insurance review

If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specific age what type of policy is this?

jumping juvenile policy- provide a low face amount in the early years and then increase usually 5 times the amount usually when the insured reaches a specific age like 21

mortality-interest=

net single premium

results clause

only excludes the death benefit if the insured is killed as a result of an act of war

unilateral

only one of the parties is legally bound to do anything

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

option a, the death benefit will increase at a later age in order to keep a gap between the cash value and the death benefit

cash accumulation

permanent policies have living benefits

Human Life Value Approach

potential earnings of the insured

needs approach

predicts needs of a family after premature death of insured

a couple owns a policy with a childrens term rider, their daughter is coming to an age where she will need to convert to a permanent insurance, what will she need to do to prove insurability

proof of insurability is not needed

ambiguities in the contract are always

resolved in favor of the insured

liquidation

selling your assets to raise capital

life insurance policies that have been in force for 3 years must provide for a maximum policy loan interest rate of what percentage

8%

inflation

A general and progressive increase in prices

estate tax

A tax on the estate, or total value of the money and property, of a person who has died

Ambiguity

An event or situation that may be interpreted in more than one way.

inheritance tax

An inheritance tax is a tax paid by a person who inherits money or property of a person who has died, whereas an estate tax is a levy on the estate of a person who has died.

conditional

Certain conditions must be met in order for policy to pay-out.

an agent selling variable products must be registered with

FINRA

net worth

In a nutshell, your net worth is really everything you own of significance (your assets) minus what you owe in debts (your liabilities). Assets include cash and investments, your home and other real estate, cars or anything else of value you own

interest only

Insurance company holds death benefit for a period of time and pays only the interest earned to beneficiaries

the federal fair reporting act

Regulates consumer reports.

what is NOT true regarding a decreasing term policy

The payable premium amount steadily declines throughout the duration of the contract.

annuitant

The person that buys an annuity; may or may not be an annuity's policyowner.

business continuation agreement is also known as

a buy sell agreement

estate

a person's net worth

inducement

a thing that persuades or influences someone to do something

solvency

ability to meet all financial obligations

continuation agreement

an agreement among the surviving or remaining general partners of a partnership to continue a partnership after its dissolution

apparent authority (or perceived authority)

appearance or assumption of authority based on the actions words or deeds of the principal because of the circumstances the principal created

whos life expectancy is taken into account when an annuity is written

the annuitant

this protects the insured from unintentional lapse in the policy due to non payment of premium

automatic premium loan

personal

between the policy owner and the insurance company

per stripes

by the bloodline

what is NOT an example of insurable interest

debtor and creditor

pure insurance

difference between the current cash value and the face amount

projection

disguising one's own threatening impulses by attributing them to others

Fair Credit Reporting Act

ensures that records are confidential, accurate, relevant and properly used

projected

estimated

Status Clause

excludes all causes of death while the insured is on active duty in the military

per capita

for each person

net premium+ loading charge (expense factor)=

gross premium

collateral assignment

is a conditional assignment appointing a lender as the primary beneficiary of a death benefit to use as collateral for a loan.

capital

is a term for financial assets, such as funds held in deposit accounts and/or funds obtained from special financing sources. Capital can also be associated with capital assets of a company that requires significant amounts of capital to finance or expand.

what is correct regarding credit life insurance

it insures the life of a debtor

levy

to impose a tax upon

which option for universal life allows the beneficiary to collect both the death benefit and the cash value upon the death of the insured

under option B the death benefit gradually increases each year by the amount the cash value increases

aleatory

unequal exchange of amounts

estate conservation

using life insurance proceeds to cover estate taxes

premium rated up

usually used when someone is a substandard or a higher risk, where a higher premium is charged

Adhesion ( insurance contract)

the company and its agent has the power to draft the contract, while the potential policyholder only has the right of refusal; they cannot counter the offer or create a new contract to which the insurer can agree (TAKE IT OR LEAVE IT)

what is an agreement between the insurer and insured where the insurer agrees to indemnify the insured for specific losses in exchange for a premium

the insurance contract

waiver

the voluntary relinquishment of a known legal right