Extra Questions Flashcards
What rider allows the policyowner to purchase specific amounts of additional insurance at specific dates or events, without proving continued insurability?
Guaranteed Insurability rider
As part of the continuing education requirement, what is the minimum number of hours of continuing education specific to long-term care insurance to be completed prior to each license renewal?
8
The interest earned on policy dividends is ________
taxable
a return of unused premiums on which the insured has already paid taxes
dividends
Which policy component decreases in decreasing term insurance?
face amount
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated.
An agent who violates the replacement provision of the Code will be fined a $____ for the first offense
$1,000
An insurance company that violates the replacement provision of the Code will be fined $_____ for the first offense
$10,000
considered refund of unearned premium
dividends
Department that is responsible for developing mortality and morbidity tables, calculating premiums and dividends, and preparing annual reports
actuarial
an increasing term insurance policy that pays an additional death benefit to the beneficiary equal to the amount of the premiums paid.
Return of premium (ROP) life insurance
court actions which increase the likelihood or size of a loss
Legal hazard
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
What component increases in the increasing term insurance?
death benefit
availability of cash to the insured
liquidity
Who’s general duty or power is it to develop laws?
State Legislature
Who’s general duty or power is it to enforce laws?
Commissioner
What 3 things are funded by annuities?
A person’s retirement, estate liquidation, cash accumulation for any reason
What results from three basic desires of the insured: to reduce expenses and improve cash flow, to increase control of claim reserving and claims settlements, and to fund losses that cannot be insured.
retention
What determines whether an insurance policy is “over-funded” or if it’s a Modified Endowment Contract
Seven-pay Test
How often must every insurer doing business in California report its financial condition to the Commissioner?
Each year, on or before March 1
The period of time during which a binding receipt covers a policyholder
temporary term period
Units with the same or similar exposure to loss
homogeneous
“by the head”
per capita
Who is protected by a Temporary Insuring Agreement?
The applicant and the insurer
What insurance option would be considered a risk-sharing arrangement?
Reciprocal
Upon policy delivery, the producer may be required to obtain what 3 things?
Delivery receipt, statement of good health, payment of premium
In a group life insurance policy, the employer may select three things?
The premium payor, the type of insurance, the amount of insurance
Examples of risk retention
Deductibles, copayments, self-insurance.
What kind of annuity is it when the owner is guaranteed a fixed interest rate for a specific period of time?
modified guaranteed annuity
Why is an equity indexed annuity considered to be a fixed annuity?
It has a guaranteed minimum interest rate.
The Waiver of Cost of Insurance rider is found in what type of insurance?
Universal Life
In the Executive Bonus plan, who is the owner of the policy, and who pays the premium?
Executive is the owner, and the executive pays the premium.
According to CIC 783, after a hearing, the Commissioner may suspend the license of any such person for violating provision relating to misrepresentation for a period of ______
3 years
Unassigned funds that are required to be reported on the insurer’s annual statement.
Earned Surplus
Any insurance agent who commits a repeated violation of the Insurance Code with respect to insurance replacement will be liable for _________.
An administrative penalty of no less than $5,000 and no more than $50,000 per violation.
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days
only one of the parties to the contract is legally bound to do anything
unilateral insurance contract
Another term for the cash payment settlement option
Lump sum
intentional withholding of information by the insured that is material to the insurer
concealment
The owner of an adjustable life policy has four privileges:
increasing or decreasing the premium, changing the premium-paying period, increasing or decreasing the face amount of coverage, or changing the period of protection
collects any charges the insured owes, processes and settles claims, and acts as a fiduciary for the insured and the insurer
administrator
The agent’s role to act in the insured’s best interest is called?
The fiduciary duty
When can the frequency of premium payments be changed?
on the policy’s anniversary date
This rider annually adjusts the policy’s face value in accordance with the national rate of inflation or deflation
Cost of Living
Retention usually results from three basic desires of the insured:
to reduce expenses and improve cash flow, to increase control of claim reserving and claims settlements, and to fund losses that cannot be insured
A tax-sheltered annuity is a special tax-favored retirement plan available only to _____________
certain groups of employees
The Human Life Value Approach to determining the value of an individual’s life requires the calculation of _____________
probable future earnings of the insured, which involves wages, expenses, inflation, amount of time until retirement, and the time value of money
What type of risk will result in the highest premium
Substandard
insures the life of a homeowner for an amount equal to his mortgage
Mortgage Redemption
not securities, but these annuities invest on a relatively aggressive basis to aim for higher returns
Equity Indexed Annuities
All records relating to insurance application must be maintained for _____
5 years after policy delivery or initial application
The Medical Information Bureau (MIB) was created to protect
Insurance companies from adverse selection by high risk persons
What rider pays 2 or 3 times the face amount if death is the result of an accident as defined in the policy and occurs within 90 days of such an accident.
Accidental Death rider
What kind of policy issues certificates of insurance to insureds?
Group insurance
According to CIC 16, the word “shall” describes ______ actions, and the word “may” describes _______ actions unless otherwise apparent from the context.
mandatory, permissive
Beneficiary designations
primary or contingent, secondary and tertiary
the agent may continue to operate under the expired license for a period of ______ as long as the application for renewal has been filed and renewal fee paid.
60 days
In terms of Social Security, what is the interval spanning between the day when the youngest child of a family turns 16 and before the surviving spouse turns age 60 called?
Blackout Period
closest term to an authorized insurer
admitted
Any agent violating the misrepresentation provisions is guilty of a misdemeanor and punishable by a fine not to exceed
$25,000 (for losses less than $10,000), and/or by imprisonment not to exceed 1 year
What is the purpose of a suicide provision within a life insurance policy?
To protect the insurer from persons who purchase life insurance with the intention of committing suicide
The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called
Waiver of premium
Which provision of a life insurance policy states the insurer’s duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?
Insuring clause
a short-term annuity that limits the amounts paid to a certain fixed period or until a certain fixed amount is liquidated
Annuity certain
What law states that a deferred annuity must have a guaranteed surrender value that is available if the owner decides to surrender the annuity prior to annuitization
nonforfeiture law
determined not by the event, but solely by the influence of the facts upon the party to whom the communication is due, in forming his/her estimate of the disadvantages of the contract.
Materiality
Any domestic insurer issuing variable contracts must establish one or more ________ accounts
separate
Which component increases in the increasing term insurance?
Death benefit
The law will assume that the primary beneficiary dies first as long as the beneficiary dies within this specified period of time following the death of the insured (usually 30 days).
Common Disaster
This settlement option provides a single beneficiary with income for the rest of his/her life.
Single Life
When coverage is effective immediately
Written binder
What two terms are associated directly with the premium?
level or flexible
What individual must have insurable interest in the insured?
policyowner
What is the waiting period on a Waiver of Premium rider in life insurance policies?
6 months
For a retirement plan to be qualified, it must be designed for the benefit of
employees
protection period offered by binding receipts
temporary term
The dividend option in which the policyowner uses dividends to purchase a term policy for one year
One-year term option
Section 10128.2 of the CIC uses the word _________ to refer to the length of such an extension.
“reasonable”
The clause that protects the proceeds of a life insurance policy from creditors after the death of the insured
Spendthrift clause
This department is responsible for developing mortality and morbidity tables, calculating premiums and dividends, and preparing annual reports.
Actuarial
