GA Life Chapter 2 Practice test
at what point does coverage begin when an agent issues a conditional receipt for a life insurance policy?
either on the date of the application or the date of the medical exam whichever occurs last
life insurance may be used to pay state inheritance taxes and federal estate taxes eliminatinh the need to sell assets from the estate. What is this called?
estate conservation
what type of policy is typically issued without proof of insurability from the insured?
group policy
what type of policy issues certificates of insurance to the insureds?
group policy
how does a premium mold affect the total premium paid for insurance for the year?
higher frequency of premium payments will result in higher overall premium
if an insurer changes his payment plan from monthly to annually, what happens to the total premium?
it will decrease
what type of insurance creates an immediate estate?
life insurance
what type of insurance would perform the function of cash accumulation?
life insurance
all other factors being equal, which premium payment bowl will require an overall higher premiums monthly or
monthly
what are the three factors that determine the premium for a particular life insurance policy?
mortality, interest and expense
what document describes the specific information about a policy?
policy summary
in calculating the amount of life insurance needed, what is the needs approach based on?
the predicted death of a family after premature death of the insured
what is the main purpose of the regulation on life insurance policy illustrations?
to help the public make educated decisions about buying life insurance
what is Insurance underwriting?
The process of risk selection and classification
what is the purpose of key person insurance
To minimize the risk of financial loss caused by the death of a key employee
what is policy replacement?
a new policy is issued while an existing policy is terminated or reissue what a reduction in cash value
quantum insurable interest exist in a life insurance policy?
at the time of the application
mortality tables are used by insurance companies to predict what?
Life expectancy and the death rates for specific groups of individuals
what is included in part 2 of a life insurance application?
Medical information about the prospective insured
what type of life insurance offers an applicant a cash value element?
Permanent insurance (usually, whole life)
who must have insurable interest in the insured?
Policyowner
what are illustrations in a life insurance policy?
Presentations of nonguaranteed elements of the policy
what is the main responsibility of a company's underwriting unit?
Risk selection
what are the personal uses of Life Insurance life insurance reviews
Survivor protection, estate creation and conservation, cash accumulation and liquidity
what is the purpose of the agent's report during the application process?
The agent's report discusses the agent's personal observations about the proposed insured that may help in the underwriting process
who is a replacing insurer?
The company that issues a new policy during policy replacement
what is a blackout. For a social security benefits?
a. of time during which the surviving spouse does not receive benefits
when when must the policy summary for a life Insurance policy be delivered to the policy owner?
at the timen of policy delivery
what does liquidity mean in a life insurance policy?
availability of cash value
what are the three main instances when insurable interest exist in life insurance?
insuring your own life, the life of a family member, or the life of a business partners or someone who has financial obligation to the policy owner
what document must a producer provide to ensured during policy replacement?
notice regarding replacement
if someone wants to buy a life insurance policy that will provide lifetime protection against premature death, what type of life insurance policy should it be?
permanent
what term describes the fee a person pays an insurance company to receive coverage?
premium
what is the term that describes the frequency and the amount of the premium payment?
premium mode
a business is the owner and beneficiary of the key person life policy. When the business collects the policy benefit, how is it taxed?
the benefit is received tax free
what is the beneficiary on a key person life insurance policy?
the employer
if an applicant for a life insurance policy and the potential insured are two different people, what will be the underwriters main concern?
the existence of insurable interest between the applicant and the insured
who is responsible for the contents of an insurance advertisement?
the insurance company
when planning for a Survivor protection in life insurance, what needs to be considered?
the insured's current assets, liabilities and survivors needs
an insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?
variable