Life Insurance and Health Insurance
(Section 529 Plans)
Latest Updated Exam Study Guide
2025/2026.
Section 529 Plans - - state provided
- can be funded by after tax dollars
- can pay prepaid tuition
- All earnings exempt from federal taxes
- If withdrawn for unqualified withdrawl, 10% penalty
Roth IRA - private retirement plan that taxes income before it is saved, but which does not
tax interest on that income when funds are used upon retirement
Distributions don't have to start before 70.5
401(k) plan - Elective deferral plan that allows employee to reduce compensation by a stated
percentage on a tax deductible/ tax differed basis; often the employer matches the employee
contributions
Simplified Employee Pension (SEP) - A qualified plan in which a smaller employer
contributes specified amounts directly into IRA accounts on behalf of eligible employees
403(b) plan - An elective deferral plan for employees of organizations such as school
systems, churches, and hospitals
Keogh Plan - Retirement plan for self-employed individual and their qualified employees
Rollover - Tax free withdrawal of cash or other assets from one retirement program and its
reinvestment in another program. It is not considered income and it is not taxable until a later
withdrawal. Has to be completed in 60 days
Transfer - When amounts of a qualified plan are transferred to another qualified plan
Employee Retirement Income Security Act (ERISA) - Federal law that increased the
responsibility of pension plan trustees to protect retirees, established certain rights related to
vesting and portability, and created the Pension Benefit Guarantee Corporation
profit-sharing plan - a benefit whereby employees may share in the profits of the business
Catch-up Contributions - -for those aged 50 or older
-additional $1,000 annually
**Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) - established the
catch up provisions**
Rollover time frame - 60 days
Keogh Plan - A federally-approved, tax-deferred savings program for self-employed people,
allowing them to set money aside for their retirement.
Annuity Period - the payout period of an annuity
Flexible Premium Annuity - allows the owner to vary the premium payments
Deferred Annuity - An annuity that starts sometime in the future.
Variable Annuity - Annuity that has a varying rate of return based on the mutual funds in
which one has invested
Gramm-Leach-Bliley Act - requires financial institutions to ensure the security and
confidentiality of customer data
Certificate of Insurance (COI) - proof that the insured has insurance
Market conduct - refers to the marketing practices of insurers and agents that involve
interaction with insureds, claimants, or consumers
,Life Insurance and Health Insurance
(Section 529 Plans)
Latest Updated Exam Study Guide
2025/2026.
expense loading - the amount needed to pay all expenses, including commissions, general
administrative expenses, state premium taxes, acquisition expenses, and an allowance for
contingencies and profit
Straight Life Annuity - The payout option that will guarantee an annuity payment for the
remainder of an individual's life. This option typically provides the largest monthly payment.
Refund Life Annuity - Provides annuity payments for the annuitant's lifetime with the
guarantee that in no event will total income be less than the purchase price of the contract. If
the annuitant dies before receiving this amount, the difference is paid to a named beneficiary
either as a cash refund or in installments.
convertible term policy -
Aleatory Contract - a contract where the values exchanged may not be equal but depend on
an uncertain event
Insurance Dividends - Considered to be a return of overpaid premiums and is not taxable.
You can get the dividend in the form of CRAPPO
- Cash
- reduction of premium
- allow the dividends to accumulate at interest (the money earned on the returned dividend is
taxable as ordinary income
- Paid up permament addition - you can purchase additional whole life policy and the price
will change depending on dividend and age
-paid up option - pay up policy earlier than expected
- one year term - use dividends to purchase additional term insurance for 1 year (after 1 year,
the term expires)
insurance benefit - Advantage, privilege, right, or financial reimbursement
Insurance Considerations - The easiest way to protect yourself and your organization from
the legal liability and financial loss associated with environmental safety risks is through
insurance. Coverage by insurance allows the facility to transfer the potentially devastating
financial risk of a future loss for the cost certainty of a monthly or yearly payment (i.e.,
premium).
Adverse Selection - A high-risk person benefits more from insurance, so is more likely to
purchase it.
qualified retirement plan - A retirement savings plan approved by the Internal Revenue
Service that provides individuals with a tax benefit
Unilateral Contract - promise in exchange for an act
Elements of a Contract - offer, acceptance, consideration
Section 1035 (Policy Exchanges) - Due to the fact that life insurance, annuities and
endowments are all similar in nature (though they have their differences), the IRS, under
certain circumstances, allows for the exchange of one policy for another without taxation to
the individual, as long as funds are not distributed to the individual in the process.
limited pay life insurance - A form of whole life insurance characterized by premium
payments only being made for a specified or limited number of years.
annuity - payment received every year
Mutual Insurance Company - A type of insurance company owned by its policyholders.
,Life Insurance and Health Insurance
(Section 529 Plans)
Latest Updated Exam Study Guide
2025/2026.
Whole Life Insurance Policy - the cash value is greatest at the end of the policy period, and
the insurance protection is greatest at the start of the policy
class beneficiary - a member of a group, e.g., children of the insured
Tertiary Beneficiary - The third in line to receive the benefits of a life insurance policy.
State Guaranty Association - protect policy owners in the event of any insurance company
going out of business, becoming insolvent, or the in ability to pay claims
What effects the amount of the person premium? - If it does not effect their life span it does
not effect their premium
Credit Life Insurance - A special type of coverage written to pay off the balance of a loan in
the event of the death of the debtor.
Individual Life Insurance - purchased by individuals; usually greater face value
Has 10 day return policy upon delivery
Insurance twisting - When a person knowingly makes misleading statements about the policy,
to make a sale
Policy Replacement - if a policy is to be replaced then you must provide in writing the
information about the policy that is going to be submitted with the application
Pure Risk - a risk that presents the chance of loss but no opportunity for gain
Speculative Risk - A chance of loss, no loss, or gain.
Dread Disease Policy - Provides coverage for specific disease(s), such as cancer or leukemia.
Fair Credit Reporting Act - Act that protects privacy of background information and ensures
that information supplied is accurate.
Controlled business insurance - Includes the insurnace writting the the business of the
licensees self or by virtue of the influence with the buyer (spouse, family member)
Limited Partnership (LP) - A partnership consisting of one or more general partners and one
or more limited partners.
Life Income Option - installment payments are paid only while the beneficiary is alive and
cease on the beneficiary's death
Insurable Interest - Only allowed when contract is issued and does not have to be maintained
throughout the life of the contract
Insuring Clause - A general statement that identifies the basic agreement between the
insurance company and the insured, usually located on the first page of the policy.
Installment refund annuity - An annuity income option that provides for the funds remaining
at the annuitant's death to be paid to the beneficiary in the form of continued annuity
payments.
Fraternal Benefit Societies - Life or health insurance companies formed to provide insurance
for members of an affiliated lodge, religious organization, or fraternal organization with a
representative form of government.
level term life insurance - premiums remain the same thoughout the life of the policy
Straight whole life insurance - Policy where premium is paid for the whole lifetime of the
insured
Does group insurance require medical examinations? - No there are not and medical
examinations to guard against adverse selection
Unilateral Contract - promise in exchange for an act
, Life Insurance and Health Insurance
(Section 529 Plans)
Latest Updated Exam Study Guide
2025/2026.
NAIC - National Association of Insurance Commissioners
current assumption whole life insurance - a nonparticipating whole life policy in which the
cash values are based on the insurer's current mortality, investment, and expense experience.
Low interest rates increase premiums
Replacement Insurance - Insurance that actually replaces an item that has been destroyed.
variable contracts - Regulated seperately but in a coordinated fashion between the
Department of Insurance, the SEC, NASD
HR-10 plan - What is another name for a Keogh plan?
Koegh plan - A tax-deferred retirement plan for self-employed people and qualified
employees
Mutual Insurer - An insurer that is owned by its policyholders and formed as a corporation
for the purpose of providing insurance to them.
Errors and Omissions Insurance - Insurance which financially protects an architect against
claims for damages resulting from professional negligence. Also called professional liability
insurance.
Insurable Interest - The applicant has more to gain if he lives then if the insured dies
Accelerated Benefits - Riders attached to life insurance policies which allow death benefits to
be used to cover nursing or convalescent home expenses.
Viatical Settlement - the sale of a life insurance policy by a terminally ill insured to another
party, typically to investors or investor groups, who hope to profit by the insured's early death
Modified Whole Life - Level premiums for designated timeframe (typically 5 years); higher
premiums thereafter
ERISA (Employee Retirement Income Security Act) - Federal law that increased the
responsibility of pension plan trustees to protect retirees, established certain rights related to
vesting and portability, and created the Pension Benefit Guarantee Corporation
Simple Plans (IRA) - retirement plan often offered to employees of smaller businesses; the
business matches funds placed in the retirement fund by the employee up to a certain % of
the salary; tax-sheltered, tax deferred, or pre-tax
Medical Information Bureau (MIB) - An information database that stores the health histories
of individuals who have applied for insurance in the past. Most insurance companies
subscribe to this database for underwriting purposes.
Joint Life Annuity - payment to two or moer annuitants which ceases upon death of either
Joint Life Policy - Covers two or more lives and provides for the payment of the proceeds at
the death of the first among those insured, at which time the policy automatically terminates.
Tax sheltered annuity - a savings plan where pre-tax money is deposited to earn interest over
a period of time. Available to employees of certain non profits
Cross-Purchase Buy-Sell Agreement - An arrangement between individuals who agree to
purchase the business interest of a deceased owner
Variable Universal Life Insurance - A form of universal life insurance that allows the
policyholder to make fund choices for the investment component but that has no guaranteed
cash value and no guaranteed interest rate.
social security disability - Medically determinable physical or mental impairment that can
result in blindness, death or last at least 12 months
(Section 529 Plans)
Latest Updated Exam Study Guide
2025/2026.
Section 529 Plans - - state provided
- can be funded by after tax dollars
- can pay prepaid tuition
- All earnings exempt from federal taxes
- If withdrawn for unqualified withdrawl, 10% penalty
Roth IRA - private retirement plan that taxes income before it is saved, but which does not
tax interest on that income when funds are used upon retirement
Distributions don't have to start before 70.5
401(k) plan - Elective deferral plan that allows employee to reduce compensation by a stated
percentage on a tax deductible/ tax differed basis; often the employer matches the employee
contributions
Simplified Employee Pension (SEP) - A qualified plan in which a smaller employer
contributes specified amounts directly into IRA accounts on behalf of eligible employees
403(b) plan - An elective deferral plan for employees of organizations such as school
systems, churches, and hospitals
Keogh Plan - Retirement plan for self-employed individual and their qualified employees
Rollover - Tax free withdrawal of cash or other assets from one retirement program and its
reinvestment in another program. It is not considered income and it is not taxable until a later
withdrawal. Has to be completed in 60 days
Transfer - When amounts of a qualified plan are transferred to another qualified plan
Employee Retirement Income Security Act (ERISA) - Federal law that increased the
responsibility of pension plan trustees to protect retirees, established certain rights related to
vesting and portability, and created the Pension Benefit Guarantee Corporation
profit-sharing plan - a benefit whereby employees may share in the profits of the business
Catch-up Contributions - -for those aged 50 or older
-additional $1,000 annually
**Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) - established the
catch up provisions**
Rollover time frame - 60 days
Keogh Plan - A federally-approved, tax-deferred savings program for self-employed people,
allowing them to set money aside for their retirement.
Annuity Period - the payout period of an annuity
Flexible Premium Annuity - allows the owner to vary the premium payments
Deferred Annuity - An annuity that starts sometime in the future.
Variable Annuity - Annuity that has a varying rate of return based on the mutual funds in
which one has invested
Gramm-Leach-Bliley Act - requires financial institutions to ensure the security and
confidentiality of customer data
Certificate of Insurance (COI) - proof that the insured has insurance
Market conduct - refers to the marketing practices of insurers and agents that involve
interaction with insureds, claimants, or consumers
,Life Insurance and Health Insurance
(Section 529 Plans)
Latest Updated Exam Study Guide
2025/2026.
expense loading - the amount needed to pay all expenses, including commissions, general
administrative expenses, state premium taxes, acquisition expenses, and an allowance for
contingencies and profit
Straight Life Annuity - The payout option that will guarantee an annuity payment for the
remainder of an individual's life. This option typically provides the largest monthly payment.
Refund Life Annuity - Provides annuity payments for the annuitant's lifetime with the
guarantee that in no event will total income be less than the purchase price of the contract. If
the annuitant dies before receiving this amount, the difference is paid to a named beneficiary
either as a cash refund or in installments.
convertible term policy -
Aleatory Contract - a contract where the values exchanged may not be equal but depend on
an uncertain event
Insurance Dividends - Considered to be a return of overpaid premiums and is not taxable.
You can get the dividend in the form of CRAPPO
- Cash
- reduction of premium
- allow the dividends to accumulate at interest (the money earned on the returned dividend is
taxable as ordinary income
- Paid up permament addition - you can purchase additional whole life policy and the price
will change depending on dividend and age
-paid up option - pay up policy earlier than expected
- one year term - use dividends to purchase additional term insurance for 1 year (after 1 year,
the term expires)
insurance benefit - Advantage, privilege, right, or financial reimbursement
Insurance Considerations - The easiest way to protect yourself and your organization from
the legal liability and financial loss associated with environmental safety risks is through
insurance. Coverage by insurance allows the facility to transfer the potentially devastating
financial risk of a future loss for the cost certainty of a monthly or yearly payment (i.e.,
premium).
Adverse Selection - A high-risk person benefits more from insurance, so is more likely to
purchase it.
qualified retirement plan - A retirement savings plan approved by the Internal Revenue
Service that provides individuals with a tax benefit
Unilateral Contract - promise in exchange for an act
Elements of a Contract - offer, acceptance, consideration
Section 1035 (Policy Exchanges) - Due to the fact that life insurance, annuities and
endowments are all similar in nature (though they have their differences), the IRS, under
certain circumstances, allows for the exchange of one policy for another without taxation to
the individual, as long as funds are not distributed to the individual in the process.
limited pay life insurance - A form of whole life insurance characterized by premium
payments only being made for a specified or limited number of years.
annuity - payment received every year
Mutual Insurance Company - A type of insurance company owned by its policyholders.
,Life Insurance and Health Insurance
(Section 529 Plans)
Latest Updated Exam Study Guide
2025/2026.
Whole Life Insurance Policy - the cash value is greatest at the end of the policy period, and
the insurance protection is greatest at the start of the policy
class beneficiary - a member of a group, e.g., children of the insured
Tertiary Beneficiary - The third in line to receive the benefits of a life insurance policy.
State Guaranty Association - protect policy owners in the event of any insurance company
going out of business, becoming insolvent, or the in ability to pay claims
What effects the amount of the person premium? - If it does not effect their life span it does
not effect their premium
Credit Life Insurance - A special type of coverage written to pay off the balance of a loan in
the event of the death of the debtor.
Individual Life Insurance - purchased by individuals; usually greater face value
Has 10 day return policy upon delivery
Insurance twisting - When a person knowingly makes misleading statements about the policy,
to make a sale
Policy Replacement - if a policy is to be replaced then you must provide in writing the
information about the policy that is going to be submitted with the application
Pure Risk - a risk that presents the chance of loss but no opportunity for gain
Speculative Risk - A chance of loss, no loss, or gain.
Dread Disease Policy - Provides coverage for specific disease(s), such as cancer or leukemia.
Fair Credit Reporting Act - Act that protects privacy of background information and ensures
that information supplied is accurate.
Controlled business insurance - Includes the insurnace writting the the business of the
licensees self or by virtue of the influence with the buyer (spouse, family member)
Limited Partnership (LP) - A partnership consisting of one or more general partners and one
or more limited partners.
Life Income Option - installment payments are paid only while the beneficiary is alive and
cease on the beneficiary's death
Insurable Interest - Only allowed when contract is issued and does not have to be maintained
throughout the life of the contract
Insuring Clause - A general statement that identifies the basic agreement between the
insurance company and the insured, usually located on the first page of the policy.
Installment refund annuity - An annuity income option that provides for the funds remaining
at the annuitant's death to be paid to the beneficiary in the form of continued annuity
payments.
Fraternal Benefit Societies - Life or health insurance companies formed to provide insurance
for members of an affiliated lodge, religious organization, or fraternal organization with a
representative form of government.
level term life insurance - premiums remain the same thoughout the life of the policy
Straight whole life insurance - Policy where premium is paid for the whole lifetime of the
insured
Does group insurance require medical examinations? - No there are not and medical
examinations to guard against adverse selection
Unilateral Contract - promise in exchange for an act
, Life Insurance and Health Insurance
(Section 529 Plans)
Latest Updated Exam Study Guide
2025/2026.
NAIC - National Association of Insurance Commissioners
current assumption whole life insurance - a nonparticipating whole life policy in which the
cash values are based on the insurer's current mortality, investment, and expense experience.
Low interest rates increase premiums
Replacement Insurance - Insurance that actually replaces an item that has been destroyed.
variable contracts - Regulated seperately but in a coordinated fashion between the
Department of Insurance, the SEC, NASD
HR-10 plan - What is another name for a Keogh plan?
Koegh plan - A tax-deferred retirement plan for self-employed people and qualified
employees
Mutual Insurer - An insurer that is owned by its policyholders and formed as a corporation
for the purpose of providing insurance to them.
Errors and Omissions Insurance - Insurance which financially protects an architect against
claims for damages resulting from professional negligence. Also called professional liability
insurance.
Insurable Interest - The applicant has more to gain if he lives then if the insured dies
Accelerated Benefits - Riders attached to life insurance policies which allow death benefits to
be used to cover nursing or convalescent home expenses.
Viatical Settlement - the sale of a life insurance policy by a terminally ill insured to another
party, typically to investors or investor groups, who hope to profit by the insured's early death
Modified Whole Life - Level premiums for designated timeframe (typically 5 years); higher
premiums thereafter
ERISA (Employee Retirement Income Security Act) - Federal law that increased the
responsibility of pension plan trustees to protect retirees, established certain rights related to
vesting and portability, and created the Pension Benefit Guarantee Corporation
Simple Plans (IRA) - retirement plan often offered to employees of smaller businesses; the
business matches funds placed in the retirement fund by the employee up to a certain % of
the salary; tax-sheltered, tax deferred, or pre-tax
Medical Information Bureau (MIB) - An information database that stores the health histories
of individuals who have applied for insurance in the past. Most insurance companies
subscribe to this database for underwriting purposes.
Joint Life Annuity - payment to two or moer annuitants which ceases upon death of either
Joint Life Policy - Covers two or more lives and provides for the payment of the proceeds at
the death of the first among those insured, at which time the policy automatically terminates.
Tax sheltered annuity - a savings plan where pre-tax money is deposited to earn interest over
a period of time. Available to employees of certain non profits
Cross-Purchase Buy-Sell Agreement - An arrangement between individuals who agree to
purchase the business interest of a deceased owner
Variable Universal Life Insurance - A form of universal life insurance that allows the
policyholder to make fund choices for the investment component but that has no guaranteed
cash value and no guaranteed interest rate.
social security disability - Medically determinable physical or mental impairment that can
result in blindness, death or last at least 12 months
