Common Disaster Provision? 10) What happens if the policy proceeds are paid out in a lump sum?

***Beneficiaries 1) When a policyowner lists a group of people as beneficiaries, it is known as a class designation. 2) Life insurance proceeds create an immediate estate for the beneficiary. 3) Age of majority depends of state (18 or 21) in order to recieve proceeds; however, proceeds cannot be directly paid to a minor child since they cannot sign the release. 4) If the insured names an individual as their irrevocable beneficiary, the insured cannot change the designation without the beneficiary's consent. 5) A revocable beneficiary may be changed at any time by the policyowner. 6) A revocable beneficiary has no vested rights under a life policy. 7) A irrevocable beneficiary has a vest interest in the policy. 8) A contingent beneficiary will receive the policy proceeds if the primary beneficiary dies before the insured. 9) Under the common disaster provision, it is assumed that the insured died last. 10) If the policy proceeds are paid out in a lump sum, the spendthrift clause will not apply.

***Business Uses of Life Insurance*** 1) What do Stockholders, in small, of privately held closed corporations often enter into? 2) What is a cross purchase (buy/sell) agreement based upon? 3) Why would a corporation buy a policy on a shareholder? 4) What are examples of a Third-Party policyownership? 5) How are premiums paid to employees and reportable as under an Executive Bonus? 6) Who owns a policy when life insurance is purchased as an executive bonus for a corporate employee?

***Business Uses of Life Insurance*** 1) Enter into (buy/sell) agreements with the corporation that are funded by life policies. 2) A policy that provides for business continuation in the event that a business partner dies. 3) A corporation would buy a policy on a shareholder to provide for a stock redemption in the event of the shareholders death. 4) Key person, partnership insurance, & policies written on the life of a spouse or minor child. 5) Under Executive Bonus, the premium paid to the employee as a bonus is deductible by the business; the amount paid to or for the employee is reportable as taxable income to the employee. 6)When life insurance is purchased as an executive bonus for a corporate employee, it belongs to the employee.

***Immediate (Vs) Deferred 1) When does an Immediate Annuity begin paying out? *?*2) What is the premium for a $100,000 immediate annuity? 3) What does SPIA stand for? 4) What must there be in order to be considered a single-premium deferred annuity? 5) What is a flexible-premium fixed deferred annuity? What are the minimum guarantee rate of return and its death benefit equal to? 6) How are Deferred Annuities purchased? 7) What is the only time a Deferred Annuity can be surrendered? 8) What is the owner of an annuity responsible for paying? 9) When a policy owner surrenders an annuity for cash, what has been exercised? 10) During the surrender period of an annuity, the surrender value is? 11) What is the surrender charge on an annuity reffered to as? 12) What do Annuities waive for death or disability? 13) What is the death benefit on an Annuity during the accumulation period equal to?

***Immediate (Vs) Deferred 1) An immediate annuity begins paying out immediately after the initial premium is paid. 2) The premium for a $100,000 immediate annuity is gender. It is the payout that depends on these factors. 3) SPIA's (Single premium annuities are often purchased with a lump sun upon retirement. 4) In order to be considered a single-premium deferred anuity, there must be a period longer than one benefit payment interval before payments begin. 5) A flexible-premium fixed deferred annuity has a flexible has a flexible premium, minimum guaranteed rate of return and a death benefit equal to its cash value. 6) Deferred annuities are purchased by making periodic payments over a period of time. 7) A deferred annuity can only be surrendered for cash during its accumulation period. 8) The owner of an annuity is responsible for paying the premium. 9) When a policyowner surrenders an annuity for cash, they have exercised a nonforfeiture option. 10) During the surrender period of an annuity, the surrender value is less than the contracts cash value. 11) The surrender charge on an annuity is sometimes referred to as a back-end load. 12) Annuities waive surrender charges for death or disability. 13) The death benefit on an annuity during the accumulation period is equal to its cash value.

***Life Insurance Basics*** 1) When must insurable interest exist? 2) Insurance may be based on? 3) An Insurable Interest exists if?

***Life Insurance Basics*** 1) It mus exist at the time of the application, but not necessarily at the time of a claim. 2) Based on economics or family relationships. 3) Someone would benefit from someone else continuing to live.

***Life Insurance Policy Provisions, Options and Riders* 1) Are producers a party to the contract? and whose responsibility is it to explain policy provisions, rider, and exclusions? 2) The owner's rights section of a life policy states? 3) What is Collateral assignment? 4) What is the sole collateral for a Policy Loan? and are Policy Loans taxable? 5) Define absolute assignment. 6) What does the entire contract include? 7) Can producers make changes to a policy? 8) What needs to happen in order to modify a policy? 9) What is the life insurance Free Look about? 10) Does a policy owner have to give a reason to exercise the free look provision? 11) How long is the free look period and when does it start? What is constructive delivery? 12) How long does ordinary life insurance have a grace period for? 13) Define Grace Period. 14) What happens if a terminated employee dies within the grace period? 15) What happens when an insured dies in the grace period without paying a premium? 16) If someones policy has lapsed, how can they get it back? 17) What happens to the incontestability and suicide clause upon policy reinstatement? 18) Life insurance policies that have been surrendered for cash are not allowed to be what? 19) What makes a Life policy incontestable? 20) How long is a life insurance policy contestable for material misrepresentation? 21) What does the Misstatement of Age provision state? 22) What gets reduced in the misstatement of age clause if the insured understates their age? 23) Can the proceeds of a life insurance policy be attached by creditors? 24) Can proceeds be paid directly to a minor child? -Why? 25) What is an insurer allowed to order if the insured dies in an incident? 26) When is suicide covered in most states? What happens if an insured commits suicide within the clause period? 27) Who pays for a claim if an insured buys a life insurance policy and dies a month later?

***Life Insurance Policy Provisions, Options and Riders* 1) Although producers must sign the application, they are not a party to the contract. It is the responsibility of the producer to explain the policy provisions, riders, and exclusions to the applicant. 2) The owner's rights section of a life policy states who has the right to change the beneficiary, who can take a loan, and who can take a cash surrender. 3) Owners of life insurance policies may temporarily assign their life insurance policy to a bank as collateral for a loan, which is known as a collateral assignment. 4) The policy is the sole collateral for a policy loan. Policy Loans are not taxable. 5) The owner of a life insurance policy may transfer his or her ownership to another person by making an absolute assignment. 6) The entire contract includes the policy and anything else attached at issue, such as the application. 7) Producers may not make changes to a policy. 8) Policy modifications must be in writing and signed by a company officer. 9) Under the life insurance free look, a policyowner who returns their policy 5 days after delivery will receive a full refund since the free look is commonly 10 days. 10) A policy owner may exercise the free look provision without giving any reason. 11) The free look period (usually 10 days) starts upon policy delivery. If the policy is mailed to the applicant by the company, the free look starts on the date of mailing. This is called constructive delivery. 12) Ordinary Life insurance has a grace perod of 30 days. 13) A life insurance policy provision that allows coverage to continue even if that allows coverage to continue even if the premium is not paid on time is known as Grace Period. 14) If a terminated employee dies within the grace period of his or her employer provided group life policy without converting, the full death benefit will be paid to the beneficiary. 15) When an insured dies in the grace period without paying the premium due, the face amount will be paid to the beneficiary, less the overdue premium. 16) If an whose policy has lapsed wants it back, the insured can apply for investment. 17) Upon policy reinstatement, the incontestability and suicide clause start over. 18) Life insurance policy that has been surrendered for cash may not be reinstated. 19) Life Insurance policies are incontestable after they have been in force for 2 years. 20) New life insurance policies are contestable for material misrepresentation for the first 2 years. 21) Under the misstatement of age provision, if an insurer discovers that an insured has misstated his/her age on the policy application, the insurer will adjust the premiums and benefits according to the correct age of the insured. 22) The misstatement of age clause, if the insured understates his/her age, it is the face amount that is reduced. 23) Proceeds of a life insurance policy, left with an insurer, for the benefit of a beneficiary, may NOT be attached by creditors. 24) Proceeds cannot be irectly paid to a minor child since a minor can't sign a release. 25) If the Insured dies in an incident, the insurer may order an autopsy to determine that death was not the result of a suicide. 26) In most states, suicide is covered after 2 years. If an insured commits suicide within a specified period of time after policy issue (normally 2 years), no benefits payable, but all premiums are refunded to the beneficiary. 27) If an insured buys a life insurance policy and dies one month later, the insurer must pay the claim.

***Nonforfeiture Options 1) How will surrender charges levied by some insurers on annuities and universal life effect the amount a policy owner will receive upon a cash surrender? 2) An extended term option is the same as a ____________? 3) What happens if a policy with a cash value lapses for nonpayment? 4) Define Extended term. 5) What happens when the reduced paid-up nonforfeiture option is selected? 6) When may the reduced paid-up nonforfeiture option may be taken? 7) The reduced paid-up nonforfeiture option will provide for what?

***Nonforfeiture Options 1) Surrender charges levied by some insurers on annuities and universal life will reduce the amount a policyowner will recieve upon cash surrender. 2) The extended term option is a nonforfeiture option. 3)If a policy with a cash value lapses for nonpayment, the insured has 60 days from the premium due date to select a nonforfeiture option. 4) Extended term is the automatic nonforfeiture option. 5) When the reduced paid-up nonforfeiture option is selected, the amount of coverage in the new policy is reduced from that of the original policy. 6) The reduced paid-up nonforfeiture option may be taken any time there is a cash value. 7) The reduced paid-up nonforfeiture option will provide coverage for life.

***Personal Uses for Life Insurance*** 1) Buying a life insurance policy creates what? 2) When life insurance is used to pay estate taxes, it is known as what? 3) A life settlement contract is between who? 4) The human life value approach was created to establish what? 5) The needs approach to life insurance does not consider what?

***Personal Uses for Life Insurance*** 1) Buying a life insurance policy creates an immediate estate. 2) It is known as conservation. 3) A life settlement contract is between the life insurance policy owner and the third party. 4) It was created to establish what a family would lose in income upon the death of the chief income provider. 5) It does not consider future earnings.

***Policy Loan and Withdrawel Options 1) Failure to repay a loan will result in what? 2) The annual interest on a life insurance loan is added to what? 3) How do you calculate if a policy will lapse? 4) When can a loan be taken from a whole life policy? 5) What can an automatic premium loan rider be added to? 6) What kind of policies are allowed to have partial surrenders?

***Policy Loan and Withdrawel Options 1) Failure to repay a loan will have a permanent effect on cash value accumulation. 2) The annual interest on a life insurance loan is added to the amount of the loan it accrues. 3) If an outstanding policy loan, plus interest, exceeds the cash value of the policy, the policy will lapse. 4) A loan may be taken from a whole life policy as soon as it develops cash value. 5) The automatic premium loan rider can be added to a whole life policy, but not to a term or credit life policy. 6) Partial surrenders are usually allowed in annuities, universal life and variable life policies.

**Producers and General Rules of Agency 1) A producer may be liable when violating what? 2) Producers represent who? 3) Independent producers own what? 4) Producers have what kinds of authority? 5) Define Express Authority. 6) What is a producers binding authority 7) Define Implied Authority

***Producers and General Rules of Agency 1) A producer may be personally liable when violating the producer's contract. 2) Producers represent the insurance company, not the insured. 3) Independant producers own their own accounts and are not insurance company employees. 4) Producers have express, implied and apparently authority. 5) The authority a producer has that is written in (his/her) contract is known as express authority. 6) A producer's binding authority (if any) is written in the producers contract with the insurer the producer represents. 7) Implied Authority - Authority that is not expressly granted but is an actual authority of its producer.

***Riders*** 1) What is a waiver of premium? 2) Does a waiver of premium pay a cash benefit? 3) What happens if a parent paying the premium on a child's life insurance policy dies? 4) If policy owner dies or becomes disabled, will they have to worry about paying prem's is the payor benefit rider is attached? 5) When will the accelerated benefits rider pay proceeds? 6) Who may take advantage of the change of insured rider? 7) On a Term Life Rider added to a parent's policy you cover what? 8) When adding a children's term rider to a life insurance policy, all of the insured's children are cover for what? 9) A level term rider may be added to who's life policy in order to insure a child? 10) A combination policy that automatically covers who? 11) The guaranteed insurability rider is also known as? 12) the guaranteed insurability rider allows for what? 13) If a person purchases a whole life policy and adds a return of premium rider, they will have what kind of coverage from what kind of policy? How is the coverage effected from the rider? 14) What are both types of increasing term coverages?

***Riders*** 1) Waiver of premium is a rider that will pay the premium on behalf of a disabled insured, after a short waiting period, until the insured either recovers or dies. 2) The waiver of premium is a rider does not pay a cash benefit to the insured. 3) If a parent paying the premium on a child's life insurance policy dies, the provision that allows the premium to be waived is known as a payor benefit. --> NOT waiver of premium. 4) If the payor benefit rider is attached to the policy, insured will not have to worry about premiums being paid if the policyowner dies or becomes disabled. 5) The accelerated benefits rider will pay proceeds prior to death for those with a terminal illness. 6) The change of insured rider may be utilised by an employer who wants to transfer a key person life insurance policy from one key person to another. 7) On a Term Life Rider added to a parent's polict yo cover the life of a child, the child's coverage terminates when the child reaches age 18, unless the child converts the rider to permanent coverage. 8) When adding a children's term rider to a life insurance policy, all of the insured's children are covered for a single, flat premium charge no matter how many. 9) A level term rider may be added to a parent's life policy in order to insure a child. 10) A combination policy that automatically covers all family members, including newborn children at no extra premium charge is called a Family Policy. 11) The guaranteed insurability rider is also known as the guaranteed purchase benefit. 12) the guaranteed insurability rider allows the insured to increase coverage periodically without a physical exam. 13) If a person purchases a whole life policy and adds a return of premium rider, they will have level coverage from the whole life policy, and increasing coverage from the rider. 14) The return of premium rider and the return of cash value rider are both types of increasing term coverage.

***Settlement Options*** 1) If the insured/owner of a life policy does not designate a settlement option prior to death, the beneficiary may choose what option? Is cash a taxable option? 2) If the interest settlement option is selected, what happens to the interest paid? 3) When a beneficiary selects the interest only settlement option, when can the beneficiary withdraw the principal? 4) Why would a beneficiary select the interest only settlement option? 5) What is the fixed period settlement option?

***Settlement Options*** 1) If the insured/owner of a life policy does not designate a settlement option prior to death, the benificiary may choose whichever option he/she wants. Most choose cash, which is not taxable. 2) If the interest settlement option is selected, the interest paif is subject to taxes. 3) When a beneficiary selects the interest only settlement option, interest payments (Which are taxable) wil vary, but the beneficiary may withdraw the principal at any time. 4) For estate conservation purposes, a beneficiary should select the interest only settlement option. 5) A life insurance beneficiary who elects to take the proceeds payable upon the death of the insured over a period of time has selected the fixed period settlement option.

***Types of Life Insurance Policies A.) Term Policy**** 1) What is an increasing term policy and what happens to its limits annually? 2) Can you renew term insurance? 3) Can Whole life insurance be converted to Term? And what bases an insured's ability to convert? 4) What is a convertible term based upon? 5) Re-entry option is contingent upon what in a term life insurance policy? 6) What are premiums and the amount of coverage like in a level-term policy? 7) What happens to the face amount of mortgage protection life insurance policy? At what rate does it change? 8) What happens to the face amount in a term policy? Do premiums change? 9) Define Decreasing Term Life. ------------------------------------------

***Types of Life Insurance Policies A.) Term Policy**** 1) An increasing term policy's limits increase each year. An increasing term policy is sometimes called a return-of-premium policy. 2) Term insurance is renewable without a physical examination, up to a certain age. 3) Term insurance may be converted to whole life, but not the reverse. Conversion is based on the insured's current age. 4) Convertible term is convertible based upon the current or attained age of the insured. 5) On term life insurance, the re-enrty option is contingent upon the insured passing a physical exam. 6) In a level-term policy, the premium and the amount of coverage are level throughout the term. 7) The face amount of mortgage protection life insurance policy will decrease at the same rate as the mortgage balance declines. 8) It is the face amount that decreases on a decreasing term policy, not the premium. 9) decreasing term is the type of life insurance provided in mortgage redemption insurance. ------------------------------------------

***Underwriting*** 1) What are Life Insurance mortality tables based upon? 2) Does a 60 year old male have a higher chance of lower rate of mortality than a 60 year old woman? 3) What are Life Insurance premiums based on? 4) What are Agents also known as? 5) What happens when a producer gives an applicant a conditional receipt? 6) *Conditional/Binding receipts are used in what kind of insurance? **Binders are used in What kind of insurance? 7) When is a conditional receipt nor given? 8) Why would an applicant backdate a life insurance application for a specifiec number of months? 9) What usually happens to an incomplete application? What happens should an underwriter approvie it?

***Underwriting*** 1) Life Insurance mortality tables are based upon people and time. 2) A 60-year old male has a higher mortality rate than a 60 year old female. 3) Life Insurance premiums are based on mortality (plus) company expenses (minus) interest earned on company investments. [Mortality] + Company Expenses ------------------------- - [Int. earned on investments] -------------------------------- = [Life ins. prem's.] 4) Agents (producers) are also known as field underwriters. 5) If a producer gives an applicant a conditional receipt and the underwriter rejects the application, there is no coverage. 6) Conditional or binding receipts are used in life and health insurance. Binders are used in property and casualty insurance. 7) A conditional receipt is not given to an applicant unless the initial premium has been paid. 8) Applicants may backdate a life insurance application for up to a specified number of months (typically 6 months) in order to obtain a lower premium. 9) An incomplete application is usually returned. However, should the underwriter approve it, coverage begins and the company has waived its ability to contest a claim.

**Annuity (Benefit) Payment 1) What happens if the owner of a life income annuity with a 10-year period certain dies 13 years after he/she annuitized the contract? 2) Can one outlive the income from a life annuity? 3) Do life income annuities have beneficiaries? are they risky choices? 4) When does a life annuity begin making payments? When do they stop? 5) When do payments stop on a Joint Life Annuity? 6) How much risk come with a Refund Annuity? 7) Why would an annuitant select the period certain pay-out option? 8) What is the fixed-period option?

**Annuity Payment 1) If the owner of a life income annuity with a 10-year period certain dies 13 years after he/she annuitized the contract, the beneficiary will receive nothing. 2) One cannot outlive the income from a life annuity. 3) A life income annuity has no beneficiary, and is the riskiet choice. 4) A life annuity does not tart making payments at death. Payments stop at death. 5) On a joint life annuity, payments stop when the first annuitant dies. 6) A refund annuity has the least amount of risk. 7) An annuitant would select the period certain annuity pay-out option if the annuitant wanted payments to continue to a beneficiary after the annuitant's death. 8) If an annuitant selects a pay-out option that will pay for a specified period of time, the annuitant has selected the fixed-period option.

**Busines Disability Insurance** 1) What does Key Person disability insurance indemnify? 2) Under the terms of a partnership disability (buy/sell) agreement, what happens to the proceeds of the policy? 3) On a partnership disability buy-out-policy, are the premiums tax deductible?

**Busines Disability Insurance** 1) Key person disability insurance indemnifies the business for the loss of services of a key employee due to disability. Premiums are not tax deductible, but benefits are not taxed. 2) Under the terms of a partnership disability (buy/sell) agreement, the proceeds of the policy are paid to the owner of the policy, who uses the money to buy out the disabled business partner. 3) On a partnership disability buy-out-policy, the premiums are not tax deductible, but the benefits are not taxed.

**Certificate Authority** 1) An insurance company with a certificate of authority in this state is known as what? 2) An insurer who holds a certificate of authority in this state is known as what? 3) What is a Certificate of Authority? 4) Is it unlawful for an insurer to transact business in this state without a certificate of authority? 5) Who are producers appointed by? -What must they to to appoint them?

**Certificate Authority** 1) An insurance company with a certificate of authority in this state is known as an authorized or admitted insurer. 2)An insurer who holds a certificate of authority in this state is known as an authorized or admitted insurer. 3) A certificate of authority is a license granted to an insurer by the Commissioner giving the authority to transact the business of insurance in this state. An insurer without a certificate of authority is known as an unauthorized or nonadmitted insurer. 4)It is unlawful for an insurer to transact business in this state without a certificate of authority, except for surplus lines insurers, who are generally unregulated. 5) Producers must be appointed by insurers that they represent. To appoint a producer as its agent, an insurer must file a notice of appointment with the Commissinoer within 15 days from the date the agency contract is signed or the date the agent submits their first application.

**Company Regulation** 1) What happens if an insurer terminates a producer's contract? 2) Can an nsurer may not cancel or refuse to renew a policy? -Why? 3) What is a business entity producer? 4) What is the measurement of an insurer's liabilities?

**Company Regulation** 1) If an insurer terminates a producer's contract, the producer's accounts will continue in force. 2) An insurer may not cancel or refuse to renew a policy because of the termination of an insurance producer's contract. 3) A business entity producer is a corporation, partnership or limited liability company who acts in an agency capacity on behalf of the insurers it represents. 4) The measurement of an insurer's liabilities to policyholder is called Legal Reserves.

**Connecticut Insurance and Privacy Protection Act** 1) What are privacy regulations designed for? 2) What must producer give to their customers at the time they establish the customer relationship and annually thereafter? 3) What happens if you violate the (CIPA)Connecticut Insurance Information and Privacy Act? 4) ***An applicant for insurance must be given notice at the time of application if the insurer is going to gather information about them from sources other than public records (pre-notification).***

**Connecticut Insurance and Privacy Protection Act** 1) Privacy regulations are designed to protect personal information of individuals who buy insurance products or services for personal or family purposes. 2) Producers must give Privacy Protection Notices to their customers at the time they establish the customer relationship and annually thereafter. 3) Those that violate the Connecticut Insurance Information and Privacy Act regulations are subject to the following: -A fine of not more than $20,000 for each violation; A penalty of not more than $100,000 for violations that have occured with such frequency to indicate a general business practice; and a suspension of revocation of an insurance institution's or agent's license. 4) An applicant for insurance must be given notice at the time of application if the insurer is going to gather information about them from sources other than public records (pre-notification).

**Consumer-Driven Plans** 1) What's an HRA? What do participants have under an HRA and who funds it? 2) Define HSA. Who are they available to? Who has an HDPD? 3) What are HSA contributions made with? Are distributions used to pay qualified medical expenses are tax free? 4) Are employer contributions to an employee's HSA are excludable from the employee's federal gross income and by how much? Are the contributions federally taxable? 5) What kind of penalties are HSA's subject to? 6) What is the limit of contributions to an HSA? 7) Who can setup an MSA? 8) Contributions to an MSA made by an eligible individual are limited to what?

**Consumer-Driven Plans** 1) On HRA (Health Reimbursement Account), participants have high deductible group medical expense insurance coverage, but the HRA is partially funded by their employer. 2)HSA's (health savings accounts) are available to any employer or individual who has a High-Deductible Health Plan (HDPD). 3) HSA contributions are made with before-tax dollars, account earnings grow on a tax-deferred basis, and distributions used to pay qualified medical expenses are tax free. 4) Employer contributions to an employee's HSA are excludable from the employee's federal gross income, up to the maximum contribution limit for that employee. Although the employee cannot deduct the employer's HSA contributions, the contributions are not federally taxable to the employee nor are they subject to withholding from wages for federal income tax or other employment taxes. HSA contributions by employers are considered a type of benefit, and are therefor, tax-deductible. 5) Health savings accounts are not subject to year-end tax penalties. 6) Contributions to an HSA cannot exceed the participant's deductible, and are subject to maximum limits. 7) Medical savings accounts (MSA's) may be set up only by small employers or individuals. 8) Contributions to an MSA made by an eligible individual are limited to a percentage of the annual deductible.

**Continuation of Coverage under COBRA** 1) Under COBRA, employers with 20 or more employees must allow terminated employees and their dependant to do what? 2) When an employee elects COBRA, what does the coverage equal? 3) What is the maximum period coverage continuation for termination of employment or a reduction in hours of employment? 4) How long may the dependants of a deceased or disabled employee continue group coverage? 5) What does the phrase qualifying events include? 6) What happens if an employee elects to continue group coverage under COBRA?

**Continuation of Coverage under COBRA** 1) Under COBRA, employers with 20 or more employees must allow terminated employees and their dependant to continue their group coverage by paying 102% of the group rate. 2) When an employee elects COBRA, the coverage is exactly the same as it was in the group. It is not reduced in any way. 3) The maximum period coverage continuation for termination of employment or a reduction in hours of employment is 18 months. 4) The dependants of a deceased or disabled employee may continue group coverage for another 36 months. 5) The phrase qualifying events include death, disability or termination. 6) If an employee elects to continue group coverage under COBRA, the employee may still convert to an individual policy without a physical exam when COBRA coverage ends.

**Cost Containment in Health Care Delivery** 1) On medical expense plans, what requirement will result in fewer claims? 2) What kind of claims to carry-over deductible apply to? 3) If an insurer wants to stress preventive care, what should they waive?

**Cost Containment in Health Care Delivery** 1) On medical expense plans, a mandatory second opinion requirement will result in fewer claims. 2) A carry-over deductible applies to claims that occur during the last 3-months of the calendar year. They carry over and apply to next years's deductible. 3) If an insurer wants to stress preventative care, they should waive the deductible for office visits.

**Dental Insurance** 1) In dental insurance, it would create an adverse selection situation for an insurer to offer? 2) To prevent adverse selection, most dental insurance is written what basis? 3) Does dental insurance have a deductible on diagnostic or preventive care? 4) What does Dental Insurance cover? 5) Dental insurance endodontics services provide for things such as? 6) Does Dental Insurance cover gum problems? 7) What is an example of prosthodontics under dental insurance? 8) Define Orthodontics. 9) How is a deductible satisfied on an integrated/dental plan? 10) How are Dental Indemnity plans written? 11) What kind of coverage does basic dental insurance plans have? 12) How are Comprehensive Dental plans similar to major medical plans? 13) Can Dental Insurance be written as a prepaid service plan? 14) Do most dental insurance plans cover cosmetic dentistry?

**Dental Insurance** 1) In dental insurance, it would create an adverse selection situation for an insurer to offer more than one open enrolment period during the year. 2) To prevent adverse selection, most dental insurance is written on a group basis. 3) Dental insurance has no deductible on diagnostic or preventive care. 4) Dental insurance covers restorative care, such as fillings, inlays, crown. 5)Dental insurance endodontics services things such as root canals. 6) Dental insurance covers the treatment of gum problems, which is known as periodontics. 7) UnderDental insurance, prosthodontics include bridgework. 8) Orthodontics is the treatment of problems related to the growth and development of the jaw using fabricated appliances, most often braces. 9) On an integrated medical/dental plan, the deductible may be satisfied by either medical or dental expenses. 10) Dental indemnity plans may be written as either scheduled (basic) or non-scheduled (comprehensive). 11) Basic dental insurance plans have first-dollar coverage, without a deductible or coinsurance. 12) Comprehensive dental plans are similar to major medical expense plans, with a deductible and coinsurance. 13) Dental insurance may also be written as a prepaid service plan in the same manner as an HMO. 14) Most dental insurance plans do not cover cosmetic dentistry.

**Disability Income and Related Insurance** 1) What does the typical definition of total disability on a disability income policy state? 2) Those collecting disability income insurance benefits may be required to take what? 3) Those who suffer from presumptive disabilities, such as a loss of eyesight, are not required to take what? 4) Do people have to prove their disabled? 5) What is the primary purpose of disability income insurance? 6) Whats the most important factor to consider when writing disability income insurance? 7) A longer elimination (waiting) period will reduce the premium on what? 8) What is the waiting period like? and what terms is it stated in? 9) When does the waiting period begin? 10) What do Short-term disability policies offer? 11) If a disability income policy has a 7-day elimination period and the insured is sick for 15 days, what would the insured receive? 12) The probationary period starts when? 13) Whats a recurrent disability. 14) What is a residual disability? 15) What does it mean if a disability income policy contains an accidental means clause? 16) What does it mean if a disability income policy contains an accidental bodily injury clause? 17) What is the guaranteed purchase option? 18) What is the cost of living rider on a disability income policy?

**Disability Income and Related Insurance** 1) The typical definition of total disability on a disability income policy states that the insured is considered to be totally disabled if the insured cannot perform their job for the first 2 years, and any job that the insured is suited to do thereafter. 2) Those collecting disability income insurance benefits may be required to take a physical exam every 6 months at the insurers's expense in order to prove that they are still disabled. 3) Those who suffer from presumptive disabilities, such as a loss of eyesight, are not required to take a physical exam every 6 months at the insurer's expense in order to prove that they are still disabled. 4) Those who suffer from presumptive disabilities, such as loss of eyesight, are not required to take a physical exam in order to prove that they are still disabled. 5) The primary purpose of disability income insurance is the replacement of lost wages, should the insured become disabled. 6) The most important factor to consider when writing disability income insurance is the amount of wages that could be lost. 7) On a disability income policy, a longer elimination (waiting) perios will reduce the premium. 8) The waiting period is like a deductible, except it is stated in terms of time rather than in dollars. 9) The waiting period stars at the onset of an insured's disability. 10) Short-term disability policies have sharter elimination and benefit periods than long-term disability. 11) If a disability income policy has a 7-day elimination period and the insured is sick for 15 days, the insured would receive benefits for 8 days. 12) The probationary period starts when the policy is first issued. 13) A recurrent disability is a prior injury that reoccurs again. The elimination (waiting) period is waived. 14) A residual disability is one that never goes away. Residual coverage pays the difference between what you used to make before your disability and what you can make now. 15) If a disability income policy contains an accidental means clause, there is no coverage if an insured is injured doing something he/she meant to do. 16) If a disability income policy contains an accidental bodily injury clause, coverage applies as long as the injury was unintentional and unforeseen. 17) The guaranteed purchase option is a rider that allows the insured to purchase additional coverage at certain intervals, regardless of health. 18) The cost of living rider on a disability income policy is designed to keep the policy limit up with the rate of inflations.

**Disciplinary Actions** {Cease and Desist Order} 1) What does a C/D order require a producer to do? 2) How much does a producer who knowingly violates a C/D order be subject to?

**Disciplinary Actions** {Cease and Desist Order} 1) After a hearing, the Commissioner may also issue a C/D order requiring that a producer stop engaging in specified unfair practices. 2) A producer who knowingly violates a C/D order will be subject to a maximum fine of $50,000 per violation.

**Eligibility for Coverage** 1) Who is eligible to enroll in a group plan when an employee becomes eligible to enroll? 2) After attaining age 65, do employees remain eligible for group coverage? 3) What are employers who have 20 or more employees required to offer?

**Eligibility for Coverage** 1) Dependents are eligible to enroll in a group plan when an employee becomes eligible to enroll. 2) Employees remain eligible for group coverage even after attaining age 65. 3) Employers who have 20 or more employees are required to offer the same health benefits to employees and their spouses who are age 65 or older that they offer to younger employees.

**Employer Group Insurance** 1) On group disability income insurance how much of the benefits payable would be taxable to employees? 2) What happens if an employee pays 100% of the premium for group disability income insurance? 3) Are premiums paid by an employer for a group health policy tax deductible? 4) On AD&D insurance, are the benefits taxable?

**Employer Group Insurance** 1) On group disability income insurance, if the employer pays 60% of the premiums, 60% of the benefits payable would be taxable to employees. 2) If an employee pays 100% of the premium for group disability income insurance, none of the benefits paid are taxable. 3) Premiums paid by an employer for a group healh policy (such as medical expense or disability income) are tax-deductible, since these are fringe benefits for employees. 4) On group accidental death and dismemberment (AD&D) insurance, benefits are not taxable, regardless of who paid premiums.

**Examination of Books and Records** 1) Who may the Commissioner audit? 2) If the Commissioner discovers criminal violations have occurred, who must he turn the investigation over to?

**Examination of Books and Records** 1) The Commissioner may examine (audit) an insurer's books and records as often as necessary. 2) If the Commissioner discovers criminal violations have occurred, he must turn the investigation over to the state Attorney General for prosecution.

**Federal Regulation Act** {Fair Credit Reporting Act} 1) What does the Federal Fair Credit Reporting Act do? 2) Under the Fair Credit Reporting Act, how can you correct -incorrect information? 3)

**Federal Regulation Act** {Fair Credit Reporting Act} 1) The Federal Fair Credit Reporting Act regulates consumer investigative reports, also known as credit reports. 2) Under the Fair Credit Reporting Act, there are procedures to get incorrect information corrected without the need to file a lawsuit. 3) Under the Federal Fair Credit Reporting Act, reporting agencies must make reports available to anyone whose insurance was denied as a result of information contained in a report. 4) Under the (FFCRA) reporting agencies are not required to send credit reports to persons entitles to receive them in connection with banking, insurance, underwriting or employment.

**Federal Tax Considerations for Disability (Accident and Health) Insurance** {Personally owned Health Insurance} 1) Are premiums for individual disability income or AD&D policies are tax-deductible? 2) Are premiums paid on an individual disability income policy tax deductible? Are the benefits paid tax ded.? 3) How much tax may a self employed sole proprietor deduct? 4) Are individual health insurance benefits taxable? 5) Are premiums paid for individual medical expense and qualification LTC insurance tax deductible?

**Federal Tax Considerations for Disability (Accident and Health) Insurance** {Personally owned Health Insurance} 1) Premiums for individual disability income or AD&D policies are not tax-deductible. 2) Premiums paid on an individual disability income policy are not tax-deductible, but benefits paid are not taxable. 3) A self-employed sole proprietor may tax deduct 100% of the premiums paid for medical expense insurance. 4) Individual health insurance benefits are not taxable. 5) Premiums paid for individual medical expense and qualification LTC insurance are tax-deductible to the extent that they exceed 10% of an individual's adjusted gross Income.

**Fixed vs Variable Annuities 1) What is the primary challenge faces by those that purchase fixed annuities? 2) Will the rate of return that an insurer pays on a fixed annuity keep up with inflation? 3) What do Fixed Annuities guarantee? 4) Fixed Annuities are backed by what? 5) Fixed Annuities pay as an? 6) Do Fixed annuities usually pay an interest that is similar to other types of conservative investments? 7) What is an Equity-Indexed Annuity? 8) What is an EIA and do they have much purchasing power? Do they carry inflation risk? 9)

**Fixed vs Variable Annuities 1) The primary challenge faced by those that purchase fixed annuities is purchasing power risk, since the rate of return is fixed. 2) The rate of return that an insurer pays on a fixed annuity might not keep up with inflation. 3) Fixed annuities guarantee a fixed rate of return and are backed by the state guaranty general account. 4) Fixed Annuities are backed by the insurers general account. 5) Fixed annuities usually pay an interest rate. 6) Fixed annuities usually pay an interest that is similar to other types of conservative investments. 7) An annuity which has a rate of return that is based on an index of equity products is an Equity-Indexed Annuity. 8) (EIA's) Equity-Indexed Annuities, have little purchasing power or inflation risk since their rate of return is based in part on an equity such as index or S&P 500. 9) On a market value adjusted annuity, the contract will pay the specified interest rate if it is held for a specific period of time. Adjustments are only made if the contracts is surrendered early.

**Fraud and False Statements** 1)

**Fraud and False Statements** 1) Fraudulent Insurance acts are characterized by acts or omissions that a person does knowingly and with the intent to injure, defraud, or deceive. 2) Federal fraud and false statement regulations prohibit knowingly making any false financial reports to insurance regulators, willfully embezzling or misappropriating insurance (funds or premiums), using threats of force or writing threatening letters to insurance regulators in order to influence their decisions or willfully engaging in the business of insurance after having been convicted of a felony involving dishonesty or breach of trust. 3) A material fact is one which, if known, would have caused the policy to be issued with substantially different terms. 4) It is lawful to advertise honest differences between insurance contracts.

**General Tax Considerations for Life Insurance and Annuities {Taxation of Personal Life Insurance} 1) In Life insurance, death benefits are tax-_______? 2) How are dividends paid out? -are they taxable? -why? 3) How are Dividends received by the owner of stock in a stock company taxed? Dividends are never taxed as? 4) How can a taxable event occur from a cash surrender where: Amount [recieved ≥ amount paid in premiums]? 5) What is a Tax-deferred 1035 exchange? 6) On a Cash surrender of a life insurance policy, amounts received in excess of premiums paid are ________? 7) Are benefits taxable to the beneficiary should they die (In Group Life insurance)? 8) How are premiums paid for individual life insurance are taxed? -the benefits? 9) Life Insurance Policy who gift their policies to a charity are entitled to?

**General Tax Considerations for Life Insurance and Annuities {Taxation of Personal Life Insurance} 1) Death benefits paid to beneficiaries are tax free on all life insurance. 2) Dividends which are paid out by mutual insurers are not taxable to the policyowner because they are considered to be a return of the premium paid by the policyowner. 3) Dividends received by the owner of stock in a stock company are taxable as ordinary income. Dividends are NEVER taxed as capital gains. 4) A cash surrender where the amount received is more than amount paid in premiums would cause a taxable event. 5) Surrendering a life insurance policy for cash and using the proceeds to buy a new life insurance policy from a different insurer is a Tax-deferred 1035 exchange. 6) On cash surrender of life insurance policy, amounts received in excess of premiums paid in are taxable. 7) In group life insurance, benefits are NOT taxable to the beneficiary should the employee die. 8) Premiums paid for individual life insurance are NOT tax deductible, nor are benefits taxed. This applies to Key Person insurance as well. 9) Life insurance policyowners who gift their policies to a charity are entitled to a tax deduction in the year of the gift.

**Group Accident and Health Insurance** 1) Are groups allowed to be formed to buy insurance solely? 2) What % of employees must enroll in a Non-contributory group plan? 3) What % of employees must enroll in a contributory group plan? 4) What are group participation requirements designed for? 5) Who is a group insurance contract between? 6) In group insurance, who is issued a master policy and who receives certificates of insurance? 7) Who has jurisdiction over all certificates of insurance issued under the contract? 8) What does group underwriting take into consideration? 9) How must group coverage be written? 10) Can an insurer legally cancel small group plans if the employer stops paying the premium? 11) Define MET, and what do they offer? 12) Between Association group and other types of group health, which has higher admin. costs?

**Group Accident and Health Insurance** 1) Groups may not be formed just to buy insurance. 2) On non-contributory group plans, 100% of the eligible employees must enroll. 3) On contributory group plans, 50% of the eligible employees must enroll. 4) Group participation requirements are designed to help prevent adverse selection. 5) A group insurance contract is between the employer and the insurance company. 6) In group insurance, the employer is issued a master policy and employees are issued individual certificates of insurance. 7) The state in which a group contract is delivered to the policyholder is generally held to have jurisdiction over all certificates of insurance issued under the contract. 8) Group underwriting takes into consideration the average age of the group, the health of the group and persistency factors. 9) Group coverage must be written for the benefit of employees and cannot discriminate in favor of highly paid workers. 10) Although there are strict regulatory requirements related to what an insurer can and can't do in regard to small group insurance, an insurer CAN legally non-renew or cancel a small group plan if the employer stops paying the premium. 11) Multiple employer trusts (MET's) offer group coverage for employers in the same industry. 12) Association group insurance has higher administrative costs than other types of group health insurance and is more subject to adverse selection.

**Group and Business Disability** 1) What is disability income written to cover? 2) How is individual disability income written to cover? 3) What does Key Person disability insurance indemnify? 4) What will business overhead insurance cover? 5) How is a disability (buy/sell) policy constructed?

**Group and Business Disability** 1) Group disability income is written to cover only a percentage of an employee's gross earned income. 2) Individual disability income is written to cover only a percentage of an insured's net (after-tax) earned income. 3) Key person disability insurance indemnifies the business for the loss of services of a key employee due to disability. 4) Business overhead insurance will cover the ongoing business expenses of a self-employed person, such as rent or salaries while the sole proprietor is disabled. Premiums are tax deductible, but benefits are taxable. 5) A disability (buy/sell) policy could be structured to pay a monthly benefit to a corporation for up to 1 year while waiting to see if a disabled partner recovers. If not, then a lump sum is paid as a partnership buyout.

**Hearings** 1) Can an insurance license be suspended or revoked without a hearing? 2) Where are hearings held?

**Hearings** 1) An insurance license cannot be suspended or revoked without a hearing. 2) Hearings are held at the Insurance Department, not in a court of law.

**Individual Disability (Accident and Health) Insurance Basics** {Uniform required provisions} 1) Who do Mandatory provisions protect? Who do Optional provisions protect? 2) health insurance policies are incontestible after they have been in force for 2 years except in what kind of case? 3) How is the probationary period different from the time limit on certain defences provision (Incontestability). 4) Who does the incontestability clause protect? What does this clause state? 5) What is the time limit on certain defences clause called? 6) If an insured is to be reinstated, is an application required? and how long is the probationary period if they are? 7) What happens if no reinstatement application is required? 8) What does the legal actions provision state? 9) When should Health insurers pay individual claims? 10) What does the time payment of claims provision allow for? 11) Why would a claim be denied? 12) Do insurers have to pay unsubstantiated claims? 13) After receipt of notice of claim, what must the insurer do? 14) What would happen if claims forms are not provided by the insurer within the time frame required?

**Individual Disability (Accident and Health) Insurance Basics** {Uniform required provisions} 1) Mandatory provision, such as the grace period, protect the insured. Optional provisions, such as probationary periods, protect the insurance company. 2) Except for fraud, health insurance policies are incontestible after they have been in force for 2 years. 3) The probationary period is different from the time limit on certain defenses provision (Incontestability); the maximum probationary period is usually 12 months and the incontestibility provision is usually 2 years. 4) The incontestability clause protects the insurance company. Under this clause, the company may contest a claim for the first 12 years, but not thereafter unless it can prove fraud. Companies are reluctant to charge fraud, however, since it requires proof of intent to deceive and is difficult to prove. 5) The time limit on certain defenses clause is another name for the incontestability clause (generally for up to 2 years, except fraud). 6) If a reinstatement application is required, an insured is reinstated when the company says or after 45 days, whichever comes first. When an insured is reinstated, a 10-day probationary period starts for sickness only. 7) If no reinstatement application is required, an insured is reinstated effective upon payment of the late premium to either the company or the producer. 8) Under the legal actions provision, if a claim is not paid immediately, the claimant must wait at least 60 dyas before filing a lawsuit for failure to pay. Such suits must be filled within 3 years of the original loss. 9) Health insurers should pay individual claims as soon as possible, as specified in a provision known as timely payment of claims. 10) The time payment of claims provision allows the claims department time to investigate (maximum of 60 days). 11) Claims may be denied if they occur after policy expiration. 12) Insurers do not have to pay unsubstantiated claims. 13) After receit of notice of claim, the insurer must send out claim forms. 14) If claims forms are not provided by the insurer within the time frame required, the insured can submit proof of loss in writing.

**Insurance Regulation {licensing} -Process: 1) What is required of a candidate for Connecticut producer license? 2) What is the purpose of producer licensing education? 3) Who must business entity producers designate in order to be responsible for compliance with the insurance laws of state?

**Insurance Regulation {licensing} -Process: 1) Candidates for Connecticut producer licenses must be at least age 18,complete the pre-licensing application, pay nonrefundable fees and pass he required examination. 2) The purpose of producer licensing education and examinations is to make sure that producers have adequiteknowledge of insurance when selling insurance to customers. 3) Business entity producers must designate a licensed producer to be responsible for compliance with the insurance laws of this estate.

**Insurance for Senior Citizens and Special Needs Individuals** {Medicare} 1) How do you become eligible for medicare? Does Kidney failure qualify you? 2) What is the difference between what the doctor bills and what Medicare pays is called? 3) What provisions come with Medicare Part A? -Part B?

**Insurance for Senior Citizens and Special Needs Individuals** {Medicare} 1) Certain persons under age 65, who are disabled or who have suffered kidney failure are also eligible for Medicare. 2) On Medicare, the difference between what the doctor bills and what Medicare pays is called the excess charge. 3) Part A of Medicare covers hospitals and Part B covers doctors.

**Insurers***= 1) Do stockholders pay dividends? and are they guaranteed? 2) Define a reciprocal insurance company. 4) The government offers insurance primarily based upon? Do they offer insurance for the purpose of preventing fraud? 5) A foreign company has their home office where? 6) An insurer incorporated outside of the U.S. who sells in the U.S. is?

**Insurers 1) A stock insurer may pay dividends to its shareholders, but they may not be guaranteed. 2) A reciprocal insurance company is managed by an attorney in fact. -An unincorporated association of individuals who insure each other is known as a reciprocal insurer. 4) The government offers insurance primarily based upon social needs, such as flood insurance & workers comp. Does not offer insurance for the purpose of preventing fraud. 5) A foreign company has their home office in another state. 6) An insurer incorporated outside of the U.S. who sells in the U.S. is an alien company.

**Long-Term Care (LTC) Insurance** 1)

**Long-Term Care (LTC) Insurance** 1) When an insured needs care, but not 24-hour care supervised by a doctor, the insured needs long-term care. 2) Long-term care policies have a 30-day free-look period. 3) Long-term care insurance is underwritten based upon the applicant's ability to perform the activities of daily living (ADL's). 4) ADL's include mobility, dressing oneself, bathing, toileting and eating. 5) LTC policies must cover Alzheimers disease. 6) LTC policies may not condition benefits on a prior hospital stay. 7) LTC policies may not condition benefits on a prior hospital stay. 8)LTC home health care services include coverage for physical therapy, nursing care, home health aides and homemaker services. 9) Adult daycare is an LTC coverage which covers meals, meaningful activities, and general supervisiono of adults in a professionally staffed non-residential facility. 10) Respite care is an LTC coverage that allows family members a reprieve or break from their caregiving responsibilities. 11) The period of time that a long-term care policy will provide custodial care in a nursing home is known as the benefit period. 12) LTC policies usually pay a fixed amount per day while an insured is confined to a custodial nursing home. 13) Optional LTC coverage includes home health care, adult day care and hospice care. 14) The LTC return of premium rider will refund some or all of the insured's premiums to the insured's estate or beneficiary if the insured dies prior to age 65. 15) Insurers who write LTC insurance are usually required by state law to allow the insured to name a third party who the insurance company would contact if the insured forgets to pay the premium. 16) LTC insurers must include coverage for inflation protection unless the applicant rejects it in writing. 17) LTC policies may exclude pre-existing illness, acute care, war related illness and self-inflicted injuries, but may not exclude Alzeimer's disease. 18) On qualified LTC policies, insureds may add a nonforfeiture benefit.

**Maintaining a License** 1) What are the conditions required in order to keep a producer license in effect? 2) What happens to a producer who did not comply with continuing education requirements? 3) Who is notified if a producer changes legal name or address? -Within what time frame must they be notified in? 4) Who must be notified if an insurer who terminates a producer's appointment? -Within what time frame must they be notified in? 5) Is a producer who is subject to aministrative action or criminal prosecution to be reported to the Commissioner? 6)***A producer doing business under any name other than their own legal name must notify the Commissioner prior to using the assumed name.*** 7) What must a producer complete in order to renew their license? 8) How many hours of CE must be completed for each line of authority? 9) Are producers generally granted time-extensions to complete their continuing education requirements? 10) What must a producer who seeks reinstatement of their license within 12 months after the license expiration date be required to complete?

**Maintaining a License** 1) Producer licenses will continue in effect as long as continueing education requirements are met and license renewal fees are paid. 2) A producer who did not comply with the continuing education requirements may not apply for license renewal until they have successfully completed their continuing education requirements for the period. 3)Producers must notify the Commissioner of a change of legal name or address within 30 days of the change. 4) An insurer who terminates a producer's appointment must inform the Commissioner within 30 days of the date of termination. 5) A producer who is subject to administrative action or criminal prosecution in another jurisdiction must notify the Commissioner within 30 days of the final disposition of the matter. 6) A producer doing business under any name other than their own legal name must notify the Commissioner prior to using the assumed name. 7) Producers must complete 24 hours of CE every 2 years in order to renew their license. Of the credit hours, 3 must be specific to state insurance regulations or ethics. 8) A minimum of 6 CE hours must be completed for each line of authority. 9) In general, producers are not granted extensions of time to complete their continuing education requirements. This applies to everyone except those serving in the military that are prevented from meeting their CE requirements. 10)A producer who seeks reinstatement of their license within 12 months after the license expiration date will be required to complete any unmet continuing education requirements, as well as undergo 24 more credit hours of CE.

**Medicaid** 1) What is Medicaid eligibility based upon? 2) Who funds Medicaid?

**Medicaid** 1) Medicaid eligibility is based upon financial need. There is no age limit. 2) Medicaid is funded by state, local, and federal monies. It is medical welfare, available to low-income individuals an families.

**Modified Endowment Contracts** (MEC's) 1) What does the IRS consider MEC's to be and how does that effect the nature of their tax treatment? 2) What happens if a MEC that is classified as life insurance fails the 7-pay test? 3) Making a material change to a cash value life insurance policy may cause the 7-pay test to be applied again and could cause what? 4) What is the IRS penalty for premature distributions of MEC's?

**Modified Endowment Contracts** 1) Modified endowment contracts lose their favored tax treatment as life insurance since the IRS considers them to be investments. 2) MEC's are classified that way for the life of the contract. 3) A modified endowment contract that is classified as life insurance but fails the 7-pay test would have taxable loans and withdrawals. 4) Making a material change to a cash value life insurance policy may cause the 7-pay test to be applied again and could cause the policy to be classified as a modified endowment contract. 5) Modified endowment contracts have a 10% IRS penalty for premature distributions.

**Other General Provisions** 1) What does is mean when a policy is considered to be optionally renewable? 2) What kind of policy requires that the insurance company cannot change coverage or the rates, but it does not have to offer renewal? 3) If a policy is non-cancellable and guaranteed renewable, what can't a company change? 4) What is a guaranteed renewable policy? 5) Who is a guaranteed renewable policy at the option of? How will the insurer change rates? 6) When must a conditionally renewable policy be renewed?

**Other General Provisions** 1) If a health insurable policy can be non-renewed by the insurer at the end of any policy period, the policy is considered to be optionally renewable. 2) On a non-cancellable policy, the insurance company cannot change the coverage or the rates, but it does not have to offer renewal. 3) If a policy is non-cancellable and gauranteed renewable, the company cannot change anything and it must offer renewal. 4) On a gauranteed renewable policy, the insurance company cannot change the coverage, but it can change the rates by class (NOT INDIVIDUALLY). 5) A gauranteed renewable policy is renewable at the option of the insured (through premiums) up to (generally 65), but the insurer may change rates by class. 6) A conditionally rnewable policy must be renewed if the insured meets the specified conditions.

**Part A - Hospital Insurance** 1) What does Part a of Medicare provide? 2) How long does Medicare part A pay for inpatient psychiatric hospital services during the beneficiary's lifetime? 3) How many days does Medicare Part A cover a skilled nusing facility stay for each benefit period? 4) Does Medicare Part A cover custodial care in a nursing home?

**Part A - Hospital Insurance** 1) Part A of Medicare provides hospital insurance. 2) Medicare Part A only pays for up to 190 days of inpatient psychiatric hospital services during the beneficiary's lifetime. 3) Medicare Part A also cover a skilled nursing facility stay for up to 100 days in each benefit period. 4) Medicare Part A covers skilled nursing facility care after a 3-day minimum hospital stay, but not custodial care in a nursing home.

**Part B - Hospital Insurance** 1)

**Part B - Medical Insurance** 1) Part B of Medicare (Medical Insurance) is partially funded by user premiums. 2) Medicare Part B (physician's services) has coinsurance (80/20) and a deductible. 3) The Medicare Part B coinsurance is calculated as a percentage of medicare's approved amount, not the amount the doctor charges. 4) Medicare Part B has a premium, coinsurance, ans a deductible which have amounts that are set annually. The amount paid by Social Security is dependent upon the Primary Insurance Amount (PIA) of the insured.

**Part C - Medicare Advantages* 1)

**Part C - Medicare advantages** 1) Those who enrol in Part C of Medicare (Medicare Advantage) do not need to purchase a Medicare supplement. 2) Part C is the part of Medicare that provides Managed Care.

**Part D - Prescription Drug Insurance** {Medicare Suppliments} 1) What must you be enrolled in -in order to be eligible for Part D of Medicare? 2) Who sells Medicare suppliments? 3) How long is the enrolment period for buying Medigap policy? 4) Who can be denied Medigap coverage for health problems during enrolment? 5) Are Medicare supplement plans required to be approved by medicare? 6) Are standardized medigap plans the only ones offered? 7) What are Medicare suppliments required to cover? 8) Is it unlawful to sell someone more than one medigap policy? 9) What is the maxmimum probationary period on Medicare suppliments? 10) When selling Medicare supplement, what must agents give out? 11) How long is the free-look period on Medicare suppliments? 12) Is it legal to sell someone more than one Medicare Policy? Is it illegal to sell someone a replacement suppliment? 13) Do Medicare suppliment policies have to contain guidelines for Medicare eligibility?

**Part D - Prescription Drug Insurance** {Medicare Suppliments} 1) In order to be eligible for Part D of Medicare (prescription drug insurance), one must be enrolled in Medicare Part A or in Part (A & B). 2) Medicare supplements are sold by private insurance companies and their agents. 3) There is a 6-month open enrollment period for buying Medigap policy. 4) Persons age 65 or older cannot be denied Medigap coverage for health problems during open enrollment. 5)Medicare supplement plans are not required to be approved by Medicare. 6) Only standardized Medigap plans may be offered. 7) Medicare suppliments are required to cover Medicare's Part A and Part B coinsurance and the first 3 pints of a blood transfusion as basic r core benefits. 8) It is unlawful to sell someone more than one Medigap policy. 9) The maximum probationary period on Medicare supplements policies is 6 months. 10) when selling Medicare supplement, agents must give out an Outline of Coverage no later than the time of application and must obtain a signed receipt from the applicant. 11) Medicare suppliments have a 30-day free-look period. 12) Although selling someone more than one Medicare supplement is prohibited, replacing one Medicare supplement policy with another is permitted as long as it is not detrimental to the insured. 13) Medicare supplement policies do not have to contain guidelines for Medicare eligibility.

**Producers Regulation** 1) Can producers share commissions? 2) What may a producer whose license has lapsed receive? 3) Can producers pay or assign their commissions to a business entity? 4) ***Insurers must file a policy forms and rates with the Commissioner for approval. Forms and rates are considered to be approved 30 days after they are filed, unless disapproved.***

**Producers Regulation** 1) Commisions may be shared by producers who have like licenses. 2) A producer whose license has lapsed may receive deferred commissions on business they sold as long as they were licensed at the time of the sale. 3) A producer may pay or assign their commissions to a business entity (agency) with whom they are affiliated. 4) Insurers must file a policy forms and rates with the Commissioner for approval. Forms and rates are considered to be approved 30 days after they are filed, unless disapproved.

**Qualified Plans** (pt. 2) {Plans, characteristics, purchasers} 1) What is a deffered compensation plan? 2) Who limits the amounts contributed to qualified plans? 3) Is there a maximum dollar limit that applies to rollovers from one Qual. plan to another? 4) How much of a distribution from a qualified plan may be rolled over into an IRA? -With or without tax? 5) What does a trustee-to-trustee rollover eliminate? 6) Who are Keogh plans made available to? 7) Define: Profit-Sharing-Plan. 8) When do contributions made by participants to a SIMPLE plan be vested? 9) How are the proceeds taxable when surrendering a 403(b) TSA for cash under the age 59(1/2)?

**Qualified Plans** (pt. 2) 1) A plan where an employee forgoes current pay in exchange for future benefits is known as a deferred compensation plan. 2) Amounts contributed to qualified plans are limited by the IRS. 3) There is no maximum dollar limit that applies to rollovers from one qualified plan to another. 4) All or part of a distribution from a qualified plan may be rolled over into an IRA without tax. 5) A trustee-to-trustee rollover eliminates the withholding tax requirement. 6) Although Keogh plans are available to self employed sole proprieters, partners, and their employees, they are NOT available to corporate officers. 7) When a corporation sets up a qualified retirement plan to contribute a portion of their net income for the benefits of employees, it is known as a Profit-Sharing-Plan. 8) Contributions made by participants to a SIMPLE plan must be vested immediately. 9) When surrendering a 403(b) TSA for cash under the age 59(1/2), all the proceeds are taxable as: [ordinary income] + [The proceeds], are subject to an IRS 10% premature distribution penalty.

**Qualified Plans** (pt. 1) 1) What is a [Defined Benefit] Qualified plan? 2) What is a Defined Contribution Plan? 3) What do most qualified retirement plans require participants to take out minimum distributions no later than what age? 4) What are the coverage requirements in a qualified plan? 5) Who manages qualified plan assets exclusively for the benefit of the participants?

**Qualified Plans**(pt. 1) 1) A defined benefit qualified plan is structured based on a pre-determined benefit amount. 2) A defined contribution plan is a qualified plan. 3)Most qualified retirement plans require participants to begin taking required minimum distributions no later than April 1st after they reach age 70(1/2). 4) The coverage requirements in a qualified plan requires a broad range of employees to be covered by the plan. 5)Turstees must manage qualified plan assets exclusively for the benefit of the participants.

**Section 1035 Exchanges** (IRC = internal revenue code) 1) Under Section 1035 of the Internal Revenue Code, what can an Annuity be traded for? 2) Under Section 1035 of the Internal Revenue Code, Taxes may be deferred when exchanging what kind of policies? 3) Although the IRC (sect. 1035) exchanges defer taxes, do they void them?

**Section 1035 Exchanges** 1) Under Section 1035 of the Internal Revenue Code, an annuity may be exchanged for another annuity, but not for life insurance. 2) Taxes may be deferred when exchanging one life insurance contract for another under Section 1035 of the Internal rev. code. 3) Although the (IRC) Section 1035 exchanges defer taxes, they do not avoid them.

**Social Security Disability** 1) What does OASDHI stand for? what is it actually? 2) Are Social Security disability income benefits harder to receive than benefits provided by private disability income insurers? 3) What do you need to have fully insured status under social security for disability benefits? 4) What must a disabled person have in order to be eligible for soc. sec. disability benefits? 5) How long is the waiting period soc. sec. disab. benefits? 6) What is required to receive Social security disability benefits?

**Social Security Disability** 1) OASDHI is an acronym for social securty. (Old age, survivors, disab, health insurance.) 2)Social Security disability income benefits are harder to obtain than benefits provided by private disability income insurers. 3) To have fully insured status under social security for disability benefits, a worker must have contributed to social security for at least 40 quarters (10 years). 4) A disabled person must have fully-insured status in rder to be eligible for social security disability benefits. 5) The waiting period for social security disability benefits is 5 months. 6) Social security disability benefits require that a disabled person cannot work ANY job, and that the disability is expected to last at least 1 year or result in death.

**State Regulation** {Commissioner's General Duties and Powers} 1) Who regulates insurance? -Are they uniform by state? 2) What are the Commissioners broad powers to protect the public's best interest? 3) What is the Commissioner responsible for determining? 4) Can the Commissioner issue limited licenses? 5) What must Rate filings give due consideration to?

**State Regulation** {Commissioner's General Duties and Powers} 1) Insurance is regulated by state law and laws are not uniform from state to state. 2) The Commissioner has broad powers to administer and enforce the state's Insurance Code in order to protect the public's best interest. 3) The Commissioner is responsible for determining if an insurer is insolvent (bankrupt). 4) The Commissioner may issue limited licenses, such as credit life, without pre-license training or examination. 5) Rate filings must give due consideration to past and prospective losses within and outside of this state and must allow the insurer to make a reasonable underwriting profit.

**Suspensions, Revocations, Refusal to Issue or Renew** {Fines:} 1) How can a producer's license be terminated? 2) Can a producers license be revoked/suspended for declaring bankruptcy? 3) What are persons found guitly of violating the insurance code subject to? 4) What 2 central powers does the Commissioner have? 5) What is the fine per violation for unknowingly engaging in an unfair competition or practice? 6) What is the fine per violation for knowingly engaging in an unfair competition or practice? 7) What is the fine for individuals found GUILTY of unknowingly engaging in an unfair competition or practice? 8) How much will Individuals that continue to renew contracts for an unauthorized insurer and who fail to file required affidavits be fined for?

**Suspensions, Revocations, Refusal to Issue or Renew** {Fines:} 1) A producer's license will terminate when itt is voluntarily surrendered or when it is supended or revoked by the Commissioner. 2) A producers license may not be revoked/suspended for declaring bankruptcy. 3) Persons found guitly of violating the insurance code may be subject to civil (fines) or criminal (jail) penalties. 4) The Commissioner has the power to subpoena witnesses and compel parties to provide documents relevant to his investigations. 5) The fine per violation for unknowingly engaging in an unfair competition or practice is $5,000. 6) The fine per violation for knowingly engaging in an unfair competition or practice is $25,000. 7) Individuals found guilty of unknowingly engaging in an unfair competition or practice may be fined up to the maximum aggregate of $50,000. Those found doing it knowingly pays a maximum aggregate of $250,000. 8) Individuals that continue to renew contracts for an unauthorized insurer and who fail to file required affidavits may be fined up to $4,000, imprisoned for 6 months, or both.

**Taxation of individual Retirement Plans** 1) If a surviving spouse is the beneficiary of an IRA owner who died before distributions begin, what may the spouse do to roll it over? 2) What can IRA's be funded with? 3) What conditions can children buy an IRA? 4) Can Deffered Annuities be used to fund an IRA? 5) If income is below a certain level, how are traditional IRA contributions taxed? 6) Is the direct transfer of IRA funds from one trustee to another taxable? 7) Contributions made to qualified plans generally made before or after taxes? 8) What do Qualified Retirement plans offer? 9) What kinds of penalties do Qualified plans have? What kinds of penalties do the IRA levy and how is it accounted? 10) How do you become subject to the lifetime dollar limit? 11) Premature distributions made from a deductible IRA for qualified educational expenses are exempt from what? 12) Do bankruptcy waive premature distribution penalties? 13) How are Roth IRA's taxed differently than traditional IRA's? 14) Whats different about a Roth IRA's distribution than a traditional IRA? 15) Are distributions from Roth IRA's taxable? What circumstances allow them to not be taxable? 16) If an individual or spouse is not covered by a retirement plan, are contributions to an trad. IRA tax deductible? 17) If a surviving spouse inherits an IRA, the spouse must start withdrawals when?

**Taxation of individual Retirement Plans** 1) If a surviving spouse is the beneficiary of an IRA owner who died before distributions begin, the spouse may elect to treat the IRA as his/her own, by continuing it or rolling it over to a new one. 2) IRA's may be funded with annuities, but NOT with Whole-Life policies. 3) Children cannot buy an IRA unless they have earned income. 4) Deferred annuities may be used to fund an IRA. 5) If income is below a certain level, traditional IRA contributions may be tax deductible even though the employee is an active participant in another qualified plan. 6) The direct transfer of IRA funds from one trustee to another is NOT taxable. 7) Contributions made to qualified plans generally made before taxes, which benefits employees. 8) Qualified retirement plans offer special tax advantages to both employers and employee, in that employers can tax deduct contributions. (they are ont taxable to employees until distributed). 9) Qualified plans have early withdrawal penalties. The IRS levies a 10% penalty for cash surrenders on annuities, IRA's, TSA's, and Keogh plans prior to age 59(1/2) unless the individual has died or become disabled. this penalty is in addition to income taxes due. 10) Premature distributions may be made to a first-time homebuyer from an IRA without incurring a 10% penalty, subject to a lifetime dollar limit. 11) Premature distributions made from a deductible IRA for qualified educational expenses are exempt from the 10% penalty, but they are not exempt from income tax. 12) Premature distribution penalties are not waived due to bankruptcy. 13) A Roth IRA is different from a traditional IRA because contributions are not tax deductible but distributions are tax-free. 14) A Roth IRA is different than traditional because Roth IRA does not have any required distribution date. 15) Distributions from a Roth IRA are not taxable if the participant held the contract for at least 5 years and is atleast age 59(1/2). 16) Contributions to a traditional IRA will always be tax deductible if an individual and spouse (if married) aren't covered by a retirement plan at work. 17) If a surviving spouse inherits an IRA, the spouse must start withdrawals no later than April 1st of the year after they reach age 70(1/2).

**Types of licenses** 1) Who do producers represent? 2) What is an insurer responsible for in their producers? 3) What must a certified insurance consultant provide to their clients? 4) How many non resident licenses and how many resident licenses may a producer obtain? 5) How may a non resident producer obtain a CT insurance license? 6) Connecticut continueing education requirements are waived for non resident producers for what reason? 7) Can the Commissioner issue a temporary license without exam?

**Types of licenses** 1) Producers represent the insurer, not the insured. Producers are also known as agents. 2)An insurer is responsible for all acts of thier producers, as long as the producer stays within the scope of their authority. 3) A certified insurance consultant must give the person advised a statement in writing specifying the advice given as well as a receipt of the fee paid to the consultant for their services. 4) Although a producer may only have one resident license, they may obtain as many as nonresident licenses as they need. 5) Non resident producers may obtain a CT insurance license without being required to pass an exam as long as they are in good standing in their home state and there are reciprocal agreement between states. 6) Connecticut continueing education requirements are waived for nonresident producers based upon reciprocal agreemennts between states. 7) The commissioner may issue a temporary license, without exam, for up to 180 days, to the surviving spouse of a producer who dies or becomes mentally or physically disabled.

**Types of providers and plans** 1)

**Types of providers and plans** 1)

**Unfair Claims Settlement Practices** 1) Why are claims settlement practices considered to be unfair? 2) What is an 'unfair claims practice'? 3) What is an 'unfair claims settlement practice'?

**Unfair Claims Settlement Practices** 1) Claims settlement practices may be considered to be unfair if comitted with such frequency as to indicate a general business practice. 2) Refusing to pay claims without conducting a reasonable investigation is an example of an unfair claims practice. 3) Attempting to settle claims on the basis of an application which was alter without notice to the insured is an unfair claims settlement practice.

**Unfair and Prohibited Practices** 1) Define misrepresentation. 2) Define Defamation. 3) What is coercion considered to be? 4) How may a financial institution be guilty of coercion? 5) Is it unlawful to give or receive a rebate? 6) What is a rebate? 7) Is the payment of dividends considered to be rebating? 8) Define Twisting. 9) Is rate discrimination unlawful? when are they not? 10) 11) Can the availability or amount of coverage be denied or reduced? 12) Rates vary depending upon what?

**Unfair and Prohibited Practices** 1) Making false or misleading statements about the dividends to be paid under an insurance policy is an unfair practice known as misrepresentation. Dividends may never be guaranteed. 2) Defamation is defined as making oral or written statements that are false or maliciously critical of the financial condition of any insurer or producer. 3) Coercion is considered to be a restraint of trade and is an unfair trade practice. 4)A financial institution that requires applicants to buy insurance from them as a condition to loan approval may be guilty of coercion. 5) It is unlawful to either give or receive a rebate. 6) Giving part of one's commission to a customer as an inducement to a sale is known as rebating, which is an unfair trade practice. 7) The payment of dividends is not considered to be rebating since it is stated in the policy that they may be paid. 8) Inducing a person to drop existing insurance and buy a new insurance policy by misrepresenting the terms of the policy or by making incomplete comparisons is an unfair practice known as twisting. 9) Rate discrimination is unlawful, unless the rate differential is based upon verifiable actuarial data. 10) Rates may not be too high, too low, or unfairly discriminatory. 11) The availability or amount of coverage may not be denied or reduced based upon marital status. 12) Rates may vary depending upon the age of the applicant.

**Uniform Optional Provisions** 1) What does the change of occupation provision allow for? 2) What does the the misstatement of age clause state? 3) To reinforce the principle of indemnity from collecting more than they actually lost, most disability income policies contain what? 4) What happens if an insured pays the overdue premium on a lapsed health insurance and doesn't hear from the insurer? 5) What does the unpaid premium provision state? 6) a cancellable health insurance policy may be canceled by who? 7) When the policy is canceled midterm, what happens? What happens when the company cancels? What happens when the insured cancels? 8) Will cancellation have an effect on pending claims? 9) The Illegal Occupations Provision allows for what?

**Uniform Optional Provisions** 1) The change of occupation provision allows the insurer to change the benefit amount or premium should the insured change occupations during the coverage period. 2) Under the misstatement of age cluase, it is the benefits that are adjusted, not the premiums. 3) To reinforce the principle of indemnity from collecting more than they actually lost, most disability income policies contain an insurance with other Insurers clause, which requires insurers to share a claim propportionately. 4) If an insured pays the overdue premium on a lapsed health insurance policy and does not hear from the insurer, the insured is automatically reinstated in 45 days. 5) Under the unpaid premium provision, if an insured has a claim in the grace period, the insurer may subtract the overdue premium from the amount of the claim paid. 6) A cancellable health insurance policy may be concaeled by either the insurer or the insured. 7) Unearne premiums must be refunded to an insured who was canceled midterm. A pro-rata refundis sent when the company cancels. A short-rate is sent when the insured cancels. 8)Cancellation will have no effect on a pending claim. 9) The Illegal Occupations Provision would allow an insurer to deny coverage if the insured became injured or died while committing a felony.

**Uses of Annuities 1)

**Uses of Annuities 1) Employers may use annuities to fund deferred compensation plans, but not corporae pension plans. 2) Lottery payouts and structured settlements are often funded by annuities. 3) A self-employed person cannot use an annuity to fund a 403(b) tax-sheltered annuity (TSA). 4) A 403(b) TSA is funded by making voluntary before-tax contributions. 5) 403(b) TSA's are owned by the employee, no the employer. 6) A corporation cannot use an annuity to build tax-deferred growth on corporation assets. Only individuals are entitles to tax deferred annuity earnings. 7) Most immediate annuities are purchased by those who wish to supplement their retirement income. 8) Most annuities are used for retirement purposes and are considered to be LONG-TERM investments. 9) One purpose of an annuity is to keep customers from outliving their savings. 10) When recommending a variable annuity, the agent should inquire about the applicant's tax status. 11) Producers selling annuities must have reasonable grounds for believing that the transaction is suitable based upon a customer's financial status, tax status, and investment objectives.

**General Insurance 1) Insurance is defined as? 2) The chance of loss without any chance of gain is called? 3) What kind of risk has the possibility for gain or loss and is not insurable? 4) Risk is defined as? 5) Define Exposure 6) A ________ is something that increases the chance of loss. 7) ***The presence of a physical loss increases the chance of a loss occuring. 8) Define Peril 9) What do you need in order to be insurable? 10) The Law of large numbers allows insurers to: 11) The Law of large numbers applies to? 12) Why do most insurers buy reinsurance? 13) Are insurance laws required to be uniform from one state to another?

1) Insurance is defined as the transfer of PURE risk. 2) Pure Risk. 3) Speculative Risk. 4) Risk is defined as the chance of loss. 5) Exposure is a condition that could result in a loss. 6) HAZARD is something that increases the chance of loss. 7) ***The presence of a physical loss increases the chance of a loss occuring. 8) Peril - as a cause of loss, such as a fire. 9) Losses must be calculable to be INSURED 10) to: predict claims more accurately. 11) applies to: groups of people, not individuals. More people, more accurate the predictions are. 12) Most insurers buy reinsurance to protect themselves in the event of a catastrophic loss. 13) No, Insurance laws are not required to be uniform from one state to another.

***Contracts*** 1) The elements of a legal contract may be remembered by the acronym C-O-A-L. What does it stand for? 2) What are the requirements of a valid contract? 3) Is Advertising considered to be an offer? 4) A specific and definite proposal to enter into a contract is known as __________. 5) **Consideration on a policy need not be equal. 6) Can a policy be voided by unequal consideration? 7) Under the consideration clause, what must be exchanged? 8) Why do insurance policies typically favor the insured? 9) What is a unilateral contract? -and, are insurance policies unilateral? 10) What does the principle of indemnity state? 11) What does the principle of utmost good faith state? 12) A representation is define as? 13) A warranty is defined as? 14) A breach of warranty will result in what? 15) Concealment is defined as? 16) How is a waiver made?

1) It stands for Consideration. Offer. Acceptance. Legal Purpose/Capacity. 2) a valid contract requires, is offer and acceptance, or mutual agreement. 3) Advertising is not considered to be an advertisement offer. 4) It is known as an offer. 5) **Consideration on a policy need not be equal. 6) No, a policy may not be voided due to unequal consideration. 7) Under the consideration clause, something of value must be exchanged. 8) They typically favor the insured because insurance contracts are contracts of adhesion therefor, ambiguities in the policy typically favor the insured. 9) Unilateral contracts are when only one party makes an enforceable promise to the insurer. Insurance policies are Unilateral contracts. 10) The principle of indemnity states that the purpose of insurance is to restore the insured to the same position as before the loss occurred. 11) The Principle of Utmost Good Faith states that all parties to an insurance transaction are honest. 12) A Representation is defined as the truth to the best f one's knowledge. 13) A warranty is a sworn statement of truth, guaranteed to be true. 14) A breach of warranty will result in a void of contract. 15) Concealment is defined as the failure to disclose a material fact. 16) A waiver is made when an insurer voluntarily gives up the right to obtain information that they are entitled to.

B.) Whole Life**** 1) What must Whole Life policies contain? 2) Whats the difference between Whole Life and Universal Life? 3) What do Whole Life and Limited Pay Life have in common? 4) When are premiums due in a: *Whole life policy and a *Limited pay policy? 5) What will a Whole Life policy pay for upon death or reaching age 100? 6) What are the limits involved in a Limited Pay-Whole Life policy? 7) When do Limited pay Whole Life policies mature? 8) What will the cash value be on a 20-life pay? 9) What may a single premium buy? --> Is a single premium immediate in its cash value? --------------------------------

B.) Whole Life**** 1) Whole Life policies must contain a table showing their gauranteed cash value at the end of each year, for the first 20 years. It is shown per unit (thousand). 2) Whole Life benefits are bundled while, --> Universal Life benefits are transparent (stand-alone). 3) Whole Life and Limited Pay Life both reach maturity at the same time (Age 100). 4) In a Whole life policy premiums are due until the insured dies or reaches age 100. In a limited pay policy, the premiums are paid for a shorter period of time. 5) Whole Life will pay the face amount upon death or at age 100. Whichever comes first. 6) Limited pay whole life insurance has limits that involve the number of years payments must be made, ex.) 20pay-life, or the age by which all premiums must be paid. 7) Limited pay Whole Life policies do not mature until the insured reaches age 100. 8)On a 20-life pay, the cash value will equal the face amount at maturity. 9) A single premium may buy a policy that is paid up for life. --> A Single premium policy has an immediate cash value. ------------------------------------------

C.) Flexible Premium Policies**** 1) What is an adjustable Whole life policy? And who are they suitable for? 2) Adjusting the premium paid on an adjustable whole life policy will affect what? 3) What is the difference between Universal Life and Whole Life? 4) What kind of Life insurance policies permit their owners to take partial surrenders? 5) Taking a partial surrender on a Universal Life insurance policy allows the policy owner to withdraw what? 6) What is another nickname for Universal Life? 7) Universal Life is a combination of what two things? 8) Universal Life offers what kind of premiums and what kind of return? 9) Are Loans allowed on Universal Life policies?

C.) Flexible Premium Policies**** 1) An adjustable whole life policy may be suitable for someone with fluctuating income. 2) Adjusting the premium paid on an adjustable whole life policy will affect the face amount, and vice-versa. 3) Universal Life insurance is different from Whole life because it has a flexible premium. 4) Universal life insurance policies permit their owners to take partial surrenders. 5) Taking a partial surrender on a Universal Life insurance policy allows the policy owner towithdraw some of the cash value without paying tax on the interest. 6) Universal life is also known as Interest Sensitive Whole Life. 7) Universal life is a combination of 1-year renewable term and a cash value account. 8) Universal life offers flexible premiums and minimum guaranteed rate of return. 9) Loans are allowed on universal life policies. ------------------------------

D.) Variable Life**** 1) What does Variable Whole Life allow you the insured to do? 2) What kind of guarantee do Variable products have and what are they backed by? 3) What is investing in variable products considered to be? 4) What is a universal life policy that invest its cash values in equities? 5) Define Variable/Universal Life? 6) An agent must be registered with who in order to sell variable products?

D.) Variable Life**** 1) Variable whole life allows the insured to self-direct the cash value investment. 2) Variable products have no guarantees and are not backed by guaranty fund. 3) Investing in variable products is considered a hedge against inflation. 4) A universal life policy that invest its cash values in equities is known as Variable Life. 5) A life insurance policy that has flexible premium and allows the policy owner to self-direct their cash values into equities is known as Variable/Universal Life. 6) An agent must be registered with FINRA in order to sell variable products. ---------------------------------

E.) Group**** 1) What do employees receive once they officialize their group policy? 2) Who recieves a master policy in group? 3) What percent of eligible employees must enroll in contributory group life? 4) How many employees must enrol in a noncontributory policy? 5) Are individual policies more expensive usually? 6) On group life, what may the employer require? 7) What does group insurance participation help avoid? 8) A group insurance plan cannot be formed under what incentive? 9) What is an Experience Rating for? 10) When does Conversion from a group life policy to an individual policy occur?

E.) Group**** 1) The employees recieve a certificate of insurance that summarizes coverage and lists the employee's beneficiary. 2) In group insurance the policy owner, who is usually an employer, is issued a master policy. 3) Conrtibutory group life insurance policy, 50% eligible employees must enroll. 4) In a noncontributory group life plan (employer pays total premium), 100% of all eligible employees must participate. 5) Individual policies are usually more expensive. 6) On group life, the employer may require an employee to pay the premium for dependent's coverage. 7) Group insurance participation requirements help avoid adverse selection. 8) A group cannot be formed just to buy insurance. 9) Experience rating is for large groups only. Rates are based on claims experience of the group. 10) Conversion from a group life policy to an individual policy when employment is terminated is permitted for 31 days, regardless of health.

F.) Credit-Life**** 1) On Group Credit Life, what role does the creditor play? 2) What kind of policy is used to provide credit life insurance? 3) What is credit life NOT usually used for? 4) What are the policy limits on credit life?

F.) Credit-Life**** 1) On a Group Credit life, the creditor is both the policyholder and the beneficiary. 2) The type of policy used to provide credit life insurance is decreasing term. 3)Although it is a type of decreasing term, credit life is usually NOT used for mortgage protection. 4) The policy limits on credit life cannot exceed the amount of the loan.

G.) Specialized Policies**** 1) Who gets paid in a Joint Life policy? -A Joint Survivor policy? 2) What is Survivorship Life insurance commonly used for and why?

G.) Specialized Policies**** 1) A joint life policy pays only when the first insured dies. A joint surviver policy pays only when the second insured dies. 2)Survivorship life insurance is commonly used in estate planning so the death benefit of the policy can be used to pay estate taxes when due.