insurance exam vocab

rebating

any inducement offered to the insured in the sale of insurance products that is not specified in the policy

joint and survivor option

payments will continue until the death of the last beneficiary

fixed amount

pays a fixed specified amount in installments until the proceeds are exhausted

insurance application

primary source of information that an insurer uses to evaluate an insured's risk for life insurance

annuity

protects a person against outliving his or her money

a buyers guide

provides basic generic information about life insurance policies

liquidity

refers to availability of cash to the insured through cash values

churning

replacing insurances policies for the sole purpose of making commissions

has the highest amount of protection

the benefit of choosing extended term as a nonforfeiture option

conditional contract

type of agreement which both parties must perform certain duties and follows rules of conduct to make contract enforceable

single premium

type of life insurance policy generates immediate cash value

what policy allows withdrawals or partial surrenders

universal whole life

in a survivorship life insurance policy when does the insurer pay the death benefit

upon the last death

the office of financial regulation and the office of insurance regulation

what are the two offices of the financial services commission

3-6 months

what is the waiting period on a waiver of premium rider in a life insurance policy

option A-universal life

IRS required corridor or gap

universal life

allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount

defamation

an agent or insurer makes an injurious comment about another with the intent of harming the person or company's reputation

material misstatements

an allowing reason an insurance company can contest a payment of a claimed based on statements in the application

the underwriters approve the application

an applicant submits the initial premium with an application, which action constitutes acceptance

nonmedical insurance application

an application on which the medical information is completed by the applicant and agent only

third party ownership

contracts that are owned by someone other than the insured are known as

contract of adhesion

contracts that are prepared by one party and submitted to other party on a "take it or leave it basis"

decreasing term

death benefit decreases and premiums remain level

size of each installment

determines the length of time that benefits will be received under the fixed-amount settlement option

foreign

domiciled in one state and transacts insurance in another

sliding

falsely leading an applicant to believe that a specified additional coverage or product is required by law

transfers the risk to all persons insured

how does insurance distribute the financial consequences of individual losses

unilateral contract

only one of the contracts is legally bound to do anything

option B

the death benefit includes the annual increase in cash value so that death benefit gradually increases each year

taxation on accumulation

the difference between non qualified and qualified retirement plans

stock insurers are owned by the shareholders and issue nonparticipating policies

the difference between stock and mutual insurers is

paid up addition

the dividend option that increases the death benefit

IRA direct transfer

the full amount gets reinvested from one plan to the other

false advertising

the illegal practice of advertising or circulating materials that are untrue, deceptive or misleading

interest only settlement option

the insurer retains policy proceeds and pays interest on the proceeds to the beneficiary at regular intervals

taxable

the interest earned on policy dividends is

domestic

transacts insurance in the domicile place

insurance and cash account

two components of a universal life policy

both guarantee that the principal and interest will be fully paid out

what makes fixed amount and fixed period alike

extended term

when a whole life policy is surrendered for its non-forfeiture value what is the automatic option

31 days

when an employee terminates coverage under a group insurance policy

convertible term insurance

a type of policy that can be changed from one that does not accumulate cash value to the one that does is

alien

domiciled in one country and transacts insurance in another

30

if a licensee changes his or her residence address, within how many days must the department be notified

aleatory contract

in exchange of unequal amounts or values

paying all claims

a consideration from an insurer on a contracts is

fixed annuities do not provide protection against inflation

a correct statement about annuities

insurer

all advertisements are the responsibility of the

5 years

if a master contract is terminated the person can convert to individual if he or she was with the company for

the owner

in a life settlement contract whom does the life settlement broker represent

insurance is the transfer of

risk

the producer

the responsibility of making certain that an application for insurance is filled out completely, correctly, and to the best of his or her knowledge is the responsibility of whom?

reduced paid up

non-forfeiture option that provides coverage for the longest period of time

the office of insurance regulation

who is responsible for agent licensing and administrative supervision

6 months

a life agents license may obtain a temporary license for a maximum period of

illustration in a life insurance policy refers to

a presentation of nonguaranteed elements of a policy

insurer

all advertisements, regardless of their source of creation are the responsibility of

viatical settlement

allow someone living with a life threatening condition to sell their existing life insurance policy and use the proceeds

cash value of a variable life policy

the performance of the policy portfolio

the annuity period

the period of time during which accumulated money is converted into income payments

tax deductible by the employer

the premiums paid by the employer in a business life insurance policy are

target premium in a universal life policy defines

the recommended amount to keep the policy in force throughout its lifetime

which of the following types of policies will provide permanent protection

whole life

a liability insurance company owned by its members

risk retention group

the earnings in the plan accumulate tax deferred

which of the following describes the tax advantage of a qualified retirement plan

the amount of premium payment

which of the following information will be stated in the consideration clause of a life insurance policy

department of financial services

which of the following revokes and grants insuring licenses

option A

which universal life option has a gradually increasing cash value and level death benefit

specific information about the policy

which will not be included in a buyers guide

the insurance company

who bears all of the investment risk in a fixed annuity

individuals aged 50 or older

who would be allowed catch-up contributions?

the payments on survivorship are lower or higher than joint life

lower

the least expensive first-year premium payment is found in

annually renewable term

twisting

a misrepresentation that persuades an insured or a policyowner, to his or her detriment, to cancel, lapse, or switch policies

material misrepresentation

a statement by the applicant that upon discovery would affect the underwriting decision of the insurance company

warranty

a statement that is guaranteed to be true, and if untrue may breach an insurance contract

the length of time the coverage will last, the death benefit, the premium

adjustable life the owner could change all of the following

cash option

allows an insurer to send the policy holder an annual, nontaxable dividend check

guaranteed insurability option

allows the insured to purchase specific amounts of additional insurance at specific times without proving insurability

reduction of premium

allows the policyholder to apply policy dividends towards the next years premium

a policy is reissued with a reduction in cash value

an example of policy replacement

the death protection component of universal life insurance is always

annually renewable term

policy dividends are not guaranteed and not taxable

one thing from mutual insurers that they don't do is

interest-sensitive whole life

cash values are generated by investments, interest rates will affect the amount of cash value

non-forfeiture values

cash values guarantees in a whole life policy are called

return of premium

increasing term policy that pays an additional death benefit to the beneficiary equal to the amount of premiums paid

the medical information bureau was created to protect

insurance companies from adverse selection by high risk persons

fraud

intentional misrepresentation or deceit with the intent to induce a person to part with something of value

a simple plan

is available to small business only that employ not more than 100 employees receiving at least 5,000 in compensation

straight life policy has what type of premium

level annual premium and level guaranteed death benefit

any insured rider or spouse has what type of insurance

level term insurance

which of the following is an example of a limited-pay life policy

life paid-up at age 65

misrepresentation

making false or misleading statements with the intent to defraud another is