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L&H > Chapter 2, 7-10 Types of Life Ins; Business Uses; Retirement; Group Life > Flashcards

Chapter 2, 7-10 Types of Life Ins; Business Uses; Retirement; Group Life Flashcards

1
Q

Temporary life insurance for a temporary need with only a death benefit

A

Term Insurance

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2
Q

life insurance product that provides protection throughout one’s “whole life” or to age 100

A

Permanent Insurance

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3
Q

benefits available during the policy while the person is still alive

A

Living Benefits

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4
Q

term insurance that does not change in benefit or cost over the term

A

Level Term

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5
Q

term insurance where the death benefit decreases over the time

A

Decreasing Term

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6
Q

Life insurance where the death benefit increases each year during a set term

A

Increasing Term (Return of Premium)

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7
Q

Term insurance that can be renewed after a certain amount of time while insurability does not have to be established

A

Renewable Term

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8
Q

a product that can be converted from term to permanent without proof of insurability

A

Convertible Term

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9
Q

the ability to be insured

A

Insurability

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10
Q

the age of the insured at a specific time period throughout the policy

A

Attained Age

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11
Q

fixed premium term insurance

A

Level Premium Term

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12
Q

one year term policy

A

Annually Renewable Term

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13
Q

rate that is based on the date of purchase or conversion

A

Attained Age Rate

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14
Q

Rate based on the original date of purchase before conversion by making up the difference between the new rate and the original rate that has been paid since the original purchase date

A

Original Age Rate

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15
Q

permanent life insurance product that provides protection for one’s whole life or until age 100

A

Whole Life

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16
Q

equity of a life insurance policy

A

Cash Value

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17
Q

minimum interest rate guaranteed by the insurance company

A

Guaranteed Growth Rate

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18
Q

the amount you have PAID IN at the time you cash out your policy

A

Cost Basis

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19
Q

when you borrow money from the equity of a life policy

A

Loan

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20
Q

if a loan plus interest reaches the full cash value it is considered a full what?

A

Withdrawal

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21
Q

person(s) designated to receive the death benefit

A

Beneficiary

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22
Q

whole life premiums paid each year until the age of 100 at a lower rate

A

Continuous Premium/Straight Life Premium

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23
Q

payment into whole life for a set number of years at a higher rate per year, but still provides lifetime protection

A

Limited Pay Whole Life

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24
Q

One premium payment is made into the policy to pay up the protection for life

A

Single Premium

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25
Q

whole life policy that allows changes to be made without purchasing an additional policy subject to insurability

A

Adjustable Life Insurance

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26
Q

whole life policy that invests the cash value in a separate account chosen by the insured subject to investment risk and sold by a dually licensed rep

A

Variable Whole Life

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27
Q

FINRA

A

Financial Industry Regulatory Authority

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28
Q

investment account within a whole life policy

A

Separate Account

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29
Q

a form of whole life insurance in which the owner has both a flexible premium and death benefit amount

A

Universal Life

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30
Q

the period of time the owner has to pay the premium payment after the policy comes due

A

Grace Period

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31
Q

a change endorsement to the original policy

A

Rider

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32
Q

a rider found in UL policies that maintains the policy . It waives the cost of protection being deducted each month from the cash value account in the event that the insured becomes disabled

A

Waiver of Cost Rider

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33
Q

waives the premium on a policy, in the event of the insured becoming disabled

A

Waiver of Premium Rider

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34
Q

UL option with level death benefit up to age 95; risk decreases as cash value increases

A

Universal Life Option A

35
Q

UL option with increasing death benefit ; risk stays constant

A

Universal Life Option B

36
Q

designed by the IRS to insure the cash value in a policy does not exceed the death benefit

A

Risk Corridor

37
Q

universal life where the insured assumes the investment risk while the cash value is invested in a separate account

A

Variable Universal Life

38
Q

a permanent policy with cash value growth, fixed premium, but the cash value account is credited with an interest rate based on the company’s investment experience along with the company’s guaranteed minimum

A

Interest Sensitive Whole Life

39
Q

a permanent policy that pays interest based upon the change in a particular equity index such as Dow Jones or S&P500

A

Equity Indexed Life

40
Q

a single policy intended to insured multiple lives, but only pays one death benefit (after the first insured’s death)

A

Joint Life (First to Die)

41
Q

a single policy intended to insured multiple lives, but only pays on death benefit (after the last insured dies)

A

Joint and Survivor Life (Last to Die)

42
Q

a single policy that provides multiple death benefits for multiple insureds (covers each member of the family)

A

Family (Protection) Policy

43
Q
A

Units

44
Q

life product that modifies the premium structure; begins with a low premium and after a period of time, increases, then levels off

A

Modified Life

45
Q

life product that modifies the premium by gradually increasing each year until it levels off after 5 years

A

Graded Premium

46
Q

a life insurance product designed to provide coverage for the life of a child

A

Juvenile Life

47
Q

rider that states if the payor (adult or parent) dies or becomes disabled, the premium will be paid up until the child is old enough to take over the premium payments

A

Payor Rider or Benefit

48
Q

rider that allows the insured to purchase additional amounts of insurance at predetermined times without proving insurability

A

Guaranteed Insurability Rider

49
Q

insurance used to pay off a debt in the event of the insured’s death

A

Credit Life

50
Q

a permanent policy paid up (overfunded), in less than 7 years

A

Modified Endowment Contracts (MEC)

51
Q

test used to determine if too much money was paid in too early; if the accumulated amount paid under the contract at any time during the first seven years exceed the total net level premiums that would have been paid

A

7-Pay Test

52
Q

Life policy to protect the business if a key employee dies

A

Key Employee life policy

53
Q

A contract agreement that will state in the event of an owner’s death their share will be bought for a pre-determined price and the heirs will sell their ownership for the agreed upon price.

A

Buy Sell Agreement

54
Q

a plan that allows the corporation to buy out shares of a deceased owner, often financed by life insurance to fund the sale

A

Stock Purchase Plan

55
Q

a plan where each owner has a life policy on all the other owners; at the time of death the remaining owners use the proceeds to buy out the heirs of the deceased owner

A

Cross Purchase Plan

56
Q

method used to purchase permanent insurance by an employer and employee protecting the employee and the owner if the key employee dies

A

Split Dollar Plan

57
Q

OASDI Act of 1935 funded by employers & employees

A

Old Age, Survivors, and Disability Income (Social Security)

58
Q

benefit that provides a monthly check to a retiree after reaching retirement age

A

Retirement Income

59
Q

If an individual meets the early disability requirements of SS, it is possible to qualify for this income earlier than retirement age

A

Disability Income

60
Q

Survivors who have lost their spouses may qualify for a temporary income and/or death benefit

A

Survivor Benefits

61
Q

The amount of social security a personal will receive is based on their __________________

A

Primary Insurance Amount (PIA)

62
Q

the period of time in which a survivor no longer qualifies for the survivor benefit and is not old enough to receive the retirement benefit

A

Blackout period

63
Q

A fully insured individual has worked how many quarters

A

40

64
Q

retirement plans defined by the IRS with funding limitations, participation requirements and tax advantages

A

Qualified

65
Q

retirement plan that does not get a full tax benefit

A

Non-Qualified

66
Q

3 advantages of Qualified Plans

A

Tax Deductible Business Expense
Tax Deferred Contributions
Tax Deferred Growth

67
Q

retirement plans that define the benefit the employee will receive upon retirement

A

Defined Benefit Plan

68
Q

retirement plan that establishes the amount the is being contributed into the plan, the end result will not be known until it is time to use the plan

A

Defined Contribution Plan

69
Q

deferred compensation plans that defer a portion of their paycheck into the retirement account

A

401K

70
Q

401K or 403b plans are sometimes referred to as

A

CODA (Cash or Deferred Arrangement)

71
Q

retirement plan for non-profit organizations

A

403b

72
Q

retirement plan for self employed (farmers, doctors, etc)

A

Keogh

73
Q

retirement plan for small or self employed that establishes separate IRAs for each employee

A

Simplified Employee Pension Plan (SEP)

74
Q

retirement plans designed for 100 or less employees that establishes separate IRA accounts for the retirement money to be deposited into

A

SIMPLE Retirement Plan

75
Q

retirement accounts established by the individual

A

IRA

76
Q

individual plan that may be deductible, grows tax deferred, subject to early withdrawal penalties and withdrawals must begin after owner is 70 1/2

A

Traditional IRA

77
Q

IRA that is post tax and the growth is tax free

A

Roth IRA

78
Q

allows the employee to move money from an employer sponsored retirement fund into an IRA within 60 days without penalty

A

Plan Roll Over

79
Q

roll over of retirement plan that omits the need for the company to send 20% to the IRS

A

Direct Transfer

80
Q

group life made up of a group of small employers from a common industry purchasing insurance through a trust

A

MET (Multiple Employer Trusts)

81
Q

group life with a made up of small employers self-insuring

A

MEWA Multiple Employer Welfare Arrangement

82
Q

allows an employee to convert group life to whole life individual policy at attained age within 31 days with guaranteed insurability

A

Life Conversion Privileges

83
Q

% of participation on contributory vs non-contributory group life

A

100% Non-Contributory
75% Contributory

L&H (10 decks)

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