Primerica Study Guide 100% Solved

Insurance - ANSWER-A transfer of risk of loss from an individual or business entity to an insurance company which spreads the costs of unexpected losses to many individuals. An agents job is to - ANSWER-Solicits insurance (orally or written) Must give disclosure statement that provides basic information about cost and coverage of the insurance Buyer's Guide - ANSWER--Provides basic, generic information about life insurance policies that contains, and is limited to, language approved by the Department of Insurance. -can compare the cost of similar polices, -if the policy contains an unconstitutional refund provision of at least 10 days (freelook period) a buyer's guide can be delivered with the policy. Policy summary - ANSWER-a written statement describing the features and elements of the policy being issued -name, address of agent, insurers address, generic name of the basic policy and each rider. -PREMIUM, CASH VALUE, DIVEND, SURRENDER CALUE AND DEATH BENEFIT. Illustrations - ANSWER-Presentation or depiction that includes nonguaranteed elements of a policy of an individual or group life insurance -agents may use illustrations that have been approved and may NOT/NEVER change them Field underwriting - ANSWER-AKA AGENT/ producer -solicitor, prevent adverse selection, completing the application, obtaining signatures, collecting initial premium, delivering the policy Application has what? - ANSWER-2 parts. 1. General information: name, age, address, birthdate, occupation, income, status 2. Medical information: medical background, present health, Agents report - ANSWER-Provides the agent's personal observations concerning the proposed insured Required Signatures - ANSWER-Both the producer and the applicant/insured must sign the application. -The applicant is representing that statements on the application are true. If the applicant is a minor, a guardian must sign the application. -if policyowner and insured are not the same then policyowner signs it Changes in the Application - ANSWER-If an answer to a question on the application needs to be changed, the producer or applicant may make the correction but the applicant must initial the change, or the producer can complete a new application. -AGENT CAN NEVER ERASE OR WHITE OUT ANY INFORMATION consequences of incomplete application - ANSWER--application will be returned for completion -if policy IS issued, the contract will be interpreted as if the insurer waived its right to have an answer to the question. Premium receipts - ANSWER--when an agent accept the first initial premium along with the application. Conditional Receipt - ANSWER-The applicant submits a prepaid application -says that converse will be effective either on the date of the application OR the date of medical exam. -WHICHEVER OCCURS LAST warranty - ANSWER-An absolutely true statement upon which the validity of the insurance policy depends Representation - ANSWER-Are statements believed to be true to the best of ones knowledge, but not guaranteed to be true. Misrepresentation/ 1b. material misrepresentation - ANSWER-Untrue statements on the application and could avoid the contract B. A statement that would alter the underwriting decision. If done intentionally= FRAUD. Insurable Interest - ANSWER-something of value that, if lost, would cause you financial harm -must exist between the policy owners and the insured at the time of application. -insurer must pay the policy benefit Investigative Consumer Report (Inspection) - ANSWER-General reports of the applicant's finances, character, work, hobbies, and habits that supplement the information of the application. Subject to rules an regulations outlined in Fair Credit Reporting Act. What is a MIB? - ANSWER-Medical Information Bureau -membership corporation owns by member insurance companies. -received adverse medical information from insurance companies and maintains confidential medical information on people Examinations on HIV - ANSWER--insured must disclose the use of testing to the applicant and obtain written consent -must establish written policies and procedures HIPAA (Health Insurance Portability and Accountability Act) - ANSWER-a federal law that sets standards for protecting the privacy of patients' health information -must provide a written disclosure authorization notice and approved by the head department of insurance What are the three risk classification? - ANSWER-Standard: are average risk, higher premiums than preferred risks. Substandard: highest risk of all, and are not acceptable at standard rates Preferred: meet certain requirements and qualify for lower premiums Delivery Receipt - ANSWER-a form signed by a purchaser to show that goods were received. Personal Delivery - ANSWER-agent personally delivers policy to the insured. good practice bc agent can explain coverage to the insured. Coverage Begins When - ANSWER-The initial premium is paid -police begins if the medical examination is not required but if medical is required, it begins the date of the medical exam Annually Renewable Term (ART) - ANSWER-. The death benefit remains level, and the policy may be guaranteed to be renewable each year without proof of insurability, but the premium increases annually according to the attained age, as the probability of death increases. Renewable provision - ANSWER-allows the policy owner the right to renew the coverage at the expiration date without evidence of insurability The new premium will be based on the new age after X years Universal life - ANSWER-A combination of a flexible premium and adjustable life insurance. -can increase the amount of premium paid into the policy Variable life - ANSWER-premiums are fixed, but face amount varies with investment results -aka variable whole life insurance Joint Life Policy - ANSWER-covers multiple lives and pays out when the first insured dies suvivorship policy - ANSWER-Reinsured two or more lives for a premium that is based on a joint age. Pays on the last death