Insurance 3 Exam

Front 1

Types of Life Insurance Policies

Back 1

1. Term Insurance
2. Whole Life Insurance
3. Universal Life Insurance
4. Other Types

Front 2

Policy of life insurance written to cover specific period of time

Back 2

Term Insurance

Front 3

in Texas, the longest you can write term insurance is ___ years

Back 3

20

Front 4

provides at _______ ages, the most dath protection per premium dollar spent

Back 4

younger

Front 5

the amount of the insurance

Back 5

"face amount variability"

Front 6

2 choices when setting up

Back 6

1. level term
2. decreasing term

Front 7

face amount stays the same

Back 7

level term

Front 8

face amount decreases over time

Back 8

decreasing term

Front 9

in addition to providing life insurance, there is an automatic savings account built in

Back 9

whole life insurance

Front 10

if you decide you don't want the policy, you can...

Back 10

take out the cash value or only some and keep the policy

Front 11

3 different payment methods for whole life insurance

Back 11

1. straight life
2. limited pay life
3. single premium life

Front 12

premiums are paid as long as the insured is alive

Back 12

straight life

Front 13

pay premiums for only a specified period of time

Back 13

limited pay life

Front 14

pay all premium at once

Back 14

single premium life

Front 15

only difference b/t this type and universal life is that this type is more flexible

Back 15

universal life insurance

Front 16

universal life insurance is flexible in two ways

Back 16

1. premium payments
2. death benefit

Front 17

death benefits flexibility

Back 17

- you can change it
- you can put money in it
- you can increase it

Front 18

other types of life insurance

Back 18

1. variable life insurance
2. credit life insurance

Front 19

insurance company lets you make the decisions of how to invest the cash value

Back 19

variable life insurance

Front 20

- a decreasing term policy that is used to pay of a debt
- it is the same cost for everybody

Back 20

credit life insurance

Front 21

2 types of loss of health exposures

Back 21

1. medical expenses
2. loss of income

Front 22

type of insurance for medical expenses

Back 22

health insurance

Front 23

type of insurnce for loss of income

Back 23

disability income insurance

Front 24

providers of health insurance

Back 24

1. insurance companies
2. blue cross/blue shield companies
3. HMO's:Health Maintanence Organizations
4. Self Insurance
5. Medicare (65+)/Medicaid (poor)

Front 25

types of health insurance

Back 25

1. health discount plan
2. basic health insurance policy
3. HMO
4. Point of Service Plans
5. Major Medical Policy
6. PPO:Preferred Provider Organization

Front 26

- "1 stop shop for healthcare"
- pay a set fee to get fixed
- you have a primary care physician

Back 26

HMO:Health Maintainance Organization

Front 27

- still have one-stop-shop & primary care physician
- if you need to see a specialist, they will give you choives on which you can see

Back 27

Point of Service Plans (HMO with a twist)

Front 28

- choose your doctor and hospital
- downside: it will cost you more, has deductible

Back 28

Major Medical Policy

Front 29

deductible specifics

Back 29

after cost is shared (usually 80% company 20% you) there is usually a cap (around $5,000) where insurance company pays the rest

Front 30

- written with Major Medical
- $30 per isit if you go to a doctor on the list

Back 30

PPO:Preferred Provider Organization

Front 31

Other types of health insurance policies

Back 31

1. dental insurance
2. long term care insurance

Front 32

covers things like a cavity and root canal

Back 32

dental insurance

Front 33

- covers the need for assistance with daily living
- if you have issue with two of these, policy will pay

Back 33

long term care insurance

Front 34

provides income payments if the insured is disabled as a result of an injury or illness

Back 34

disability income insurance

Front 35

3 types of disability definitions

Back 35

1. unable to perform the major duties of your occupation (best)
2. unable to perform the major duties of any occupation for which you are suited through education/training (good)
3. unable to perform any gainful employement (bad)

Front 36

how long will the policy pay?

Back 36

- short term policy pays up to 2 years
- long term policy may pay either up to age 65 or some even for life

Front 37

what is the elimination period?

Back 37

it is a "waiting period" (a deductible in some ways)

Front 38

- stated in a # of days
- short term will have 7 days usually
- most have 60 days (this helps bring premium down)

Back 38

elimination period

Front 39

benefit level of disability income insurance

Back 39

usually up to 60% of your former income

Front 40

can the premium change?

Back 40

better policies are guaranteed forever

Front 41

2 health insurance policy provisions

Back 41

1. pre-existing conditions
2. grace period

Front 42

how does the policy respond to a health condition that exists prior to taking on the policy

Back 42

pre-existing conditions

Front 43

says you have 30 days to pay the premium

Back 43

grce period

Front 44

3 sources of retirement planning

Back 44

1. social security
2. employer sponsored retirement plans
3. person savings

Front 45

a contract that provides for the liquidation of a sum of money through a series of payments over a specified period of time often for the lifetime of one or more persons

Back 45

annuity

Front 46

2 ways annuity premiums are paid

Back 46

1. annual/flexible premium annuity. ex:401K
2. Single premium annuity

Front 47

when does the annuity benefit begin?

Back 47

might be immediately, might be at a later date

Front 48

how long are the benefits payable? (5)

Back 48

1. annuity certain
2. straight life annuity
3. joint & survivor annuity
4. period certain guarantee
5. refund guarantee

Front 49

paid for a specific period of time

Back 49

annuity certain

Front 50

pays only for the life of the annuitant

Back 50

straight life annuity

Front 51

stops paying when the second person dies

Back 51

joint & survivorship annuity

Front 52

pays for life but guarantees to pay a certain minimum number of payments

Back 52

period certain guarantee

Front 53

pays for life but guarantees to pay all the money pay

Back 53

refund guarantee

Front 54

annuity taxation

Back 54

before benefits begin, we don't have to pay on the growth but you are penalized for taking it out early

Front 55

Reason for Employee Benefits

Back 55

1. Improved Employee Relations
2. Tax Advantage

Front 56

2 Tax advantages

Back 56

1. cost is deductible
2. it is normally not taxable

Front 57

Distinguishing features of Group Insurance

Back 57

1. underwriting unit is the group
2. lower expenses
3. experience rating
4. contributory vs. non-contributory

Front 58

they don't ask health questions

Back 58

underwriting unit is the group

Front 59

cost is determined by how good/bad the group has done

Back 59

experience rating

Front 60

whether or not the company has to pay part of the cost

Back 60

contributory vs. non-contributory

Front 61

the employee pays for it all

Back 61

non-contributory

Front 62

the employee pays for part of the cost

Back 62

contributory

Front 63

allows avoidance of being taxed on money taken out of paychecks for their plans

Back 63

cafeteria plan

Front 64

eligibility for benefits of group life insurance

Back 64

1. must be working full-time (usually 30 hours a week)
2. must have worked for company for a minumum number of days (usually 60)

Front 65

Amounts of group life insurance

Back 65

1. level amount (everyones the same)
2. classification (higher up in the company you go, the more insurance you get)
3. multiple of earnings (1.5x your annual salary)

Front 66

typically, term insurance may include _______ & ________

Back 66

accidental death & dismemberment

Front 67

says you will get double or get paid for loss of body parts

Back 67

dismemberment

Front 68

- allows you to continue coverage under health insurance plan even though you are no longer elligible
- allows coverage for 18 months
- optional to take, mandatory for employer to give

Back 68

COBRA

Front 69

3 cost containment features

Back 69

1. pre-certification
2. review of charges
3. wellness program

Front 70

must notify insurance company of care you will receive if it is not an emergency or else they won't pay as much

Back 70

pre-certification

Front 71

incentive for you to look through your hospital bills

Back 71

review of charges

Front 72

insurance pays for routine physical and sometime will pay for membership to health clubs

Back 72

wellness program

Front 73

group discount sick leave plans

Back 73

paid time off

Front 74

group disability income insurance short term vs long term

Back 74

most quit paying at the age of 65

Front 75

group disability income insurance coverage

Back 75

same as individual disability insurance

Front 76

group disability income insurance benefit level

Back 76

different from individual policy

Front 77

Chp 20
Employee benefits & retirement plans

Back 77

Chp 20
Employee benefits & retirement plans

Front 78

a plan for retirment

Back 78

pension plan

Front 79

goal of plan

Back 79

to provide retirement income for employees

Front 80

2 types of plans

Back 80

1. defind benefit plan
2. defind contribution plan

Front 81

example forumule for month pension payment for retirement under defined benefit plan

Back 81

2% of final salary for every year with the firm

Front 82

IRS recognizes these types of plans and approves them as pension plans

Back 82

qualified plans

Front 83

whenn the plan is qualified, money that does in is ______

Back 83

tax deductible

Front 84

non-qualified plans _____ against different employees

Back 84

discriminate

Front 85

eligibility

Back 85

IRS has very strict discrimination rules

Front 86

deals with what right does the employee have to the $ in the retirement account if they leave before retirement

Back 86

vesting

Front 87

%100 vested means

Back 87

the employee gets all of the employer's money

Front 88

0% vested means

Back 88

you get none of the employer's contributed money

Front 89

Genereal rule for vested is

Back 89

you get 100% after 7 years

Front 90

- an employee can put up to $15000 per year into this
- it is a defined contribution plan
- conpany will have a certain amount that they will match

Back 90

401K
(403b for non profit)

Front 91

Chp 21
Financial and Estate Planning

Back 91

Chp 21
Financial and Estate Planning

Front 92

involves looking at a person's comprehensive financial plan

Back 92

financial planning

Front 93

involves taking steps to ensure that when you die, your assets go to your desired beneficiary and no the federal government

Back 93

estate planning

Front 94

IRS says you can leave $__ million behind to your beneficiary and they won't get taxed

Back 94

2

Front 95

4 objectives for estate planning

Back 95

1. minimizing the cost of transfering property to heirs
2. providing liquid funds to pay transfer costs in the most exonomical way
3. assure that estate assets will be transferred to desired beneficiary
4. planning for the most efficient use of an estate's assets

Front 96

costs associated with estate transfer

Back 96

1. debts: most are paid out of assets
2. adminstrative costs: executor of the state, person in charge of estate when you die
3. death taxes

Front 97

risk of death

Back 97

someone is financially hurt by our death

Front 98

these are normally not tax deductible

Back 98

premiums

Front 99

these are not subject ot income tax

Back 99

beath benefits

Front 100

savings account in life insurance policies

Back 100

cash value

Front 101

will grow over time, no tax owe on growth

Back 101

accumulation

Front 102

take money from cash value, only pay tax on amount in excess of premiums you have paid

Back 102

surrender

Front 103

no income tax on money, benefits go down by amount borrowed

Back 103

borrow

Front 104

policy as been in effect for two years, insurance company can't deny coverage because of concealment, misrepresentation or fraud (takes away an out for insurance policies)

Back 104

incontestability clause

Front 105

happens during first two years, no coverage, premiums returned without interest to beneficiary

Back 105

suicide clause

Front 106

lie about age or sex

Back 106

misstatement of age or sex

Front 107

death benefits = insurance that would have been paid had true age or sex been stated

Back 107

if insured lies

Front 108

most people will be owner, insured and pick beneficiary

Back 108

beneficiary designation

Front 109

make sure it is clear because you are dead. Change as issues come up in life

Back 109

importance of wording

Front 110

reveives money if primary beneficiary isn't alive

Back 110

contingent beneficiary

Front 111

chioces beneficary has when insured dies

Back 111

settlement options

Front 112

insurance company holds money, you get interesting in money market, you get checks to take out money, more popular for large amounts

Back 112

interest option

Front 113

pays a specified amount each month

Back 113

fixed amount option

Front 114

proceeds paid with installments over a fixed period of time

Back 114

fixed period option

Front 115

pays beneficiary a monthly income for life. see this with older people who die and have a spouse as beneficiary

Back 115

life income option

Front 116

owner becomes disabled, premiums are waived. policy will remain in force

Back 116

waiver of premium benefit

Front 117

policy pays more (double) if death results because of an accident

Back 117

accidental death benefit

Front 118

under certain circumstances a percent of policies face amount can be paid prior to the insured's death

Back 118

living benefit option

Front 119

details of living benefit option

Back 119

terminal illnes < 24 months
amount varies

Front 120

people pay money for another person's life insurance policy (started by crooks)

Back 120

viatical settlement

Front 121

HB 1440 TX

Back 121

government needs to do something to keep more people under health insurance

Front 122

specifics about HB 1440 TX

Back 122

- applies to business with home offices in Texas
- applies to business that have an insured health insurance plan
- most offer coverage to unmarried children until age 25