WEBCE Life And Health

WEBCE Life And Health (281 Questions) With 100% Correct Verified Answers GRADED A Representations and Warranties - Correct Answer-Representations are statements theapplicant makes on an application that are deemed to be true to the applicant's best knowledge. Warranties are statements the insurer makes in the contract. Underwriting vs. Actuarial Departments - Correct Answer-Two related insurance company functions. Throughthe process of , applications are assessed forinsurability andtoassign premium rates. The department analyzes data to help estimate future losses and to producerate tables. Managerial System vs. General Agency System - Correct Answer-Two variations of thecareer agency system in which producers represent a single company. One is headed by a company employee called a general manager (GM), the other by an independent contractor called a general agent (GA). Fraternal Insurance Company - Correct Answer-A non-profit form of insurance providersponsored by an organization of people who share a common ethnic, religious, or vocational affiliation. Peril and Hazard - Correct Answer-Two related general insurance terms: Peril is the immediate causeof a loss (andthe event that is insuredagainst).Hazard is any condition that increases the risk of incurring a loss. Contract of adhesion - Correct Answer-A type of contract in which one party (the offeror)drafts the terms that must be accepted as-is by the offeree. Insurance policies are this type. Mutual Insurance Company - Correct Answer-A form of insurance company that isowned by policyowners. May distribute policy dividends (non-taxable) through participating policies. Independent Agency System - Correct Answer-An insurance distribution system in which the manager and producers are fully independent and not affiliated with anysingle insurer. Buyer's Guide and Policy Summary - Correct Answer-Two related disclosure documentsthat are required by most states to be presented to life and health insurance applicants at some point during the buying process. Risk - Correct Answer-A basic insurance term referring tothepossibility of incurringaloss. Domestic, Foreign, and Alien Insurers - Correct Answer-Insurers can be categorized by their state of domicile. There are three categories, known as , , and . Law of Large Numbers - Correct Answer-A mathematical principle that is the basis forpredictingthe odds of a loss occurring in acertain population inanygiven year. Social Security (OASDI) - Correct Answer-A federal insurance program that providesdisability, death, and retirement benefits to covered workers and their qualifying beneficiaries. Agents vs. Brokers - Correct Answer-Two basic typesof insuranceproducer: an represents asingle insurer anda sells policies from multiple insurers. Reinsurance - Correct Answer-The process through which insurance companies spreadlarge risks among other insurers. Stock Insurance Company - Correct Answer-A form of insurance company that is ownedby stockholders who may or may not also bepolicyowners. May distribute stockdividends (taxable). AdmittedInsurer - Correct Answer-An insurer thathas acertificate of authority inagiven stateis said to be an insurer in that state. Express, Implied, and Apparent Authority - Correct Answer-Express authority—The rightto sign an application as anagent for the insurer. Impliedauthority—Using acomputer program to identify insurance needs andtorecommendsolutions. Apparent authority—Advising the applicant tonotdiscloseonthe applicationanyimportant health facts that might reduce his orher insurability. Indemnity vs. Valued Contract - Correct Answer-Two forms of insurance contract. Anindemnity contract bases policy benefits on reimbursement of actual losses. A valuedcontract bases benefits onastatedamount without regardfor the value of the loss. Loss - Correct Answer-An unplanned reduction in economic value resulting from theoccurrence of a covered peril. Medicare - Correct Answer-A federal insurance program that provides medical carebenefits to covered workers (retirees). Underwriting - Correct Answer-The process by whichan insurance companyassessesan application to determine if it represents an insurable risk. Risk Management - Correct Answer-The natural process by which people contend withthe perils faced daily, of which there are five common techniques. The five basic elements of a valid contract - Correct Answer-Offer, acceptance,consideration,competent parties,and legal purpose Concealment - Correct Answer-The willful nondisclosure of material facts on anapplication for the purpose of obtaining insurance. Insurable Risk (5 Criteria) - Correct Answer-Loss must be definable and measurable.The covered peril mustbe accidental oroutside the insured's control. The risk must be shared bya large group of similar risks.The loss must not be catastrophic. The risk mustnotbegenerally excludedfrom coverage. Needs Approach - Correct Answer-The needs approach to determining life insuranceneeds is based on a detailed review of a person's specific situation. It examines personalandfamily income, liabilities,andassets, as wellas future financial goals, tocalculate the right amount of life insurance. Bring-Back Rule - Correct Answer-In estate planning, this rule requires life insurancepolicies transferred from the insured within 3 years beforedeathtobe returnedtothedecedent'sestate for valuation purposes. Life Insurance "Living Benefits" - Correct Answer-Living benefits are made possible bythe policy's cash value, which is always available to the policyowner through policy loans, withdrawals, and partial surrenders. The funds may beusedfor anypurpose. Key Person Life Insurance - Correct Answer-If a key employee ends his or her employment, the employer cancontinue the policy in force. However, many employerschoose to: sell the policy tothe insured for anamount equal to its cashvaluesurrender the policy or change insureds if allowed bythe insurance companyandapplicable state law Annuity - Correct Answer-An insurance contract between a person and an insurer to distributeanaccumulatedsum of moneyoveracertain period, including theperson'slifetime. Annuities come in many forms,but theyallhave twocommon purposes:to accumulate moneyon a taxdeferred basis to distribute theaccumulated money as income inaguaranteedamount for aguaranteedperiod (including the annuitant's life) Decreasing Term Life Insurance - Correct Answer-This form of term life features a deathbenefit that diminishes over time and premium that remains level for the term of the policy