LIFE INSURANCE

401 k plan (Ans- A qualified retirement plan in which the employee can set aside a portion of their income with pre-tax dollars. Absolute Assignment v. Collateral Assignment (Ans- Absolute: A permanent and irrevocable transfer of rights and/or benefits by the policyowner. Collateral: A temporary and/or revocable transfer of benefits by the policyowner. Accelerated Death Benefit (Ans- Policy provision that allows full or partial payment of the policy's death benefit before the insur...

Stranger-oriented life insurance policies are in direct opposition to the principle of a. law of large numbers b. good faith c. indemnity d. insurable interest - ANSWER d. insurable interest-STOLI purchaser doesn't know the insured, or have any interest in the insured's longevity, so it violates the principle of insurable interest Which is generally true regarding insureds who have earned preferred status? a. they keep a higher percentage of any interest earned on their policies b. th...

Which will be included in a policy summary? - Answer Premium amounts and surrender values Why should the producer personally deliver the policy when the first premium has already been paid? - Answer To help the insured understand all aspects of the contract An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe? - Answer Conditional If a policy includes a free...

Insurance (General concept) - Answer - transfers the risk of loss from an individual to an insurer - based on the principle of indemnity - based on the principle of risk (risk pooling) insurable interest (General Concept) - Answer - must exist at the time of the application - insuring one's own life, family member, or a business partner Solicitation and sales presentation - Answer - illustration- presentation of nonguaranteed elements - buyer's guide is generic information about life ...

CHAPTER 1: INTRODUCTION TO LIFE INSURANCE •In any activity of life there is a possibility that an undesired event may occur and as a result pecuniary ( loss may arise). •In adventures by sea the ship may fail to make to the port (remember Titanic!) or the cargo may be damaged or lost •In the adventure of life itself, the life may fail and death may occur, thus causing suffering to dependents Death comes to all sooner or later, and it is the only truth in this world. The rest as the...

Mortality - Answer The rate people will die Morbidity - Answer The rate people will get sick Peril - Answer The cause of loss and the event insured against. Ex: premature death, dependency during old age, accident, and sickness Adverse Selection - Answer The tendency for poorer than average risks to seek out insurance Annuity - Answer Annuities protect against the risk of living longer than expected. Annuities provide a guaranteed life income to protect against the risk of depleting reti...

#1. In a survivorship life policy, when does the insurer pay the death benefit? a) If the insured survives to age 100 b) Upon the last death c) Upon the first death d) Half at the first death, and half at the second death - Correct Answer-b) Upon the last death #3. A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums? a) The premiums ...

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy? a. mutual b. reciprocal c. nonprofit service organization d. stock (Ans- A. mutual funds not paid out after paying claims and other operating costs are returned to the policy owners in the form of a dividend. if all funds are ...

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy? a. mutual b. reciprocal c. nonprofit service organization d. stock A. mutual funds not paid out after paying claims and other operating costs are returned to the policy owners in the form of a dividend. if all funds are paid out, no di...

The Commissioner conducts an examination of a domestic insurer and believes that the costs of examination places an unreasonable financial burden on the insurer. Which of the following will happen? a. The federal government will absorb the full cost b. The federal government will absorb part of the cost, and the state government will absorb the rest of the cost c. The costs will be reduced to the amount that the examinee can reasonable pat; the rest will be paid by the federal government ...