215 life health and annuities exam
grace period for life insurance, where premiums are made monthly
30 days
designated time period for indexed annuity
7 years
Home Service Insurers
home service insurance is industrial insurance sold by home service or debit life insurance companies. Face amounts are small; usually $1,000 to $2,000 and premiums are paid weekly.
policy reserves belong to
insured
A pure risk involves a chance of:
loss only
if beneficiary is deceased and the proceeds go to living descendants
per stirpes
ERISA was created to
protect retirees from loopholes
independent agent
represent multiple companies and will shop your policy to find the best coverage at the best premium
parol evidence rule
rule that prohibits the introduction into evidence of oral changes once it becomes a written document
health insurance is based off of ___ principles
scientific
Stock Insurers are owned by
stockholders or shareholders
NAHU
supports health insurance industry
NAIFA
supports life insurance industry
mortality
the number of deaths in a population
Life insurance is considered a______ contract
valued
State Guaranty Association
established by each state to support insurers and protect consumers in the case of insurer insolvency,
self-insurers
establishes a self-funded plan to cover potential losses instead of transferring the risk to an insurance company
Who bears the investment risk in a fixed annuity?
insurer
basic principle of insurance that larger number of individual risks combined in a group, the more certainty in predicting the amount or degree of loss that will be in any given period
law of large numbers
Four elements of legally binding contract
legal purpose offer and acceptance consideration monies competent parties
what is associated with disability buy out plan
lengthy elimination periods
risk pooling is also known as
loss sharing
NAIC
measures company performance and reports to IRS
Overstating promises and guarantees is a form of:
misrepresentation
when insurance company issues both nonparticipating and participating plans
mixed plan
PPO
must have PCP must pay fixed periodic premium
variable annuties have ____ minimum guarantee
no
which type of policy prevents insurers from increasing premiums when policy is renewed
noncancellable policies
individual health insurance are written on a
nonparticipating basis
irrevocable beneficary
one that cannot be changed without the beneficiary's consent
group health insurance plans are written ona
participating basis
if proceeds are divided among living beneficiaries
per capita
cash value belongs to
policy owner
morbidity
presence of illness or disease
two reasons for insurance
protects against financial loss restores insured to status before the loss
basic principle of group insurance
provides coverage for mutliple people under one contract
premiums for business overhead expense insurance are _______. benefits are _____
tax deductable, taxable
death benefits paid under policy to beneficiary are
tax free
as long as equity remains in life insurance policy and continues to accumulate, the cash value remains ___, once surrendered, equity is considered ____
tax free; taxable
when policy terminates for any reason other than death benefit, excess income over cost basis
taxable
if premium deposit is NOT collected and submitted with application, the __________-- is when the policy goes into effect
the date the policy is issued
contract that obligates one party (the insurer)
unilateral contract
Reciprocal Insurers
unincorporated groups of people that provide insurance for one another through individual indemnity agreements
group long term disability plans provide for a benefit period of
up to 2 years, sometimes into retirement
estoppel is enforcement of ___
waiver
twisting
"external replacement" A form of misrepresentation in which an agent persuades an insured/owner to cancel, lapse, or switch policies, even when it's to the insured's disadvantage.
churning
"internal replacement" inducing person to sell their policy and buy another one with same company
The Florida Life and Health Guaranty Association for liability of contractual obligations of insolvent insurers cannot exceed _______in cash values, or ____ for all benefits
$100,000 : 300,000
each credit equals
$1220
Health Maintenance Organization (HMO)
Alternative means of health care in which people or their employers are charged a set amount and the HMO provides health care and covers hospital costs.
do group A&d plans normally contain conversion priveleges
NO
guidelines for number of participants in contributory group coverage
NO MINIMUM
mutual insurers are owned by
Policyholders
cafeteria plans are also called
Section 125 plans
NAIC has no legal power.... T or F
TRUE
T or F. Agents records are subject to scrutiny by commissioner at any time
True
moral hazard
When the act of insuring an event increases the likelihood that the event will happen
credit life insurance means the insured must ____ before loan benefits will pay
die
Two principles involved in needs-based selling
education fact-finding
Indemity Contract
pays amount of loss only
State Guaranty Associations are funded by
assessments
key person insurance gives ownership of the policy to the ___ as an owned asset
company
if an individual earned 6 credits in the last 13 credit quarters they are considered
currently insured
if receipt is issued when premium deposit is collected, the policy goes into effect on ___
date of receipt
if policy owner fails to determine life insurance beneficiary, proceeds go to
estate
agents are sometimes referred to as
field underwriters
indexed annuties are
fixed
a certificate of insurance summarizes coverage and explains employees rights under
group contract
Demutualization
a mutual insurer is converted into a stock insurer
The true significance of insurance is to replace the unknown with:
a sense of security
life insurance is based off of ___ principles
actuarial or mathematical
unequal contingencies of profit or loss between parties
aleatory contract
captive agent
an insurance agent who represents only one insurance company and who is, in effect, an employee of that company
who bears investment risk in a variable annuity?
annuitant
who can draft buy-sell agreements
attorneys
two items required to be delivered to life insurance applicant
buyers guide policy summary
peril
cause of loss
before one can sell insurance, one must have
certificate of authority
exlcusion ratio in annuities
100%
the taxable wage basis for FICA taxes is ____
118,500
free-look period of life insurance
14 days
child must be ___ to sign life insurance policy
15
if adverse information is given about applicant, applicant must know in __ days
3 days
industrial policies that total ____ or more in face value can be converted into ordinary life policy with no evidence of insurability
3000
conversion period for group life insurance
31 days
how many quarters are required to be fully considered under social security
40
written notices of contract termination must be made in
45 days
social security benefits are eligible after __ consecutive months
5
if applicant requests summary of adverse information, the company has ___ days
5 days
agent is required to keep records for __ years
5 years
additional lapse notice for seniors over age of 64
51 days
OASDI is ____ SSA is ___
6.20, 1.45
Under Group long-term disability plans, benefit amounts are usually limited to approximately ________ of the Participants income.
60
Under the accelerated death benefits provision, usually up to _________ of the policy's face value can be withdrawn.
75
Speculative Risk
A chance of loss, no loss, or gain. Not insurable
spendthrift clause
A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.
Morale Hazard
A condition of carelessness or indifference that increases the frequency or severity of loss.
hazard
A danger or risk.
risk retention groups
A form of mutual insurer that provides liability coverage to insure groups of individuals who are of the same group or class.
Physical Hazard
A tangible characteristic of property, persons, or operations that tends to increase the frequency or severity of loss.