Advanced Curriculum Chapter 4_Risk Management & Insurance

Question 1

CRITICAL ILLNESS INSURANCE (CII) - What conditions are covered under most CII policies?

Answer 1

Heart attack, stroke, cancer, and other serious illnesses.

Question 2

CII UNDERWRITING - What factors affect eligibility for critical illness insurance?

Answer 2

Health history, family medical conditions, risky activities, and financial stability.

Question 3

LONG-TERM CARE INSURANCE (LTCI) - What triggers a long-term care insurance claim?

Answer 3

Inability to perform two or more activities of daily living (ADLs) or cognitive impairment.

Question 4

LTCI POLICY TYPES - What are the three main types of LTCI policies?

Answer 4

Reimbursement, indemnity, and income policies.

Question 5

INSURANCE TAXATION - Are life insurance death benefits taxable?

Answer 5

No, death benefits are tax-free to beneficiaries.

Question 6

LEVERAGED LIFE INSURANCE - How does leveraging life insurance work?

Answer 6

Uses policy cash values as collateral for loans, often for investment or retirement income.

Question 7

BUY-SELL AGREEMENTS - How is life insurance used in buy-sell agreements?

Answer 7

Funds the transfer of business ownership in case of a partner’s death.

Question 8

KEY PERSON INSURANCE - What is the purpose of key person insurance?

Answer 8

Protects a company financially if a key employee or executive dies.