Basic principles of life and health insurance and annuities Xcel Solutions Questions and Answers 100% Pass

Basic principles of life and health insurance and annuities Xcel Solutions Questions and Answers 100% Pass Commercial Insurers "private insurance companies" - Correct Answer ️️ -sell insurance for a profit. Offers many different lines of insurance. Some sell primarily life insurance and annuities. Commercial insurance is divided into two main groups-Stock and mutual insurers. Multi-Line insurer - Correct Answer ️️ -An insurance company selling more than one line of insurance. Stock Companies - Correct Answer ️️ -Organized and incorporated under state laws for the purpose of making a profit for its stockholders/shareholders. When declared, stock dividends are paid to stockholders in a stock company, the Directors & officers are responsible to the stockholders. non-participating insures - Correct Answer ️️ -traditionally stock insures are called_____________because policyholders do not participate in receiving dividends or electing the board of directors unless they are also a stockholder of the company? terminated mutualization - Correct Answer ️️ -Transformation of a stock insurer into a mutual insurer. the reverse is termed demutualization. Dividends from stock insurers - Correct Answer ️️ -Subject to taxation because they are considered profit Mutual companies - Correct Answer ️️ -they are owned by their policyholders. Mutual insurers are known as participating insurers because policyholders participate in receiving dividends and electing the board of directors. When declared, Mutual company Dividends are paid to the policyholders. Dividends from a mutual insurer are not subject to taxation because the Dividends are considered to be a return of Premium. The Only Exception is if the policyowner chooses to let the dividend sit and collect interest. In this case, only the accumulated interest would be taxable Mixed Insurer - Correct Answer ️️ -company that operates as both a participating and non-participating ensure dividends can never be guaranteed regardless of the type of company offering them. strong assessment Mutual companies are classified - Correct Answer ️️ -by the way they charge premiums Pure assessment Mutual company - Correct Answer ️️ -operates based on laws sharing by group members. No premium is payable in advance. Instead, each member is assessed in individual portion of losses that occur. Advanced premium assessment Mutual - Correct Answer ️️ -charges the premium at the beginning of the policy period. if the original premiums exceed the operating expenses and losses, the Surplus is returned to the policyholders as dividends. However, if total premiums are not enough to meet losses, additional assessments are levied against the members. Normally, the amount of assessment that may be levied is limited either by state law or simply as a provision in the insurers bylaws fraternal benefit societies - Correct Answer ️️ -Must be nonprofit, have a lodge system, and offer insurance to its members only. risk retention groups - Correct Answer ️️ -are mutual companies formed by a group of people in the same industry or profession. Examples would be pharmacists, dentists, and engineers. service providers - Correct Answer ️️ -offer benefits to subscribers in return for the payment of a premium. He services are packaged into various plans, and those who purchased the plans are known as subscribers. Examples of service providers are Health maintenance organizations like hmos or preferred provider organization PPO reciprocal insurers - Correct Answer ️️ -unincorporated groups of people that provide insurance for one another through Indemnity contracts. Each member access both insurer and insured and are managed by attorney in fact. reinsurers - Correct Answer ️️ -make arrangements with oth