Only the MIB will provide information about an applicant's medical history. a) To limit the insurer's liability after the 2 year waiting period Who would be eligible to obtain SGLI? Study with Quizlet and memorize flashcards containing terms like All of the following are true regarding group term life insurance, EXCEPT: a. $ cant exceed indebtness. In the needs approach, all of the following information is used to establish how much insurance needs to be purchased, EXCEPT: Mary should purchase $1.5 million ($75,000 x 20 working years remaining = $1,500,000). Which is generally true regarding insureds who have been classified as preferred risks? When applicant is not the insured ______________ must exist. B. The policy is issued for one year and may be renewed annually with evidence of insurability. Address of his principal office InventoryJul1Jul3122,000???? d) The Medical Information Bureau. Which of the following statements is NOT true concering insurable interest as it applies to life insurance? Involuntary Risk The remaining amounts should be charged to selling and administrative activities. Foreign. Accumulateddepr.-equipmentJul1DeprJul3155,0003,00058,000, RetainedEarningsJul165,000Dividend19,000NetInc65,000Jul31111,000\begin{aligned} exclusions: when the accident occurs within an illness,disease, or mental infirmity. \text { Type I } & \$ 30 & \$ 35 & - \\ 1)Domestic Insurer D. Speculative Risk 2. D. The policy is a bilateral contract If an insurer is incorporated in Rhode Island, but primarily does business in New York, what type of insurer would it be considered in New York? d. The total of all cost sheets completed during the month is $628,880.00. Which of the following would be the best option that would help the surviving spouse of the insured to put her child through daycare after the insured's death? -If the insured dies, the policy payed out the PRINCIPAL SUM a sheet where the agent lists any additional info about insured including: habits,financial status, or anything that may be important for the underwriting department to determine the risk involved. With a little work, an unused office area could be converted to a rental room. Cash value is the same as ___________ when the policy matures. -age 100. A company that does business in another state than incorporated who is owned by policyholders who received dividends when declared and voting rights. &&\\ Executive office a) Consumer Privacy Act All of the following information about a customer must be used in determining annuity suitability EXCEPT D. Represent the insured's interest Life insurance proceeds Estate conservation B) A "cost of living" rider adjusts the face amount of a policy to maintain the relationship of the face amount and increases in the cost of living. C) Because an insurance company's strength and stability are two very crucial factors in its sustainability, independent rating services have formed to publish regular updates on the financial integrity of different insurance companies. If a parent purchases life insurance on their child all of the following are true, EXCEPT: A) The child is the insured. The following information is taken from the records of Hammond on November 30 of the current year. When an insured fails to disclose known facts in an application for insurance, he/she may be guilty of: A. Out of 20 yr or 30 yr which policy is less expensive? D) The Life and Health Insurance Guaranty Corporation protects Maryland residents who are policyholders, insureds, beneficiaries, annuitants, and assignees of life and health insurance policies, annuities, and supplemental contracts, if the insurer issuing the policies fails to perform its contractual obligations because it becomes impaired. All of the following are true regarding health insurance policies, EXCEPT: A) An agent or producer may not make changes to the policy B) Once issued, a policy may only be changed with the approval of a company officer C) An agent may change an application with the verbal consent of the applicant Correct: B. Should a key person die, the benefit is treated as a reimbursement to the business for loss of services from that key person. IRS classification of a policy that is overfunded? -pays an additional death benefit if the insured dies from an accident ? It is the specific cause of loss. When a policy is contributory how much is paid? The issuance of a policy or binder is not part of the consideration element of an insurance contract, it is part of the _______ ________. cheating. a) Executive offer of the replacing company ?19,500, Accumulateddepr.-equipmentJul155,000Depr3,000Jul3158,000\begin{aligned} Whats the "take it or leave it contract"? Which of the following information about the applicant is NOT included on Part 1 of the application for life insurance. the willful holding back or secretion of material facts pertinent of the issuance of insurance or a claim. If someone dies within the Grace period, what happens? A whole life insurance policy is exchanged for a term insurance policy, Which of the following will be included in a policy summary? How has the Aswan High Dam affected the lives of Egyptians? &\begin{array}{r|lr} All of the following statements about the settlement of a claim are true EXCEPT. 3. B. When a insurance company(insurer) has too many risks exposed to loss it seek another company(reinsurers) to insure them. b) To deter the policyowner from committing suicide Due to climate change, premiums are going up for certain types of insurance, such as flood insurance. B. Consumer report Concerning insurance, the definition of a fiduciary is He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. Is interest always gained in Universal Life Policy? A mutual insurance company is owned by who? D. Workers compensation. Conviction of a felony involving moral turpitude. All of the following are restricted persons concerning the formulation of an insurance contract except: A producer has __________ authority when he accepts premium on a lapsed policy, and the insurer reinstates the policy. 1) mentally incompetent persons What contract characteristic does this describe? 6)Explain Free Look period-10-30 days- unconditional refund that begins when policy is delivered. a) Year only. 5)coverage begins I. D. Delivery receipt. All The statements made on the application are called ______? B. c) To protect the policyowner (Choose from the following options) All of the following are true regarding life insurance illustrations EXCEPT. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. Correct: C. Unilateral contract. a) Juvenile Life \hline \text { Jul 1 } & \begin{array}{r} 2)Straight Life What are (4) characteristics of permanent insurance? Which risk management type is shifting the risk of loss to a larger homogeneous group? Receipt C. They can borrow higher amounts off of their policies b. (b) Prepare a correct income statement for October 2017. Explain your answer. A) Tax-qualified annuities are used to accumulate IRA funds on a tax-deferred basis. An insured becomes disabled at age 22 and can no longer work. B) A fiduciary is a producer who handles insurer funds in a trust capacity. A whole life insurance policy is exchanged for a Universal life insurance policy. AccountspayableJul1Jul3114,500??? 2) form of interest sensitive life insurance(current market conditions influence the cash value) All of the following are true about the Fair Credit Reporting Act Except: Regardless of what the consumer learns about the unfavorable information, the report can be changed by court action only. When a policy has reached its final destination and can be paid out in full is when the policy has ____________? Which of the following is usually true of a participating life insurance policy? Which of the following about the use of ordinary life insurance is true? The requirement that producers must account for all insurance funds collected, and without the expressed consent of the insurance company(ies) are not permitted to co-mingle those funds with their own funds is known as Liquidity in life insurance refers to availability of cash to the insured through cash values. 1) coverage is permanent A state administered health insurance for the needy? a) Aleatory What constitutes the acceptance of an offer? (d) Its use may be appropriate if a person wants paid-up life insurance by retirement. 3)Rider expires 60,65,75. The premium is guaranteed for an initial period and then the insurer can charge up to a maximum premium charge in what type of policy? b. If you don't have health insurance, you pay all costs for healthcare and medical emergencies. (c) both I & II (d) neither I nor II. 2)attorneys b) Index used by stock companies b) The policy will not be affected. 1. Which nonforfeiture option provides coverage for the longest period of time? C. Payment of premium Investors become more risk averse. D. Solicit applications on insurer's behalf d) Primary and secondary beneficiary designations. An agent tells an insured that if he replaces his current insurance policy with a newer one, his dividends will be higher and his premium will be slightly lower. C. Tax Status C. Department of State Rating codes are assigned to show financial strength or weakness of each company rated (a) They increase at an increasing rate. D. Concealment Steven prints a pamphlet to advertise his life insurance business. Group life insurance is most often issued as guaranteed annual renewable term. Life insurance is unique from other types of insurance in that it could perform the function of cash accumulation. Correct: B. Estate Creation B. (6). ____________ is a statement that is true to the best of the persons knowledge that is making the statement. All of the following statements regarding contracts of indemnity are true EXCEPT a. Rates are considered inadequate when they do not cover projected losses and expenses. All of the following statements about ordinary life insurance are true EXCEPT. B. The money in a savings account B. Marital Status -Take it or leave it contract 1) a policyholder votes on the Board of Directors C. Premiums are tax deductible by the key employee Renew policy holder has an option- THE INSURER DOES NOT. See Answer. B. don't pick binding receipt at all on test. &\text { Cash }\\ If the ultimate consumer is a business that collects and pays to the government VAT on . 5)Explain when coverage begins 4. a) Small employers D. Financial Experience. (b) The face amount of the policy is paid if the insured lives to age 65. 2)people under the influence of drugs or alcohol If the initial premium is not paid with the application, the agent will be required to collect the premium at the time of policy delivery. c. Yes, all T-mobile insurance plans cover cracked screens.You will have to pay a deductible fee which will depend on your device model. 4)defined contribution plans. Who appoints the state insurance regulator in many states? A debtor has an insurable interest in the life of a lender. Statement of good health Hammond estimates that it will manufacture 5,000 televisions next year. If the premium was not collected at the time of the application, the producer may also be required to get a Statement of Good Health from the applicant at the time of policy delivery. Surplus lines broker deals with admitted carriers only Buy-sell agreements are normally funded with a life insurance policy. (a) universal life insurance. Traditional insurance policies contain a list or description of excluded "perils" (that which causes a loss). Terms that apply to the insurer not the applicant. It is used to pay off the balance on the mortgage. 3)substandard-highest, 6 factors that are complete for policy 2 be paid? A surplus lines broker accepts business only from non- resident agents Indicate by a plus (+)(+)(+), minus ()(-)(), or zero (0)(0)(0) if the factor would increase, decrease, or have an indeterminate effect. Which of the following statements about universal life insurance is true? (3), WHat is the difference between universal and whole life policies? b) Policyholder Inventory balances at the beginning and end of October were: Only 75% of the utilities expense and 60% of the insurance expense apply to factory operations. &\text { Rental Class }\\ The policy's cash value grows as the investments grow. An__________ represents the insurer. D. Reduction is a method of managing risk. Is claim still paid if there is a misstatement of age or sex? (c) They decrease at a constant rate. (c) variable life insurance. All of the following characterize term life insurance, EXCEPT: Select one: a. When an insurance policy is not clear, the court will usually interpret in favor of the insured because of which characteristic? D. Term life. c. Using the payback period, which project should Bill choose? An individual applies for a life policy. C. Funding business continuation agreements Which method makes the most sense for her to employ? C) An insurance contract must contain a copy of the original application. (a) renewal provision -Not invested in stock market Warranty C. Whole life I. d) Producer. C. Buy-Sell agreements are normally funded with a life insurance policy (b) single-parent family. Reinsurer Assuming company. Which type of life insurance makes sense for someone in this situation? b) Increasing Premium 2)Decreasing term(premium is low) declining face value ? 3)Alien Insurer. C. Waiver of Estoppel ~~~\text{Advertising expense}&90,000\\ A key person insurance policy can pay for which of the following? A. A. 2) Binding Reciept. A value-added tax ( VAT ), known in some countries as a goods and services tax ( GST ), is a type of tax that is assessed incrementally. (c) both I & II (d) neither I or II, Diane is a single parent. \end{array} Insurance is an important tool to manage risks, but often unavailable to poorer households. Suitability Insurance is not designed to cover _____________ losses. B. \hline \text { Jul 31 } & 17,000 d) Decreases annually. If an insurer finds that an applicant has committed fraud, it can void the contract, provided that the discovery occurs within the first two years of the effective policy date. How does having children affect the decisions that couples must make when considering a divorce? d) Living need rider. A linear programming model developed to maximize profit is used to determine how many reservations to accept for each rental class. (d) They remain level. Participating policy. c) Whole Life B. The agent 2)standard-average Rates. Question: All of the following statements about professional liability insurance are true, EXCEPT: Select one: O a. (c) Interest credited to a policy's cash value is taxable to the policyowner in the year credited. (d) Most policies have a CV that is refunded when coverage ceases. -it pays the double indemnity, 1)accident occurs, person must die within 90 days