Life Insurance Exam-Illinois
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1. Pooling of Risks A large group of people contribute money to a fund out of which their losses can
be paid
2. Policyowner is the person or org that applies for the policy and pays the premium
3. Actuarial Tables Are statistical tables that are used when calculating premium rates and mortality
loss reserves
4. Life Insurance financial risks of premature death on a defined amount
Policies transfer:
5. Loss of income the face amount of life insurance is determined as a multiple of income
6. Life annuity contract which is issued by a life insurance company protects an individual against
the financial risk of outliving a normal life expectancy according to the mortality
actuarial tables and running out of money in old age
7. Life annuity guarantees monthly income benefits to the annuitant for the rest of his/her life
no matter how long he/she lives
8. Insurable inter- a person must be in a position where he/she will lose money should loss occur
est only at the time the policy is issued
9. Who must have the policy owner; he/she will lose money should hte insured die prematurely
insurable inter-
est?
10. tax qualified contributions can be deducted
plans
11. non qualified contributions cannot be deducted
plans
12.
, Life Insurance Exam-Illinois
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tax deferred tax on the interest and/or earnings is postponed as it compounds and accumu-
plans lates until it is withdrawn
13. tax free no tax on benefits
14. cost basis total contributions made to the plan
15. Tax: premiums cannot be deducted (non-qualified)
paid on individ-
ual life insurance
policies...
16. Tax: the benefits is usually not taxed (tax free)
paid to the ben-
eficiary at the in-
sured's death...
17. Participating pol- pays a dividend
icy
18. Tax: dividends are usually not taxed (tax free)
paid to the poli-
cyowner on par-
ticipating poli-
cies...
19. Modified Endow- The IRS has written rules that define when a life insurance policy does not have
ment Contract a real, valid life insurance purpose and is in substance an investment or savings
plan
20. If a cash value life modified endowment contract
insurance policy
does not have
a valid life in-
, Life Insurance Exam-Illinois
Study online at https://quizlet.com/_263fu0
surance purpose,
the IRS classifies
it as a
21. Underwriter is an insurance company employee who reviews applications and additional
information and decides whether the applicant is acceptable and what the correct
premium rate should be
22. Application in- age, sex, occupation, dangerous recreational activities, aviation, smoking, agent's
cludes (7 items) report
23. Medical reports health questionare, paramedic examiner's report, and physician's report
can be (3 items)
24. Who completes the agent and the applicant with questions about applicant's health history as well
the health ques- as the applicant's parents' health history
tionnaire?
25. Errors and if an error on an application occurs, underwriter may require that it be correct and
changes on the changes must be approved and initialed by the applicant
application
26. Medical Informa- it is a CLEARINGHOUSE for medical information for insurance companies that
tion Bureau Re- belong to it
port (MIB)
27. Inspection Re- does by an outside firm to verity that the producer completed the application
port accurately and completely and to determine if the applicant has any moral or
character risks
28. Fair Credit Re- 1. applicant has a right to be advised that there may be information collected from
porting Act (4 outside sources
items) 2. the applicant has a right to the name and address of the inspecting firm if rated
or rejected
Study online at https://quizlet.com/_263fu0
1. Pooling of Risks A large group of people contribute money to a fund out of which their losses can
be paid
2. Policyowner is the person or org that applies for the policy and pays the premium
3. Actuarial Tables Are statistical tables that are used when calculating premium rates and mortality
loss reserves
4. Life Insurance financial risks of premature death on a defined amount
Policies transfer:
5. Loss of income the face amount of life insurance is determined as a multiple of income
6. Life annuity contract which is issued by a life insurance company protects an individual against
the financial risk of outliving a normal life expectancy according to the mortality
actuarial tables and running out of money in old age
7. Life annuity guarantees monthly income benefits to the annuitant for the rest of his/her life
no matter how long he/she lives
8. Insurable inter- a person must be in a position where he/she will lose money should loss occur
est only at the time the policy is issued
9. Who must have the policy owner; he/she will lose money should hte insured die prematurely
insurable inter-
est?
10. tax qualified contributions can be deducted
plans
11. non qualified contributions cannot be deducted
plans
12.
, Life Insurance Exam-Illinois
Study online at https://quizlet.com/_263fu0
tax deferred tax on the interest and/or earnings is postponed as it compounds and accumu-
plans lates until it is withdrawn
13. tax free no tax on benefits
14. cost basis total contributions made to the plan
15. Tax: premiums cannot be deducted (non-qualified)
paid on individ-
ual life insurance
policies...
16. Tax: the benefits is usually not taxed (tax free)
paid to the ben-
eficiary at the in-
sured's death...
17. Participating pol- pays a dividend
icy
18. Tax: dividends are usually not taxed (tax free)
paid to the poli-
cyowner on par-
ticipating poli-
cies...
19. Modified Endow- The IRS has written rules that define when a life insurance policy does not have
ment Contract a real, valid life insurance purpose and is in substance an investment or savings
plan
20. If a cash value life modified endowment contract
insurance policy
does not have
a valid life in-
, Life Insurance Exam-Illinois
Study online at https://quizlet.com/_263fu0
surance purpose,
the IRS classifies
it as a
21. Underwriter is an insurance company employee who reviews applications and additional
information and decides whether the applicant is acceptable and what the correct
premium rate should be
22. Application in- age, sex, occupation, dangerous recreational activities, aviation, smoking, agent's
cludes (7 items) report
23. Medical reports health questionare, paramedic examiner's report, and physician's report
can be (3 items)
24. Who completes the agent and the applicant with questions about applicant's health history as well
the health ques- as the applicant's parents' health history
tionnaire?
25. Errors and if an error on an application occurs, underwriter may require that it be correct and
changes on the changes must be approved and initialed by the applicant
application
26. Medical Informa- it is a CLEARINGHOUSE for medical information for insurance companies that
tion Bureau Re- belong to it
port (MIB)
27. Inspection Re- does by an outside firm to verity that the producer completed the application
port accurately and completely and to determine if the applicant has any moral or
character risks
28. Fair Credit Re- 1. applicant has a right to be advised that there may be information collected from
porting Act (4 outside sources
items) 2. the applicant has a right to the name and address of the inspecting firm if rated
or rejected
