life insurance
A written contract atteWe've a corny boymps to indemnify another party against loss damage or liability rising from a contingent or unknown event. this describes
-Insurance CIC 22. Insurance is a contract where we are by one other takes to indemnify another against loss damage liability arising from a contingent or unknown event
Of the following, which best describes an annuity
-It has an obligation that is different to the insurance company for both accumulation period And the liquidation period; Annuities have to phases the accumulation phase and the annuitization phase Insurers obligation during the accumulation. Is to invest premiums paid in by that annuitant. The annuitization phase is to pay out the money
All following statements apply to a producer acting as an insurance broker except:
A broker acts on behalf of the insurer. Insurance broker means a person who for compensation and on behalf of another person, transact insurance other than life disability or health with, but not on behalf of, and insurer
Which of the following best describes a term insurance policy
A death benefit is payable but there is no cash value
From the following so like the type of life insurance which could be best used to protect your customers heirs from a mortgage obligation shut your customer die
Decreasing term Decreasing term life insurance can be designed to measure approximately equal outstanding balance of the mortgage. Typically the premiums will also decrease as it covers your face amount decreases. Decreasing term life policy specifically designed to cover a mortgage go by name such as mortgage protection, mortgage life and mortgage insurance, and mortgage redemption life. 2078
What is the difference between deferred annuities and immediate annuities
Deferred annuities have longer accumulation period; Immediate: does she wishes begin with then one year, deferred: distributions begin in more than one year
In financial planning what is the needs approach concept based on
Family's needs
Unless the applicant indicates otherwise during the right to return. In an individual annuity, the premium for a available annuity would be invested only in
Fixed income investments and money market funds
Choose from the following selections the best description of a premium
Funds received pay and insurer from an insured to realize the benefits of a policy
After receiving your insurance license if you change your address you are to notify the commissioner
Immediately
What is one difference between group life and individual life underwriting
Individual life insurance requires applicant to answer medical questions
All of the occurrences listed below are examples of an insurable event as defined by the California insurance code except
Insured to First Financial loss in the state lottery
Which statement option allows only the death benefit earnings to be paid to the beneficiary
Interest option
When does an individual have an insurable interest in the life of another person
The individual depends on the other person for financial support
Which of the following is a correct statement about life insurance policy types
The initial premium for the term insurance is lower than the initial premium for the whole life insurance.
In group life insurance, who is issued a certificate of insurance
The participant
The free look provision of life insurance issued in California states that certain conditions exist in order for a policy to be delivered to the policy owner properly. Which of the following is not correct in determining a delivery
The policy was hand-delivered personally no receipt needed
According to the California insurance code an insurance policy must be
-In writing Per CIC 380, Insurance policies must be in writing. That means they cannot be based on an oral agreement
Senior citizens are given a 30 day right to return a life insurance policy
60 or older
The tendency of a person who has a greater than average exposure to loss to seek out insurance is called
Adverse selection; Adverse selection is a tendency of people on the higher end of risk girl to see you go insurance more aggressively
I like the policy riders frequently found in life insurance policies
All the above We are a premium, accidental death and dismemberment, cost of living. 1957
The best description of a hazard is a
Condition that may increase the chance that a loss may occur
How many days does a California insurance code give an individual to return a life policy for cancellation
Between 10 and 30 days Senior citizen 60+ free look period No less than 30 days
An attempt by an agent to deter an insured from replacing an existing life insurance policy is called
Conservation; Conservation means any attempt by the existing insurer or his agent to dissuade a policy owner for the replacement of existing life insurance or annuity
If the owner of a life insurance policy does not select each statement option on behalf of the beneficiary the beneficiary:
Can't choose a settlement since it was not chosen by the owner
All of the following are benefits of insurance except it
Eliminates fraudulent losses
All Of the following are reasons for an individual to purchase personal life insurance except:
To cover a Buy Sell agreement
Equally sharing the death benefit among children can be done most effectively by
-A class beneficiary designation Ex: instead of writing out each child's name simply list children of insured
Which provision will pay portion of the death benefit prior to the insured's death due to a serious illness
-AcCelebrated death benefit; This enables the policyholder to receive cash advances against the death benefit if the insured is diagnosed with a terminal illness
The period of time in which a housewife who has survive the death of her husband, will not receive income benefits from Social Security is called the
-Black out period The back out period Refers to the time when the deceased worker's child turns 16 and the widower caring for the child turns 60
Select from below the potential costs related with a person's death
-Both of the above; Bills left that need to be paid. These are types of things I should be taking into consideration when determining how much life insurance One needs.
How can partners guarantee a market for their share of business in an event of death
-Buy-sell agreements. A Byselle agreement can be designed to require that upon the death or and disability of a co-owner in a business that has ownership interest are sold according to A predetermined formula to the company or the remaining co-owners of the business this helps prevent his share of business anything up in the hands of the outside parties
The additional premium charge by an insurer for adding the accidental death benefit to a whole life policy
-Does not affect the policies cash value In the case of a whole life policy that has cash value and your riders at it when I **** the cash value of the Policy to which they are attached(1961)
Chuck Harris has earned a chartered life underwriter designation. From the selections below choose the one that the California insurance code would find acceptable when publishing his name
-Harris insurance services. Per 10 mL ccr 2052.4, in the order for a licensees business need to be approved for use by the commissioner it must clearly indicate that the licensee will be an insurance provider by including it in its name the word insurance followed by one of the following that sensitive words: Agency, services, marketing, sales, solutions, center or associates
When applying for health insurance which of the following on the application is not an acceptable question to ask
-How do you think your health is these days CIC 339. Neither party to a contract of insurance is bound to communicate even upon entry information of his own judgment upon the matters in question
In financial planning, what is the human life value concept based on
-Income The human life value approach is one of the methods for estimating appropriate amount of life insurance and is based on the insured actual financial contribution to his or her household 1439
The person whose life is the object of a life insurance policy is the
-Insured It is the insured who is the object or subject of a life policy. It's the death of the insured that triggers the life policies death benefit to be paid out to the beneficiar
A life insurance policy dividend is
-Legally defined as a return of excess premium and non-taxable. Life policy dividends are A non-guaranteed return of premium that and ensure peace to the owner of the participating life policy out of the insurance surplus. As they are a return of premium they are generally not taxable to the policy owner 1597
According to the California insurance code a binder is a valid insurance policy for the purpose of providing their insured as insurance covered specified in the binder for all of the following classes of insurance except
-Life insurance A binder using property in Casuelas the insurance is a legal agreement issued by either an agent or an insured to provide temporary evidence of insurance until a policy can be insured
In life insurance policies naming a beneficiaries is an important part of the application process. Choose from below the best description of the contingent beneficiary
-One with the first ride to receive proceeds if there is no surviving primary beneficiary and the insured dies.; The order of beneficiary designations under a life policy is as follows: primary, contingent, final
What type of life insurance policy gives the owner the right to share in the insurer's profits in the form of a dividend
-Participating policy Participating (par) - A participating life policy is eligible for dividends Non-participating(non-par)-A non-participating life policy is not eligible for dividends
The class beneficiary designation which means that the beneficiaries will receive equal shares of the death benefit divided among the surviving members of the class is
-Per capita; Refers to a type of beneficiary designation in which the life insurance death benefit proceeds are divided equally among the designated beneficiaries who survive
Charles received a large inheritance from his uncles state. Because he can use the income, he buys an annuity with a full amount of his inheritance That will begin paying him monthly payments starting the following month. Charles has purchased a ___ annuity.
-Single premium immediate A single premium immediate annuity SPIA is funded with one lump sum payment during the accumulation phase and then distributions begin within one year of date the annuity was purchased
An individual with low income and high insurance needs should buy
-Term insurance; Term life insurance is pure life insurance, provides no cash value, just a death benefit if insured dies.
Index linked life insurance plans have their benefit determined by an index which provides an indication of the effects of information on the purchasing power of the dollar which index is typically used to do this
-The customer price index; Distracts consumer inflation so it is the index typically used in the index link life insurance policies
The mathematical rule that says that as the number of individual but similar exposure unit increases the easier it is to predict losses is which of the following
-The law of large numbers; The law of large numbers says that the larger the number of individuals, but similar risk, the more accurate the loss predictions for that group will be.
Life insurance terminology indemnify means
-make whole The principle of indemnify is a basic principle of the insurance that says the goal of insurance is to reassure one back to his previous condition that existed before a loss that's making him whole again
A person has paid 50,000 into a fixed annuity over 20 years. When he decides to begin income payments then sure calculates that he will receive 4000 per year for life, which means that he will receive a total of 100,000. In the first 10 years of payments how much is taxable each year
2000 For nonqualified annuities the nudity exclusion ratio equals in total cost revisions divided by all total expense payout. = 50,000÷100,000=.5 *4000=2000
At what age does a jumping juvenile policy increase the benefit from 1000 to 5000
21 A jumping juvenile life insurance policy is a whole life policy that ensures a juvenile with the policies face amount increasing by five times automatically when the juvenile insured turns 21 without additional premium or evidence of insurability(1500)
Which contract promises to pay the owner a guaranteed minimum income for as long as individual lives
A life annuity
A life insurance policy written after 1988 that fails to meet the seven Pay test is known as
A modified endowment contract. The 7Pay testExamines the cumulative premiums paid under a life policy during the first seven years after issue. If at any time during the policies for seven years this cumulative premium amount exceeds the sum of the next level premiums that would have been paid on the guaranteed seven year pay whole life policy providing the same death benefit then the policy will be classified as a modified endowment contract. When classified as a MEC any distributions from it will be taxed accordingly.
Which of the following is required to be included in writing of the insurance contract
All the above; The policy specify: the parties between whom the contract is made, the property or life insured, the interest of the insured and property insured if he is not the absolute owner, the risk and shirt again, the period during which the insurance is continued, either a statement of premium or if insurance is of a character wear the exact premium is only determinable upon a termination of the contract a statement of the bases on rate upon which the final premium is to be determined and paid.
What occurs during the accumulation period of an annuity
Allows the annuity to build up on tax deferred basis
A contract where by an individual deposits fine with a life insurance company, the individual defers taxes on a build up of savings within the contract and the individual can choose to take the money out in several ways upon retirement. What does this describe
An annuity
A policy is issued to a 32-year-old that has a face amount of 100,000. When the insured reaches the age of 55, the policy has built up 100,000 of cash value. Choose from the selections below the type of policy this most likely describes
An endowment at age 55 policy
Subject to the restrictions of the California insurance code, any person capable of making a contract may be considered
And insurer
Transferring ownership from the current owner to another person is known as
Assignment; Two types of assignments in life insurance. First absolute assignments, transfers are incidence of ownerships to another party. A collateral assignment, temporarily transfer of and insurance policy death benefits or cash are undervalued by the owners policy to a creditor in return of loan
The premium loan rider on a life insurance policy kicks in
At the end of the grace period
A type of receipt stating that coverage begins on the date of the application as long as insurance approves that application is a
Conditional receipt
All of the following statements apply to the child coverage in a family policy except
Coverage applies only to children born before the policy is issued
Which of the following is false about dividends paid from life insurance policies
Dividends are a return of excess premium and are therefore taxable; Why policy dividends are a non-guaranteed return opinion that an insurer pays to the owner of a participating life policy out of the insurers surplus. As they are a return of premium they are generally not taxable to the policy owner. Policy owner can choose from: one year term, cash, reduce premium, accumulated interest, paid up additions
Insurable interest in life insurance policy
Does not need to exist at the time of lost only at the time the policies written Per CIC 10110.1(f),For life and disability insurance and insurable interest should be required to access at the time the contract of life or disability insurance becomes effective, but need not to exist at the time loss occurs.
Which type of policy pays the face amount if the insured survives to the end of a certain point
Endowment insurance; Endowment insurance pays out at maturity which can be said, whole life policy will be until maturity is reached at age 100 or 121 depending on the policy
All of the following would be considered one of the four major types of loss exposure except
Financial loss exposure; A loss exposures in a situation that presents the possibility of a loss and can be classified Includes, liability laws exposure, property loss exposure, personal exposure, personnel loss exposure
A person owns a family annuity. He elects to receive his annuity payments monthly for the remainder of his life with 10 years certain then we will make payments
For a minimum of 120 months and a maximum of the remainder of his life Yrs*12months or the remainder of his life
Which of the following is not a type of authority associated with authority of agents
Justified; Three types of authority associated with agents are: express , implied, Apparent
Which two insurance products are commonly used to fund buy sell agreements
Life insurance and disability insurance; A Byselle agreement can be designed to require that upon the death or disability of a corner in a business, that is ownership interests are sold according to the predetermined formula to the company or to the remaining corners of the business. This helps prevent his share of the business ending up in the hands of outside parties.
Who are members of the medical information bureau
Life insurance companies
Choose the correct statement
Life insurance creates an immediate estate
According to the definition of an ideally insurable risk, which of the following is not a requirement
Loss must be the result of a catastrophic event
Most life insurance belong to which of the following industry organizations
Medical information bureau; MIB group is a membership corporation owned by approximately 430 member life and health insurers in the US and Canada. Provide services designed to protect insurers from attempts to conceal or omit information material to underwriting life and disability insurance 1688
All of the following qualify as background information as defined in section 1729.2 of the California insurance code except:
Misdemeanor charges filed, not resulting in conviction
An example of a moral hazard in relation to a life insurance application would be
Misstating your health and history to an insurance company1404
The theory of probability is apply to life insurance through the use of
Mortality tables
When are parties to a contract required to communicate information solely based on personal judgment for the matter of a question
Never
The insurance term used for an insured who has not complied with the requirements to obtain a certificate of authority from the California insurance commissioner is
Non-admitted
The term consideration applies to the issuance of an insurance policy. Choose the best description of this term from the choices below
None of the above Consideration is the premium or the future premiums that the insured pays to the insurance company. This term is used when talking about the initial premium that an applicant pays to an insurance company for a new insurance policy, they can also refer to feature premium payment outside of the initial premium payment.1866
From the following choices, select the one that best describes the concept of concealment
Not communicating that which a party nose and I'll to communicate
For income tax purposes, Premiums for personal life insurance are
Not deductible The premiums paid for personal life insurance are paid with after-tax dollars meaning that they are not a deductible expense when considering one's taxable income or income tax purposes
If the commissioner issues a notice of seizure for documents and the individual files to send those documents what is a penalty
One year in jail and or $1000 fine; Shelby guilty of a misdemeanor and Punishable by when you're in JAil or $1000 fine
When the public purchases annuities they are attempting to address the risk of
Outliving the money they have saved for retirement
Which of these categories of insurance combined insurance protection together with cash accumulation
Permanent insurance contracts; Permanent insurance is an umbrella term for life insurance policies I do not expire and combine a death benefit with a savings portion. The two main types of permanent life insurance or whole life and universal life insurance.
All of the following are used in determining life insurance rates except
Policy reserves Life premium= mortality-Investment income+ expenses 1873
The incontestable clause of a life insurance policy
Prevents dentures from voiding the policy after two years on the grounds of misinterpretation, concealment or fraud of the insured.; It states after two years from the date of issue of the policy, no miss statement, except Friday misstatements, made by the application application for the policy should be used to avoid the policy or to deny a claim for loss incurred commencing after the expiration of the two-year period
When premium payments on a whole life insurance policy are being waived because the person whose life is insured is totally disabled, the actual effect on the policies cash value will be to:
Provide for the continued increase in cash value during the period of disability
Under the California code of regulations all of the following would be considered proof of claim except
Public adjusters letter of representation; Proof of claim means any documentation in the claimants position submitted to the insured which provides any evidence of the claim and that supports the magnitude or the amount of the claim loss
In regards to your representations, which of the following is correct
Representations or statements me to the best of one's knowledge
According to the California insurance code which of the following must be specified in an insurance contract
Risk insured against
A husband and wife have a disabled child who is financially dependent upon them. The death of one parent would not result in financial disaster for the disabled child but the death of both parents word. Which policy should they purchase
Second to die policy
The insurance code definition of an insurance broker is
Someone paid to transact insurance on the behalf of another person, but not on the behalf of the insurer
Select the type of annuity payment option that has the least amount of risk for the insured, and therefore, pays the highest amount of income to the insured all the time
Straight/pure life. When a period certain is added to an annuity, it is a type of guarantee for the new ones that their annuity will be paid out for a minimum. Of time, even if they die before the periods are in has passed.
Which life insurance classification carries the highest premium
Substandard; Life and disability insurance classifications: Standard-average, preferred-above average, substandard-below average
John applies for a variable annuity and does not request that the premiums be immediately invested in the stock or bond per folio. After than what he is issued, John returns annuity contract to the insured within the free look period.What would John receipt from the ensure
The entire premium
acCording to the California insurance code, and insured policy must specify all the following except:
The financial rating of the insure; Policy shower specify: the parties between home and the contract is made, the property or life insurance, the entrance of the insured in the property issue, the rest of insured against, the period during which the insurance is to continue, either a statement of the premium or if they're insurance is of character we are the exact premium is only to terminal four upon the termination of contract a statement of the bases and rates upon which if I the premium is to be determined and paid
Why is having a large number of similar exposure units important to the insurers
The greater the number insured, the more accurately than sure can predict losses and set appropriate premiums
Frequently juvenile life policies contain a pay writer. This writer states that in the event The payer of premiums is disabled or dies, and the juvenile has not yet to reach a specific age :
The premiums will be paid by the insured in till the child reaches the age of 21 or 25.; Payer coverage can be purchased on juvenile policies which are typically owned by a parent or grandparent who is possible for paying the premium. A pay writer will waive the policy premiums if the payer dies or becomes disabled and the insured is under a specified age.
Why would a business use a key person life insurance policy
To protect the company from the financial consequences of the death of the Vice President
The purpose of laws regarding the replacement of life and in the wedding contracts and his all the following except:
To protect the interest of life insurers and their agent
And insured replaces an existing annuity with a new one and must pay a surrender charge for canceling the existing annuity. The new policy holds no greater financial benefits to the insured then the existing contract. This is an example of:
Unnecessary replacement
Why is the delivery of a life insurance policy important
Why is the delivery of a life insurance policy important
