Insurance Review

Question 1

het·er·o·ge·ne·ous

Answer 1

Different or diverse risks

Question 2

Homogeneous

Answer 2

The same or similar risk

Question 3

Principle of indemnity

Answer 3

When cash value equals DB.

Question 4

sub·ro·ga·tion

Answer 4

the substitution of one person or group by another in respect of a debt or insurance claim,

Example: force carrier to provide you a new car for accident that isnt your fault. They take over the claim.

Question 5

Collateral source rule

Answer 5

Can sue for injury damages even if they have their own personal loan. tort law. Double pmt.

Question 6

Declarations

Answer 6

Identifies person, property or activity that is insured.

Question 7

Insuring agreement

Answer 7

Explains the promise of the insurance company

Question 8

Attractive nuisance

Answer 8

Swimming pool

Question 9

Negligence per se

Answer 9

Violate a statute. School zone or crosswalk

Question 10

Strict liability

Answer 10

Product liability. Romaine lettuce ecoli breakout

Question 11

Absolute liability

Answer 11

Extra hazardous condition. Workers comp and wild animals

Question 12

Vicarious liability

Answer 12

One person is held responsible for negligent behavior of another. Branch mgr responsible for agents

Question 13

Capital utilization calculation for life insurance

Answer 13

Deceased salary 120k, spouse gets $20k social security, rate is 7%.

120k-20k=100k
100k / .07 = $1,428,571
Add $100k for 1st yr = $1,528,571

Question 14

HO Section I

Answer 14

Dwelling
Other structures
Personal property
Loss of use

Question 15

HO Section II

Answer 15

Personal liability

Medical pmts

Question 16

Basic perils

Answer 16

WHARVVES/FLT

Question 17

Broad Form

Answer 17

Basic plus RAFF

Ruptured system
Artificial energy
Falling objects
Freezing pipes

Question 18

Open Form

Answer 18

Best coverage. Covers everything except specific exclusions

Question 19

Forms of HO coverage

Answer 19

HO-2: broad
HO-3: Open
HO-5: HO-3 plus personal property
HO-4: Renters - covers personal property
HO-6: condo
HO-8: old homes

Question 20

HO Exclusions - 8

Answer 20

OPEN WIF

Ordinance of law
Power failure
Earthquake
Neglect and nuclear
War
Intentional loss
Flood

Question 21

PAP - Comp coverage (other than collision

Answer 21

Glass breakage
Mistakes
Falling objects
Fire, theft, larceny
Flood
Earthquake
Hail
Vandalism
Contact with bird
Explosion

Question 22

Medicare Part A - hospital insurance

Answer 22

Subject to deductibles and co-pay
150 day limit for hospital care
100days for skilled nursing
Hospice care
Patient pays for first 3 pints of blood

Question 23

Medicare Part B

Answer 23

Doctor services
Free preventative care
Depression
Drugs

Excluded:
Dentures and dental care
Eye exams
Immunizations
Prescription drugs

Question 24

Medicare Part D

Answer 24

Prescription drugs

Open enrollment is 10/15-12/7 and effective on 1/1

Question 25

HIPPA Election

Answer 25

Preexisting conditions not included if transferring between group plans within 63 days

Question 26

Dividend Options

Answer 26

``` Cash Reduction of premiums Accumulated with interest Paid up additions One year term ```

Question 27

Nonforfeiture Options

Answer 27

Cash option Reduced amount - whatever CV will provide - permanent Extended term: cv keeps policy I force as long as possible

Question 28

Approved 1035

Answer 28

Life to life Annuity to annuity Life or annuity to LTC

Question 29

Stock Redemption buy-sell (entity purchase)

Answer 29

Corporation is owner and beneficiary Premiums not deductible DB tax free to company Gain is larger than cross purchase

Question 30

Cross purchase (stockholder purchase)

Answer 30

EE is owner and spouse is beneficiary Premium not deductible

Question 31

Split dollar - two methods

Answer 31

Endorsement method: ER is owner, EE not shareholder, ER receives premiums back and DB balance goes to family Collateral Assignment: EE is owner, shareholder, family gets DB tax free

Question 32

Health FSA

Answer 32

$2650 limit | Not subject to FICA and FUTA

Question 33

Dependent FSA

Answer 33

$5k limit per year | If married both spouse must earn income or $5k is taxable