9 - Other Life Topics 2 Flashcards
_________ is a term that means there must be a potential for financial loss if death, injury, sickness or loss of property occurs to the insured or a beneficiary.
-Insurable Interest
individuals have an _____ insurable interest in their own lives or property.
-unlimited
Insurers normally require that a designated beneficiary have an _______ in the life of the insured at the time of application for life insurance.
-insurable interest
Concealment
-the intention to withhold or hide information by the policy-owner or the insured
Impersonation (AKA False Pretenses) is the act of assuming the name or identity of another person with the intentions of committing a _____.
-fraud
Adhesion
-“take it or leave it basis”
Indemnity
-compensation for a loss
Aleatory
-the values exchanged in the contract are not equal between the parties to the contract
The following two (2) methods have been used to compare the relative costs of a life insurance policy:
- Traditional Net Cost
- Interest Adjusted Cost
Traditional Net Cost
- add premiums together for the period of years in consideration
- subtract the projected cash value and dividends
- divide by the number of years under consideration
Interest Adjusted Cost
Traditional Net Cost w/ Interest added
If the policy develops dividends then the value of the dividends must be subtracted from the ______
-net cost
The Producer is often referred to as the _________
-Field Underwriter
In life insurance insurable interest must exist only when the ___________. After the policy is issued insurable interest does not need to exist.
-application is taken
The Traditional Net Cost Method does not take into account which of the following?
-Interest
The Attending Physician’s Statement (APS) is submitted to the insurer from:
-personal doctor of the applicant
J is asked about a specific medical condition when applying for a life insurance policy. J denied that he had the medical condition even though he was recently diagnosed with the condition. J has committed which of the following?
-concealment
E gave a deliberate false statement on an application for a life insurance policy. E has committed which of the following?
-misrepresentation
J surrenders a Whole Life insurance policy and receives a lump-sum cash payment of $45,000. His premium payments amounted to $39,000. Which of the following statements about taxation is correct?
-$39,000 tax free and will be taxed on $6,000
To be put back in the financial position he or she enjoyed before the loss refers to which of the following legal concepts?
-Indemnity Contract
Which of the following is NOT required to determine the net cost of a life insurance policy?
a. Premiums
b. cash value
c. insurer expense charge
d. dividends
c. insurer expense charge
J has $25,000 cash value in a life policy and has paid $9,000 in premiums and borrows $10,000 from the policy. What portion would be potentially taxable for the current tax year on the loan?
-nothing
At the time of application who is responsible for providing information to an applicant that a medical exam is required?
-producer taking the application
