LOMA 280 - EXPLORE NEW 109 QUESTIONS AND ANSWERS - 2025 UPDATE - 100% CORRECT

LOMA 280 - EXPLORE NEW 109 QUESTIONS AND ANSWERS - 2025 UPDATE - 100% CORRECT An adjustable life insurance policy - Answer-insured specifies the face amount and premium he can pay and a plan of insurance is chalked out to provide insurance incontestable provision/incontetable clause - Answer-that after the policy has been force for a specified period, usually 2 or 3 years, the insurer can't use material misrepresentations in the application either to void the policy or to deny a claim unless the misrepresentations were fraudulent. a whole life insurance policy that is priced according to the level premium system - Answer-pay the same premium amount each year that the policy is in force absolute assignment - Answer-where complete transfer of rights occurs collateral assignment - Answer-differs from absolute because a) the collateral assignee's rights are limited to those ownership rights that directly concern the monetary value of the policy b) the collateral assignee has a vested right to a policy's monetary values, but the rights are limited c) the collateral assignee's right to the policy values are temporary McCarran - Ferguson Act (Public Law 15) - Answer-insurance regulation is primarily the responsibility of the States as long as United States congress considers state regulation to be adequate Business overhead expense coverage - Answer-Should the owner gets disabled, still he might incur expenses to operate his business Presumptive Disability coverage - Answer-a stated condition that, if present, automatically causes the insured to be considered totally disabled; thus the insured will receive the full benefits even he resumes his original occupation A deferred compensation plan - Answer-is a plan established by an employer to provide income benefits to an employee at a later date, such as the Principles of Insurance: Life, Health & Annuities Page 18 of 110 Dated: 26th Feb, 2003 employee's retirement, if the employee does not voluntarily terminate the employment before that date insurance provision purpose - Answer-prevents an insurance company from excluding certain type of illness or injuries from coverage law of large numbers - Answer-the more times we observe a particular event, the more likely it is that our observed results will approximate the "true"probability that the event will occur Office of the Superintendent of Insurance - Answer-In Canada, each province has established an administrative agency to enforce the province's insurance laws and regulations Securities and Exchange Commission (SEC) - Answer- corporations - Answer-continue beyond the death of any or all of its owners Gross premium = - Answer-net premium + loading premium Substandard risk - Answer-Proposed insured who have significantly greater -than average likelihood of loss but are still found insurable. Standard risk - Answer-Proposed insureds that have the likelihood of loss that is not significantly greater-than-average. reinsurance - Answer-is the insurance that one insurance company- known as the ceding company-sells to another insurance company-known as the reinsurer Under the settlement option known as the fixed-period option, - Answer-the insurer pays the policy proceeds in installments of equal amount to the payee for a specified period of time Preference beneficiary clause - Answer-If the policy owner does not name a beneficiary then insured keeps a list of stated order of preference and proceed will be paid according to that order. Facility-of-payment clause - Answer-permits an insurer to make payment of all or part of the policy proceeds either to a relative of the insured or to anyone who has a valid claim to the proceeds Level term life insurance policy - Answer-provides a death benefit of $100,000 if her death occurs at any time during the five-year period during which the policy is in force, and Ms. Carter's annual premium remains the same throughout this five-year period Limited-payment whole life insurance policy - Answer-Joe Su will pay level premiums on his life insurance policy for twenty years, after which time the premium payments will cease, but his coverage will continue until his death. His policy provides a death benefit of $250,000 deferred annuity contract generally includes a withdrawal provision, which gives the contract holder the right to - Answer-Withdraw all or part of the annuity's accumulated value during the accumulation period annuity's accumulation period - Answer-Time period between the contract holder's purchase of a deferred annuity and the onset of the annuity's payout period Defined contribution plan - Answer-In this plan the employer states the amount of contribution that will be paid for each plan participants. The contributions are invested into separate accounts for each participant. The participants get the entire accrued amount as a lump sum or as monthly annuity. There are advantages that the Defined Contribution Plans have over Defined Benefit Plans—firstly, the employer knows the amount that will be paid for the plan in advance, secondly, the employer does not have to depend on the actuary's estimation. Moreover ERSIA imposes more complicated laws for Benefit Plans