Life Insurance
Which of the following must an insurer obtain in order to transact insurance within a given state? a) Producer's certificate b) Business entity license c) Insurer's license d) Certificate of authority
Certificate of authority. All insurers (domestic, foreign, or alien) must obtain a certificate of authority before transacting insurance within a given state.
Which of the following authorities grants and revokes licenses? a) Department of Financial Services b) Federal Insurance Bureau c) National Association of Insurance Commissioners (NAIC) d) Guaranty Association
Department of Financial Services. The Department is responsible for issuing, reissuing, and terminating licenses.
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? a) 5 days b) 7 days c) 10 days d) 3 days
5 days. Consumers must be advised that they have a right to request additional information concerning investigative consumer reports, and the insurer or reporting agency has 5 days to provide the consumer with the additional information.
Circulating deceptive sales material to the public is what type of Unfair Trade Practice? a) Coercion b) Misrepresentation c) False advertising d) Defamation
False advertising. This is considered to be false, deceptive or misleading advertising.
A Return of Premium term life policy is written as what type of term coverage? a) Decreasing b) Renewable c) Level d) Increasing
Increasing. Return of premium (ROP) life insurance is an increasing term insurance policy that pays an additional death benefit to the beneficiary equal to the amount of the premiums paid.
Which of the following documents must be provided to the policyowner or applicant during policy replacement? a) Buyer's Guide and Policy Summary b) Policy illustrations c) Notice Regarding Replacement d) Disclosure Authorization Form
Notice regarding replacement. During policy replacement, the replacing producer must present to the applicant a Notice Regarding Replacement that is signed by both the applicant and the producer
When an insurer terminates an agent's appointment, the insurer must do all of the following EXCEPT a) Provide a 30-day advance notice to the Commissioner. b) Provide a 60-day advance notice to the agent. c) File a written notice with the department of insurance within 30 days of termination. d) Make sure that the agent's contract rights are not violated.
Provide a 30-day advance notice to the commissioner. An appointing entity may terminate an agent's appointment at any time, subject to an appointee's contract rights and with a 60-days advance notice. Once the appointment is terminated, the appointing entity must file a written notice with the department of insurance within 30 days.
An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe? a) Flexible Premium b) Reduction of Premium c) Accumulation at Interest d) Cash option
Reduction of premium. The Reduction of Premium option allows the policyholder to apply policy dividends toward the next year's premium. The dividend is subtracted from the premium amount, yielding the new premium due for the next year.
twisting
Twisting" is a misrepresentation that persuades an insured/owner, to his or her detriment, to cancel, lapse, or switch policies from one to another.
Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as a) Aleatory contracts. b) Binding contracts. c) Contracts of adhesion. d) Unilateral contracts.
Contracts of adhesion. Insurance policies are written by the insurer and submitted to the insured on a take- it-or-leave-it basis. The insured does not have any input into the contract, but simply adheres to the contract.
A key person insurance policy can pay for which of the following? a) Hospital bills of the key employee b) Costs of training a replacement c) Loss of personal income d) Workers compensation
Costs of training a replacement. A key person insurance policy will pay for costs of running the business and replacing the employee.
What type of insurance would be used for a Return of Premium rider? a) Decreasing Term b) Annually Renewable Term c) Increasing Term d) Level Term
Increasing term. The Return of Premium Rider is achieved by using increasing term insurance. When added to a whole life policy it provides that at death prior to a given age, not only is the original face amount payable, but also all premiums previously paid are payable to the beneficiary.
Variable Whole Life insurance is based on what type of premium? a) Flexible b) Graded c) Level fixed d) Increasing Variable
Level fixed. Whole Life insurance is a level fixed premium investment-based product.
Traditional IRA contributions are tax deductible based on which of the following? a) IRA limit b) Owner's income c) How long the plan has been in force d) Owner's age
Owners income. Traditional IRA contributions are tax deductible, but may be limited if the owner's income exceeds a certain level.
What is the major difference between a stock company and a mutual company? a) Ownership b) Amount of death benefit c) Number of producers d) Types of whole life policies
Ownership. Mutual companies are owned by policyholders, while stock companies are owned by stockholders.
Which of the following dates must be contained in a policy summary? a) The date that the producer was licensed b) The date the summary was prepared c) The date the application was signed d) The date that the policy was issued
The date the summary was prepared. A policy summary must contain the date that the summary was prepared.
Which of the following is a key distinction between variable whole life and variable universal life products? a) Variable universal life is regulated solely through FINRA. b) Variable whole life allows policy loans from the cash value. c) Variable universal life has a fixed premium. d) Variable whole life has a guaranteed death benefit.
Variable whole life has a guaranteed death benefit. Variable universal life insurance may or may not have a minimum death benefit, unlike variable whole life insurance which guarantees a minimum death benefit.
In the state of Florida, it is illegal for a licensee's commissions from controlled business to exceed what percentage of the total in a given year? a) 35% b) 50% c) 60% d) 20%
50% A license will not be permitted to exist if the department finds that during any 12-month period, aggregate commissions or other compensation accruing in favor of the licensee's insurable interest have exceeded 50% of the aggregate amount of commissions and compensation accruing in the licensee's favor during the same period as to all insurance coverages procured through him/her.
Which of the following persons is required to hold a producer license? a) A person who takes messages related to claims b) A person who administers employee benefits c) A person who negotiates insurance contracts d) A person who creates insurance advertisements
A person who negotiates insurance contracts. Persons who perform clerical tasks that are not related to soliciting or negotiating insurance contracts are not required to be licensed.
Which of the following insurance products will be subject to the regulation on life insurance solicitation? a)An annuity b)A term life policy c)A credit life policy d)A group life policy
A term life policy. The regulation on life insurance solicitation does not apply to the sale of annuities, credit life and group life insurance, variable life insurance policies, and life insurance policies issued in connection with pension and welfare plans that are subject to ERISA.
An agent's client needs additional insurance which the agent's own insurer cannot provide. The agent has to solicit additional coverage from another authorized insurer. This coverage is known as a) Excess. b) Authorized. c) Controlled business. d) Rejected.
Excess. A licensed life agent may place excess or rejected risks within the agent's licensing authority with another insurer without being required to have an appointment with that insurer. Excess business is that portion of a risk above the limits of that which the agent's own insurer will accept.
In which of the following instances would the premium be tax deductible? a) Premiums paid by an employer on the life of a key person b) Premiums paid by an employer on a $30,000 group term life insurance plan for employees c) Premiums paid by an individual on his/her own life insurance d) Premiums paid by a mother on her son's policy
Premiums paid by an employer on a $30,000 group term life insurance plan for employees. As a general rule, premiums paid for life insurance are not tax deductible. The exception to this rule is when an employer buys group term life insurance for his employees since it is considered a business expense.
The clause that protects the proceeds of a life insurance policy from creditors after the death of the insured is known as the a) Beneficiary protection clause. b) Spendthrift clause. c) Benefit protection clause. d) Incontestability clause.
Spendthrift clause. The spendthrift clause protects the policy proceeds from creditors of the policyowner or beneficiary.
Who examines the books and records of insurance companies in Florida? a) The NAIC b) The Commissioner of Insurance c) The Governor d) The Chief Financial Officer
The Chief Financial Officer. The CFO and the Office of Insurance Regulation have the right to examine the affairs of every person or entity authorized to transact insurance in this state. Examinations must be conducted at least once every 5 years.
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change? a) The death benefit can be increased only when the policy has developed a cash value. b) The death benefit can be increased only by exchanging the existing policy for a new one. c) The death benefit can be increased by providing evidence of insurability. d) The death benefit cannot be increased
The death benefit can be increased by providing evidence of insurability. The policyowner (insured) would need to prove insurability for the amount of the increase.
Who does the secondary addressee provision protect? a) The insured over the age of 64 b) Contingent (secondary) beneficiaries c) The insured whose policy is being replaced d) The insurance company
The insured over the age of 64. The secondary notice/addressee provision protects elderly insured. Coverage for persons age 64 and older that has been in force for at least 1 year cannot lapse for nonpayment of premium after expiration of the grace period without the insurer notifying the policyowner and a specified secondary addressee (if designated in writing by the policyowner) of the impending lapse in coverage.
All of the following are true of key person insurance EXCEPT a) The plan is funded by permanent insurance only. b) There is no limitation on the number of key employee plans in force at any one time. c) The employer is the owner, payor and beneficiary of the policy. d) The key employee is the insured.
The plan is funded by permanent insurance only. Key Person coverage may be funded by any type of life insurance.
In accordance with the Code of Ethics, agents must provide a completed application to a) The soliciting agent and the insured. b) The Florida Insurance Guaranty Association and the Director. c) The prospective insured and the insurer. d) The Director and the insurer.
The prospective insured and insurer. Licensed agents should submit applications to the insurer with which he or she is appointed and to the prospective insured.
The paid-up addition option uses the dividend a) To accumulate additional savings for retirement. b) To purchase a smaller amount of the same type of insurance as the original policy. c) To purchase a one-year term insurance in the amount of the cash value. d) To reduce the next year's premium.
To purchase a smaller amount of the same type of insurance as the original policy. The dividends are used to purchase a single premium policy in addition to the face amount of the permanent policy.
Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount? a) Universal life b) Flexible life c) Variable life d) Adjustable life
Universal life. The policyowner has the flexibility to increase the amount of premium going into the policy and to later decrease it again. In fact, the policyowner may even skip paying a premium and the policy will not lapse as long as there is sufficient cash value at the time to compensate for the nonpayment of premium.
Which of the following products requires a securities license? a) Fixed annuity b) Equity Indexed annuity c) Deferred annuity d) Variable annuity
Variable annuity. A variable annuity is considered to be a security and is regulated by the Securities Exchange Commission (SEC) in addition to state insurance regulations. For that reason, a person must hold a securities license in addition to a life agent's license in order to sell variable annuities.
Which of the following is true regarding the agent's appointments? a) A person only needs 1 appointment for all the insurers he/she represents if it's in the same line of authority. b) A person does not need to be licensed to hold an insurance appointment. c) A person may hold several appointments at one time. d) A person can only have one appointment.
A person may hold several appointments at one time. At any one time, the same individual agent may hold any or all categories of appointments for which he or she is qualified and licensed. However, an agent must have a separate appointment for each insurer.
What level of authority is given to the Office of Insurance Regulation with respect to examination of insurer's activities to determine compliance Unfair Trade Practice laws? a) Voluntary b) Limited c) Civil d) Absolute
Absolute. Florida statutes provide the Office of Insurance Regulation with an absolute right to examine the affairs of every person (insurers and licensees) involved in the business of insurance to see if they are engaged in any unfair trade practices.
All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT a) Employer contributions are tax deductible as ordinary business expense. b) Funds accumulate on a tax-deferred basis. c) Employee and employer contributions are not counted as income to the employee for income tax purposes. d) At distribution, all amounts received by the employee are tax free.
At distribution, all amounts received by the employee are tax free. Funds in a qualified plan accumulate on a tax-deferred basis; however, at distribution any amount received by the employee will be treated as ordinary income for tax purposes.
Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance? a) Undercutting b) Twisting c) Slandering d) Defamation
Defamation. Defamation is making statements that are false as to the financial condition of any insurer and which are calculated to injure any person engaged in the business of insurance.
The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose? a) Interest only option b) Life income with period certain c) Joint and survivor d) Fixed amount option
Interest only option. With the interest-only option, the insurance company retains the policy proceeds and pays interest on the proceeds to the recipient (beneficiary) at regular intervals.
Which of the following is NOT true regarding a Certificate of Authority? a) It is equivalent to an insurance license. b) It is issued by the state department of insurance. c) It is issued to group insurance participants. d) It may be necessary for transacting business in a specific state.
It is issued to group insurance participants. Before insurers may transact business in a specific state, they must apply for a license or Certificate of Authority from the state department of insurance and meet any financial (capital and surplus) requirements set down by the state.
Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company? a) Adhesion b) Subrogation c) Warranty d) Aleatory
Aleatory An insurance contract is an aleatory contract in that it requires a relatively small amount of premium for a large risk.
All of the following information about a customer must be used in determining annuity suitability EXCEPT a) Beneficiary's age. b) Tax status. c) Financial experience. d) Annual income.
Beneficiary's age. To ensure suitability of annuity products, producers must obtain relevant information about the consumer's age, income, financial status, tax status, financial experience and objectives. Beneficiary's age is not a suitability factor.
What is the waiting period on a Waiver of Premium rider in life insurance policies? a) 30 days b) 3 months c) 5 months d) 6 months
6 months. Most insurers impose a 6-month waiting period from the time of disability until the first premium is waived.
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount? a) The same as the original policy minus the cash value b) Equal to the original policy for as long as the cash values will purchase. c) In lesser amounts for the remaining policy term of age 100. d) Equal to the cash value surrendered from the policy
Equal to the original policy for as long as the cash values will purchase. With this option, the cash value is used as a single premium to purchase the same face amount as the original policy for as long a period of time as the cash will buy at the insured's current age.
Which of the following statements is TRUE concerning the Accidental Death Rider? a) This rider is only available to insureds over the age of 65. b) It is only available in group insurance. c) It will pay double or triple the face amount. d) It is also known as a triple indemnity rider.
It will pay double or triple the face amount. The Accidental Death Rider pays 2 or 3 times the face amount if death is the result of an accident as defined in the policy and occurs within 90 days of such an accident.
If a person accumulates more continuing education hours than is necessary to fulfill the requirements for a 2-year period, which of the following will occur? a) The extra hours will be reimbursed monetarily. b) Nothing will happen; the hours will not be reimbursed or deducted from the next period's hours. c) The extra hours may be continued into the next period. d) The extra hours will not count toward the next period's requirements.
The extra hours will be continued into the next period. Excess classroom hours accumulated during any 2-year period may be carried forward to the next 2-year period.
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term? a) The insured may renew the policy for another 10 years at the same premium rate. b) The insured may renew the policy for another 10 years, but at a higher premium rate. c) The insured must provide evidence of insurability to renew the policy. d) The insured may only convert the policy to another term policy.
The insured may renew the policy for another 10 years but at a higher premium rate. Policies that are guaranteed renewable and convertible may be renewed, without evidence of insurability, for another like term, or may be converted to permanent insurance, without evidence of insurability.
Which of the following is NOT true regarding Equity Indexed Annuities? a) They have guaranteed minimum interest rates. b) They are less risky than variable annuities. c) They earn lower interest rates than fixed annuities. d) The insurance company keeps a percentage of the returns.
They earn lower interest rates than fixed annuities. Equity Indexed Annuities invest on an aggressive basis in order to yield higher returns. Like a fixed annuity, Equity Indexed Annuities have guaranteed minimum interest rates. The insurance company often keeps a predetermined percentage of the return and pays the rest to the annuity owner. Equity Indexed Annuities are less risky than variable annuities and earn higher interest rates than fixed annuities.
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium? a) Universal life b) Variable life c) Decreasing term d) Straight whole life
Universal life. The policyowner has the flexibility to increase the amount of premium going into the policy and to later decrease it again. In fact, the policyowner may even skip paying a premium and the policy will not lapse as long as there is sufficient cash value at the time to compensate for the nonpayment of premium.
When is the earliest a policy may go into effect? a) When the first premium is paid and the policy has been delivered b) When the insurer approves the application c) After the underwriter reviews the policy d) When the application is signed and a check is given to the agent
When the application is signed and a check is given to the agent. The policy can be effective as early as the date of the application, if the premium is submitted with the application and the policy is issued as applied for.
Who bears all of the investment risk in a fixed annuity? a) The annuitant b) The insurance company c) The owner d) The beneficiary
The insurance company. Fixed annuities guarantee a minimum amount of interest to be credited to the purchase payment. Income payments do not vary from one payment to the next. The insurance company can afford to make guarantees because the money of a fixed annuity is placed in the general account of the insurance company, which is part of its investment portfolio. The company makes conservative enough investments to insure a guaranteed rate to the annuity owners.
What is the advantage of reinstating a policy instead of applying for a new one? a) The cash values have gained interest while the policy was lapsed. b) The original age is used for premium determination. c) Proof of insurability is not required. d) The face amount can be increased.
The original age is used for the premium determination. The reinstatement provision allows the policyowner an opportunity to put a lapsed policy back in force, subject to proving continued insurability. If the policyowner elects to reinstate the policy, as opposed to purchasing a new policy, the reinstated policy is restored to its original status.
Which of the following is an agreement between an insured and an insurer, where the insurer agrees to indemnify the insured for specific losses in exchange for a premium? a)Reciprocity b)The indemnity clause c)The insurance contract d)The insurance guaranty
The insurance contract. Insurance contracts are defined as the agreements made between an insured and an insurer, where the insurer promises to indemnify the insured for covered losses, in exchange for a premium. Both parties are bound by the conditions of the contract.
What is the maximum allowed value of promotional gifts that an agent may give to a prospective insured? a) $20 b) $50 c) $100 d) Gifts are never allowed.
$100. A licensed insurer or its agents may not give to insureds or prospective insureds for the purpose of advertising any articles of merchandise that have a value of more than $100 per insured in any calendar year.
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT a) An offer of employment. b) Stocks, securities, or bonds. c) An offer to share in commissions generated by the sale. d) Dividends from a mutual insurer.
Dividends from a mutual insurer. Dividends paid to policyholders of a mutual insurer are not considered to be a rebate because the policy specifies that they might be paid.
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a a) Cost of living provision. b) Nonforfeiture option. c) Guaranteed insurability rider. d) Paid-up additions option.
Guaranteed insurability rider. The Guaranteed Insurability rider allows the policyowner to purchase specific amounts of additional insurance at specific dates or events, without proving continued insurability. Rates for the additions are based upon attained age.
Which statement is NOT true regarding a policy summary? a) It is generally given to applicants before acceptance of the initial premium. b) It must include the generic name of the basic policy and each rider. c) It must include the date the policy summary is prepared. d) It must be combined with a sales illustration.
It must be combined with a sales illustration. The policy summary must be a separate document. It cannot be combined with a sales illustration.
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the a) Reinstatement clause. b) Insuring clause. c) Misstatement of Age clause. d) Incontestability clause.
Incontestability Clause. If an insurer wishes to contest any statements on an application, they must do so within the first two years.
Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled? a) Waiver of Premium b) Payor Benefit c) Jumping Juvenile d) Juvenile Premium Provision
Payor Benefit If the payor (usually a parent or guardian) becomes disabled for at least 6 months or dies, the insurer will waive the premiums until the minor reaches a certain age, such as 21.
Which is TRUE about the cash surrender nonforfeiture option? a) Funds exceeding the premium paid are taxable as ordinary income. b) After the cash surrender, the insured is covered for a grace period of one month. c) The policy remains active for some time after the policyholder opts for cash surrender. d) The policyholder receives the original cash value of the policy.
Funds exceeding the premium paid are taxable as ordinary income. The insurers surrender the policy at its current cash value. Only any excess of value is taxable as income. Once the policyholder opts for cash surrender, the policy is immediately inactive.
In insurance transactions, fiduciary responsibility means a) Maintaining a good credit record. b) Being liable with respect to payment of claims. c) Commingling premiums with agent's personal funds. d) Handling insurer funds in a trust capacity.
Handling insurer funds in a trust capacity. An agent's fiduciary responsibility includes handling insurer funds in a trust capacity.
Which of the following riders would NOT cause the Death Benefit to increase? a) Guaranteed Insurability Rider b) Cost of Living Rider c) Accidental Death Rider d) Payor Benefit Rider
Payor Benefit Rider. Payor Benefit Rider does not increase the Death Benefit; it only pays the premium if the payor is disabled or dies. With Guaranteed Insurability Rider, the policyowner can increase DB at specified ages or events, i.e. marriage or birth of a child; Cost of Living Rider increases DB to keep pace with inflation; in Accidental Death Rider, if the insured dies from an accident, DB is a multiple of the Face Amount.
What is reinsurance? a) An agreement between an originating insurer and a ceding insurer b) An agreement between a domestic insurer and a foreign insurer c) An agreement between an insurer and an insured d) An agreement between a ceding insurer an assuming insurer
An agreement between a ceding insurer an assuming insurer The originating company that procures insurance on itself in another insurer is called the ceding insurer. The other insurer is called assuming insurer.
The type of policy that can be changed from one that does not accumulate cash value to the one that does is a a) Whole Life Policy. b) Convertible Term Policy. c) Renewable Term Policy. d) Decreasing Term Policy.
Convertible term policy. A convertible term policy has a provision that allows the policyowner to convert to permanent insurance.
Applications to an insurer must include all of the following information, EXCEPT a) License identification number of the agent b) Name of the insurer c) Credit history report d) Name of the agent
Credit history report. Licensed agents may not submit applications to an insurer or furnish a copy of an application to a prospective insured unless the name of the insurer is legibly typed or printed on the first page of the application form at the time coverage is bound or the premium is quoted. The application must also disclose the name and license identification number of the agent as shown on the agent's license.
What kind of policy issues certificates of insurance to insureds? a) Nonqualified annuity b) Any insurance c) Group insurance d) Individual insurance
Group insurance. Individuals covered by group life insurance do not receive a policy, but receive a certificate of insurance from the master policy.
If an agent is in the military, which of the following is true? a) The agent cannot sell any policies during times of war or conflict. b) The agent cannot sell policies while on active duty. c) The agent cannot sell a policy to another active military person who is of a lower rank. d) The agent cannot sell a policy to someone outside of the military base.
The agent cannot sell policy to another active military person who is of lower rank. Agents are not allowed to sell insurance policies, contracts, or certificates to any active duty military person or their families if the buyer or proposed insured is of a lower rank or pay grade.
Under what circumstances can an agent's appointment be transferred to another person? a) When another person works for the same appointing insurer b) With the Commissioner's written approval c) If the agent's license has been temporarily suspended d) Under no circumstances
Under no circumstances. Any issued appointment is valid only for the person named and is not transferable to another person.
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy a) Required a premium increase each renewal. b) Built cash values. c) Required proof of insurability every year. d) Decreased death benefit at each renewal.
Required a premium increase each renewal. Annually Renewable Term policies' premiums are adjusted each year to the insured's attained age; however, the policy may be guaranteed renewable. Death benefits remain level, and as with any term policy, there are no cash values.
An agent's appointment has been denied. Which of the following is true? a) State taxes may be refunded upon a written request. b) No refunds will be issued. c) All application fees will be refunded. d) Appointment fees will be refunded.
State taxes may be refunded upon written request within 60 days. Appointment fees are nonrefundable. However, if the applicant submits a written request within 60 days after the denial or disapproval of an appointment, the department will refund any state or county taxes received in connection with the application for the appointment.
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT a) The interest is credited at a rate specified by the policy. b) The policyholder has the right to withdraw the accumulations at any time. c) The interest is not taxable since it remains inside the insurance policy. d) The annual dividend is retained by the company..
The interest is not taxable since it remains inside the insurance policy. The interest credited under this option is TAXABLE, whether or not the policyowner receives it
Under what conditions will proof of insurability NOT be required of an employee wanting to enroll in a group insurance plan? a) If the employee enrolls within a certain time period b) The employee will never have to provide proof of insurability in order to enroll in a group plan c) If the employee has been approved for other insurance policies in the past d) If the employee has maintained consistent insurance coverage
If the employee enrolls within a certain time period. In group insurance, evidence of insurability is usually not required if participant enrolls during the open enrollment period, and participants (insureds) under the plan do not receive a policy, nor do they own or control the policy. Instead, they receive certificates, indicating that they are included in the coverage.
Which two terms are associated directly with the way an annuity is funded? a) Renewable or convertible b) Single payment or periodic payments c) Increasing or decreasing d) Immediate or deferred
Single payment or periodic payments. Annuities are characterized by how they can be paid for: either a single payment (lump sum) or through periodic payments in which the premiums are paid in installments over a period of time. Periodic payment annuities can be either level, in which the annuitant/owner pays a fixed installment, or the payments can be flexible, in which the amount and frequency of each installment varies.
What does "level" refer to in level term insurance? a) Interest rate b) Face amount c) Premium d) Cash value
Face Amount Level term policies maintain level death benefit (or face amount) throughout the term of the policy. In level term insurance, the premium also remains consistent over the years, unlike the premiums of many policies, which increase as the policyholder ages.