Download Exam Study Guide: Life Insurance, Health Insurance, and Retirement Planning and more Exams International Relations in PDF only on Docsity!
(Section 529 Plans)
Latest Updated Exam Study Guide
100% Certified Exam Study Guide
Section 529 Plans - - state provided
- can be funded by after tax dollars
- can pay prepaid tuition
- All earnings exempt from federal taxes
- If withdrawn for unqualified withdrawl, 10% penalty Roth IRA - private retirement plan that taxes income before it is saved, but which does not tax interest on that income when funds are used upon retirement Distributions don't have to start before 70. 401(k) plan - Elective deferral plan that allows employee to reduce compensation by a stated percentage on a tax deductible/ tax differed basis; often the employer matches the employee contributions Simplified Employee Pension (SEP) - A qualified plan in which a smaller employer contributes specified amounts directly into IRA accounts on behalf of eligible employees 403(b) plan - An elective deferral plan for employees of organizations such as school systems, churches, and hospitals Keogh Plan - Retirement plan for self-employed individual and their qualified employees Rollover - Tax free withdrawal of cash or other assets from one retirement program and its reinvestment in another program. It is not considered income and it is not taxable until a later withdrawal. Has to be completed in 60 days Transfer - When amounts of a qualified plan are transferred to another qualified plan Employee Retirement Income Security Act (ERISA) - Federal law that increased the responsibility of pension plan trustees to protect retirees, established certain rights related to vesting and portability, and created the Pension Benefit Guarantee Corporation profit-sharing plan - a benefit whereby employees may share in the profits of the business Catch-up Contributions - - for those aged 50 or older
- additional $1,000 annually Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) - established the catch up provisions Rollover time frame - 60 days Keogh Plan - A federally-approved, tax-deferred savings program for self-employed people, allowing them to set money aside for their retirement. Annuity Period - the payout period of an annuity Flexible Premium Annuity - allows the owner to vary the premium payments Deferred Annuity - An annuity that starts sometime in the future. Variable Annuity - Annuity that has a varying rate of return based on the mutual funds in which one has invested Gramm-Leach-Bliley Act - requires financial institutions to ensure the security and confidentiality of customer data
(Section 529 Plans)
Latest Updated Exam Study Guide
100% Certified Exam Study Guide
Certificate of Insurance (COI) - proof that the insured has insurance Market conduct - refers to the marketing practices of insurers and agents that involve interaction with insureds, claimants, or consumers expense loading - the amount needed to pay all expenses, including commissions, general administrative expenses, state premium taxes, acquisition expenses, and an allowance for contingencies and profit Straight Life Annuity - The payout option that will guarantee an annuity payment for the remainder of an individual's life. This option typically provides the largest monthly payment. Refund Life Annuity - Provides annuity payments for the annuitant's lifetime with the guarantee that in no event will total income be less than the purchase price of the contract. If the annuitant dies before receiving this amount, the difference is paid to a named beneficiary either as a cash refund or in installments. convertible term policy - Aleatory Contract - a contract where the values exchanged may not be equal but depend on an uncertain event Insurance Dividends - Considered to be a return of overpaid premiums and is not taxable. You can get the dividend in the form of CRAPPO
- Cash
- reduction of premium
- allow the dividends to accumulate at interest (the money earned on the returned dividend is taxable as ordinary income
- Paid up permament addition - you can purchase additional whole life policy and the price will change depending on dividend and age
- paid up option - pay up policy earlier than expected
- one year term - use dividends to purchase additional term insurance for 1 year (after 1 year, the term expires) insurance benefit - Advantage, privilege, right, or financial reimbursement Insurance Considerations - The easiest way to protect yourself and your organization from the legal liability and financial loss associated with environmental safety risks is through insurance. Coverage by insurance allows the facility to transfer the potentially devastating financial risk of a future loss for the cost certainty of a monthly or yearly payment (i.e., premium). Adverse Selection - A high-risk person benefits more from insurance, so is more likely to purchase it. qualified retirement plan - A retirement savings plan approved by the Internal Revenue Service that provides individuals with a tax benefit Unilateral Contract - promise in exchange for an act Elements of a Contract - offer, acceptance, consideration
(Section 529 Plans)
Latest Updated Exam Study Guide
100% Certified Exam Study Guide
Installment refund annuity - An annuity income option that provides for the funds remaining at the annuitant's death to be paid to the beneficiary in the form of continued annuity payments. Fraternal Benefit Societies - Life or health insurance companies formed to provide insurance for members of an affiliated lodge, religious organization, or fraternal organization with a representative form of government. level term life insurance - premiums remain the same thoughout the life of the policy Straight whole life insurance - Policy where premium is paid for the whole lifetime of the insured Does group insurance require medical examinations? - No there are not and medical examinations to guard against adverse selection Unilateral Contract - promise in exchange for an act NAIC - National Association of Insurance Commissioners current assumption whole life insurance - a nonparticipating whole life policy in which the cash values are based on the insurer's current mortality, investment, and expense experience. Low interest rates increase premiums Replacement Insurance - Insurance that actually replaces an item that has been destroyed. variable contracts - Regulated seperately but in a coordinated fashion between the Department of Insurance, the SEC, NASD HR-10 plan - What is another name for a Keogh plan? Koegh plan - A tax-deferred retirement plan for self-employed people and qualified employees Mutual Insurer - An insurer that is owned by its policyholders and formed as a corporation for the purpose of providing insurance to them. Errors and Omissions Insurance - Insurance which financially protects an architect against claims for damages resulting from professional negligence. Also called professional liability insurance. Insurable Interest - The applicant has more to gain if he lives then if the insured dies Accelerated Benefits - Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses. Viatical Settlement - the sale of a life insurance policy by a terminally ill insured to another party, typically to investors or investor groups, who hope to profit by the insured's early death Modified Whole Life - Level premiums for designated timeframe (typically 5 years); higher premiums thereafter ERISA (Employee Retirement Income Security Act) - Federal law that increased the responsibility of pension plan trustees to protect retirees, established certain rights related to vesting and portability, and created the Pension Benefit Guarantee Corporation
(Section 529 Plans)
Latest Updated Exam Study Guide
100% Certified Exam Study Guide
Simple Plans (IRA) - retirement plan often offered to employees of smaller businesses; the business matches funds placed in the retirement fund by the employee up to a certain % of the salary; tax-sheltered, tax deferred, or pre-tax Medical Information Bureau (MIB) - An information database that stores the health histories of individuals who have applied for insurance in the past. Most insurance companies subscribe to this database for underwriting purposes. Joint Life Annuity - payment to two or moer annuitants which ceases upon death of either Joint Life Policy - Covers two or more lives and provides for the payment of the proceeds at the death of the first among those insured, at which time the policy automatically terminates. Tax sheltered annuity - a savings plan where pre-tax money is deposited to earn interest over a period of time. Available to employees of certain non profits Cross-Purchase Buy-Sell Agreement - An arrangement between individuals who agree to purchase the business interest of a deceased owner Variable Universal Life Insurance - A form of universal life insurance that allows the policyholder to make fund choices for the investment component but that has no guaranteed cash value and no guaranteed interest rate. social security disability - Medically determinable physical or mental impairment that can result in blindness, death or last at least 12 months Social security primary insurance amount - Equal to workers retirement benefit at full retirement age or disability benefit Accidental death benefits - If a person dies within 90 days of an accident Accidental Death Benefit Rider - A life insurance policy rider providing for payment of an additional benefit when death occurs by accidental means. Decreasing Term Insurance - term insurance in which the annual premium remains constant but the face amount of the policy declines each year Employer qualified retirement plan employees must be - 21 and worked for a year The factors for premium rates - Mortality, Interest earnings, expenses 50 day notice - If an insurer is not renewing the health plan for a small employer Coordination of Benefits (COB) - A clause in an insurance policy that explains how the policy will pay if more than one insurance policy applies to the claim. skilled care - medically necessary care given by a skilled nurse or therapist, Must be available 24 hours a day Intermediate Care - A level of care that is one step down from skilled nursing care; provided under the supervision of physicians or registered nurses. Daily care but not 24 hour care intermediate vs skilled care - Skilled care is 24 hours a day and intermediate is daily but not 24 hour Health Savings Account (HSA) - Tax-sheltered savings account similar to an IRA but created primarily to pay for medical expenses. HSA's Do not include - Medical supplement premiums
(Section 529 Plans)
Latest Updated Exam Study Guide
100% Certified Exam Study Guide
Accidental death and dismemberment (AD&D) principle sum - Paid as the death sum Blue Cross and Blue Shield - A corporation that is a health care service contractor An accident and health insurance policy my not be issued unless - it contains a change in beneficiary provision Medicare supplement or Medigap is designed to pay - Most or all of Medicares deductibles long-term care insurance - Insurance coverage that provides a daily monetary benefit to people who are chronically ill and who require living assistance either at home or in a residential facility Long-term care can limit - Coverage for alcoholism Risk Retention Group - A group captive formed under the requirements of the Liability Risk Retention Act of 1986 to insure the parent organizations. EX. Mutual insurance company that is formed to handle the needs of lawyers Important notice regarding the Replacement of life insurance - When the sale of life insurance involves a replacement the applicant must be given a copy that he/she has to sign Keogh Plan as employer - Must contribute the same amount to eligible employees that they contribute to their own plan Mortality rate is not - used to determine health insurance rates Noncontributory Group life - all of the eligible person within that company must be insured Insurance company that is owned by its policy owners - Mutual insurance company Insurance agents represent the - Insurance company of the insurer Cash Value Loan - Insurer loans the money and attaches a comparable portion to the cash value as collateral Insurance policy owners - Can do what they please like give there policy away they only need to tell the company about the new assignments (ownership) fully insured - A status of complete eligibility for the full range of Social Security benefits: death benefits, retirement benefits, disability benefits, and Medicare benefits. Deferred Compensation Plan - A nonqualified retirement plan whereby the employee defers receiving current compensation in favor of a larger payout at retirement (or in the case of disability or death). Recovery time on health insurance policy (legal) - 60 days and 3 years Dread Disease Policy - Provides coverage for specific disease(s), such as cancer or leukemia. Exclusion Ratio - investment in the contract/expected return Self insurance is and example of what kind of risk treatment? - Retention 1035 Exchanges which are contracts funded with existing client asset transfers - Unit Coverage - What every the coverage times by the number of units Policyowner - Person entitled to exercise the rights and priveleges in the policy Death Benefit - Amount paid upon the death of the insured in a life insurance policy Annually Renewable Term - The death protection component of Universal Life Insurance is always....
(Section 529 Plans)
Latest Updated Exam Study Guide
100% Certified Exam Study Guide
Annuity owner - The "owner" is the person who purchases the contract and has all of the rights such as naming the beneficiary and surrendering the annuity. The owner, however, does not have to be the one who receives the benefits; it could be the annuitant or the beneficiary. Standard, substandard, and preferred - The 3 risk classifications used by underwriters for life insurance Best detail of underwriting process for life insurance - Selection, classification, and rating of risks Timeframe for filing relevant Suspicious Activity Reports - Within 30 days of INITIAL DISCOVERY Buyer's guide purpose - To allow the consume to compare the costs of different policies The Application - An Insurer wants to begin underwriting procedures for an applicant. What source will it consult for the majority of its underwriting information? Contract of Adhesion - When a persons only options for a contract are on a take it or leave it basis; prepared only by the insurer. Standard risk - Considered to be the average risk; representative of the majority of people in their age and with similar lifestyles Who makes up the Medical Information Bureau? - Insurers (this is so the insurers can compare the info that have collected on the individual) As a field underwriter, a producer is responsible for all of the following tasks.. - Obtain appropriate signatures on the application for insurance, help prevent adverse selection, and solicit business that will fall within the insurer's underwriting guidelines. When an agent collects the initial premium from the applicant, the agent should issue the applicant a... - Premium receipt 3 days - Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? Consideration - Something of value exchanged between the insurer and the insurer is considered.... In forming an insurance contract, when does acceptance usually occur? - When an insurer's underwriter approves coverage and issues a policy Contracts of Adhesion - Contracts that are prepared by one party and submitted to the other party on a take it or leave it basis are classified as? Purpose of a conditional receipt - It is intended to provide coverage on a date earlier than the age of the issuance of the policy A prospective insurer receives a conditional receipt, but dies before the policy is issued. The insurer will... - Pay the policy proceeds only if it would have issued the policy Changes to an application may involve drawing a line through the first answer, record the correct answer, and have the applicant initial the change, one may note on the application the reason for the change, and if all else fails one may destroy the application and complete a
(Section 529 Plans)
Latest Updated Exam Study Guide
100% Certified Exam Study Guide
Substandard Risk - Will result in having to pay the highest premium due to health, history, habits, etc. Aleatory Contract (Example) - Exchange of unequal values When a large face amount is requested by an applicant it is protocol to do this.. - Insurers commonly require HIV testing; the insurer must abide by a variety of rules created by its respective state. Major difference between stock company and a mutual company.. - Ownership is the difference between these two companies. Mutual-policyholders; Stock-stockholders ........ insurable interest must exist in a life insurance policy - "At the time of the application" is when interest must exist. The Federal Fair Credit Reporting Act - Regulates consumer reports Return the application to the applicant for a signature - If an agent fails to obtain an applicant's signature on the application, the agent must... Conditional Contract - An insurance contract that requires both the insured and the insurer meet certain conditions in order for the contract to be enforceable is... Issue the policy anyway and pay the face value to the beneficiary. - (Example) When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will... A policy summary - Must be delivered along with the policy and will provide the producer's name & address, the insurance company's home office address, the generic name of the policy issued, and premium, cash value, surrender value & death benefit figures for specific policy years. Rated - Synonym for a substandard risk classification Dividends - A participating insurance policy will pay _________ to the owner based upon actual mortality cost, interest earned and costs. Mutual Insurance Company - ________________ are owned and controlled by their policyholders. Any surplus money is returned to the policyholders as dividends. Maximum penalty for habitual willful noncompliance is $2,500 - An individual who willfully violates this Act enough to constitute a general pattern or business practice will be subject to a penalty of up to.... Have lower premiums - Insureds who have been classified as preferred risk will... "Not taxable" since the IRS treats them as a return of a portion of the premium paid. - On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are Debtor in Creditor - What relationship is not an example of insurable interest? Loss - Insurance is a contract by which one seeks to protect another from...
(Section 529 Plans)
Latest Updated Exam Study Guide
100% Certified Exam Study Guide
When the application is signed and a check is given to the agent. - When is the earliest a policy may go into effect? When the application is given to a prospective insured. - What is not a consideration in a policy? Family health history, alcohol/tobacco consumption, and recent surgeries - Part 2 of the application for life insurance provides questions regarding all of the following.. Be interpreted as if the insurer waived its right to have an answer on the application. - If an insurer issued a policy based on the application that had unanswered questions it would... Respond to the consumer's complaint. - Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must... Legal purpose, offer & acceptance, and consideration - Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements... Prior insurance, credit history, and habits - If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information of the applicant... Applicants present physical condition, present occupation, and past medical history. - In classifying a risk, the Home Office underwriting department will look at all of the following.. Buyer's Guide - A generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process. Certificate of Authority - In order for an insurer to legally transact insurance, it must obtain what? The applications - Primary source of insurance underwriting Differentiate between guaranteed and projected amounts, only be used as approved, must identify nonguaranteed values - All of the following are requirements for life insurance illustrations.. Insurable interest - Stranger-originated life insurance (STOLI) policies are in direct opposition to the principle of... If it is intentional and material - When would a misrepresentation on the insurance application be considered fraud? Failure to pay off a loan, tax delinquencies, late payments - According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer: Premium amounts and surrender values - Included in a policy summary Offer & Acceptance, consideration, competent parties, and legal purpose - The four essential elements of all legal contracts:
(Section 529 Plans)
Latest Updated Exam Study Guide
100% Certified Exam Study Guide
The policy contains sufficient cash value to cover the cost of insurance - The policyowner of a Universal Life Policy may skip paying the premium and the policy will not lapse as long as... Flexible premium - Both Universal Life and Variable Life have a... When the income payments begin - The main difference between immediate and deferred annuities is... Face amount - What does "level" refer to in level term insurance? Level fixed - Variable life insurance is based on what kind of premium? Gradually increases each year by the amount that the cash value increases. - Under Option B the death benefit includes the annual increase in cash value so that the death benefit... A single payment or periodic payments - Annuities are characterized by how they can be paid for which is: Equity Indexed Annuity and Fixed Annuities - While equity indexed annuities earn higher interest rates than fixed annuities, both types of annuities guarantee a specific minimum interest rate Limited Pay Whole Life premiums - All paid by the time the insured reaches age 65. The policy endows when the insured turns 100. It is the premium paying period that is limited, not the maturity. Annually Renewable Term - Purest form of term insurance; death benefit remains level, but the premium increases each year with the insured's attained age. In decreasing policies, while the face amount decreases, the premium remains constant throughout the life of the contracts. In level term and increasing term policies, the premium also remains level for the term of the policy. Therefore, in the other types of level policies, the first-year premium would not be different from any other year. Face Amount - Which policy component decreases in decreasing term insurance? The annuitant assumes the risks on investment. - The payments that that annuitant invests into the variable annuity are invested in the insurer's separated account. The separate account under many annuities provides the annuitant with a dozen or more investment options ranging from "money market funds" to "growth stock funds" to "precious metal funds". Single premium - Which type of life insurance policy generates immediate cash value? Annuities do not provide a (death benefit) - A fixed annuity is fixed in the sense that it provides a guaranteed minimum rate of interest and income payments that do not vary from one to the next. The company also guarantees the specified dollar amount for each payment and the length of the payout period. Insurance and cash account - What are the two components of a universal policy? Benefit payment amounts are not guaranteed - Under a variable annuity, the issuing insurance company does not guarantee a minimum interest rate or the benefit payment amounts. Universal Life - Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?
(Section 529 Plans)
Latest Updated Exam Study Guide
100% Certified Exam Study Guide
The customer's associates, friends, and neighbors provide the report's data - In comparison to consumer reports, what best describes a unique characteristic of investigate consumer reports? Offer & Acceptance, Consideration, competent parties, and legal purpose - An insurance contract must contain... As of the application date (because FULL premium was taken during application) - The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective? Policy summary - What usually includes information about premium amounts, cash values, surrender values, and death benefits for specific policy years? 3 days - Within how many days of requesting an an investigative consumer report must an (insurer) notify the consumer in writing that the report will be obtained? Statement of good health, payment of premium, and delivery receipt. - Upon policy delivery, the producer may be required to obtain? They must differentiate between guaranteed and projected amounts, they may only be used as approved, and the must identify non guaranteed values - Requirements for life insurance illustrations: 5 days - If a (consumer) requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? To explain features and benefits of a proposed policy to the consumer. - What is the purpose of a disclosure statement in life insurance policies? Consumer reports - What reports include written and/or oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources? STOLI policy. - An investor buys a life insurance policy on an elderly person in order to sell it for a life settlement.. what is this an example of? With the policy - If a policy includes a free-look period of at least 10 days, the Buyer's Guide must be delivered to the applicant... A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company. - What is a material misrepresentation? Face amount - What policy component decreases in decreasing term insurance? To keep the policy in force - What is the purpose of establishing the target premium for a universal life policy? A level annual premium for the life of the insured - A straight life policy has what type of premium? Whole life policy - The policyowner is entitled to policy loans FINRA - An agent selling variable annuities must be registered with..
(Section 529 Plans)
Latest Updated Exam Study Guide
100% Certified Exam Study Guide
Deferred - An individual has been making periodic payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it? Required a premium increase each renewal. - A man decided to purchase a $100, Annually Renewable Term Life Policy to provide additional protection until his children finished college. He discovered that his policy.. Liquidate an estate. Annuities do not provide death benefits; those are provided by life insurance. - Annuities are most commonly used to fund a persons retirement, but they can technically be used to accumulate cash for any reason. Annuities can also be used to.. The death benefit can be increased by providing evidence of insurability. - The policyowner of an adjustable life policy wants to increase the death benefit. In order to to do that, what may happen? Separate Accounts - A domestic insurer issuing variable contracts must establish one or more.. State and federal government, the insurance department, and the SEC. - Variable life insurance is regulated by..: They do not earn lower interest rates than fixes annuities - Equity Indexed Annuities invest on an aggressive basis in order to yield higher returns. Like a fixed annuity, EIA's have guaranteed minimum interest rates, also less risky than variable annuities, the insurance company also keeps a percentage of the returns. It has a guaranteed minimum interest rate - Why is an equity Indexed annuity considered to be a fixed annuity? An annuity - Periodic payments of accumulated funds best describes... Premium, death benefit, and policy period - Features of the Indexed whole life policy that are fixed.. Tax status, financial experience, and annual income - All of the following info about a customer must be in determining annuity suitability.. Straight life policy - Traditional level premium contract.. The death benefit is $0 at the end of the policy term, the contract pays only in the even if death during the term and there is no cash value, the face amount steadily declines throughout the duration of the contract. - All of the following is in regards to a decreasing term policy... Face amount - What policy component decreases in decreasing term insurance? Annually Renewable Term - The death protection component of Universal Life Insurance is always.. Increasing - A return of Premium term life policy is written as what type of term coverage? Level term - A policy will pay the death benefit if the insured dies during the 30-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?
(Section 529 Plans)
Latest Updated Exam Study Guide
100% Certified Exam Study Guide
It has a guaranteed minimum interest rate - Why is an equity Indexed annuity considered to be a fixed annuity? Annually Renewable Term - The least expensive first year premium payment is found in.. The performance of the policy portfolio - What determines the cash value of a variable life policy? Universal Life- Option A - What policy would have an IRS required corridor or gap between the cash value and the death benefit? Option B - What option for Universal Life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured? Increases annually - Annually Renewable Term policies provide a level death benefit for a premium that?... It remains the same no matter how many children are added to the policy - What happens to the premium on the children's rider in a life insurance policy? Incontestability clause - The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the? If the father is disabled for more than 6 months - A father purchases a life insurance policy on his teenage daughter and adds the Payor benefit rider. What must be acceptable in order for the ride to be able to waive the payment of premium? Fixed amount - When the policyowner specifies dollar amount in which installments are to be paid, he/she has chosen which settlement option? A copy of the original application for insurance - According to the Entire Contract provision, a policy must contain... Irrevocable Beneficiary - The can be changed only with the written consent of that beneficiary Other-insured rider - A rider attached to a life insurance policy that provides coverage on the insured's family members is called the... nonforfeiture clause option - The insurer's surrender the policy at its current cash value. Only any excess of value is taxable as income. Once the policyholder opts for cash surrender, the policy is immediately inactive. Cash surrender - Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner? The policyowner - If the policyowner, the insured, and the beneficiary under a life insurance policy are three different people, who had the ownership rights? One-year Term option - The dividend option in which the policyowner used dividends to purchase a term policy for one year is referred to as the... If the primary beneficiary predecreases the insured - An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?
(Section 529 Plans)
Latest Updated Exam Study Guide
100% Certified Exam Study Guide
Fixed amount - When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option? The balance of the loan will be taken out of the death benefit - If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back? The beneficiary will only receive payments of the interest earned on the death benefit. - Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean? Paid-up option - An insured had a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use? $100,000 - Example: the insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive? Consideration - An insured pays an annual premium to his insurer. In return, the insurer promised to pay benefits in accordance with the terms of the contract. This is called.. Reduced paid-up - This nonforfeiture option provides coverage for the longest period of time: Interest only option - The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. What settlement option should the policyowner choose? Lump sum - What is the other term for the cash payment settlement option? The amount and frequency of premium payments - The consideration clause states that the value offered by the insured is the premium and statements made in the application, so it will include the information about.. When death occurs within a specified period of time after the policy was issued - When may an insurance company use suicide as a defense against paying a death claim? The insured's premiums will be waived until she is 21. - 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? Payor benefit rider - This rider will not cause the death benefit to increase Accidental Death Rider - This pays 2 or 3 times the face amount if death is the result of an accident as defined in the policy and occurs within 90 days of such an accident. Both the principal and interest are liquidated together over the selected period of time - Under the fixed-period option, a specified period of years is selected, and equal installments are paid to the recipient. The guaranteed insurability rider - May be structured to allow for specific additional amounts of insurance to be purchased at specific ages, dates, and events without proving insurability;
(Section 529 Plans)
Latest Updated Exam Study Guide
100% Certified Exam Study Guide
however, the coverage is purchased at the insured's attained age and the maximum allowable purchase is specified in the base policy. This rider usually expires at the insured's age of 40. The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive - An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries? Revocable Beneficiary - A policyowner who is also yeh insured wants to name her husband as the beneficiary of her life policy. She also wished to retain all of the rights of ownership. The policyowner should have her husband named as the.. Proof of insurability is not required - A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. What will she need to provide for proof of insurability? Reinstatement provision - An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this? Paid-up option - An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called? Automatic premium loan - What protects the insured from an unintentional policy lapse due to a nonpayment of premium? Waiver or premium - Th rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called? Extended term - Which nonforfeiture option has the highest amount of insurance protection? 2 years - The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years? Purchase a smaller amount of the same type of insurance as the original policy - The paid-up addition option uses the dividend to.. Reduction of premium - The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this? Life income with period certain - What life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary? Adjustment in the amount of the death benefit - An insured misstates her age at the time the life insurance application is taken. This misstatement may result in? Insuring clause - Which provision of a life insurance policy states that the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid? Purchase a single premium policy for a reduced face amount - When a whole life policy lapses or is surrendered prior to maturity, the cash value can be use to..
