$$$

Buy-Sell Agreement

A legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled.

If an insured changes his payment plan from monthly to annually, what happens to the total premium

Decreases Because the insurer would have the entire premium to invest for a full year, they would reduce the premium amount.

What is MIB (medical information bureau)?

A nonprofit organization that maintains the underwriting info on applicants life and health insurance

UNDERWRITER

A person who evaluates and classifies risks to accept or reject them on behalf of the insurer.

Which of the following is NOT an allowable 1035 exchange?

A whole life insurance policy is exchanged for a term insurance policy

PREFERRD RISK

APPLICANTS WHO HAVE LOWER PROBABILITY OF LOSS THEREFORE CO VERD AT A LOWERED RATE

Human Life Value Approach

determines an estimat of what would b lost to the family in the event of death. looks at wages, inflation, # of years to retire, Time value of money

.Which of the following insurance options would be considered a risk-sharing arrangement?

(A) When insurance is obtained through a reciprocal insurer, the insureds are sharing the risk of loss with other subscribers of that reciprocal.

Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?

The employer is the owner and beneficiary.

SUBSTANDARD RISK AKA RATED

An applicant or insured who has a HIGHER than normal probability of loss, and who may be subject to an increased premium.

STANDARD RISK

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