Tennessee Life Insurance
Glass-Steagall Act
(Banking Act of 1933) - Established the Federal Deposit Insurance Corporation and included banking reforms, some designed to control speculation. Repealed in 1999, opening the door to scandals involving banks and stock investment companies.
Personal Producing General Agency System
(PPGA) - The agent supplies his own working environment. Agents hired by a PPGA are considered employees of the PPGA, not the insurance company, and are supervised by the regional salary.
self-insurer
*Assumes the financial risk one's self. *Generally an option only for large companies.
Insuring Clause
- Appears on first page of contract - has a summary of all the main points of the contract like the "promise to pay" death benefit
Variable Universal Life
- Death Benefit is Variable & Adjustable - Two death benefit options - Premium is Flexible - Mortality Rates are current & guaranteed maximum - Cash Value is variable, and no Guarantee - Yes, investment options - Yes, partial surrenders
variable universal life
- Death Benefit is Variable & Adjustable - Two death benefit options - Premium is Flexible - Mortality Rates are current & guaranteed maximum - Cash Value is variable, and no Guarantee - Yes, investment options - Yes, partial surrenders
misstatement of age or sex provision
- Designed to enable the insurer to make the adjustment between the death benefit at the misstated rate and what the death benefit should have been if the age and/or sex had not been misstated.
automatic premium loan provision
- Enables the insurer to withdraw funds from the policy if any cash value has accumulated within the contract
mandatory provisions
- Entire Contract - Time Limit on Certain Defenses - Grace Period - Reinstatement - Notice of Claims - Claims Forms - Proof of Loss - Time of Payment of Claims - Payment of Claims - Physical Exams and Autopsy - Legal Actions - Change of Beneficiary
Depreciation Period
- If lease transfers ownership, depreciate asset over the economic life of the asset. - If the lease does not transfer ownership, depreciate over the term of the lease.
NAIC
- National Association of Insurance Commissioners - No legal power of its own - Encourages uniformity in state insurance laws and regulations
State Guaranty Funds
- Protects against insurance company insolvency - Pays claims if company declared insolvent - Funded by assessments against all insurance companies - Assessment based on market share - Maximum limit per claim is $300,000
STOLI
- Stranger-Orignated Life Insurance - Typically target seniors
STOLI
- Stranger-Orignated Life Insurance - Typically target seniors -
ordinary life insurance
- Term, Whole Life, Universal Life, Endowment - The most common
Notice of Claim
- The policyowner's obligation to the insurer to provide notification of loss within 20 days after the occurrence (or as soon as is reasonably possible). - 20 days
Reduced Paid-Up Insurance
- the policyowner may request the cash value of the policy to be used to pay for itself. - It's the same type of insurance as the original policy except all riders, including those for disability and accidental death
annually renewable term
-Renews each year without proof of insurability -Premiums increase due to attained age
NAIC Fundamental Insurance Objectives
1. Protect the public interest 2. Promote competitive markets 3. Facilitate fair and equitable treatment of insurance consumers 4. Promote reliability, solvency, and financial solidity of insurance institutions 5. Support and improve state regulation of insurance
Free Look Period
10 days
N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?
30 pay life
30 pay life
40 year old wants to retire at 70; wants level premiums, permanent protection and be paid up at retirement
straight life
A basic policy that charges a level annual premium for the lifetime of the insured and provides a level, guaranteed death benefit.
Buyer's Guide
A booklet that describes insurance policies and concepts, and provides general information to help an applicant make an informed decision.
the buyer's guide
A booklet that describes insurance policies and concepts, and provides general information to help an applicant make an informed decision.
Proof of Loss
A claim form that a claimant must submit after a loss occurs.
universal life
A combination of a flexible premium and adjustable life insurance.
Stock Company
A company or corporation whose capital is divided into shares.
a void contract
A contract having no legal force or binding effect.
aleatory
A contract in which participating parties exchange unequal amounts. Insurance contracts are aleatory in that the amount the insured will pay in premiums is unequal to the amount the insurer will pay in the event of a loss.
Voidable Contract
A contract that may be legally avoided at the option of one or both of the parties.
a conditional contract
A contract that one or more parties must perform only under certain conditions.
a unilateral contract
A contract that results when an offer can be accepted only by the offeree's performance.
unilateral contract
A contract that results when an offer can be accepted only by the offeree's performance.
is not renewable since the death benefit is zero at the end of the policy terms
A decreasing term policy
Annual Statement
A detailed financial report that an insurance company must submit every year to the insurance department of state(s) in which it conducts business.
Medicaid
A federal and state assistance program that pays for health care services for people who cannot afford them.
Fair Credit Reporting Act
A federal law that established procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant and properly used.
risk retention group
A group captive formed under the requirements of the Liability Risk Retention Act of 1986 to insure the parent organizations.
stockholders
A group of people that make up a corporation by sharing ownership in a certain company
HMO
A group plan offering prepaid medical care to its members
Medicaid
A health care payment program sponsored by federal & state government's
estoppel
A legal impediment to denying a fact or restoring a right that has been previously waived.
survivorship life
A life insurance contract which pays policy proceeds only upon the death of the last of two or more insureds covered by a combination plan.
Group Life
A life insurance policy that is offered to a group of people under a master policy and that does not require medical examinations if purchased during the initial eligibility period. It is usually issued to an employer for its employees or to members of an association.
variable whole life
A life insurance policy which contains cash values that vary according to its investment performance of stocks is called _________.
Concealment
A means of hiding
Reduced Paid-Up Insurance Option
A non-forfeiture option under which the insured uses the cash value of his present policy to purchase a single-premium Whole Life policy, at attained-age rates, for a reduced face amount. The policy will then stay in force to age 120.
pay dividends to the policy owner
A participating insurance policy may do which of the following?
Rated Policy
A policy issued at a higher premium to cover a person classified as a greater-than-average risk, usually due to impaired health or a dangerous occupation.
nonforfeiture option
A policy provision that allows the insured to receive surplus cash value if the policy lapses.
accidental death benefits
A policy rider that states that the cause of death will be analyzed to determine if it complies with the policy description of accidental death.
utmost good faith
A principle of insurance which states that the insurance company must be able to rely on the honesty and cooperation of the insured, and the insured must rely on the company to fulfill its obligations in good faith.
Medicare
A program added to the Social Security system in 1965 that provides hospitalization insurance for the elderly and permits older Americans to purchase inexpensive coverage for doctor fees and other health expenses.
pay the policy proceeds only if it would have issued the policy
A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will
pay the policy proceeds only if it would have issued the policy.
A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will
Notice of Claim
A provision that spells out an insured's duty to provide the insurer with reasonable notice in the event of a loss.
a life income annuity
A pure life annuity is also known as a:
currency transaction report
A report that documents a physical currency transaction that exceeds a certain monetary threshold. A CTR can also be filed on multiple currency transactions that occur in one day exceed the required reporting amount. Some countries, including the U.S., have requirements addressing when CTRs should be filed with government authorities.
Adjuster
A representative of an insurance company who investigates and acts on the behalf of the company to obtain agreements for the amount of the insurance claim.
Living Benefits Rider
A rider attached to a life insurance policy LTC benefits or benefits for the terminally ill by using available life insurance benefits.
Proof of Loss
A statement of facts about a loss for which the insured is making a claim.
Attending Physician's Statement (APS)
A statement usually obtained from the applicant's doctor.
captive insurer
A subsidiary formed to insure the loss exposures of its parent company and the parent's affiliates.
independent agency system
A system for marketing, selling, and distributing insurance in which independent brokers are not affiliated with any one insurer but represent any number of insurers.
adhesion contract
A take-it-or-leave-it offer made by a party who holds most of the power in a bargaining session
level term life insurance
A term life insurance policy in which the death benefit remains unchanged throughout the life of the policy
certificate of authority
A third party that acts as a trusted intermediary between computers (and companies) by issuing digital certificates and verifying the worth and integrity of the certificates.
casualty liability insurance
A third-party insurance that covers the insured's legal responsibilities in an accident or negligent act.
Grace Period
A time period during which no finance charges will be added to your account
absolute assignment
A transfer by the policyholder of all control and rights to a third party
Mutual Company
A type of insurance company that returns part of the profits of the company to its policyholders.
Decreasing Term
A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.
straight life
A whole life policy under which premiums are paid throughout the life of the insured, and the face value is paid at death
Agent's Report
A written report from the agent submitted to the insurer along with the application disclosing what the agent knows, observed, or learned about the proposed insured's risks.
inspection report
A written report that details the existing conditions of the house and property.
ad&d
Accidental Death and Dismemberment insurance. A limited form of Health insurance that covers accident only. It is the only type of Health insurance that covers death. AD&D policies do not follow the Principle of Indemnity, in that they pay in addition to any other coverage the insured has.
Fair credit reporting act
Act that protects privacy of background information and ensures that information supplied is accurate.
the Fair credit reporting act
Act that protects privacy of background information and ensures that information supplied is accurate.
interest only does not systematically liquidate
All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT Fixed Period Interest Only Fixed Amount Life Income
variable universal whole life
Allows the client to self direct the cash value investment
Deductible
Amount you must pay before you begin receiving any benefits from your insurance company
mortgage redemption insurance
An additional requirement in obtaining a loan which is to pay off the loan or outstanding obligation upon the death of the borrower
personal contract
An agreement between an insurance company and an individual that states that insurance policies cover the individual's insurable interest.
business continuation agreement
An agreement in which owners of a business make plans to buy the ownership interest of a deceased associate from his or her heirs.
the entire contract
An agreement that is made up of two or more parts, in which each part is dependent upon the others.
policy rider
An amendment to an insurance policy that becomes part of the insurance contract and either expands or limits the benefits payable under the contract
Free Look Period
An amount of time provided to an insured in order to examine the insurance policy.
return of Premium
An amount, equal to a fraction of the premium, which is given back to the insured in the case of a cancellation
return of premium
An amount, equal to a fraction of the premium, which is given back to the insured in the case of a cancellation
Standard Risk
An applicant or insured who is considered to have an average probability of a loss based on health, vocation and lifestyle.
lloyds of London
An association of individuals and companies that underwrite insurance on their own accounts and provide specialized coverages.
Self-Insurer (INSURANCE)
An employer who can meet the state legal and financial requirements to assume by him or herself all of its risk and pay for the losses, although the employer may contract with an insurance carrier or others to provide certain essential services.
fiduciary responsibility
An ethical and legal obligation to perform a person's duties in a trustworthy manner.
incontestability period
An incontestability clause is a clause in most life insurance policies that prevents the provider from voiding coverage due to a misstatement by the insured after a specific amount of time has passed. A typical incontestability clause specifies that a contract will not be voidable after two or three years due to a misstatement. 2 year policy, don't care if you lie and die from a disease you didn't tell them about, they don't care about suicide either, the family needs to file for life insurance to get the $. Annuity payment stop at death, so they want you to pay unless you ask
the date of medical exam
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?
administrator
An individual appointed by a court as a fiduciary to settle the financial affairs and estate of a deceased person.
agent
An individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of an insurer.
Admitted Insurer
An insurance company authorized and licensed to transact business in a particular state.
Alien Insurance Company
An insurance company incorporated outside the country
Multi-line insurer
An insurance company selling more than one insurance is called what?
multi-line insurer
An insurance company selling more than one line of insurance
Domestic Insurer
An insurance company that is incorporated in the state.
Alien Insurer
An insurance company that is incorporated outside the United States.
endowment policy
An insurance product that pays out a lump sum after a specified term or if the insured person dies before the end of the term. Endowment policies are often used as a way of saving over the long term.
Full face amount minus any past due premiums
An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period?
mutual
An insured purchase an insurance policy 5 years ago. last year, she received a dividend check from the insurance company that was not taxable. this year, she did not receive a check from the insurer period from what type of insurer did the insured purchase the policy?
long term care
An insured's inability to perform two or more activities of daily living may trigger which type of policy rider? Waiver of premium Long term care Accelerated death benefit Accidental
domestic insurance
An insurer doing business in the jurisdiction in which it is incorporated.
underwriter
An insurer employee who evaluates applicants for insurance, selects those that are acceptable to the insurer, prices coverage, and determines policy terms and conditions.
utmost good faith
An obligation to act in complete honesty and to disclose all relevant facts.
Life Income Period Certain
Annuity is payable for life, or for a specified period of time, whichever is longer. If the annuitant lives beyond the stated period, benefits continue for life of the annuitant. If the annuitant dies prior to the end of the period, certain a beneficiary receives the balance of the payments for the remaining time period.
Modified Endowment Contract (MEC)
Any cash value policy that builds cash value faster than a Seven-Pay Whole Life Contract and therefore loses the tax advantages of life insurance.
contract of adhesion
Any contract in which one party must either accept the agreement as written by the other party or reject it.
decreasing term policies
Are issued typically for a certain amount and decreased until the policy gets to a 0 at policy expiration
strong assessment mutual insurers
Assessment mutual companies are classified by the way in which they charge premiums
collateral assignment
Assignment of part of the proceeds of an insurance policy to a bank as collateral to settle the loan balance that may exist at the insured's death.
before accepting the initial premium
Assuming that a policy does not contain an unconditional refund provision of at least 10 days, when must a Buyer's Guide and policy summary be provided?
implied authority
Authority that is created not by an explicit oral or written agreement but by implication. In agency law, implied authority (of the agent) can be conferred by custom, inferred from the position the agent occupies, or implied by virtue of being reasonably necessary to carry out express authority.
implied authority
Authority that is not expressed or written into the contract, but which the agent is assumed to have in order to transact the business of insurance for the principal.
automatic premium loan provision
Authorizes insurer to automatically pay any premium in default at the end of the grace period and charge the amount so paid against the life insurance policy as a policy loan.
Cost-of-living adjustment (COLA)
Automatic adjustments of nominal income to the rate of inflation
Liquidity
Availability of resources to meet short-term cash requirements.
self-insured
Clients who obtain benefits on a self-funded basis. The company assumes all of the financial risk and liability that would normally be covered by an insurance company.
Authorized Insurer
Company that meets a state insurance department's standards and is authorized to do business in that state
Grace Period Provision
Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
a joint life policy
Covers two or more lives and provides for the payment of the proceeds at the death of the first among those insured, at which time the policy automatically terminates.
joint life policy
Covers two or more lives and provides for the payment of the proceeds at the death of the first among those insured, at which time the policy automatically terminates.
FINRA
Created in July 2007 through the consolidation of NASD and the member regulation, enforcement and arbitration functions of the New York Stock Exchange, FINRA is the largest non-governmental regulator for all securities firms doing business in the United States.
ex-wife
D is the policyowner and insured for a $50,000 life insurance policy. The beneficiary is D's wife. D and his wife divorce and D remarries, transferring ownership of his policy to his new wife. If D dies without making any further changes, to whom will the policy proceeds be paid to?
The full face amount
D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive?
Seven-Pay Test
Determines whether a life insurance policy is a modified endowment contract, which it is if cumulative amounts paid under the contract at any time during the first seven contract years exceeds the cumulative amount that would have been paid had the policy's annual premium equaled the net level premium for a seven-pay life policy of the same type, using certain required assumptions
fiduciary responsibility
Duty of management to safeguard a company's assets and handle its funds in a trustworthy manner.
F
E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to?
12 Mandatory Provisions
Eddie (entire Contract;changes); The (time limit of certain defenses); Gardener (grace period); Raided (reinstatement); Nana's (Notice of Claim); Cookies (Claim Forms); Prior (proof of loss); To (time of payment of claims); Publicly (payment of claims); Performing (physical exam and autopsy); Last (legal actions); Christmas (change of beneficiary)
e&o
Errors and Omissions
State Guaranty Funds
Established in all states to protect policyholders and claimants from loss due to insurer insolvency.
decreasing term Policy
F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?
FDIC
Federal Deposit Insurance Corporation
FDIC
Federal Deposit Insurance Corporation: A federal guarantee of savings bank deposits initially of up to $2500, raised to $5000 in 1934, and frequently thereafter; continues today with a limit of $100,000
regulates consumer reports
Federal Fair Credit Reporting Act
Cash Surrender Value
For life insurance, the quantity that the owner is able to get if the policy does not remain in force until the insured's death. For annuities, the amount of a deferred annuity's accrued value that the contract holder is able to get if the policy is relinquished during its accumulation period.
warranties
Formal statements of expected product performance by the manufacturer
McCarran-Ferguson Act (1945)
Gave states the authority to regulate insurance
annually renewable term
Group life insurance policies are written as what type of insurance?
old age insurance
Guarantees a pension to the retired
Medicare and Medicaid
Health benefits for the elderly and poor
commercial insurance
Health insurance that covers medical expenses and disability income for the insured that is not paid for by the government. These policies are sold individually or as part of a group plan through an employer.
through mutual funds, stocks and bonds
How does a typical Variable Life Policy investment account grow?
Age 100
How long does the coverage normally remain on a limited-pay life policy?
age 100
How long does the coverage normally remain on a limited-pay life policy?
Fixed Period
If a beneficiary wanted a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what option would a beneficiary select?
Fixed Period
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?
erase the incorrect answer and record the correct answer
If a change needs to be made to the application for insurance, the agent may do all of the following EXCEPT
Grace Period Provision
If a policyowner fails to pay his or her life insurance policy's premium by the date stated in the contract, the policy's grace period will prevent the policy from lapsing. Typically, a life insurance policy grace period extends for either 30 or 31 days after the date in which the premium is normally due.
hazardous occupation or hobby
If the insured dies as a result of a hazardous occupation or hobby, the insurer will not pay the claim.
misstatement of age or sex provision
If the insured's age or sex is misstated in an application for insurance, the benefit payable usually is adjusted to what the premiums paid should have purchased.
stranger-originated life insurance
In Stranger-Originated Life Insurance, or STOLI, a consumer purchases a life insurance policy with the agreement that a third party agent/broker or investor will purchase the consumer's policy and receive the proceeds as a profit upon the consumer's death.
Policy Summary
In life insurance, document explaining the coverage purchased and the names of the insurer and agent.
a policy summary
In life insurance, document explaining the coverage purchased and the names of the insurer and agent.
premium amounts and surrender values
Included in a policy summary
option b
Increasing death benefit option
mutual company
Insurance company owned by its policyholders.
industrial insurer
Insurance is also sold through a special branch of the industry known as home service or "debit" insurers. These companies specialize in a particular type of insurance called industrial insurance, which is characterized by relatively small face amounts (usually $1,000 to $2,000) with premiums paid weekly.
whole life insurance
Insurance that is kept in force for a person's entire life and pays a benefit upon the person's death, whenever that may be.
professional liability insurance
Insurance that protects directors, officers, employees, and organizations against claims of negligence in the performance of professional services.
term life insurance
Insurance that provides financial protection from losses resulting from a death during a definite period, or term.
Renewable Term
Insurance which can, at the election of the policyowner, be renewed at the end of a term without evidence of insurability.
Claims forms
Insurer's duty to supply the forms to the insured within a specified number of days after notice of claim
ioli
Investor-Originated Life Insurance
avocation ( hobby)
Is an allowable underwriting factor in life insurance
yearly renewable term
Issued for one-year period Renewable Premiums increase with renewal Convertible
modified whole life
K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?
B. L's spouse dies at age 66
L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They purchase a Family Policy that covers L's spouse to age 65. A death benefit will NOT be paid in which of the following circumstances? A. L's spouse dies at age 62. B. L's spouse dies at age 66. C. Their natural child dies at age 18. D. Their adopted child dies at age 18.
Tort Law
Law that deals with harm to a person or a person's property.
option A
Level death benefit
limited pay whole life
Level premiums limited to certain time period, less than life.
annual renewable term
Level term insurance which has a level face amount and increasing premiums.
Term Insurance
Life insurance coverage for a specified period of time, less expensive than whole
buy sell agreements
Life insurance is used to help fund it Based on legal contracts that set a value on each person's portion of ownership in the business Another person must purchase the deceased owner's interest in the business (funded through insurance) Can be used for any form of business: 1) Sole Proprietorship 2) Partnership 3) Corporation Proceeds are not taxed; Premiums are NOT tax deductible
accelerated benefit rider
Life insurance rider which allows the insured to receive a portion of the death benefit prior to death if the insured has a terminal illness.
Adjustable Life
Life insurance that permits changes in the face amount, premium amount, period of protection, and the duration of the premium payment period.
straight life insurance
Life insurance that requires the payment of premiums until the face value is reached or the insured is deceased; also called ordinary life or whole life
Adjustable Life
Life insurance which permits changes in the face amount, premium amount, period of protection, and the duration of the premium payment period.
mortgage redemption insurance
MRI means
applicants with incomes that tend to fluctuate
May benefit most from purchasing and adjustable whole life policy
fraternal benefit societies
Must be nonprofit, have a lodge system, and offer insurance to its members only
30 pay life
N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?
claim will be denied
N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take?
Claim will be denied
N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take? -Claim will be denied -Claim will be paid in full -Claim will be partially paid -Claim will be decided by an arbitrator
the national association of insurance commissioners
NAIC
NAIC
National Association of Insurance Commissioners
Medicare
National Health Insurance program for the elderly and disabled.
Reduced Paid-Up Insurance
Nonforfeiture option where cash value is used to make a single premium payment to purchase as much of the same type of insurance as possible. Face amount of the new policy would be less than the original policy but no further premium payments would be necessary. Policy can be reinstated.
State Guaranty Funds
Nonprofit, unincorporated associations established in all states to pay the outstanding claims of insolvent primary insurers.
OASDI
Old-Age, Survivors, and Disability Insurance
property and casualty insurance
One of the two main sectors of the insurance industry, encompassing numerous types of insurance, most of which cover the financial consequences of damage to one's own property or legal liability to others.
General Agent
One who is authorized by a principal to represent the principal in a specific range of matters.
Term Policies
Only effective for a short period after which period the insurer cancels the policy. Term health coverages include travel accident policies and short term medical plans.
hazardous occupation or hobby
Optional life insurance provision stating that if the insured dies as a result of a hazardous occupation or hobby, the insurer will not pay the claim.
P will still receive declared dividends
P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability?
$50,000 minus any outstanding policy loans
P purchases a $50,000 term life insurance policy in 2005. One of the questions on the application ask if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary? -Premiums paid plus interest -Nothing. Claim will be denied -$50,000 minus any outstanding policy loans -$100,000 because the cause of death was accidental
single premium whole life
Paid up for life with one large premium payment
Survivors Insurance
Part of Social Security that provides death benefits to dependents of workers who die
accelerated benefit rider
Pays a portion of the death benefit if the insured is diagnosed with a terminal illness.
Grace Period
Period of time after a borrower graduates, leaves school or drops below half-time enrollment where they are not required to make certain federal loan payments.
Adjustable Life
Permanent + Term Combines permanent and term life policies allowing changes to face amount, period payments, and term during policy lifetime.
the guaranteed insurability rider
Permits Insured to buy specific amounts of additional insurance at specified intervals (usually 3 years) without evidence of insurability
ppga
Personal Producing General Agency System
reduced paid up
Peter wants to utilize the cash value from his life insurance policy to buy another policy. He opts to use the cash value as a single premium to buy a policy that has a lesser face amount than the original, which will accumulate in cash value until it matures or Peter dies. What type of policy does Peter have?
Juvenile Life (aka Jumping Juvenile) policy
Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
return of premium
Policy refunds every penny of the premiums if one outlives the defined term
equity index universal life insurance
Policyholders to link accumulation values to an outside equity index, like the S&P 500 Minimum guaranteed fixed interest rate If the return on the index exceeds the policy's guaranteed rate of return, the cash value will reflect that of the index
PPO
Preferred provider organization. A prepaid health insurance plan in which providers agree to deliver services for discount fees; patients can go to any provider, but using nonparticipating providers results in higher costs to the patient
Seven-Pay Test
Premiums paid cannot cause a policy to be paid-up after seven years.
interest sensitive whole life
Premiums vary to reflect the insurer's changing assumptions with regard to death investment and expense factors.
the convertible provision
Provides the policyowner with the right to convert the policy to a permanent insurance policy without evidence of insurability
survivor protection
Providing funds for surviving spouses and dependents
change of beneficiary
Provision in individual health insurance policies stating that unless the policyowner makes an irrevocable designation of beneficiary, the right to change a beneficiary is reserved to the policyowner and does not require the consent of the beneficiary.
Industrial (Home Service) Life Insurance
Referred to as Burial Insurance, industrial life insurance provides minimal life insurance coverage (usually less than $2,000 and without requiring a medical exam) in the event the insured dies, providing the beneficiary with enough money to cover basic final expenses such as funeral costs.
the return of Premium rider
Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
accelerated benefits
Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses.
Return of premium rider
S buys a $10,000 whole life policy in 2003 and pays an annual premium of $100. if s dies 5 years later in 2008 in the insurer pays the beneficiary $10,500. what kind of writer did s include on the policy?
$50,000
S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?
serviceman's group life insurance
SLGI
Family Income Policy
Same as WL but w/ Decreasing Term rider; upon death, pays monthly income for REMAINING term AFTER which pays full death benefit.
family maintenance policy
Same as WL but w/ Level Term rider; upon death, pays monthly income for FULL term AFTER which pays full death benefit.
SEC
Securities and Exchange Commission
Payor Provision
Someone dies within 3 years of purchasing a life insurance policy on infant daughter can have policy premiums paid under this
Agent's Authority
Special powers granted to an agent by his or her agency contract.
Concealment or Fraud
Specifies that the policy may be voided if there is material concealment, misrepresentation, or fraud on the part of the insured.
McCarran-Ferguson Act (1945)
Stipulates that insurance companies are to be regulated at the state level
Insuring clause/provision (aka Insuring Agreement)
Summary of coverage including premium & mode of payment, death benefit, beneficiary(ies), exclusions, & promise to pay.
annual renewable term
Term coverage that provides a level face amount that renews annually. This type of coverage is guaranteed renewable annually without proof of insurability.
Renewable Term
Term insurance where at the end of the specified term the policyowner has the right to continue the policy for another term without proof of insurability. Premiums will be determined by the new attained age.
Level Term Insurance
Term insurance where the face value of policy remains the same from the date the policy is issued until the date the policy expires.
insurance companies from adverse selection by high-risk persons
The Medical Information Bureau (MIB) was created to protect
Attained Age
The age of the insured at a determined date.
Apparent Authority
The appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.
apparent authority
The appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.
Express authority
The authority a principal deliberately gives to its agent
apparent authority
The authority an agent is believed by third parties to have because of the behavior of the principal.
Express authority
The authority granted to an agent by means of the agent's written contract.
avoid a policy lapse
The automatic premium loan provision is designed to
on a 20 pay life,
The cash value will equal the face amount at maturity
Reduced Paid-Up Insurance Option
The cash-surrender value is applied as a net single premium to purchase a reduced paid-up policy
annually renewable term
The death protection component of Universal Life Insurance is always..
Aleatory Contract
The exchange of value is unequal.
as of the application date
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
Insuring Clause
The heart of an insurance policy. It contains the company's promise to the policyowner and describes the coverage provided and the policy limits.
Reinsurer
The insurer that assumes some or all of the potential costs of insured loss exposures of the primary insurer in a reinsurance contractual agreement.
war or military service
The insurer will not pay the claim if the insured dies while in active military service or due to an act of war.
Law of Agency
The law that governs the relationship between a principal and his or her agent.
Depreciation Period
The number of years the equipment is owned
the annuitant
The party receiving the benefits of an annuity, similar to the insured on an insurance policy. The annuitant usually also owns the annuity, although you can buy an annuity to benefit another party, who would then be the annuitant.
an annuitant
The person that buys an annuity; may or may not be an annuity's policyowner.
Reduced Paid-Up option
The policy owner pays no more premiums but the face amount is decreased
collateral assignment
The policyowner temporarily assigns a life insurance policy to a creditor as collateral for a loan
in a level term Policy
The premium and the amount of coverage are level throughout the term
Target Premium
The premium in a universal life policy that builds policy cash value.
Viatical Settlement
The purchase of an insurance policy before its maturity date by an investor for a percentage of its face value. Often the policyholder is terminally ill.
the insuring agreement
The section of an insurance policy containing the insurer's promise to pay, the description of coverage provided and perils insured against.
Accumulation Period
The time before an annuitant's retirement during which the annuitant is making payments or investments in an annuity.
Survivors Insurance
This part of Social Security provides death benefits to dependents of workers who die
Mode of Premium
This provision addresses the frequency of premium payments (monthly, quarterly, semiannually or annually), and to whom the premiums are payable. The more frequent the payment, the greater the cost. The policyowner has the right to change the premium mode.
Demutualization
Transformation of a mutual insurer into a stock insurer.
Mutualization
Transformation of a stock insurer into a mutual insurer.
offer and acceptance
Two essential components of a valid contract; a "meeting of the minds."
industrial home service life insurance
Type of life insurance in which policies are sold in small amounts and the premiums are collected weekly or monthly by a debit agent at the policyholder's home. See also Home service life insurance.
gradually increases each year by the amount that the cash value increases
Under Option B the death benefit includes the annual increase in cash value so that the death benefit...
Life Income Settlement Option
Upon maturity of an insurance policy, the policy proceeds are used to purchase an immediate Life Annuity payable in periodic payments to the beneficiary for the rest of his/her life.
signed waiver of premium
Upon policy delivery, the agent must make sure that all of the following are obtained from the applicant EXCEPT
signed waiver of premium
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT
VUL
Variable Universal Life
level fixed
Variable life insurance is based on what kind of premium?
level, increasing, and decreasing
What are the three basic types of term coverage available, based on how the face amount (death benefit) changes during the policy term:
federal government, the SEC, the insurance department
What entity is regulate variable life policies?
limited pay life
What is the type of whole life insurance that is covered for your entire life but premiums are paid for a limited time?
Increasing Term
What type of insurance would be used for a Return of Premium rider?
option A
What universal life option has a gradually increasing cash value and a level death benefit?
issue the policy anyway and pay the face value to the beneficiary.
When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will
exclusion
When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n) elimination exclusion limitation exception
fixed amount
When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?
Extended Term
Which nonforfeiture option has the highest amount of insurance protection?
Reduced Paid-Up
Which nonforfeiture option provides coverage for the longest period of time?
notice regarding replacement
Which of the following documents must be provided to the policyowner or applicant during policy replacement?
medical background
Which of the following information about the applicant is NOT included on Part 1 of the application for insurance?
Depreciation Period
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?
benefit payment amounts are not guaranteed
Which of the following is a feature of a variable annuity?
Life Paid-up at Age 65
Which of the following is an example of a limited-pay life policy?
Conversion Provision
Which of the following provisions give an employee the right to exchange group insurance for an individual policy within 60 days from the group insurance?
Policy Loan
Which of the following provisions would NOT be found in Term Life Insurance?
premium amounts and surrender values
Which of the following will be included in a policy summary
Investor-Originated Life Insurance
Which of these arrangements allows one to bypass insurable interest laws?
investor originated life insurance
Which of these arrangements allows one to bypass insurable interest laws?
a life income annuity
Which of these is NOT considered to be a common life insurance nonforfeiture option?
modified whole life
Which of these life products is NOT considered interest-sensitive? Modified Whole Life Variable Universal Life Interest Sensitive Whole Life Variable Life
Evidence of insurability is required when the option is exercised
Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE?
option b
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
variable life
Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling? A. Variable Life B. Credit Life C. Universal Life D. Interest-Sensitive Whole Life
policyholders
Who elects the governing body of a mutual insurance company?
family income policies
Whole life and decreasing term insurance (begins date of purchase). Provides monthly income to a beneficiary if death occurs during a specified period after date of purchase. If the insured dies after the specified period, only the face value is paid to the beneficiary since the decreasing term insurance expired.
Age 100
Whole life policies provide protection until the insured reaches what age?
The accelerated benefits rider
Will pay proceeds prior to death for those with a terminal illness. the proceeds are not taxable
Self-Insurer Bonds
Workers compensation bonds that required in the states that permit employers to self-insure compensation benefits
universal life
a 42 year old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his or her needs change period which of the following policies will best meet this need?
Reinsurer
a company that provides financial protection to insurance companies. they handle risks that are too large for insurance companies to handle on their own and make it possible for insurance to obtain more business than they would otherwise be able to..
the entire contract
a contract in which each component of the contract is dependent on every other component
Adhesion
a contract offered on a take it or leave it basis by an insurer, which is the insurance only option to either accept or reject the contract
annuity
a contract that provides a regular income for as long as the person lives
Aleatory Contract
a contract where the values exchanged may not be equal but depend on an uncertain event
aleatory contract
a contract where the values exchanged may not be equal but depend on an uncertain event
15 days
a copy of termination notification must be provided by the insurer to the producer within
the benefit is received tax-free
a corporation is the owner and beneficiary of the key person life policy if the corporation collects the policy benefit, then
the excess funds, which the ensure invest, provide the cash for the returned premiums
a healthy 30 year old male pays $380 annually for a $250,000 30-year term policy period at the end of the 30 years, he has paid a total of $11,400 in premiums which will be returned to him if he is still alive. the insurance company has determined that $250 per year or $7,500 over 30 years will cover the actual cost of protection.
investor originated life insurance
a life insurance arrangement which circumvents insurable interest that suits is called
the full death benefit
a life insurance policy does not have a war clause period if the insured is killed during a time of war what will the beneficiary receive from the life policy
insurable interest
a life insurance policy would be considered a wagering contract without
premium payments limited to a specific number of years
a limited pay life policy has
premium payments limited to a specific number of years
a limited pay life policy has:
immediate annuity
a lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years period what type of annuity products are they likely to use to provide these benefits?
immediate
a man purchased a $90,000 annuity with a single premium, and began receiving payments two months after that period which type of annuity isn't.
joint life policy
a married couple owns a permanent policy which covers both of their lives and pays the death benefit upon only the first death period which policy is that?
Risk Retention Group (RRG)
a mutual insurance company formed to insure people in the same business, occupation, or profession
hmos
a network of providers for which costs are covered inside but not outside the network
a fraternal benefit society
a nonprofit or Incorporated society that is not have Capital stock and operates for the sole benefit of its members is known as
FINRA (Financial Industry Regulatory Authority)
a not-for-profit entity that regulates securities firms for the purpose of protecting investors. Licensed individuals and firms, such as brokerage houses, must adhere to FINRA guidelines
annual dividend
a part of the company's profits divided to shareholders
a competent party
a person of legal age and at least normal mentality who is considered by law to be capable of understanding the meaning of a contract and is permitted to enter into a valid contract
agent
a person who acts or does business for another
Life Settlement Broker
a person who, for compensation, solicits, negotiates, or offers to negotiate a life settlement contract
the cash value provision
a policy loan is made possible by which of these life insurance policy features?
the guaranteed dividend rate
a policy summary must include all of the following except
permanent life insurance
a policy that provides a death benefit and builds cash value
20 pay life accumulates cash value faster than straight life
a potential client, at age 40, would like to purchase a whole life policy that will accumulate cash value at a faster rate in the early years of the policy period which of the statements made by the producer would be correct?
for 6 months from the course completion date
a pre-licensing training course completion certificate is good
survivor protection
a producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely period This is a personal use of life insurance known as
during the first 120 days of licensure
a producer must follow special rules when engaging in a replacement transaction
for 24 months
a producer's license is good
whole life and increasing term
a return of Premium life insurance policy is
has an immediate cash value
a single premium policy
deductible
a specified amount of money that the insured must pay before an insurance company will pay a claim
Proof of Loss
a sworn statement that must usually be furnished by the insured to an insurer before any loss under a policy can be paid
180 days
a temporary license is good for at most
Survivors Insurance
a type of social insurance where survivors of a person eligible for benefits under the system may also receive benefits
Variable Universal Life
a universal policy where the premiums are invested in variable rate earning assets
universal life insurance policy
a whole life policy that combines term insurance and investment elements
Broker
a wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiations
other insured Rider
a writer attached to a life insurance policy that provides coverage on the insurance family members is called the
fraternal benefits societies
a. Fraternal societies are primarily social organizations that engage in charitable and benevolent activities that provide insurance, primarily life insurance, to its members. b. Membership is typically drawn from members of a given lodge, order, or society. c. They are usually organized on a nonprofit basis.
fraternal benefits societies
a. are primarily social organizations that engage in charitable and benevolent activities that provide insurance, primarily life insurance, to its members. b. Membership is typically drawn from members of a given lodge, order, or society. c. They are usually organized on a nonprofit basis.
cash values
accredited to the policy on a regular basis and have a guaranteed interest rate
policy rider
additional insurance coverage to cover things such as jewelry or valuable heirlooms that are often not fully covered by a typical insurance policy.
3 years
all documents used in the solicitation of insurance must be maintained by an insurer for at least
a single sum of all guaranteed and nonguaranteed benefits
all materials used in the solicitation of life insurance just provide the following except
a fine of no more than $300,000
all of the following actions may be brought against an insurance agency found guilty of withholding knowledge of an appointed licenses violation of the insurance code except
estate creation, cash accumulation, survivor protection, conservation and liquidity
all of the following are personal uses of Life insurance
if I sell agreement
all of the following are personal uses of life insurance except
policy loans can be made on policies that do not accumulate cash value
all of the following are true regarding insurance policy loans except
the Guaranty association
all of the following entities regulate variable Life policies except
the guarantee association
all of the following entities require variable Life policies except
claim settlement practices
all states require prompt, Fair and equitable______
a fine of no more than $300,000
all the following actions may be brought against an insurance company found guilty of withholding knowledge of an appointed licenses violation of the insurance code except
long-term care insurance
all the following are considered limited lines of insurance except
the payable premium amounts steadily declines throughout the duration of the contract
all the following are true regarding a degreasing term Policy except
an agent misrepresents policy benefits to convince a policy owner to replace policies
all the following would be considered rebating except
Term Riders
allow for an additional amount of temporary insurance to be provided on the insured without the need to issue another policy. they are usually attached to a whole life policy to provide greater protection at a reduced cost.
Option to Renew
allows policyowner to renew the term policy before its termination date without having to provide evidence of insurability/good health.
a long-term care rider
allows the insured to take money out of a policies cash value to pay for qualifying nursing home care or home health Care Services
the renewable provision
allows the policy owner the right to renew the coverage at the expiration date without evidence of insurability
Cash Surrender
allows the policyowner to receive the policy's cash value. Policyowner no longer has coverage at this point. Normally, the maximum length of time a life insurance company may legally defer paying the cash value of a surrendered policy is 6 months (Delayed Payment provision).
straight life
also referred to as ordinary life or continuous premium whole life is the basic whole life policy
the USA Patriot act
also requires financial institutions to report wire transfers that are in excess of $3,000
coverage does not begin until the applicant meets all the conditions and the application is approved
although a conditional receipt may be issued,
he or she is not a party to the contract
although the producer must sign the application
S&P 500 (Standard & Poor's 500)
an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ.
FINRA
an agent must be registered with ____ in order to sell a variable product
implied authority
an agent's authority to do things not specifically authorized in order to carry out express authority
Underwriting
an arrangement under which an investment banker agrees to purchase all shares of a public offering at an agreed-upon price
Fair credit reporting act
an insurance applicant must be informed of an investigation regarding his reputation and character according to the
false advertising
an insurance company has produced a brochure that inaccurately portrays the advantages of a particular insurance policy. this is an example of
foreign
an insurance company is domiciled in Montana and transacts insurance in Wyoming period which term best describes the insurance classification in Wyoming
15 days
an insurance producer must be appointed as an agent of the insurer within _____ from the date of agency contract or the date that the first insurance application is submitted.
the insurer
an insurance producer represents
material misrepresentation
an insurance stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she saw medical attention period which of the following will explain the reason a death benefit claim is denied?
adjustment of the amount of the death benefit
an insured Mistates her age at the time of the life insurance application is taken. this misstatement may result in
full face amount minus any past due premiums
an insured is past due on his life insurance premium, but is still within the grace.. what will the beneficiary receive if the insure dies during the grace.
universal life
an insured owns a life insurance policy period to be able to pay some of her medical bills, she withdraws a portion of the policies cash value period there is a limit for draw and the insurer charges a fee period what type of policy does the insured most likely have?
written pre-authorization
an insurer must have ____ in order to pull an applicant's credit report
Alien Insurer
an insurer that is chartered by a foreign country, but is licensed to operate in the state
Foreign Insurer
an out-of-state insurer that is chartered by another state, but licensed to operate in the state
captive insurer
and ensure established and owned by a parent firm for the purpose of ensuring the parents firms loss exposure is known as
Premium policy
and increasing term Policy is sometimes called a return of
$50,000
and insured owns a $50,000 whole life policy period at age 47, the insured decides to cancel his policy and exercise the extended term option for the policies cash value, which is currently $20,000. what would be the face amount of the new term Policy
universal life
and insured owns a life insurance policy period to be able to pay some of her medical bills, she withdraws a portion of the policies cash value. there's a limit for withdrawal and the insurance charges a fee period what type of policy does the insured most likely have ?
viatical settlement
and insured under a life insurance policy has been diagnosed with a terminal illness and has 6 months to live. the insured knows that his financial state will worsen even more with the upcoming medical expenses. what option could the insured utilize?
reinstatement provision
and insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. which policy provision allows this?
rated
another name for a substandard risk classification is
$1,000
any licensed person in this state may be assessed a civil penalty for unintentional violation of State insurance statutes up to
must be licensed as a producer
anyone who solicits, negotiates or sell insurance
mandatory provisions
are designed to protect the insured
fraternal benefits societies
are nonprofit benevolent organization that provide insurance to its members. producers or agents who only sell within their society, do not receive commission, and stay under a specific premium threshold often have less stringent licensing requirements.
property and casualty insurance
are often referred to collectively as property and casual insurance because the things you own have the potential to harm people in ways that could cause them to sue you. the main kinds of property and casualty insurance include Auto insurance, homeowners insurance, renters insurance and umbrella insurance
funds not paid out after paying claims and other operating costs
are return to the policy owners in the form of a dividend
ROP policies
are structured to consider the low risk factor of the term policy but at a significant increase in premium cost, sometimes as much as 25% to 50% more
Annuities
are the opposite of Life insurance
limited pay whole life
are well suited for those insurance who do not want to be paying premiums beyond a certain point in time
Free Look Period
at the minimum of 10 days, but no longer than 20 days
upon completion of the application
at what point must a life insurance applicant be informed of their rights that fall under the Fair credit reporting act?
Express authority
authority declared in clear, direct, and definite terms
original-age method
bases the premiums on the age of the insured when the term insurance was first acquired
Free Look Period
begins when the policy is delivered (10 days for non replacement) (30 days for replaced)
Living Benefits
benefits that allow the policyholder to receive a portion of death benefits prior to death
actuarial
calculating; pertaining to insurance statistics According to recent actuarial tables, life expectancy is greater today than it was a century ago.
an annuitant
cannot outlive the income from an annuity
industrial insurance
characterized by comparatively small issue amounts, such as $1,000, with premiums collected on a weekly or monthly basis by the agent at the policyowner's home. Quite often it is marketed and purchased as burial insurance.
Cost-of-living adjustment (COLA)
clause during the period of the contract ties future wage increases to increases in the cost of living
medical information bureau report
companies that belong to this trade association report any health impairments, which are recorded and made available to member companies
contract of adhesion
contract offered by a dominant party to a party with inferior bargaining power on a take-it-or-leave-it basis
COLA
cost of living adjustment
joint survivor or last survivor Life policies
cover the lives of two individuals and saves on premium costs by averaging the ages of the two insurance
until the premium has been paid
coverage can never begin
cash value
created by the accumulation of premium, is scheduled to equal the face amount of the policy when the insurer reaches age 100 and is paid out to the policy owner
life insurance
creates an estate, while annuities systematically liquidate in a state over a period of time
Decreasing Term
credit life insurance is typically issued with which of the following types of coverage?
CTR
currency transaction report
Reserves
deposits that banks have received but have not loaned out
not cancellation of the policy
discovery of a misstated age results in adjustment of benefit amount,
are not guaranteed
dividends
An annuity
does not involve underwriting
interest
during partial withdrawal from a universal life policy, which portion will be taxed?
interest
during partial withdrawal from universal Life policy, which portion will be taxed?
within three years
elapsed policy maybe reinstated ____ by paying back premiums, with interest, and proving insurability
Glass-Steagall Act
established the Federal Deposit Insurance Corporation (FDIC) and included banking reforms, some of which were designed to control speculation
Death benefits that are received by a beneficiary are generally
exempt from federal income tax
Concealment
failure by the applicant to disclose a known material fact when applying for insurance.
decreasing term policies
feature a level premium and a death benefit that decreases each year over the duration of the policy terms
increase or decrease the premium or premium paying period -increase or decrease the face amount -change the period of production
for adjustable life the policy owner has the following options
coercion
forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as
Reserve
funds held by the company to help fulfill future claims period minimum reserves are usually set by the State department of insurance
part one
general information of the application
option to convert
gives the insured the right to convert or exchange the term policy for a whole life(or permanent) plan without evidence of insurability.
Fixed Annuities
guarantee a fixed rate of return and are backed by the state guaranty fund
a universal life insurance policy
has a choice of death benefits option A or B
an irrevocable beneficiary
has a vested interest in the policy, and the policy cannot be changed without his or her consent
a life income annuity
has no beneficiary and is the most risky option for the annuitant
term insurance
has no cash value
a refund annuity
has the least amount of risk to the annuitant
a joint and survivor life policy
he's only when the second insured dies
HMO
health maintenance organization
interest on accumulations is taxed
how are policy owner dividends treated in regards to income tax?
Deducted when the policy is discontinued.
how are surrender charges deducted in a life policy with a rear end loaded provision?
the insurers domicile or location of incorporation will determine whether a company is domestic, foreign, or alien.
how is it determined whether an insurer is allowed to write business in a state?
3
how many hours of continuing education must be completed in ethics each licensing.
12 mandatory policy provisions
how many mandatory policy provisions are there?
2 months
how soon must the insurer pay a death benefit after receiving the proof of death?
a qualified plan for small business
if a company has a simplified employee pension plan what type of plan is it?
insured
if a contract of adhesion contains complicated language, to whom would the interpretation be in favor of?
modified endowment contract
if a life insurance policy develops cash value faster than a seven pay whole life contract, it becomes an
no dividends are paid
if all funds are paid out,
alcohol - narcotics
if the insurance dies or is injured as a result of alcohol or narcotics the insurer will not pay the claim
the free look starts on the date of mailing known as constructive delivery
if the policy is mailed to the policy owner by the company,
a statement of good health from the applicant at the time of policy delivery
if the premium was not collected at the time of the application, the producer may also be required to get
proceeds will go into the estate, which may be attached by creditors
if there is no beneficiary,
insuring Clause
in a life insurance contract, an insurance companies promise to pay stated benefits is called the
the owner
in a life settlement contract whom does the life settlement broker represent
Waiver
in agreement waving the company's liability for a certain type or types of risk ordinarily covered in the policy
Unilateral Contract
in an insurance contract, the insurer is the only party who makes a legally enforceable promise. what kind of contract is this ?
unilateral
in an insurance contract, the insurer is the only party who makes illegally enforceable promise. what kind of contract is this ?
investigations
in order to enforce the insurance code, the commissioner has the power to conduct which of the following?
group life
in this life insurance plan, the insurance typically does not own the policy. the group employer owns and controls the policy
if the insured lives to age 100
in which of the following cases will there be able to receive the full face amount from a whole life policy?
unfair trade practices
include false advertising, defamation and boycotting
part one
includes the general questions about the applicant, including name, age, address, birth date, gender, income, marital status, and occupation
universal life insurance policy
incorporates flexible premiums and an adjustable death benefit. the investment gains from a universal life policy usually go toward the cash value.
S&P 500
index that shows the price changes of 500 different stocks
have 6 months
insurance companies _____ to defer a request for a loan or cash surrender, although they usually do not exercise this right.
medical expense
insurance pays benefits for non-surgical doctors fees commonly rendered in a hospital. sometimes pays for home and office calls
Annuity tables are different than mortality tables since there is no what?
insurance protection
captive insurer
insurer owned by a parent firm for the purpose of insuring the parent firm's loss exposures
the buyer's guide and policy summary for 3 years
insurers must maintain copies of
single premium whole life
involves a large one-time-only premium payment at the beginning of the policy period and from that point on the policy is completely paid for.
permanent life insurance
is a general term used to refer to various forms of life insurance policies that build cash value and remain in effect for the entire life of the insured or until age 100 as long as the premium is paid . the most common type of permanent insurance is whole life
health insurance
is a general way of describing insurance against loss through sickness or accidental bodily injury.
Term Life policy
is a life insurance policy that offers a death benefit for a defined period (the term) Term-from 1 to 30 years When term ends, so does your coverage
Proof of Loss
is a mandatory health insurance provision stating that the insured must provide a completed claim form to the insurer within days of the date of loss.
Whole Life
is a permanent level insurance protection for their life until death
an insurance declaration page
is a piece of paper which provides basic information about an insurance policy. typically the first page of an insurance policy is a declaration page. the declaration page normally specifies the name insured, address, policy., location of property, policy limits, and other key information
a participating plan
is a plan under which the policy owner receives shares, commonly called dividends, of the divisible surplus of the company.
absolute assignment
is a policy assignment under which the assignee receives full control over the policy and also full rights to its benefits.
Notice of Claim
is a policy provision that describes the policy owner's obligation to provide notification of loss to the insurer within a reasonable period of time. it only requires the insurance company be notified of a loss, it does not require that proof of loss is provided
convertible term
is a provision that allows policy owners to convert their term insurance into permanent policies without showing proof of insurability
Target Premium
is a recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime.
waiver of premium
is a rider that can be added to a life insurance policy, and not something to be obtained from the applicant
Target Premium (Universal Life)
is a suggested premium used in universal life policies. it does not guarantee there will be adequate funds to maintain the policy to anytime, especially to life.
mortgage redemption insurance
is a type of decreasing term life insurance policy. it's purpose is to provide policy holders a way to have their mortgage paid off if they die before it is fully paid
group life
is a type of life insurance in which a single contract covers an entire group of people. most often the group is an employer employee group. those covered under a group life policy may or may not pay a portion of the premium and can usually choose their beneficiary.
SEP
is a type of qualified plan suited for the small owner or for self-employed
A PRODUCER
is allowed to share an insurance commission with another person if that person is licensed in the same line of insurance as that producer at the time of sale
SEP
is an employer sponsored ira with an expanded contribution rate up to 25% of compensation or a specified maximum contribution amount
a surcharge
is an example of a counter offer period there is no coverage until the applicant accepts the policy at the higher rate and pays the increased premium.
property insurance
is an insurance policy that provides financial reimbursement to the owner or renter of a structure and its contents in the event of damage or theft
offering a return of part of a commission as an inducement to buy
is an unfair trade practice called rebating unless it is stated in the contract
modified endowed contract
is best described as a policy that exceeds the maximum amount of Premium that can be paid into a policy and still have it recognized as a life insurance contract.
survivorship life
is commonly purchased to fund estate taxes
survivorship life
is commonly used in estate planning so the death benefit of the policy can be used to pay a state taxes when due
limited pay whole life
is designed so that the premiums for coverage will be completely paid up well before age 100
single premium whole life
is designed to provide a level death benefit to the insurance age 100 for a one-time lump sum payment. the policy is completely paid up after one premium and generates immediate cash.
Death Benefit
is guaranteed and also remains level for life
a non-participating plan
is insurance under which the insured is not entitled to share in the divisible surplus of the company
casualty liability insurance
is insurance which broadly encompasses insurance not directly concerned with life insurance, health insurance, or property insurance
stranger orientated life insurance
is life insurance arrangements where investors persuade consumers usually seniors to take out new life insurance policies with the investors named as beneficiary
marital status
is not an allowable underwriting factor in life insurance
a standard risk
is one with an average lifespan
Decreasing Term
is primarily used when the amount of needed protection is time sensitive, or decreases over time. is commonly used to ensure the payment of a mortgage or other debts if the insurer dies prematurely
Term Insurance
is renewable without a physical examination, up to a certain age
reinstatement
is the act of putting a lapsed policy back and forth by producing satisfactory evidence of insurance ability and paying any past due premiums required.
apparent authority
is the appearance or assumption of authority based on the actions, words, or deeds of the principal period it can also exist because of circumstances the principle created.
cash value
is the equity amount or savings accumulation in a whole life policy
level term insurance
is the most common type of temporary protection purchase
Consideration
is the part of an insurance contract setting for the amount of initial and renewal premiums and frequency of future payments.
the insuring agreement
is the portion of the insurance policy in which the insurer promises to make payment to or on behalf of the insured . it states the scope and limits of coverage.
annually renewable term
is the purest form of term insurance
implied authority
is the unwritten authority that is not expressly granted, but which the agent is assumed to have in order to transact the business of the principal
industrial life insurance
issues very small face amounts, such as $1,000 or $2,000. premiums are paid weekly and collected by debit agents. they were designed for burial coverage
legal
it is _____ to pay an unlicensed person a renewal commission if that person was properly licensed at the time of the sale, solicitation and/or negotiation
variable whole life is an insurance and securities product
it is regulated on the state level by the department of insurance and on the federal level by the SEC
charge individuals of the same class and same hazard different premiums
it is unfair discrimination
modified endowment contract
it loses the benefits of a standard life contract
consideration
it's often said to include the initial premium and completed application for insurance. in other words, the applicant is saying, "please consider me for insurance, here's my initial premium, my completed application, and how much/how often I agree to pay in the future. please consider me'
level
k is looking to purchase renewable term insurance. which of these types of term insurance may be renewable?
unfair trade practices act
laws that prohibit wholesalers and retailers from selling below cost
third party owner
legal term used to identify an individual or entity that is not an insured under the contract, but that has a legally enforceable right under it
unilateral contracts
life and health insurance policies are :
generally not taxed as income
life insurance death proceeds are
return of premium
life insurance is an increase in term insurance policy that pays an additional death benefit to the beneficiary equal to the amount of the premiums paid
Term Insurance
life insurance protection for a specified period of time; sometimes called temporary life insurance
limited pay life
life insurance that covers and insurance whole life with level premiums paid over a limited time is called
travel insurance, credit life, credit health, or unemployment insurance, mortgage guarantee insurance, cop hail insurance, title insurance, portable electronics insurance, self-service storage insurance and personal property insurance sold to a debtor
limited lines of insurance include
S&P 500
market index of U.S. equities based on the performance of 500 large-cap stocks representing various sectors of the overall equities market
Surcharges (rate-ups)
maybe accomplished by using a rate charge for a higher age, a different sex, a flat fee, or percentage of adjustment to the manual rate
Term Insurance
maybe converted to whole life, but not the reverse period conversion is based on the insurance current age.
policy loans
maybe taken during the grace.
viator
means the owner of a life insurance policy who enters into or seeks to enter into a viatical settlement contract
Part two
medical information
Medicare Part B
medical insurance
cannot sign a legal document
minors, the mentally and firm, those under the influence of alcohol or narcotics
not competent
minors, the mentally and firm, those under the influence of alcohol or narcotics
MEC
modified endowed contract
are renewable convertible or renewable and convertible
most term insurance policies
currency transaction report
must be filed within 15 days of a cash deposit in excess of $10,000
lloyds of London
not an insurer, but a society of members who underwrite insurance in syndicates
Claims
notice by the insured to the insurance company that a loss has occurred and demand for payment for the loss
apparent authority
occurs when the powers of the agent are created by law or circumstance.
traditional term policies
offer a low cost, simple death benefit for a specified term but have no investment component or cash value
HMOs
offer a wide range of healthcare services to member subscribers. they provide for healthcare Plus the healthcare itself. they are known for stressing preventative healthcare and early treatment programs.
An ROP policy
offers the pure protection of a term policy, but if the insured remains healthy and is still alive once the term limit expires, the insurance company guarantees a return of premium. however, since the amount returned equals the amount paid in, The returned premiums are not taxed deductible
when the application is made
one must insurable interest be present in order for a life insurance policy to be valid?
inception of the contract
one must insurable interest exist for a life insurance contract to be valid?
a joint life policy
only pays when they first insured dies
Stock Companies
our insurance companies owned and controlled by a group of stockholders whose investment in the company provides the safety margin necessary and issuance of guaranteed, fixed premium, non participating policies
mutual companies
our insurance company's characterized by having no Capital stock. it is owned by its policy owners and usually issues participating insurance
any form of life insurance
partners in a business enter into a buy sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner period what type of insurance policy may be used to fund this agreement?
family income policies
pay and income beginning at the insurance death and continues for a period specified from the date of policy issue period for example, g purchased a family income policy at age 40, with a 20-year rider period. if g were to die at age 50, g's family would receive an income for 10 years
joint survivor
payment to two or more annuitants and if one dies, the other still gets payments
he accidental death benefit rider
pays an additional some to the beneficiary if the insurance dies due to an accident. the amount paid is a multiple of the policy face amount such as double or triple the original benefit.
increasing term insurance
pays an increasing death benefit and has increasing premium as the policyholder ages.
policy riders- return of premium
pays the total amount of premiums paid into the policy in addition to the face value, as long as the insured dies within a certain time period specified in the policy. It also returns premiums to the living insured at the end of a specified period of time, as long as the premiums have been paid.
of not less than $100 and up to $1,000 for each violation
penalties for failure to follow these requirements include license suspension, revocation, and or civil penalty of not less than
declaration page
personalizes the policy...the name, address, policy number, car model and make, deductibles & limits, effective dates ***who, what, when & how much***
are not required to be licensed
persons who perform clerical tests that are not related to soliciting or negotiating insurance contracts
PPO
preferred provider organization
original-age method
premium charged is based on the insured's original age when the term insurance was first purchased
Level Premium
premium remains the same throughout the duration of the contract
may not be attached by creditors
proceeds of life policy left to a beneficiary
are required to complete a one-time for credit hour annuities training course
producers who solicit annuities
State Guaranty Association
protect policy owners in the event of any insurance company going out of business, becoming insolvent, or the in ability to pay claims
State guaranty association
protect policy owners in the event of any insurance company going out of business, becoming insolvent, or the in ability to pay claims
property and casualty insurance
protects against property damage, personal injury and liability associated with specific events
Errors and Omissions Insurance
protects broker if the seller misrepresents property condition, the broker is unaware, and could not have detected by visual inspection
Term Policies
provide the greatest amount of coverage for the lowest premium as compared to any other form of protection. there is usually a maximum age above which coverage will not be offered or which coverage cannot be renewed
level term insurance
provides a level amount of protection for a specified period, after which the policy expires. Level premium and level death benefit
Buyer's Guide
provides general information about the types of life insurance policies available, in language that can be understood by the average person.
single premium whole life
provides lifetime protection with a single premium
only the amount of the death benefit May fluctuate, depending on the type of term insurance
regardless of the type of term insurance purchased, the premium is level throughout the term of the policy;
variable life insurance policies
require a producer to have proper finra and national association of securities dealers securities registration prior to selling any variable policy contract
USA Patriot act
requires financial institutions to file a currency transaction report with fincen part of the department of the treasury for each cash transaction that exceeds $10,000
1970 Fair Credit Reporting Act
requires the fair and accurate reporting of information about consumers. Insurers must inform applicants about any investigations being made and if the report is used to deny coverage or charge higher rates, the insurer must provide the applicant the name of the credit reporting agency conducting the investigation.
beneficiary's age
s would like to use dividends from her life insurance policy to purchase paid up additions. all of these would be factors that determine how much coverage can be purchased except
the conditional receipt
says that coverage will be affected either on the day of the application or the date of the medical exam, whichever occurs last, as long as the applicant is found to be insurable as a standard risk, and policy is issued exactly as applied for
the benefit is treated as a reimbursement to the business for loss of services from that key person
should a key person die,
old age insurance
social security
OASDI (Old Age, Survivors, and Disability Insurance)
social security, medicare, medicaid
Free Look Period
starts upon policy delivering
representations
statements made by the applicant for insurance
warranties
statements made on an application for insurance that are warranted to be true. they are the exact in every detail as opposed to representations.
McCarran-Ferguson Act (1945)
states that continued regulation and taxation of the insurance industry by the states are in the public interest
Suicide Clause
states that if the insured commits suicide within two years after the policy is issued, the face amount of insurance will not be paid; there is only a refund of the premiums paid
insurable interest
stranger originated life insurance policies are in direct opposition to the principle of
the insuring agreement
summarizes the major promises of the insurer
fiduciary responsibility
taking receipt of premiums and holding them for the insurance company is an example of:
must include three hours of ethics
the 24 hours of continuing education
if an annuitant dies during the accumulation period of annuity
the account value will be paid to the annuitants beneficiary or the annuitants estate
the insurance total loan value
the amount of coverage on a group credit life policy is limited to
paid by the insurer
the appointment fees are
Express authority
the authority of an agent, stated in the document or agreement creating the agency
Agent Appointment
the authorization of an agent to act for or represent an insurer
avoid a policy lapse
the automatic premium loan provision is designed to
non-forfeiture value
the cash value is also called ____ and does not usually accumulate until the third policy year and it grows tax deferred
misstatement of age or sex provision
the company can make an adjustment due to a misunderstanding of age or sex at any time and adjust the payout or premiums accordingly.
amount of premiums and when they are due
the consideration clause on a life insurance contract contains what pertinent information
annually renewable term
the death benefit remains level in the sense that it's a level term Policy and the policy may be guaranteed to be renewable each year without proof of insurability, but the premium increases annually according to the attained age, as the probability of death increases
employees receive a certificate of insurance
the employer receives a master policy, and
the quicker the cash value grow
the higher the premium amount,
interest only settlement option
the insurance company retains the policy proceeds and pays interest on the proceeds to the recipient at regular intervals monthly quarterly semi-annually or annually
100 years old
the insured is also a policy owner of a whole life policy. what age must he insured attain in order to receive the policies face amount?
Notice of Claim provision
the insured must give written notice to the insurer within 20 days after a covered loss occurs
aviation
the insurer will not play the claim if the insured dies or is injured due to involvement with aviation, such as a military pilot flying a jet aircraft
self-insured
the insurer, often an employer, assumes the risk of paying directly for medical services
in a stoli or ioli
the investor potentially profits upon the death of the insured
the larger the cash values
the larger the face amount of the policy,
do not apply to credit life, group life, or group annuity
the life insurance replacement rules
the greater the buildup in cash values
the longer the policy has been enforced,
warranty
the part of a life insurance policy guaranteed to be true is called an
Survivorship
the percentage of members of a group that are likely to survive to any given age
guaranteed rate
the policy must contain all of the following except
converting
the policy owner also has the option of _____ from term to whole life or vice versa. however, increases in the death benefit or changing to a lower premium type of policy will usually require proof of insurability.
living benefits
the policy owner can borrow against the cash value while the policy is in effect or can receive the cash value when the policy is surrendered
declaration page
the policy page that lists the insurance company's name and address, the policyholder, the coverage dates, and the contracted coverage amounts
Fixed Period Option
the policy proceeds are paid to a beneficiary over some fixed period of time
attained-age method
the premium charged for the new policy is based on the insured's attained age at the time of conversion
the renewable provision
the premium for the new term Policy will be based on the insurance current age
level premium
the premium for whole Life policies is based on the issue age, therefore it remains the same throughout the life of the policy
Level Premium
the premium that does not change throughout the life of a policy
the convertible provision
the premium will be based on the insurance attained age at the time of conversion
Underwriting
the process of selecting, classifying, and pricing applicants for insurance
in a replacement transaction
the producer must leave a copy of the notice as well as a copy of any written or printed communication used for presentation with the applicant
Reinstatement
the provision that can be used to put an insurance policy back and forth after it has lapsed due to non-payment is called
Actual Cash Value
the required amount to pay damages or for property loss. this is calculated based on the properties current replacement minus depreciation
the producer
the responsibility of making certain that an application for insurance is filled out completely, correctly, into the best of his or her knowledge is the responsibility of home?
the original policy is allowed to lapse
the rules regarding life insurance replacement apply to which of the following situations?
the quicker the cash value grows
the shorter the premium payment period,
Street life, limited payment, and single premium
the three basic forms of whole life
assignment
the transfer of contractual rights to a third party
joint and survivor
the type of settlement option which pays throughout the lifetime of two or more beneficiaries is called
cost of insurance
the universal life policy is called an unbundled life policy because the policy holder can see the expenses charges, the interest earned and the
cash value
the___of an adjustable life policy only develops when the premium paid are more than the cost of the policy
in a replacement transaction
then notice must be signed by both the applicant and the producer
Investor-Originated Life Insurance
these arrangements are used to circumvent state insurable interest statutes
Reserves
they stated amount or percent of liquid assets that an insurer must have on hand that will satisfy obligations to its policyholders is called
unilateral contract
this means that only one party the insurer, makes any kind of enforceable promise
the initial premium
thn consideration clause and a life insurance policy indicates that a policy owners consideration consists of a completed application and
circumvent
to get around; to bypass
24 hours of continuing education must be completed and renewal fees must be paid
to renew producer's license
Boycotting
to try to create a monopoly or restrict fair trade transactions of insurance is an unfair trade practice called
FinCEN (Financial Crimes Enforcement Network)
treasury department agency that focuses on money laundering
discrimination
two individuals are in the same risk and age class yet they are charge different rates for their insurance policies due to an insignificant Factor period what is this called
viators
typically receive a percentage of the policies face value from the person who purchases the policy
insolvent
unable to pay debts owed
reciprocal insurers
unincorporated groups of people that provide insurance for one another through individual indemnity agreements
and suicide clauses start over
upon reinstatement, both the incontestability
the beneficiary will only receive payments of the interest earned on the death benefit
upon the death of the insured, the primary beneficiary discovers that the insured shows the interest only settlement option. what does this mean
hold a life insurance license and a securities license
variable Life products require a producer to
a life policy with the death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to
variable life
universal life
variable life in variable - universal life are all interest sensitive whole Life products
both an insurance and securities products
variable whole life insurance can be described as
USA Patriot Act (2001)
was designed to detect international money laundering and the financing of terrorism
Adjustable Life
was developed in an effort to provide the policy owner with the best of both worlds ( term and permanent coverage.)
straight life
we'll have the lowest annual premium of the common whole Life policies
Maturity at age 100
well some people live beyond age 100, the number of people who do live to that is not statistically significant portion of the population. the premium rate for whole life insurance is based on the assumption that the policy owner will be paying premiums for the insurance whole life.
Face Amount
what does the level refer to in level term insurance?
Who the policyowner is and what rights the policyowner is entitled to
what does the ownership clause in a life insurance policy state?
viator
what is the name of the insured who answers into a viatical settlement?
$10,000 or up to one year in jail
what is the penalty for any person who violates the McCarran Ferguson act?
level
what kind of Premium does a whole life policy have?
whole life
what kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100?
both a insurance license and a securities license
what license or licenses are required to sell variable annuities?
Grace Period
what provision in an insurance policy extends coverage beyond the premium due date
Increasing Term
what type of insurance would be used for a return of Premium Rider
term life
what type of life insurance gives the greatest amount of coverage for a limited period of time
Survivorship
what type of life policy covers two people and pays upon the death of the last insured?
treaty reinsurance
what type of reinsurance contract involves two companies automatically sharing their risk exposure?
void the policy only if it is discovered during the contestable period and proven to be material
when a misrepresentation on a life insurance policy application is discovered
conversion provision
when a policyowner exchanges a term Policy for a whole life policy without providing proof of good health, which of these apply?
purchase a single premium policy for a reduced face amount
when a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to
within 30 days
when an insurer terminates a producer's appointment for any reason, the insurer must notify the insurance commissioner
when the insurer dies or at the policy's maturity date, whichever happens first
when is the face amount of a whole life policy paid?
equal to the original policy as long as the cash values will purchase
when the insurance selects the extended term non-fortunator option the cash value will be used to purchase term insurance with what face amount?
discrimination
when twin brothers applied for life insurance from company a, the company found that while neither of them smoked and both had a very similar lifestyle, one of the brothers was in a much stronger financial position than the other period because of this, the company charged him a higher rate for his insurance. this practice is considered
application
which is the primary source of information used for insurance underwriting?
reduced paid up
which non-forfeiture option provides coverage for the longest period of time?
domestic
which of the following best describes an insurance company that has been formed under the laws of the state?
selection, classification, rating of risks
which of the following best details the underwriting process for life insurance?
contract
which of the following consists of an offer, acceptance, and consideration?
Buyer's Guide
which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process?
the cash value available to the policy owner
which of the following is an example of liquidity in a life insurance contract?
survivorship life
which of the following is called a second to die policy?
the employees receive individual policies
which of the following is incorrect concerning a non-contributory group plan?
develop insurance rates
which of the following is not a duty of the commissioner?
increasing term
which of the following is not a type of whole life insurance?
the seller must be terminally ill
which of the following is not true of life settlements?
admitted
which of the following is the closest term to an authorized insurer?
a person who negotiates insurance contracts
which of the following persons is required to hold a producer license?
variable universal life
which of the following policies combined investment choices whether it's form of term coverage?
variable universal life
which of the following policies is characterized by a flexible premium and death benefit and allows the policy owner control of the investment aspect of the plan?
insuring clause
which of the following policy components contains the company's promise to pay
buy sell agreements are normally funded with a life insurance policy
which of the following statements concerning buy sell agreements is true?
life expectancy
which of the following terms means a result of calculation based on the average number of months the insured projected to live due to the medical history and mortality factors
AD&D
which of the following types of policies pays a benefit if the insured goes blind?
buy sell agreement
which of the following would describe a legal document which would dictate who can buy a deceased partner share a business and for what amount
Target Premium
which of the following would help prevent a universal life policy from lapsing?
variable universal life
which of the types of Life policies contains a monthly mortality charge as well as a self-directed investment choices
premiums are payable for as long as there is insurance coverage in force
which of these characteristics is consistent with a straight life policy?
policy owners are entitled to receive dividends
which of these describe a participating life insurance policy?
premiums are payable for as long as there is insurance coverage in force
which of these is characteristics is consistent with a straight life policy
principal
which of these is not a type of agent authority?
negotiating
which of these is not considered to be an element of an insurance contract?
reduced paid up
which of these non-forfeiture options continue a buildup of cash value?
premiums are payable throughout the insurance lifetime/coverage last until death of the insured
which statement is correct regarding the premium payment schedule for whole life policies?
pass through interest on a policy loan is added to the total debt
which statement is true in regards to a policy loan?
universal life
which type of life insurance policy allows the policy owner to pay more or less than the planned premium?
Modified Endowment Contract
which type of policy is considered to be overfunded as stated by IRS guidelines
Family Term Rider
which writer when attached to a permanent life insurance policy provides an amount of insurance on every family member
the underwriter, not the producer
who determines the final rating classification
a policy owner who is not the insured
who is the third party owner?
the insurance company
who makes the legally enforceable promises in a unilateral insurance policy?
the commissioner
who reviews rates to make sure that they are fair, adequate, and not unfairly discriminating?
First 20 years
whole Life policies must contain a table showing their guaranteed cash value at the end of each year anniversary date for the the
child
whose life is covered on a life insurance policy that contains a pay or benefit clause?
Producer
whose responsibility is it to explain the policy provisions, writers, and exclusions to the policy owner and or insured?
It has a guaranteed minimum interest rate
why is an equity indexed annuity considered to be a fixed annuity?
distribution starts within one year of purchase
with an immediate annuity,
a joint and survivor annuity
would pay while either party is alive
