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59 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Domestic Insurer |
Incorporated under the laws of the state which it conducts business |
Hometown |
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Foreign insurer |
Conducts business in a state other than where it's offices or located. |
Out of state business |
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4 Elements of insurance contract |
Consideration Offer Acceptance of the offer Legal purpose |
C.O.A.L. |
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Per Stripes |
By the branch, death benefit is split equally |
Goes by the bloodline |
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Per capita |
Per person, beneficiaries share benefit equally |
Doesn't have to be family |
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All of the following are insurance marketing system EXPECT |
Collective Bargaining System |
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The Insurance Guaranty Association does not cover |
Risk retention group |
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Estoppel is the enforcement of a |
Waiver |
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The principle of making someone whole by only paying what was actually lost is called |
Indemnity |
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What best describes risk |
Uncertainty of loss |
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Coverage under a life insurance contract will be in effect when |
When the policy is delivered and initial premium is collected |
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Which of the following is the correct formula for determining the gross annual premium |
Mortality + Expenses - Interest |
MEI |
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Which of the following best describes the difference between industrial life insurance and Ordinary Life insurace? |
Industrial life is weekly & Ordinary is monthly |
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Under the human life value approach, which is not a determining factor for income |
Debts and mortgages that need repaid |
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What is a Moral Risk? |
Is presented by a dishonest client |
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What is a Pure Risk? |
Chance of loss without any gain |
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A client can skip, reduce, or increase premiums for which policy? |
Variable Universal Life policy |
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In a Variable Universal Life policy, what can stop it from lapsing? |
As long as there is enough cash value to cover the monthly expense deductions |
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Annual Renewable Term insurance can be renewed with? |
Without a physical examination, up to a certain age. |
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When a employee is terminated how long do they have to convert the Group life to a individual policy? |
31 days, regardless of health |
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What options does Universal Life offer |
Flexible premiums and able to adjust the death benefit up or down. Must prove insurability for it to go up. |
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What are the goals for Annuities? |
Liquidate an estate over a period of time |
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What does Fixed Annuities guarantee? |
A fixed rate of return and it is backed by the Ohio Guaranty Fund. |
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What are the four parties for Annuities? |
Insurance company Owner Annuitant Beneficiary |
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In a fixed Annuity, what happens when the annuitant dies in the accumulation period? |
Account value will be paid to the beneficiary or the annuitant's estate |
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What are the six methods of dividend payment? |
Cash Reduction of Premium Payments Accumulation at Interest Paid up additions Paid up option One year term addition |
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What is the grace period for industrial life insurace? |
28 days |
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What is the grace period for Group Life and Variable Whole Life? |
31 days |
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What is the grace period for Variable Universal Life? |
61 days |
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What is the grace period for all other life insurance besides Industrial Life, Group Life, Variable Whole Life and Variable Universal Life? |
One month |
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What does the Waiver of Premium rider do? |
Pays the premium on behalf of the insured if they become totally disabled. Sickness or disability must last for 6 months |
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What does a Disability Income Benefit Rider do? |
It will pay the loss of net earned income if the insured becomes totally disable. (Separate from Disability Insurance) |
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What does the Payor Benefit Life/Disability do? |
Add on for a policy written on a child. Pays the premium of child's policy if the payer becomes disabled or dies. Only paid until 18 or 21 |
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How does the Human Life Value method determines the insurance needed? |
Takes into consideration the income that will be earned over the working lifetime of the insured. |
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How does the Needs Approach determine how much insurance is needed? |
Look at the needs of the surviving family. |
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What are the two calculation of the Needs Approach ? |
1. The lump sum of money that would be necessary immediately For the family 2. What the family needs for everyday living and in addition to the survivor income and social security |
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What are the 5 personal uses of Life Insurance? |
Survivor protection Estate creation Cash accumulation Liquidity Estate conservation |
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What is the Injunctive Relief? |
An act that has been requested in a petition to the court for an injunction. |
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Paid Up |
Life insurance on which all premiums have been paid, but has not yet matured by death or endowment. |
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Paid Up Additions |
The additional single premium life insurance paid for by policy dividends and added to the policy's face amount |
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Insurance is defined as ? |
The transfer of pure risk to the insurance company in consideration for a premium |
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What are the conditions clause? |
Stated the insured's duties in the event of a claim. |
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What is an Aleatory contract ? |
A contract is one in which the consideration given by each party is unequal. |
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Even though the agent signs the application, he is not apart of the contract. What are the responsibility of the agent? |
Explain policy provisions, riders and exclusions to the client. |
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How long does free look last? |
10 days |
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What is a Modified Endowment Contract? |
A life insurance policy that has excessive premiums paid into it in the first seven years, called the seven pay test, and once a policy is marked as MEC, it cant be reserved. |
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What are the 3 things that changes in a MEC? |
1. Goes from FIFO to LIFO 2. Loan becomes taxable if it comes from the growth 3. Any money that comes before the age of 59 1/2 is assessed a 10% penalty in addition to income tax |
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What type of coverage is most group life insurance? |
Annual Renewable Term |
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Which statement about preferred risk for Life Insurance is false? |
Because it is preferred the cash values will grow faster than a policy with standard rates |
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Which statement about annuities is NOT correct? |
Annuities are used to create an estate for the insured's family |
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Which is NOT a dividend option on a life insurance policy issues by an insurer? |
Extended term option |
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The interest adjusted cost comparison index |
Is based upon living to cash in the policy at the 20th year |
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When someone other than the insured is the owner l of a life insurance policy, the owner may not do which of the following without the consent of the insured? |
Increase the amount of insurance |
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If someone has inherited a sum of money. They are elderly around 60, and wants a annuity that will appreciate with marker and economic conditions. What type of annuity should be consider? |
Variable |
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The Survivor Life Annuity contract calls for the beneficiary to receive? |
Nothing |
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Renewable Term policy |
Limits number of renewals by an insurance company |
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A conditional receipt |
Is a receipt for the first full modal premium paid by the applicant. |
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When an insured wishes to cash in a policy, insurance compaines |
May defer payment for as long as 6 months |
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The insured, if still living, can receive the face amount of an Endowment policy when the policy's |
Cash value equals the face amount |
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