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Return of premium rider

is increasing term insurance. when added to a whole life policy, at death original face amount is payable as well as the amount of all premiums previously paid this rider usually expires at age 60.

The maximum time limit for reinstatement for a policy is usually

3 years after the policy has lapsed.

Interest Sensitive Whole Life

aka current assumption life. added benefit of current interest rates. May allow for either greater cash value accumulation or a shorter premium paying period.

What term best describes the act of withholding material information that would be critical to an underwriting decision?

concealment

Executive Bonus

employer offers the employee a wage increase in the amount of premium on a new life insurance policy on the employee. Employee owns policy an has all control. Premium amount is tax deductible to the employer an income taxable to the employee.

status clause

excludes all causes of death while the insured is an active duty in the military

What are the factors in the premium determination for a life insurance policy?

mortality costs, insurer expenses and investment return

A stock company is referred to as a

non-participating company

Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive

nothing; the payments will cease. Straight or pure life annuity will pay a specific amount of income for the remainder of the annuitant's life. This payment will cease at death, regardless of the amount of principal that hasn't been paid out.

The Living Needs Rider

provides for the payment of part of the policy death benefit if the insured is diagnosed with a terminal illness that will result in death within 2 years.

Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the info contained in his or her report, the reporting agency must

respond to the consumer's complaint

An insurer is issued a cease and desist order for misrepresentation. What is the insurer required to do to comply with the order?

stop the action in violation

Gross premium

the one year cost of mortality plus the cost of operating expenses. (net premium + expenses = Gross premium

what is true regarding the taxation of MEC (Modified Endowment contracts)

withdrawals are not taxable

Under what conditions would life insurance proceeds be taxable by the federal government?

If there is a transfer of value (if the policy is sold to another person)

What is true regarding taxation of the accelerated benefits rider?

A portion of the benefit up to a limit is tax free, the rest is taxable income.

An insurer invests the money it receives from premiums paid by it's insureds. What is TRUE regarding interest earned on these investments?

It is used to lower premiums

Fair Credit Reporting Act

Protects consumers against the circulation of inaccurate or obsolete personal or financial information. *An individual who willfully violates this act is subject to a penalty of up to 2,500.

Net Single Premium

Mortality minus Interest equals the net premium (mortality - interest = net premium)

Accidental Death Rider

pays multiple of the face amount, (double and triple indemnity). death must occur within 90 days of an accident.

the results clause

only excludes the death benefit if the insured is killed as a result of an act of war