Wisconsin Life Insurance Exam
Binding Receipts - coverage is guaranteed until the insurer formally rejects the application
-even if the proposed insured is ultimately found to be uninsurable
-coverage is guaranteed until rejection of application
Blanket Life Insurance - COvers groups of people exposed to the same hazard, such as passengers
on an airplane. No one is named on the policy and there is not a certificate of coverage given out.
Individuals are only covered for the common hazard.
Accelerated benefits - provides the beneficiary with an income that they cannot outlive. A joint
and survivor option guarantees that benefits will be payed on a life-long basis to two or more people.
This option may include a period certain and the amount payable is based on the ages of the
beneficiaries.
1945 McCarren-Ferguson Act - Insurance would be regulated by the states but would conform to
federal anti trust laws
1970 Fair Credit Reporting Act - which is the authority that requires fair and accurate reporting of
information about consumers, including applicaitons for insurance. Insurers must inform applicants
about any investigations that are being made
Absolute Assignment - the transfer is complete and irrevocable, and the assignee receives full
control over the policy and full rights to benefits.
Accumulation at Interest Option - leaves the dividends with the company to collect interest.
interest is taxable but the dividends are not
,Adhesion - Insurance contracts are contracts of adhesion. This means that the contract has been
prepared by one party with no negotiation between the applicant and insurer. In effect, the applicant
"adheres" to the terms of the contract on a take it or leave it basis when accepted. Any confusing
language of the contract would be interpreted in favor of the insured. A policy would also be considered
this it the insurance company could modify
Aleatory - unequal exchange of value or consideration for both parties
AM Best - A+
An Application - -basic source of insurability informations
-answers on this must be fully and accurately recorded
-first source of information to be reviewed
Annuities vs. Life Insurance - -annuity is not a life insurance contract but the mirror image, exact
opposites
-annuity is meant to liquidate an estate
-annuities are concerned with how long someone will live
-annuities are primarily investment products
-
Annuity Units - once variable annuity benefits are paid out to the annuitant, the accumulation
units in the participants individual account are converted into annuity units. At the time of initial payout,
the annuity unit calculation is made. The value of one annuity unit can and does vary from month to
month, depending on investment results.
1035 Exchange - When an existing life insurance policy is assigned to another insurer for a new
contract, the transaction may be treated for tax purposes Enables the postponement of tax
consequences
Apparent Authority - is the appearance or assumptions of authority based on the actions, words
or deeds of the principal. It can also exist because of circumstances the principal created
, Automatic Premium Loan Provision - authorizes the insurer to withdraw from the policy's cash
value the amount of overdue premium if the premium has not been paid by the end of the grace period
Automatic Premium Loan RIder - allows the insurer to pay premiums from the policys cash value if
premiums have not been paid by the end of the grace period. These deductions are treated as loans and
are charged interest.
Avoidance - elimination of the hazard
Backdating - an applicant can back date their age to a younger date to receive a better a premium
Buy-Sell Plans - Step 1. an attorney drafts this plan stating the employee's agreement to purchase
the proprietors estate and sell the business at a price that has been agreed upon beforehand. This is
sometimes referred to as a stock redemption
Step 2. the employee purchases a life insurance policy on the life of the proprietor. The employee is the
policy owner, beneficiary, and pays the premiums. upon the death of the proprieter, the funds from the
policy are used to buy the business
Cash dividend option - policyowner elect to have their dividends paid to them by check
Cash Surrender Option - Insurers are required to make cash surrender values available for
ordinary whole life insurance after the first three policy years. Some policies require a penalty to be paid
if a policy is surrendered in its early years. These surrenders charges, sometimes referred to as a "rear-
end load", are deductible from the cash value when the policy is discontinued. A partial surrender can
allow the policy owner to withdraw the policy's cash value interest free
cash values - is often regarded as a savings element because it represents the amount of money
the policy owner will receive if the policy is ever surrendered
Binding Receipts - coverage is guaranteed until the insurer formally rejects the application
-even if the proposed insured is ultimately found to be uninsurable
-coverage is guaranteed until rejection of application
Blanket Life Insurance - COvers groups of people exposed to the same hazard, such as passengers
on an airplane. No one is named on the policy and there is not a certificate of coverage given out.
Individuals are only covered for the common hazard.
Accelerated benefits - provides the beneficiary with an income that they cannot outlive. A joint
and survivor option guarantees that benefits will be payed on a life-long basis to two or more people.
This option may include a period certain and the amount payable is based on the ages of the
beneficiaries.
1945 McCarren-Ferguson Act - Insurance would be regulated by the states but would conform to
federal anti trust laws
1970 Fair Credit Reporting Act - which is the authority that requires fair and accurate reporting of
information about consumers, including applicaitons for insurance. Insurers must inform applicants
about any investigations that are being made
Absolute Assignment - the transfer is complete and irrevocable, and the assignee receives full
control over the policy and full rights to benefits.
Accumulation at Interest Option - leaves the dividends with the company to collect interest.
interest is taxable but the dividends are not
,Adhesion - Insurance contracts are contracts of adhesion. This means that the contract has been
prepared by one party with no negotiation between the applicant and insurer. In effect, the applicant
"adheres" to the terms of the contract on a take it or leave it basis when accepted. Any confusing
language of the contract would be interpreted in favor of the insured. A policy would also be considered
this it the insurance company could modify
Aleatory - unequal exchange of value or consideration for both parties
AM Best - A+
An Application - -basic source of insurability informations
-answers on this must be fully and accurately recorded
-first source of information to be reviewed
Annuities vs. Life Insurance - -annuity is not a life insurance contract but the mirror image, exact
opposites
-annuity is meant to liquidate an estate
-annuities are concerned with how long someone will live
-annuities are primarily investment products
-
Annuity Units - once variable annuity benefits are paid out to the annuitant, the accumulation
units in the participants individual account are converted into annuity units. At the time of initial payout,
the annuity unit calculation is made. The value of one annuity unit can and does vary from month to
month, depending on investment results.
1035 Exchange - When an existing life insurance policy is assigned to another insurer for a new
contract, the transaction may be treated for tax purposes Enables the postponement of tax
consequences
Apparent Authority - is the appearance or assumptions of authority based on the actions, words
or deeds of the principal. It can also exist because of circumstances the principal created
, Automatic Premium Loan Provision - authorizes the insurer to withdraw from the policy's cash
value the amount of overdue premium if the premium has not been paid by the end of the grace period
Automatic Premium Loan RIder - allows the insurer to pay premiums from the policys cash value if
premiums have not been paid by the end of the grace period. These deductions are treated as loans and
are charged interest.
Avoidance - elimination of the hazard
Backdating - an applicant can back date their age to a younger date to receive a better a premium
Buy-Sell Plans - Step 1. an attorney drafts this plan stating the employee's agreement to purchase
the proprietors estate and sell the business at a price that has been agreed upon beforehand. This is
sometimes referred to as a stock redemption
Step 2. the employee purchases a life insurance policy on the life of the proprietor. The employee is the
policy owner, beneficiary, and pays the premiums. upon the death of the proprieter, the funds from the
policy are used to buy the business
Cash dividend option - policyowner elect to have their dividends paid to them by check
Cash Surrender Option - Insurers are required to make cash surrender values available for
ordinary whole life insurance after the first three policy years. Some policies require a penalty to be paid
if a policy is surrendered in its early years. These surrenders charges, sometimes referred to as a "rear-
end load", are deductible from the cash value when the policy is discontinued. A partial surrender can
allow the policy owner to withdraw the policy's cash value interest free
cash values - is often regarded as a savings element because it represents the amount of money
the policy owner will receive if the policy is ever surrendered
