Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Insurance > Kinds of life insurance policies and annuity contracts > Flashcards

Kinds of life insurance policies and annuity contracts Flashcards

1
Q

Whole Life Insurance aka ___ and ____

A

Straight life insurance and ordinary life insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Whole Life

  1. provides life insurance coverage until age ____
  2. premiums do what?
  3. complimenting amounts of ___ and ____
A

100
stay the same for the life of the policy
cash value and pure insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

As the insured grows older and the insured’s mortality rate increases, the cash values become greater and greater requiring ____

A

continuously less pure insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

the cash values earn ___ and/or ___ which offsets the increasing cost of the decreasing amounts of pure insurance as the insured grows older and mortality rates increase

A

interest, earnings

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

the policy owner can ___ agains the cash values during the life of the policy

A

borrow

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

what is is called when there is no tax on the cash value interest until the policy is terminated or surrendered and cash is withdrawn

A

cash deferred interest and/or earnings

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

when the interest and/or earnings are paid to the beneficiary as part of the life insurance benefits, there will be no what?

A

no tax on the interest and or earnings

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What type of policy is also known as graded premium whole life?

A

modified whole life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Modified whole life:

  1. provides a level amount of coverage until age ___
  2. the premium does what?
A
  1. reduced for the initial period and then level thereafter
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

type of policy that is aka single premium life, 20/30 pay life, life paid up at age 55/65

A

limited pay whole life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

limited pay whole life

  1. provides coverage until age___
  2. has a level premium rate for a ____
  3. cash values equal face amount at age ___
A

100
shortened premium payment period
100

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Adjustable life

  1. provides ___ in premium amount, face amount and amount of cash value accumulation. the face amount can be ___ or ___ within limitations of the policy
  2. premium payment can be ___ or ___ as long as it equals or exceeds minimum premium stated in the policy
A

flexibility, increased or decreased (2x)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Endowment:

  1. has a level amount of life insurance coverage until ____
  2. has a ___ premium rate
  3. cash values = ___ at maturity
A

maturity which is prior age 100
level
face amount

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Term life insurance can be issued as:
1.
2.

A

a separate policy

a rider added to another policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

permanent vs temporary protection

a. cash value life insurance policies are used for ___
b. term insurance which has no cash value is used for ___

A

long term, permanent needs

short term temporary needs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

level term life insurance

A

provides a level amount of life insurance protections for a specified period of time (term)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

level term life

a. has a ___ premium during the policy term
b. it has ___ cash values
c. Does it have nonforfeiture values?
d. it is usually ___ to permanent life insurance until a specified age

A

a. level
b. no
c. no
d. convertible

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Level term life is sometimes renewable until a specified age.

a. 1 and 5 year plans usually can be renewed for successive terms up to a stated age. there is no evidence of insurability. the insured pays the premium rate for their age at time of renewal.
b. 10 year and longer plans usually cannot be renewed

A

short term plans

long term plans

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Type of policy that provides a decreasing amount of life insurance protection for a specified period of time (term)

A

decreasing term life insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

decreasing term life insurance

a. it has a ___ premium during the policy term
b. is has ___ cash values
c. it has ___ nonforfeiture values
d. it usually is ____ convertible
e. is it renewable?

A

a. level
b. no
c. no
d. partially
e. no

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

a decreasing term life insurance set up so that the benefits will automatically be applied to pay off the unpaid loan balance at the insured’s death

A

credit life and mortgage life insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

term life insurance which has no cash values or nonforfeiture options will have a lower premium rate per one thousand dollars face amount than cash value plans

A

lower premium rate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

term life insurance provides ___ life insurance protections for ___ premium amounts for ___-term needs

A

more, equal, short

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

two types of combination plans

A

family income and family maintenance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

family income plan

a. it a whole life policy with a ____ ____ ___
b. the whole life face amount is paid whenever the insured ___
c. a monthly income benefit is paid to the beneficiary from the decreasing term insurance ride until ____________
d. the insured must die during the rider term for the income benefit to be ____

A

a. decreasing term rider
b. dies
c. what would have been the end of the rider term
d. payable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

family maintenance plan

a. it is a whole life policy with a ____ ___ ___
b. the whole life face amount is paid whenever the insured ___
c. a monthly income is paid to the beneficiary from the level term insurance rider __________
d. the insured must ___ during the rider term for the income benefit to be payable

A

a. level term rider
b. dies
c. for a period equal to the term of the rider
d. dies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

a ___ ___ ____ plan provides life insurance protection on everyone in the family

A

family life insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

the ___ ____ is often the spouse who has the higher income

A

primary insured

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

it is a ___ ___ insurance policy on the primary insured

A

whole life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

it provides a term life rider on the spouse (usually in a ____ face amount)

a. the term life rider covering the spouse terminates when the primary insured achieved age __
b. if the primary insured dies prior to his/her age 65, the term life rider covering the spouse is paid up at the primary insured’s death until the primary insured ___ ___ ___ __ __

A

lower

a. 65.
b. would have been age 65

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

A family life insurance plan provides ____ term life insurance on each child

A

automatic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Family life insurance - child
the ____ on the child rider is determined entirely by the face amount that the insured selects on each child
a. there is usually __ ___ ___ per child
b. there usually are __ ____ ____
c. if more children are born after the policy has been issued, each baby is automatically covered when they achieve age ___
d. coverage terminates and is convertible is up to _ times face amount usually at the primary insured’s age 65 or the child’s age 25. - ____ ____ ____
e. the child’s coverage is paid up until the child’s age __ at either the primary insured’s or spouse’s death

A

premium

a. no additional premium per child
b. no health questions
c. 15 days
d. 5, Jumping Juvenile Provision
e. 25

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

two interest sensitive types of life insurance

A
  1. universal life

2. interest sensitive whole life insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

universal life

a. a life insurance protection combined with ___ ___
b. the premium care for life insurance protection is call the “___ ___” which increased each year with age. the policy owner can pay any premium he or she chooses as long as it =’s or exceeds ___ ___
c. premium payments exceeding mortality cost are ___ ___ ___ ____
d. interest earned on the cash values is applied toward the mortality cost, offsetting the increased mortality cost as the insured ___ ___
e. the ___ ___ ___ ___ varies from year to year, but is guaranteed to not drop below a minimum guaranteed rate
f. to sell universal life a person is required to have a ___

A

a. cash values
b. mortality cost
c. added to cash values
d. grows older
e. cash value interest rate
f. insurance producer’s license

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

interest sensitive whole life insurance

a. it is life insurance protection combined with ___ ___
b. the ___ ____ ___ ___ varies from year to year, but is guaranteed to not drop below a minimum guaranteed rate
c. the cash values are guaranteed to be no less than a ___ ____ ____ each year, but may exceed the ____ ___ ____ as interest rates increase
d. interest earned on cash values is applied to offset increasing ____ ___ as the insured grows older
e. to sell interest sensitive whole life, a person is required to have a ___

A

a. cash values
b. cash value interest rate
c. stated minimum amount
d. mortality rates
e. insurance producer’s license

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Stock Market (equity) sensitive types of life insurance

A

Variable life
Variable whole life insurance
equity - indexed life insurance
variable universal life insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

variable life

a. it is a life insurance protection combined with ___ ___
b. the life insurance death benefit and cash value growth rate varies according to the performance of either a ____ _____ __ _____ managed by the insurance company or a ____ ____ ____ or another econmic index
1. purchasing variable life insurance has many of the same characteristics of investing in ____ ___
2. plans that are based on the performance of stock market investments are often referred to as _____ ______

A

a. cash values
b. specified portfolio of securities, security market index
1. mutual funds
2. equity investments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

variable life

c. the purpose of variable life insurance is to keep a person at least equal to, if not ahead of, the annual increase in ___ __ ____ (inflation)
d. the insurance company must keep its variable life insurance premiums and cash value investments in a _____ (segregated) ___
e. to sell variable life insurance a person must have a ____ ____ ____ and a _____ ____ ____

A

c. cost of living
d. separate fund
e. insurance producer’s license, security representative license

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

business life insurance - ________
Key employee
a. it is a life insurance policy purchased on the life of a ____ _____ _____
b. the business is both the _____ and the ______
c. benefits are equal to ___ or ____ years of the ______’s earnings
d. its purpose is to ____ ___ ___ ___ at the death of a key employee
e. premiums usually cannot be ___ _____ - there usually is no tax on the benefits when paid at the insured’s death (__ ___)

A
  • any type of insurance (whole life, term life, or any other type)
    a. key business employee
    b. policy owner, beneficiary
    c. 1 or 2 years of company’s earnings
    d. keep the business going
    e. tax deducted (tax free)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

buy sell agreement

a. it is an agreement entered into by partners of a partnership or stockholders of a ____ ____ ____
b. each partner/stockholder agrees to ___ __ the other partner/stockholder and each agrees to __ ___ to the other at his or her death
c. each partner/stockholder buys life insurance on the life of the other partner/stockholder to furnish the ___ ____
d. premiums usually cannot be ___ _____ - there is usually no tax on the benefits when paid at the insured’s death (___ ___)

A

a. closely held corporation
b. buy out, sell out
c. purchase funds
d. tax deducted (tax free)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

Joint life aka ____-__-___

a. is any type of life insurance
b. the life insurance benefit is paid at the ___ ___
c. it is often used to fund ___ ___ _______

A

first to die

b. first death
c. buy out agreements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

Survivorship insurance aka ____ ___ ____ is any type of life insurance

a. it is based on _ ____
b. the life insurance benefit is paid at the ___ ___
c. it is often used to pay _____ taxes and ____ ____ that occurs at the death of the second spouse

A

second to die

a. 2 lives
c. second death
c. estate taxes and legal expenses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

Social Security Death or Survivor (OASDI) benefits

A

to be eligible for social security death or survivor benefits, a person must have contributed to social security enough quarters to achieve either fully insured or currently insured status.

a. to achieve FULLY INSURED STATUS, a person must have contributed to social security at least 40 Quarters (10 years)
b. to achieve CURRENTLY INSURED STATUS, a person must contribute to social security at least 6 quarters in the last 13 quarters immediately prior to their death

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

What lump sum death benefit is paid to the qualifying surviving spouse?

A

$225

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

Who is paid a monthly survivor benefit?

A
  1. Dependent children under the age of 18

2. widows with dependent children children under the age of 16

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

What is the 10, 15, 20 year period from the time the youngest child has his or her 16th birthday until the widow/er achieves age 66

A

Social security blackout period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

Service members Group Life Insurance

A

a federal government program underwritten by private insurance companies

a. when a person enters the service, they become eligible for group term life insurance
b. the face amount can be in increments of $50k and a max of $400k
c. payments are low and usually payroll deducted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

Within one year and 120 days of separation from the service, the service member may convert their SGLI to ______ _____ _____ ____ in an amount up to the amount of SGLI carried

A

Veteran’s Group life insurance (VGLI)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

if the conversion is within 240 days of discharge, there are no what?

A

health questions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

VGLI is term life insurance coverage until age __. There veteran may convert their VGLI to an individual insurance policy issues by a ___ ____ ____

A

60, life insurance company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

an annuity plan protects against the what?

A

financial risk of out living a normal life expectancy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

What are the 3 ways the premium payments are paid into an annuity?

A

Single premium, level premium, flexible premium

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

what are the 3 ways to classify annuity plans?

A

How premiums are paid into the plan, how soon monthly annuity income benefits payments start out of the annuity plan after the last premium payment, and if they are variable, equity indexed or fixed annuities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
54
Q

What are the 2 ways benefits from an annuity are paid?

A

immediate or deferred

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
55
Q

variable annuities

A

a. during the premium pay in period, contribution are used to purchase accumulation units which continuously change in value according to a specified securities index or economic index or the value of a specific portfolio of securities managed by a insurance company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
56
Q

at pay out, accumulation units are converted to ____ ____ which continuously change in value according to specified securities index or the value of a specific portfolio of securities managed by the insurance company during the annuity benefit payment period. each monthly monthly benefit amount varies as the value of the annuity units change

A

annuity units

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
57
Q

the goal of variable annuities is to provide the policy owner and annuitant a rate of return that at least equals, if not exceeds, the annual increase in the ____ __ _____ (____)

A

cost of living (inflation)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
58
Q

the insurance company must keep its variable annuity premium and investments in a separate (______) fund

A

segregated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
59
Q

Both a _____ _____ license and a ____ _____ ____ license is required to sell variable annuities

A

security representative, life insurance producer

60
Q

an investment in corporate stocks

A

equity investment

61
Q

an investment that is linked to a stock market index such as the S&P500. as the stock market index goes up, so does the value of the investment. as the stock market index declines, so does the value of the investment

A

equity indexed investment

62
Q

the policy owner is credited with _____ plus _____

A

contributions, interest

63
Q

the interest rate changes changes on the performance of a specified ____-____ ____ which is also called an ____ ____

A

stock-market index, equity index

64
Q

a percentage of ______ (such as 80%) is guaranteed should the index decline and then the policyholder dies or withdraws annuity benefits

A

contributions

65
Q

the insurance company must keep its equity indexed annuity premiums and investment in a ____ (_____) fund

A

separate(segregated)

66
Q

in a fixed annuity, the policy owner is credited with their ____ and ____

A

contributions and interest

67
Q

when monthly annuity income benefits to the annuitant are to start, the _____ _____ calculates what the monthly annuity income benefit is to be

A

insurance company

68
Q

the monthly annuity income benefit amount paid to the annuitant is ___ (___ ____) the entire time the benefits are paid

A

fixed (remains constant)

69
Q

fixed annuities require only a ____ license

A

life insurance producer

70
Q

____ ____ are optional methods from which a policyowner can choose to have benefits paid to an annuitant at pay-out. amounts received under each optional optional method are based on length of payment period or life expectancy (determined by ___ and ___ of annuitant at the time that payments start), and the interest rate that the insurance company anticipates earning on the annuitant;s account during the benefit payment period

A

annuity options, age and sex

71
Q

Type of annuity: ____ ____ (period certain)

a. the insurance company will pay ____ monthly benefits for the fixed period of time
b. if the annuitant dies before the fixed period of payments have been paid, benefit payments will continue at the annuitants death to the _____ for the remainder of the ____ period

A

Fixed period
level
beneficiary
fixed

72
Q

type of annuity: ____ ____ (amount certain)

a. the ____ ___ will pay monthly benefits for the ___ period of time
b. if the annuitant dies before the total account balance has been paid, then at the annuitants death monthly benefit payments will continue to the ___ until the total ___ ____ has been paid out

A 
fixed amount
insurance company
fixed
beneficiary
account balance
73
Q

type of annuity: ____ annuity

a. the insurance company will pay level monthly benefits for the annuitant’s ___
b. at the annuitant’s death, benefits stop and there will be no ____ to the beneficiary

A

life
life
benefits

74
Q

___ and ____ life annuity

a. the insurance company will pay level monthly benefit over the life of the annuitant and the annuitant’s _____
b. after one spouse dies, benefits will continue to the surviving spouse for the ___ of their __
c. at the second spouse’s death, benefits ____ and there will be no benefits to the ____

A

joint and survivor
spouse
rest of their life
stop and beneficiary

75
Q

____ and / ____ life annuity

a. the insurance company will pay a higher ____ monthly benefit while the annuitant and the annuitant’s ____ are both alive
b. after one spouse dies, a ___ monthly benefit equal to / of the original monthly benefit will be paid to the surviving spouse
c. at the second spouse’s death, benefits ___ and there will be no benefits to a beneficiary

A 
joint and 2/3 survivor
level
spouse
reduced 2/3
stop
76
Q

an annuity is a method of scientifically spreading ____ and ____ over an annuitant’s lifetime, eliminating the possibility (___) of running of income in old age. a life annuity protects an individual against the financial risk of out living a normal ___ ____ and, as a result, out living his/her savings

A

capital
income
risk
life expectancy

77
Q

if an annuity is purchased as a separate policy or as a rider added to a life insurance policy, the premiums usually cannot be tax deducted (_______)

A

non qualified

78
Q

there is no tax on the internet and/or earnings until it is withdrawn (_____)

A

tax deferred

79
Q

when the monthly annuity income benefits are paid to the annuitant, part of each payment will be considered to be a return of cost basis, subject to no tax (___ ___) part of each payment will be considered to be gain ___ to tax

A

tax free, subject

80
Q

tax penalties apply to all amounts withdrawn prior to age ___ in addition to tax on gains

A

59.5

81
Q

the term pension plan means the same as _____ plan

A

retirement

82
Q

a pension (____) plan may be established by an _____ person or by an _____ for the benefit for the employer’s employees

A

retirement
individual
employer

83
Q

The three steps to establishing a pension plan:

  1. a formal, written ___ must be established specifying eligibility requirements for participants, amounts of ___ that may be contributed, when and how money may be _____ from the plan by participants, and who is responsible for ______ the plan. The plan must be approved by the ____
  2. ____ must be contributed to the plan. when ____ is contributed to the plan, it is also referred to as ___ the plan
  3. _____ must be made with the plan funds. some of the investments that may be made are:
    a. savings accounts or CDs
    b. Gov bonds
    c. mutual funds
    d. accounts established with securities firms
    e. ____ ____ life insurance
    f. life insurance company issued ____ contracts
A
  1. plan, money, withdrawn, administering, IRS
  2. money, money, funding
  3. investments, cash value, annuity
84
Q

plans that are established by individuals for their own benefit are?

A

Individual retirement accounts (IRA)

85
Q

an eligible person may contribute up to 100% of ____ ___ not to exceed amounts that are allowed under IRS rules. the max contribution for 2015 is $___

A

earned income, $5500

86
Q

Additional “____-__” contributions can be made by individuals over 50. what is the that amount?

A

“catch-up”, $1000

87
Q

a plan can also be established by an eligible person for a non-____ ____. the same contribution rules that apply to the worker plan also apply to the spousal IRA plan

A

non-working spouse

88
Q

contributions can SOMETIMES be tax deducted (_____). tax on earnings and/or interest is usually postponed until they are withdrawn (____)

A

tax qualified, tax deferred

89
Q

A special type of IRA plan to which special tax laws apply

A

Roth IRA

90
Q

tax penalties apply on all amounts withdrawn prior to age ___

A

59.5

91
Q

IRA plan funds can be invested in many forms of insurance plans and security investments including __ _____ ____ ____ plans

A

life insurance company annuity plans

92
Q

Tax sheltered annuities (also called TSAs and 403b plans) may be established by non profit ___, ____, or ____ organizations for the benefit of their employees

A

educational, religious, or medical

93
Q

the employer/sponsor contracts with one or more life insurance and/or mutual fund companies to offer policies to the sponsor’s ____. plan funds can be invested only in life insurance company issued ____ contracts and/or ____ funds

A

employees, annuity, mutual

94
Q

If an insurance producer represents a life insurance company and/or mutual fund company that offers a plan (or group of plans) that has been selected by the employer as an approved, sponsored plan, then the insurance producer can sell the approved, sponsored plans to ____ ____

A

qualified employees

95
Q

the employer/sponsor payroll deducts the employee’s ____ and remits them to the insurance company and/or mutual fund company

A

contributions

96
Q

contributions can be no more than ___% of qualifying income not to exceed maximum contribution amounts that are established by ___ rules. Max contribution amounts are subject to periodic changes

A

100, IRS

97
Q

Tax penalties apply on all amounts withdrawn prior to age ___ in addition to tax on gains for TSAs

A

59.5

98
Q

What are the cost savings for Group Life insurance?

  1. group _____
  2. the master ____ (sponsor) assists in admin
  3. the part of the premium paid by the employer on face amounts of $__k can be tax deducted by the employer
A

underwriting, policyholder, 50

99
Q

What type of coverage is used for group life?

A

usually term life, but may be permanent (cash value) life insurance

100
Q

the group life insurance policy is issued to the master policyholder, ____ are issued to covered members

A

certificates

101
Q

group life must have __ members

A

10

102
Q

Insuring too many health conditions insureds have before the policy is issued, causing premium rates to be inadequate to pay clains

A

adverse selection

103
Q

Enrollment period

a. different employers can have different ____ requirements
b. a 31 day enrollment period usually applies after a new member becomes first eligible. during the enrollment period new members can enroll without ______
c. if a person does not enroll within the initial enrollment period, and later wants in the group, there may be ____ at that time

A

eligibility, health questions x2

104
Q

Participation requirements

a. sponsor pays 100% of the premiums - all eligible members ______
b. members contribute - __% of all eligible members must participate

A

must participate, 75

105
Q

a __ day conversion period after termination of group coverage

A

31

106
Q

31 days grace period

a. it is a 31 dat period after ___ were due during which coverage is ____
b. it avoids covered members’ coverage ____ because the master policyholder’s premium is in the mail on the due date

A

premiums, extended, lapsing

107
Q

_ year incontestability provision

a. it is a _ year period after coverage takes effect
b. a ___ cannot be contested (denied) after that time period due to any type of _____ on the application

A

2, claim, misstatement

108
Q

Franchise (____) group life insurance

a. issued to groups not eligible for ____ insurance
b. _____ policies to each covered person
c. administered like ____ insurance

A

wholesale, group, individual, group

109
Q

provision saying the policy along with the application, including the medical report, if attached, constitutes the entire contract

A

entire contract provision

110
Q

this clause states the insurance company’s promise to pay

A

insuring agreement (insuring clause)

111
Q

Consideration

a. consideration is the legal requirement that there must be an exchange of something of ____ ___ on the part of both parties to the policy
b. the insured’s ____ and ____ is his or her consideration
c. ______ the policy is the insurance company’s consideration

A

material value, premium and application, issuing

112
Q

premium payment clause

a. the first premium must be ____ __ ____ to an ___ or ___ of the insurance company
b. premium payment mode
1. frequency of payment- annual, semi annual, quarterly, monthly
2. method of payment

A

paid in advance, agent or office

113
Q

this provision is sometimes included in some (but not all) life insurance policies. if included in a policy, it allows the insured to receive part of the policy face amount while still alive. it is also sometimes called a living benefit provision

A

accelerated benefit provision

114
Q

if added, it allows the insured to receive part of the policy life insurance benefits while still alive in monthly income benefits for long term nursing care. a reduced benefit amount is later paid at the insured’s death

A

long term care accelerated benefit provision

115
Q

if added, pays a reduced benefit amount before death in case of a terminal illness specified in the policy. a reduced benefit amount is later paid at the insured’s death

A

terminal illness accelerated benefit provision

116
Q

if added, provides that the insurance company will pay a benefit up to 75% of face amount for certain specified illnesses such as heart attack, stroke, cancer, etc. while the insured is alive. a reduced benefit amount is later paid at the insured’s death

A

a qualified condition provision

117
Q

a. this is an optional rider that some (but not all) insurance companies offer which can be added to some types of life insurance policies for an extra premium charge
b. the ___ ___ ___ ___, if added for an extra premium charge, allows the insured person while alive to collect up to a specified portion of the life insurance face amount to pay nursing home expenses. a reduced benefit is paid to the beneficiary at the insured’s death

A

long term care rider

118
Q

a contract where an individual or organization buys a life insurance policy from a terminally ill insured person for a sum of money less than face amount

A

a viatical arrangement

119
Q

viatical arrangements are aka as?

A

life settlements

120
Q

the person or organization who is buying the policy

A

viatical settlement provider

121
Q

the insured who is transferring the life insurance policy to the viatical settlement provider

A

viator

122
Q

the person or organization who is negotiating the viatical settlement for the viator with the viatical settlement provider

A

viatical settlement broker

123
Q

the only time a beneficiary must have insurable interest is if he/she is the ____

A

policyowner

124
Q

if the policyowner is to be someone other than the insured (such as a beneficiary/owner or third party owner) both the ___ and the ____ must sign the application

A

owner and insured

125
Q

Owner’s rights

a. name and change beneficiaries unless an ____ ____ has been named
b. assign (___) the policy

A

irrevocable beneficiary, transfer

126
Q

______ clause - required by law in most life insurance policies

A

suicide

127
Q

if an insured commits suicide during the first two years the policy is in effect, the insurance company is required to do what?

A

refund the premiums that have been paid

128
Q

if the insured commits suicide after the policy has been in effect two years, the insurance company will do what?

A

pay the full face amount death benefit

129
Q

accident policies will not pay benefits for death caused by?

A

suicide because suicide is not an accidental means

130
Q

if an individual truthfully answers “no” to the dangerous recreation or aviation questions, the policy is issued, and then the individual engages in on the of the dangerous recreation or aviation activities, the insurance company cannot do what?

A

rate up or add exclusions to the policy after it has been issued

131
Q

Nonforfeiture options

a. nonforfeiture options are optional values from which the ____ may select when a ___ ___ ___ is terminated and surrendered prior to its maturity.
b. if the owner fails to pay the premium within the grace period, does not surrender the policy for cash, a paid up insurance policy, or an extended term insurance policy, at the end of the grace period, the policy will terminate due to nonpayment of premium and becomes classified as ____.. the policy will then go into the automatic nonforfeiture option which is usually ____ ____ ____

A

policyowner, cash value policy

lapsed, extended term insurance

132
Q

grace period

a. it is a __ day period after premiums were due
b. coverage is ____ during the grace period
c. unpaid premiums are deducted from ____ ___ paid during the grace period
d. the purpose of the grace period is it avoid unintended ____ of the policy

A

31
extended
death benefits
lapse

133
Q

Policy loan provision

a. it allows the ____ to borrow up to the amounts indicated in the policy loan table
b. this provision is found only in ___ ___ ____
c. the policy loan value will either be the same as the cash value or often it is the ___ ____ minus ___ ___’s ____

A

policyowner
cash value policies
cash value minus one years interest

134
Q

for the automatic premium loan provision, is there an extra premium charge?

A

no

135
Q

Policy change provision

a. states that no changes are effective unless signed by an _____ of the insurance company. Which includes?
b. if a life insurance policy is convertible, the policy change provision allows the owner to convert to any policy with a higher premium rate per one thousand face amount.
1. the owner can convert to a new policy with a face amount of up to the ___ of the original policy
2. no _____ _ _____ are usually required

A

officer; president, vice pres, secretary, tresurer
face amount
evidence of insurability

136
Q

dividends and dividend options
a. the ____ has the right to select the dividend option and collect the dividend
b ____ ___ pay dividends
c. participating policies pay dividends out of ____; only if the insurance company has a ____
d. dividends are ___ guaranteed
e. what is the automatic dividend option if the policyowner fails to select one?
f. there is no tax on dividends (___). if dividends are to be held by the insurance company at interest, there will be _ __ on the interest
g. participating policies are most often sold by ____ ___ companies

A 
policyowner
participating policies
surplus
never
applied to purchase paid up additional amounts of insurance
tax free, no tax
mutual insurance
137
Q

the assignment policy provision says that the life insurance company will honor an assignment (transfer) of a life insurance policy or its benefits if it is filed with the insurance company home office, but will not be responsible for its ____ (___)

A

validity (legality)

138
Q

Settlement options

a. optional methods by which the benefits can be paid to the beneficiary at the insured’s death
b. while the insured is still alive, the policyowner has the first right to select (restrict) the settlement option
c. if the insured dies without the policyowner specifying (____) the settlement option, at the insured’s death the ____ can select a settlement option

A

restrict, restricting

139
Q

this is usually the automatic settlement option if neither the policyowner nor the beneficiary selects one

A

lump sum payment

140
Q

beneficiary provisions

a. the ____ may name and change beneficiaries unless an irrevocable beneficiary has been named
b. _____ benificiary - person named to receive benefits at the insured’s death
c. _____ beneficiary - person to receive benefits at the insureds death, if the primary beneficiary:
1. predeceases the insured, or
2. dies of injuries sustained in the same accident, or
3. dies in a common disaster

A

policyowner
primary
contingent

141
Q

life insurance benefits avoid ____. life insurance benefits are paid by the insurance company directly to the beneficiary without going through legal and court process ____. the beneficiary receives the benefits quicker and without legal complications

A

probate

142
Q

Waiver of premium rider - optional rider - extra premium charge
a. if added, it waives premiums as long as the policyowner is disabled usually starting after a specified period of disability, such as after the ____ month of disability.

A

sixth

143
Q

death of payor - optional rider - ___ premium

used on _____ (___) policies

A

extra

juvenile (child)

144
Q

An increasing term life insurance policies to provide a return of the premiums paid at the insured’s death. when used for that purpose, it is referred to as a ____ __ ____ rider

A

return of premium

145
Q

other times a increasing term life insurance ride is added to cash value life insurance policies to provide total benefits that will equal a return to the insured of their cash values in addition to the face amount of the life insurance policy. when used for that purpose, it is referred to as a?

A

return of cash value rider

146
Q

incontestability provision - it is contained in all policies
after a policy has been effect ___ years, the insurance company cannot contest a policy due to any ______ or concealment in an application

A

2, misstatement

147
Q

Modified endowment contract
if a cash value life insurance policy does not meet ___ requirements, it will become classified by the ___ as a modified endowment contract
In addition to tax on gains withdrawn, tax penalties apply when the cash values are withdrawn at policy surrender prior to age ___

A

IRS, IRS

59.5

Insurance (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions