Final exam
At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called
guaranteed insurability
a rider that is included at the time of application or can be added at a later date which allows the insured to increase the amount of insurance without proving evidence of insurability
guaranteed insurability
apply to all individual and group life insurance policies except variable life, annuity contracts, credit life or life insurance policies with death benefit under $10000
regulations on illustrations
when insurance is obtained through a what the insures are sharing the risk of loss with other subscribers
reciprocal insurer
Most insurers buy ___ to protect themselves in the event of a catastrophic loss
reinsurance
chance of loss
risk
If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a
settlement option
is exercises when an immediate annuity is purchased with the face amount at death or with the cash value at surrender
settlement option
the possibility for gain or loss and is not insurable
speculative risk
What would help prevent a universal life policy from lapsing?
target premium
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 life time
target premium
policy that does not have cash value
term insurance
which of the following may not be included in an insurance company's advertisement
that its policies are covered by a state guaranty assocation
all group life insurance policies have a grace period of
31 days
what is the waiting period on a waiver premium rider in life insurance policies
6 months
the least expensive first year premium is found in which of the following policies
annually renewable term
time during which accumulated money is converted into an income stream
annuity period
provide additional information from an outside source about a customers character and reputation and used under the fair credit reporting act
consumer and investigative consumer reports
A key person insurance policy can pay for which of the following?
costs of training a replacement
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?
equal to the original policy for as long as the cash values will purchase
condition that could result in a loss
exposure
specified period of years is selected and equal installments are paid to the recipient. both the principal and interest are liquidated together over the selected period of time
fixed period settlement option or period certain
something that increases the chance of loss
hazard
allows insurers to predict claims more accurately
law of large number
applies to groups of people not to individuals
law of large number
to be insurable what must be calculable
losses
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report
must be informed of the source of the report/ cons
transfer to pure risk to the insurance company in consideration for a premium
insurance
are not required to be uniform from one state to another
insurance laws
information obtained through an investigation and interviews with associates friend and neighbors of the consumer
investigative consumerreport
what two annuity will pay until the last annuitant has died
joint and survivor (surviving annuitant may receive reduces payments)
pays for cost of running the business and replacing the employee
key person insurance policy
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?
pay a reduced death benefit
The cause of loss such as fire, wind, or theft
peril
the presence of what hazard increases the chance of a loss occurring
physical
The chance of loss without any possibility for gain is known as:
pure risk
insurance option would be considered a risk sharing arrangement
reciprocal
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of
twisting
misrepresentation that persuades insured or a policyowner to his or her detriment to cancel lapse or switch policies
twisting
the incontestability clause prevents an insurer from denying a claim due to statements in an application after the policy has been in force for how many years, it does not apply to statements relating to age sex and identity
two
life policy have cash value so they allow policy loans
variable universal life policies
