Life repeats 🤦🏻♀️🤦🏻♀️
Insurance bond
$2,500-5% not exceed $50k
An insured purchased a variable life insurance policy with a face amount of $50,000. Over the life of the policy, stock performance declined and the cash value fell to $10,000. If the insured dies, how much will be paid out?
$50,000
Insuring Clause
- Agreement between the insurer and the insured - Insurers promise to pay the death benefit upon insureds death - located on face page
Policy Summary
- Specific information about policy being issued - usually provided prior to or at policy delivery
Annually Renewable Term
-Renews each year without proof of insurability -Premiums increase due to attained age
Nonforfeiture Options
. (1) Cash (2) Reduced Paid-Up (3) Extended Term Insurance
Free Look Period
10 days
Within how many days may a person who being examined by the Director for nonfinancial business practices request a hearing after receiving the examination report
10 days
Self Employed (HR 10 or Keogh)
1000h per year Or partnered must own 10 % of business
Reinstatement of License
12 months $360 penalty
How many days after investigation may person request hearing?
14days
How many days most the premium be return after free look?
15 days
Primary Beneficiary
1st claim on death benefit if the insured dies
How many hours before renewal of insurance must compleate of education
24h
Contingent Beneficiary
2nd claim on death benefit if the primary beneficiary dies before the insured
Before investigate report costumer must be inform how many days ?
3 days prior investigate
How many days' notice must an insurer provide to an insured regarding the lapse of a policy due to outstanding loans?
30 ?❤️💕💕💕
contribution
75% employees
Fiduciary
90 days hold premium Class A misdemeanor-less than $150 Class 3 Celiny- more than 150
Consideration Clause
A clause in a Life policy specifying the premium due for the insurance protection and the frequency of payment (also called Mode). The more frequent the Mode of Payment, the higher the cost, since most insurers charge service fees for budget payments. The cheapest Mode is annual.
Roth IRA
A personal savings plan; contributions are not tax-deductible; earnings are tax-free Tex free if enroll 5 years
403 (k) plan
A tax-deferred retirement plan for teachers, hospital workers, ministers, and some other public employees
Underwriter may request examination
APS
Absolute Assignment v. Collateral Assignment
Absolute - transfers of ALL rights Collateral - partial rights
What is the maximum loan amount a policyowner may withdrawal from a variable universal life insurance policy?
An amount not exceeding the cash value
Life Settlement?
An arrangement that allows the policy owner sell their existing life insurance policy to a third party for compensation.
Life Settlement
An arrangement that allows the policyowner sell their existing life insurance policy to a third party for compensation.
Which statement below is INCORRECT regarding the type of term insurance that fits best with the applicant's needs?
Applicants who may require a larger death benefit in the future should buy convertible term insurance
What is disclosure?
Basic information about cost and coverage of Insura
What is a nonforfeiture option?
Cash surrender Reduce paid up Extended term
indexed life (equity index whole life)
Cash volue-S&P 500
Conditional
Certain conditions has to be met
Revocable Beneficiary
Change with out consent
An insured and his spouse recently had a child. Which of the following riders would allow the couple to insure the child for a limited period of time at a specified amount ?
Children's term rider
Adjustable Life Insurance
Combines features of both term and whole life coverage with the length of coverage and amount of accumulated cash value as the adjustable factors. Premiums may be increased or decreased to fit the specific needs. Such adjustments are not retroactive and apply only to the future.
Conditional Receipt
Coverage will be effective either on the date of the application or the date of the medical exam, whichever occurs last, unless coverage is declined or rated, or issued with riders excluding specific coverage.
characteristic of consumer report
Credits Character Reputation Habits
Fixed Period
Equal installments Specific period of years Continue to beneficiary
If holding premiums more than 15 days must ?
Establish PEFTA
Insurance interest must ..........between insured and insured at the time of aplication
Exist
An applicant may challenge information discovered as a result of an investigative consumer report under which of the following Acts?
Fair Credit Reporting Act
A married couple wants to include the entire family in their whole life policy under one rider. Which of the following riders will help them achieve that goal?
Family term
violations of regulations
Fine 1000$ Hearing 20-30 days after service Hearing in writing 10 days Teach day $100 max $5000
Class 4 Felony
Funds collected while violating regulations
What is buyers guide ?
General information
When policy is issued the insurable I treat is ?
Gone
Underwriting will check applicant ?
Health Occupation Lifestyle Hobbies
What is HIPPA
Health Insurance Portability and Accountability Act of 1996
All of the following information needs to be included on an application for life insurance EXCEPT
Health insurance policies in force
Substandard risk has ?
Higher premium
Flexible Premium
Increase -decrease
Who past for examination?
Insurance
whole life insurance
Insurance that is kept in force for a person's entire life and pays a benefit upon the person's death, whenever that may be.
Who is a Viator?
Insured
investigate consumer report
Interview : Associate Neighbor Fiends
What is application
Is a main source of underwriting
Which of the following is TRUE of a qualified plan?
It has a tax benefit for both employer and employee.
Class A Misdemeanor
Knowledge violates regulation
Reinstatement Clause
Lapsed policy but in force
Variable Life (or Variable Whole Life)
Level premium Coverage for life Death benefit guaranteed Cash volue Not guaranteed Policy loan -yes Cash withdrawal no
Limited Pay Whole Life
Level premiums limited to certain time period, less than life.
What is insurance interest
Loosing something volue in the event of loos
What is Prefers risk?
Low premium
Term Life (Pure Life)
Low premium Maximum age If dies during policy -benefits paid Cancel prior death - nothing will Be paid
What is standard risk ?1
Majority people have standard risk
Applicant
Makes offer when submitting applications
What is settlement option?
Method of paying death benefit
Universal Life Insurance
Minimum premium - keeps policy in force Target premium -recommended amount
When must disclose be deliver ?
No later then at the time of application
SIMPLE plans are available to groups of how many employees?
No more than 100
What is 3 party ownership?
Not insured in contract Minors Business
Dividends received on participating life insurance policies are
Not taxable because they are a return of unused premiums
USA Patriot Act
October 26 2001
Unilateral
One side promise
Death Benefit Options
Option A level death benefit Gap Applied by IRS 12/31/84 Option B Increasing death benefit
Mutual Companies
Owned by policy owners
Stock Companies
Owned by the stockholders who provide the capital necessary to establish and operate the insurance company and who share in any profits or losses.
Single Premium Whole Life
Paid up for life with one large premium payment
Insurers may request examination what kind
Paramedical
Aplication has
Part 1 general Part2 medical information
Paid-Up Option
Pays off the policy more quickly than scheduled. If the company's overall performance declines, premiums may have to be resumed.
Traditional Whole Life
Permanent until age 100
Term insurance is renewable and convertible
Premium is level all time Premium figure out at attaining age
Ordinary Whole Life Insurance
Premium paid until death or 100 years
What is mode ?
Premium- Annual Semiannual Monthly
Survivor Protection
Providing funds for surviving spouses and dependents
What is a dividend?
Return of access premium Cash Reduction of premium Paid up addition
Variable Universal Life
Separate account Regulated by SEC Registered with FINRA
What does the application of contract of adhesion mean?
Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured
Insurance transaction
Solicitation, negotiations, sale, advising
The family term rider incorporates
Spouse term and children's term
What is level term insurance
Stays the same Death benefit don't change Premium is the same
What is STOLI
Stranger-Originated Life Insurance
What is SAr
Suspicious Activity Report If $5000 or more has to be reported
Adhesion
Take it or leave it
a person is working toward becoming permanently licensed as a producer and is issued a temporary license, what else must the person also do
Take training course
Which of the following statements is true regarding SIMPLE plans?
Tax deferred until funds are withdrawn
Decreasing term
Term life insurance in which the face amount of the policy decreases over time in scheduled steps. Most often used to cover a debt obligation (mortgage).
When term insurance is added to the main policy to enhance the policy or provide added benefit or coverage, it is called a
Term rider
Paid-Up Additions
The dividends are used to purchase a single premium policy in addition to the face amount of the permanent policy.
All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT
The policy is owned by the company
Which of the following is TRUE regarding premium in a 10-year level premium policy ?
The premium will remain level for 10 years
According to the Common Disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?
The primary beneficiary died before the insured
What is converting ?
Transfer for term insurance to whole life
Conversion Privilege
Transfer form group to individual Evidence of insurability not required Employee has 31 days after cancellation still covered If 5 yrs in group coverage he /she can be covered in the individual with the same coverage
Universal Life
Type of life insurance policy, similar to cash value but with better projected returns.
Who makes the acceptance in insurance
Underwriter
Which of the following types of insurance is investment based, has a level fixed premium, and a nonguaranteed cash value?
Variable Whole Life
Common Disaster Clause
When insured and primary die at the same time, it is assumed that the primary died first
What will happen when he or she skips payment I. Universal life insurance? Will the policy lapse
Will not lapse -premium will be deducted form Cash volue
IRA
Withdrawal before 59,5 10% penalty
Physical Hazard
a physical condition that increases the chance of loss
401(k) plan
a tax-deferred retirement plan offered to employees by their employer
Variable Universal Life
a universal policy where the premiums are invested in variable rate earning assets
contract
agreement Consideration Competent parties Legal purpose
Insurance component
always annually renewable term insurance
Personal
between insurer and insured
Morale hazard
carelessness
Nonforfeiture Options
cash value, reduced paid-up insurance, extended term insurance
What is entire contract
copy of application and policy
noncontributory
employer bears the entire cost 100% employeea
To purchase insurance, the policyowner must face the possibility of losing money or something of value in the event of loss. What is this concept called?
insurable interest
With Adjustable Life, the owner can change all of the following EXCEPT
insured
Which of the following statements describes one of the reasons individuals purchase life insurance?
it creates an immediate estate
An agreement that is enforceable by law is known as what kind of contract ?
legal
Key Characteristics of whole life insurance
level premium, death benefit, cash value, living benefits
Group Life Insurance-single life
life insurance that provides a master policy for a group; each eligible group member receives a certificate of insurance Annually renewable term
Cash Value guarantees in a whole life policy are called
nonforfeiture values
Irrevocable Beneficiary
one that cannot be changed without the beneficiary's consented
Key person insurance can provide protection for all of the following economic losses to a business EXCEPT
pay the death benefit to the estate of the insured
Life Income (straight life)
provides recipient with an income that he or she cannot outlive - installment payments are guaranteed for as long as the recipient lives Single Life: provides a SINGLE beneficiary income for the rest of their life Joint & Survivor: guarantees an income for 2 or more recipients Life income with period certain option: provides lifetime income & a guaranteed installment period Joint Life with Term Certain: policy pays to 2 or more persons & stops paying at the death of the 1st (if within specified term, pymtns will continue to the other person until the end of the specified term) Life Refund Income: comes in either a cash refund form or an installment refund form
All of the following are true regarding the federal Fair Credit Reporting Act EXCEPT
reports may be sent to anyone who requests one
Which of the following would be likely to establish a SEP?
small employers
Which of the following is a permissible reason for an insurance company to contest payment of a claim based on statements in the application?
the application contains material misstatements
Viatical Settlement
the sale of a life insurance policy by a terminally ill insured to another party, typically to investors or investor groups, who hope to profit by the insured's early death
What is insurance?
transfer risk
Aleatory
unequal exchange
Which of the following types of insurance policies would perform the function of cash accumulation?
whole life