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Insurance Cert > Chapter 4 > Flashcards

Chapter 4 Flashcards

1
Q

What is Accidental Death and Dismemberment Insurance (AD&D)?

A

AD&D is a form of insurance that provides benefits in the event of accidental death, loss of sight, speech, hearing, or loss of use of limbs.

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2
Q

What does the Accidental Death Benefit (ADB) provide?

A

The ADB provides a lump sum payment for loss of life due to an accident that was the direct cause of death.

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3
Q

What is an Additional Premium in Universal Life Policies?

A

This provision allows additional premiums to be paid into the policy account above the target premium, subject to current tax laws.

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4
Q

What is Attained Age?

A

Attained Age is the age that a person or an insured has reached as of a given date, based on the nearest or last birthday.

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5
Q

What is Adjustable Life Insurance?

A

Adjustable Life Insurance is a policy that combines permanent, whole life, and temporary term life into a single plan with flexible premiums.

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6
Q

What is Cash Surrender Value?

A

Cash Surrender Value is the amount available in cash upon the surrender of a policy before or after it matures.

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7
Q

What is Cash Value in a whole life policy?

A

Cash Value is the equity portion of a whole life policy that increases with each premium payment and is tax-deferred.

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8
Q

What is Credit Insurance?

A

Credit Insurance is designed to pay the balance of a loan if the insured dies or becomes permanently disabled before repayment.

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9
Q

What is Convertible Term Life Insurance?

A

Convertible Term Life Insurance allows the policy owner to exchange an existing policy for other policies offered by the insurance company.

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10
Q

What is Decreasing Term Insurance?

A

Decreasing Term Insurance is characterized by a reducing face amount each year while the cost of coverage remains constant.

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11
Q

What is an Endowment Contract?

A

An Endowment Contract pays a face amount after a fixed time period, at a specific age, or upon the death of the insured.

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12
Q

What is Evidence of Insurability?

A

Evidence of Insurability involves an applicant establishing they meet the insurance company’s health requirements.

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13
Q

What is Extended Term Insurance?

A

Extended Term Insurance is a non-forfeiture option that continues the same face amount of coverage for a specified period after surrender.

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14
Q

What is Face Amount in life insurance?

A

Face Amount is another name for the death benefit of a life insurance policy.

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15
Q

What is a Family Income Policy?

A

A Family Income Policy combines a whole life policy with a decreasing term rider to provide a death benefit and monthly income payments.

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16
Q

What is a Family Maintenance Policy?

A

A Family Maintenance Policy combines whole life insurance and a level term rider to provide monthly income during a stated period after death.

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17
Q

What is a Family Policy?

A

A Family Policy covers an entire family, with whole life insurance for the primary insured and term insurance for the rest.

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18
Q

What is a Guideline Premium?

A

Guideline Premium is the maximum premium that can be paid into universal life policies to qualify as life insurance under federal tax laws.

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19
Q

What are Indexed Contracts?

A

Indexed Contracts allow policy holders to share in a percentage of the growth of an indexed investment, with guaranteed principles.

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20
Q

What is Increasing Term Life Insurance?

A

Increasing Term Life Insurance provides an increasing face amount over time based on specific amounts or a percentage of the original amount.

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21
Q

What is Industrial Life Insurance?

A

Industrial Life Insurance has premiums paid monthly or more often, with face amounts not exceeding a stated amount.

22
Q

What is Joint Life Insurance?

A

Joint Life Insurance covers two or more persons and pays a death benefit when the first insured dies.

23
Q

What is Joint Life Survivor Insurance?

A

Joint Life Survivor Insurance covers two or more persons and pays a death benefit when the last insured dies.

24
Q

What is Juvenile Life Insurance?

A

Juvenile Life Insurance is owned by an adult and written on the lives of children.

25
Q

What is Level Premium?

A

Level Premium is a premium that remains constant throughout the life of a policy.

26
Q

What is Life Insurance?

A

Life Insurance creates an immediate and guaranteed estate upon the death of an insured or at the end of a predetermined period.

27
Q

What is Limited Pay Life Insurance?

A

Limited Pay Life Insurance requires premiums to be paid for a specified number of years, after which the policy remains in effect for life.

28
Q

What is Maturity Date?

A

Maturity Date is when a life insurance policy becomes payable due to the death of the insured or reaching a specified age.

29
Q

What is Maturity Value?

A

Maturity Value is the amount paid under a whole life insurance contract if the insured reaches the age of the mortality table.

30
Q

What is a Modified Endowment Contract (MEC)?

A

A MEC is a whole life insurance policy where early premiums exceed the sum required for the first seven years, viewed as a short-term investment.

31
Q

What is a Modified Life Policy?

A

A Modified Life Policy has lower premiums during the initial years, which then increase and remain level for the life of the contract.

32
Q

What is a Mortgage Redemption Plan?

A

A Mortgage Redemption Plan is another name for a decreasing term life insurance policy used to provide funds for a survivor to pay off a debt.

33
Q

What is a Mutual Insurance Company?

A

A Mutual Insurance Company is owned and controlled by its policyholders and issues participating policies that may pay dividends.

34
Q

What are Non-Forfeiture Values?

A

Non-Forfeiture Values are benefits required by law to be available if a policy is surrendered, ensuring the owner does not lose their investment.

35
Q

What is Non-Medical Life Insurance?

A

Non-Medical Life Insurance is issued without a medical examination, relying on the applicant’s answers regarding their health.

36
Q

What is Non-Participating Insurance?

A

Non-Participating Insurance is issued by a stock insurer and does not pay dividends to policyholders.

37
Q

What is Ordinary Life Insurance?

A

Ordinary Life Insurance is issued by commercial insurers with face values of $1,000 or multiples thereof.

38
Q

What is Paid-Up Insurance?

A

Paid-Up Insurance is life insurance on which future premium payments are not required after a specified number of payments.

39
Q

What is Participating Insurance?

A

Participating Insurance entitles the policyholder to share in the divisible surplus of the insurer through dividends.

40
Q

What is Permanent Life Insurance?

A

Permanent Life Insurance is designed to last throughout the life of the insured, characterized by level premiums and cash value.

41
Q

What are Policy Proceeds?

A

Policy Proceeds refer to the amount paid as a death, surrender, or maturity benefit, including face value and any earned dividends.

42
Q

What is Policy Term?

A

Policy Term is the time for which a policy remains in existence, typically expressed in years.

43
Q

What is Renewable Term Life Insurance?

A

Renewable Term Life Insurance can be renewed at the end of the policy term without evidence of insurability.

44
Q

What is Single-Premium Insurance?

A

Single-Premium Insurance involves the payment of one premium that covers the cost of a life or annuity contract for life.

45
Q

What is Straight Life Insurance?

A

Straight Life Insurance provides coverage for the entire life of the insured, with premiums payable until death.

46
Q

What is a Stock Insurance Company?

A

A Stock Insurance Company is owned by its stockholders who share in its divisible surplus, typically issuing non-participating policies.

47
Q

What is Target Premium?

A

Target Premium is the suggested premium used in universal life insurance policies, indicating what may be needed to maintain the policy.

48
Q

What is Term Life Insurance?

A

Term Life Insurance is temporary life insurance designed to afford coverage for a limited number of years, with no cash value.

49
Q

What is Universal Life Insurance?

A

Universal Life Insurance is adjustable life insurance where premiums and coverage can be adjusted, with annual financial reports provided.

50
Q

What is Variable Life Insurance?

A

Variable Life Insurance is life insurance whose face value or duration varies depending on the value of underlying securities.

51
Q

What is Variable Universal Life Insurance?

A

Variable Universal Life Insurance combines flexible premium features of universal life with variable life components based on investment results.

52
Q

What is Whole Life Insurance?

A

Whole Life Insurance is designed to be kept in force for a person’s entire life and pays a benefit upon the person’s death.

Insurance Cert (20 decks)

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