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Primerica Insurance Licensing > 3.14.20 > Flashcards

3.14.20 Flashcards

1
Q

policyowner

A

the person entitled to exercise the righrts and privileges int the policy
pays premiumn to the insurance company

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2
Q

insurer (principal)

A

the company who issues an insurance policy
issues policy to the policy owner
pays benefit to beneficiary

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3
Q

two kinds of risk

A

pure and speculative

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4
Q

pure

A

loss

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5
Q

speculative

A

gain or loss

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6
Q

adverse selection

A

insuring of risks that are more prone to losses than the average risk

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7
Q

law of large numbers

A

want more people so that there’s a larger pool of people to split costs between

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8
Q

agent/producer

A

a legal rep of an insurance company, agents or broker

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9
Q

insurance is really just…

A

a transfer of risk.

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10
Q

beneficiary

A

received benefit upon insured’s (policy owner) death

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11
Q

insurable interest must only exist…

A

at the time of application

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12
Q

insurable interest

A

the possibility of losing money or something of value in the event of loss

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13
Q

4 elements of a legal contract

A

agreement
consideration
competent parties
legal purpose

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14
Q

agreement

A

offer and acceptance

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15
Q

consideration

A

applicant - representations and premium

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16
Q

competent parties

A

legal age
mentally competent
not under the influence of drugs and alcohol

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17
Q

legal purpose

A

not against public policy

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18
Q

difference between warranty + representation

A

warranty - undeniably true
rep - not guaranteed to be true
misrep - accidentally not true

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19
Q

solicitation of insurance

A

an attempt to persuade a person to buy an insurance policy

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20
Q

how to make correction on application

A

one line through, insured’s initials, new answer

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21
Q

difference between premium receipt and conditional receipt

A

when policy is made
premium receipt - when it is issued with the application
conditional receipt - letting them know this is based on if we do it exactly as applied for, we will backdate

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22
Q

conditional receipt

A

says that coverage will be effective either on the date of the application or the date of the medical exam, whiever occurs last, as long as the applicant is found to be insurable as a standard risk, and policy is issued exactly as applied for

23
Q

bond

A

$2,500 or 5% of the premiums brokered in the previous year, whiever is greater, but not to exceed 50,000 dollars total aggregiate liberty

24
Q

misrepresentation

A

false, misleading, or deceptive statements about policy terms or benefits

25
Q

rebating

A

offering benefits or services not specified in the policy

26
Q

defamation

A

maliciously critical statements about a person or company

27
Q

false advertising

A

untrue, deceptive, or misleading statements in insurance advertising

28
Q

twisting

A

misleading comparison of policies to persuade insured to cancel or switch policies

29
Q

unfair discrimination

A

discrimination in rates, premiums, or benefits

30
Q

advertising

A

any type of communication intende to create interest in life insurance, an insurer, or to induce someone to buy, change, or retain an insurance policy

31
Q

an illustration is a

A

presentation or depiction that includes nonguaranteed elements of a policy of individual or group life insurance over a period of time

32
Q

credit life

A

exempt from all the laws

33
Q

suitability

A 
age
income and existing assets
financial situation, experience objective
net worth
tax status
risk tolerance
34
Q

provisions

A

define the characteristics of an insurance contract and are fairly universal from one policy to the next

35
Q

riders

A

are added to a pplicy to modify provisions that already exist, and they cost extra

36
Q

options

A

offer insurers and insureds ways to invest or distribute a sum of money available in a life policy

37
Q

consideration

A

something of value that each party gives to the other (binding force in any contract)

38
Q

indemnity

A

a principle of reimbursement on which insurance is based; in the event of loss, an insurer reimburses the insureds or beneiciaries for the loss

39
Q

lump sum

A

payment of the entire benefit in one sum

40
Q

minor

A

a person under legal age

41
Q

principal

A

the face value of the policy; the original amount invested before the earnings

42
Q

NAIC

A

National Association of Insurance Commisioners, an organization composed of insurance Commissioners from all states and jurisdictions formed to resolve insurance regulatory issues

43
Q

principal

A

the face value of the policy; the original amount invested before the earnings

44
Q

ownership rights

A

name and change the beneficiary
right to the policy cash value, dividends, and loans
select settlement options
assign the policy

45
Q

who has ownership rights

A

the policyowner

46
Q

2 ways assignment can happen (giving away policyowner rights)

A

absolute - all rights of ownership, permanent, eg Life Policy on a spouse

collateral - partial rights, temporary, eg credit insurance

47
Q

reinstatement

A

policy lapses, restoring it

48
Q

how to reinstate

A

apply within the maximum time limit
provide proof of insurability
pay all back premiums plus interest
repay outstanding loans plus interest

49
Q

incontestability

A

prevents an insurer from denying a claim due to the statements in the application after the policy has been in force for 2 years

50
Q

exclusions

A

types of risks the policy will not cover

51
Q

types of exclusions

A

W - war and military service
A - aviation (amateur pilots)
S - suicide
H - hazardous occupations or hobbies

52
Q

suicide

A

2 years - premiums paid

after 2 years - full death benefit

53
Q

3 categories of riders

A

disability
affect disability amount
covering additional insured

Primerica Insurance Licensing (1 decks)

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