Missouri Life Insurance Exam Qs&As

Missouri Life Insurance Exam Qs&As 401(k) Plan - ANSWER-A qualified retirement plan in which the employee can set aside a portion of their income with pre-tax dollars. Absolute Assignment v. Collateral Assignment - ANSWER-Absolute: A permanent and irrevocable transfer of rights and/or benefits by the policyowner. Collateral: A temporary and/or revocable transfer of benefits by the policyowner Accelerated Death Benefit - ANSWER-Policy provision that allows full or partial payment of the policy's death benefit before the insured's death if he/she is terminally ill. Accidental Death Benefit - ANSWER-An extra cost rider that requires the insurance company to pay an additional benefit in the event that the insured dies within 90 days of an accident as a direct result of the accident. Accumulate at Interest - ANSWER-The Dividend Option where the policyowner leaves the dividends with the insurer to invest and earn interest. Adhesion - ANSWER-Since the insurer created all the documents of the contract, any ambiguities in the contract will be settled in favor of the insured. Since the insurer wrote the contract they are stuck with it. Adverse Selection - ANSWER-The tendency for less favorable risks to seek or continue insurance to a greater extent than more favorable risks. Agency Agreement or Agency Contract - ANSWER-A legal document containing the terms of the agreement between the agent and the insurance company. It clearly defines what an agent can and cannot do, and how he/she will be compensated. Agent Authorities - ANSWER-Expressed: Power or authority specifically granted in writing to an agent by the insurance company in their Agency Agreement. Apparent: Power or authority that the public reasonably assumes an agent has based upon his/her actions. Implied: Power or authority that is not expressly granted by the company but that an agent can assume or that are implied he/she has in order to transact insurance business. Agent/Producer - ANSWER-Anyone who sells or aids in the selling of insurance. Legally represents the company. Agent's Report - ANSWER-A written report from the agent submitted to the insurer along with the application disclosing what the agent knows, observed, or learned about the proposed insured's risks. Aleatory - ANSWER-Unequal exchange of value. One party may obtain a far greater value than the other under the contract. Annual Renewable Term - ANSWER-A Term Life Insurance contract which gives the policyowner the option to renew the policy each year without showing proof of insurability. Premiums increase at each renewal. Annuitant - ANSWER-The person that buys an annuity; may or may not be an annuity's policyowner. Annuity - ANSWER-A contract/policy that guarantees to pay income for a specified period of time or for the life of the annuitant. Designed to prevent people from outliving their savings. Appointment - ANSWER-Authorization of an agent/producer by an insurer to represent the company. Blackout Period - ANSWER-The period of time between the youngest child turning 16 and the widow(er) reaching retirement age during which no Social Security Survivor Benefits are paid to the surviving spouse. Buy-Sell Agreement - ANSWER-Business use of Life Insurance where partners in a business buy life insurance on each other. They agree that when one of them dies the survivors have the right to purchase the deceased partner's share of the business. The death benefit from the insurance is used to finance the purchase. Cash Nonforfeiture Option - ANSWER-Policyowner receives a lump-sum payment of the current cash value of the policy upon surrender of the policy. The policy cannot be reinstated. Cash Settlement Option - ANSWER-Upon maturity of an insurance policy the beneficiary receives a lump-sum payment of the entire policy proceeds due.. CONTINUES...