New York Life and Health Insurance Questions & Answers Solved 100% Correct!!

Define Aleatory contract. - An Aleatory contract is a contract in which participating parties exchange unequal amounts. Insurance contracts are aleatory in that the amount the insured will pay in premiums is is unequal to the amount the insurer will pay in the event of a loss. Define warranty: - A material stipulation in the policy that if breached may void coverage. During the Accumulation (Pay in)period of an annuity, there must be a designated - Beneficiary Identify the difference between the domestic, foreign and alien insurers? - A domestic insurer is an insurance company that is incorporated in the state. A foreign insurer is an insurance company that is incorporated in another state. An alien insurer is an insurance company that has incorporated outside of the United State. If a primary beneficiary dies before the insured, who receives the death benefit? - If the primary beneficiary dies before the insured, then no one is paid. The death benefit is only paid when the insured passes away. The insured, in most cases, is also the owner. If someone who was initiating an annuity was conservative, wanted stability and safety of principal, they would choose a: - Fixed annuity In regard to annuities, whose life expectancy is taken into account? - The annuitant. Life insurance is based on a morbidity table. True or False - True. Mortality tables are one of the main tools for the life insurance industry. Mortality tables are mathematically complex grids of numbers that show the probability of mortality, or death, for members of a certain population within a defined period of time.Name 5 dividend options. - Paid in cash The insurance company will send you a check in the amount of your dividend. You can cash that check and do whatever you want with it. Purchase paid up additions Instead of receiving a dividend check, you can ask the insurance company to keep your dividend in your policy and use it to buy what are called paid up additions. Paid up additions are like little tiny life insurance policies above and beyond your base policy. Each dollar of paid up additions, buys more than a dollar of paid up additions. Not a whole lot but slightly more than your dollar. That means, paid up additions increase the face amount of your policy. Accumulate at interest The next option is to let the insurance company keep the dividend you received in an account that earns interest. Reduce premiums You can choose to have the insurance company reduce your premium by the amount of the dividend. Purchase one year term insurance In some cases, insurance companies will let your dividends by an additional amount of one year term insurance. This will also increase the face amount of your policy. Name 5 Methods of handling risks? - The 5 methods of handling risk are avoidance, retention, sharing, reduction and transfer. Name and describe the 3 nonforfeiture options. - 1)Cash Surrender Value . Under this option, the insured returns the policy to the insurance company and the life insurance company pays out the current value of the policy. At this point, the insured no longer has life insurance protection. The minimum value of the policy is determined by a table established by law. 2) Reduced Paid-Up Life. With this option, the insured uses the cash value of the policy to purchase fully paid for life insurance of the same type as the original policy, but with a smaller face amount. 3) Extended Term Life Insurance . In this option, the insured uses the cash value of the policy to purchase fully paid for term life insurance for the same face amount as the original policy'The cash value, the face amount of the policy and the age of the insured will limit the duration of the coverage available. Name four types of whole life policies: - Four types of whole life policies are level premiums, death benefit, Cash value, and living benefit. Term life insurance is considered a permanent policy. True or False - False The period between which an annuity dismisses the cash value as a series of payments is the: - The annuity period ( also known as the annuitization period, liquidation period, or pay-out period)What is adverse selection? - the tendency of persons with a higher-than-average probability of loss to purchase and maintain more insurance than risks who present lower probability. What is considered in determining the amount of personal insurance using the human life value approach? - The human life value approach gives the insured an estimate of what would be owed to the family in the event of the premature death of the insured. It calculates an individuals life value by looking at the insured's wages, inflation, the number of years to retirement, and the time value of money. What is guaranteed insurability? - The guaranteed insurability (GI) rider is available on certain life insurance policies and allows you to purchase additional insurance at specific dates in the future (subject to minimums and maximums) without having to go through an exam or answer health questions. In other words, you can buy more life insurance without having to prove your insurability. As with all life insurance policy riders it comes with an additional cost. However, the benefits can outweigh the extra expense. (It's important to note that the guaranteed insurability rider is different from a guaranteed issue life insurance policy that is intended for seriously ill people and comes with a very high premium.) The typical GI rider works by allowing you the option of purchasing additional coverage every three or five years on the anniversary date of your original policy. Many policies will also allow you to exercise your option due to certain life events, such as a marriage or birth/adoption of a child. Generally, you must exercise the right within 30 or 90 days of the specified date, so it's important to review your policy and know your option dates. The GI rider can be a worthwhile to have included in your life insurance quote if you think your health may change significantly in the future, or if you have a family history of medical issues. It's also beneficial if you have a limited budget, but want to ensure that you'll have the option for purchasing additional coverage later on. What is the definition of a peril? - A peril is the cause of a possible loss. What is the difference between pure and speculative risk? - Pure risk refers to situations that can only result in a loss or no charge. There is no opportunity for financial gain. Pure risk is the only type of risk that insurance companies are willing to accept. What life insurance policy, also used by businesses, is a legal contract which forces one partner To buy and the other to sell their share of the business in case one owner dies or becomes disabled? - A Buy-Sell Agreement life insurance policy.When an insurance agent acts with authority not expressed in writing it is called: - Implied Authority When dealing with variable annuities, the producer needs a life insurance license plates plus an investment license by the - To sell Variable, you need both a life insurance license and a FINRA (NASD) securities licenses. Variable Annuities are backed by stocks. Interest, paid by insurance companies on Annuities, accumulates on a tax-deferred basis and is not taxable until the money is withdrawn. When does an insurance agent provide the client with a conditional receipt? - A conditional receipt gives an insurance company a window of time in which they can ultimately issue or refuse to approve the policy. If, during this time, the applicant for a life insurance contract dies, the company will pay a death benefit if the policy would have been issued. Who owns stock companies? - Stock companies are companies that are owned by stockholders whose investment provide the capital necessary to establish and operate the insurance company. Why would a business owner choose the use of a key persons insurance? - Key Person Insurance helps a company survive losing a person who is critical to the business. When a key employee dies unexpectedly, Key Person Insurance can provide essential funds so that the business can continue or be wound down in an orderly fashion.