Life Health & Variable Annuity

Front 1

A worker can receive Social Security Retirement Benefits

Back 1

at any age after 62.

Front 2

Disability Income Benefits are considered taxable income to the disabled person when

Back 2

The recipient’s employer paid the premiums.

Front 3

Representation

Back 3

The unintentional concealment of a non-material fact on an application

Front 4

What are the three types of authority that an agent has under the concept of agency law?

Back 4

Express authority, implied authority, and apparent authority.

Front 5

How can a person, with a recurring ailment, purchase health insurance at standard rates?

Back 5

Coverage can be issued with a rider excluding a specified condition

Front 6

What does life insurance guaranty ?

Back 6

A specified sum of money on the death of the insured.

Front 7

What is the purpose of life insurance ?

Back 7

To provide financial protection against loss, to create an estate ( money machine)

Front 8

What does an annuity provide ?

Back 8

A stream of income

Front 9

Name the two periods of time an annuity could be for ?

Back 9

For life or for a specified time ( very rare)

Front 10

What is the concept called, that predicts the approximate number of deaths that should occur in a certain group of people in a given period of time ?

Back 10

Law of Large Numbers

Front 11

List the two types of risks ?

Back 11

Pure and Speculative

Front 12

What is the difference between the two types of risk ?

Back 12

Speculative has the chance of both loss or gain ( Race Track- Investing) Pure risk has only the chance of loss ( Life and Health insurance)

Front 13

Which kind of risk is insurable ?

Back 13

Pure

Front 14

What is a Peril ?

Back 14

An event that causes a loss

Front 15

What causes a Peril ?

Back 15

A hazard

Front 16

Give example of a Hazard Peril Risk

Back 16

Hazard - lightning
Peril - fire
Risk loss of life or building

Front 17

Give an example of a Hazard Peril Risk

Back 17

Slippery road causes a out of control car which has an accident to person and or property

Front 18

Hazard peril risk

Back 18

Hazard - slippery road
Peril - car out of control
Risk - Property damage or bodily injury

Front 19

hazards Physical

Back 19

Physical : blind, family traits

Front 20

Hazards Moral

Back 20

Moral stealing, smoking, (drinking, drugs, dishonesty) acceptance of illegal behavior addiction

Front 21

What kind of hazard is it when an employee takes merchandise without paying for it ?

Back 21

Moral

Front 22

What kind of hazard is it when you are late for an appointment ? Reckless driving ?

Back 22

Morale

Front 23

List and describe the 4 ways to cope with risk ?

Back 23

Avoidance - don't fly
Reduction - smoke alarm
Retention - self insured
Transference - buys insurance

Front 24

Name two types of life insurance companies

Back 24

Stock company
Mutual company

Front 25

Who is ineligible for Life, Health, and Variable Annuity appointments in Florida ?

Back 25

Veteran's Administration employees and Funeral Directors

Front 26

Adverse selection

Back 26

People in bad health keep their policies enforce longer than people in good health

Front 27

What kind of insurance companies write more than one line of insurance ?

Back 27

Multiline

Front 28

Stock Company

Back 28

Stockholders own the company and elect the board of directors, non-par, and no dividends

Front 29

Mutual Company

Back 29

Policyholders own the company and elect the board of directors, must issue par policies ( dividends )

Front 30

In a Mutual Company what is a dividend

Back 30

Refund of overpayment - Extra expense

Front 31

What is a company called that helps an insurance company transfer a portion of its risk?

Back 31

Reinsurers

Front 32

What kind of insurance company is non-profit and has a lodge system ?

Back 32

Fraternal Benefit Society

Front 33

What is another name for Home Service Insurers?

Back 33

Debit Insurer / Industrial Insurer

Front 34

What is the insurance called that is sold by a Home Service Insurer ?

Back 34

Industrial

Front 35

What are the restrictions on Universal Life receiving favorable tax treatment ?

Back 35

Death benefits must be greater than cash by a government %

Hint 35

A (corridor) is required if cash approaches the death benefit so policy does not become a MEC.

Front 36

How does Universal Life Insurance work?

Back 36

Preminum accumulates depending on how much of the insurer's premiums is credited to the cash after expenses and the amount needed monthly to fund the insurance face value of the policy ( ART )

Hint 36

The cash accumulates currently tax free.

Front 37

What is the character of Universal life insurance ?

Back 37

Flexible premium and adjustable benefits, cash debited with expenses, credited with interest ( guaranteed and current)

Hint 37

ART insurance, loans and / or partial withdraws, interest sensitive.

Front 38

Why was variable life insurance developed ?

Back 38

To keep up with inflation

Front 39

What is the difference between variable whole life insurance and whole life insurance ?

Back 39

In VL, cash is in separate accounts, invested in stock, need dual license

Hint 39

Whole life the cash grows according to a table.

Front 40

Who regulates retirement plans ?

Back 40

ERISA - it overrides any state laws

Hint 40

ERSA - Employee Retirement Income Security act

Front 41

What does vesting in a pension plan mean ?

Back 41

Vesting refers to the employee's right to benefits or contributions accrued normally goes from 0% to 100% on a time schedule ERISA

Front 42

What is the fifth dividend ?

Back 42

Allows insured to buy one-year term insurance equal to the cash value.

Front 43

What is the original purpose of the fifth dividend ?

Back 43

To fill the gap in policy owner's coverage caused by borrowing money from his policy.

Front 44

How mush one-year term can be purchased under the fifth dividend ?

Back 44

It can equal the current cash value of the policy