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Life Insurance > Practice > Flashcards

Practice Flashcards

1
Q

The primary purpose of an annuity is

A

Income for life

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2
Q

What retirement plan is deemed to be qualified

A

Defined benefit plan

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3
Q

To be fully insured under social security, one needs how many quarters of coverage

A

40

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4
Q

What dies the conversion clause provide a terminated employee under a group life plan

A

Coverage for 31 days

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5
Q

When must owners of IRAs begin to receive payments from their retirement funds

A

April 1 following age 70 1/2

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6
Q

At what age can IRA owners begin to receive payments and not incur a tax penalty

A

59 1/2

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7
Q

Pension plan Benefits can be determined by

A

Based on years of service
Expressed as fixed dollar amount
Based on a percentage of compensation

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8
Q

What are the annuity benefit factors

A

Age of annuitant
Amount of proceeds
Interest rate

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9
Q

The MIBs main purpose is

A

Prevent fraud

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10
Q

Interim term policies have a max benefit period of how long

A

11 months

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11
Q

In a single premium Immediate annuity one must start taking payments within how many months

A

12

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12
Q

J gets fired March 10th, dies March 25th, under his group policy what would the insurers pay

A

Full face value

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13
Q

An annuity is purchased for 10,000, the expected return is $20,000, what is taxable if it pays $300 a month

A

$150

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14
Q

In a variable annuity who regulates the separate account

A

SEC

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15
Q

M cashes in his policy he paid $6,000 in premium, he received $7,200 in cash surrender, how much is taxable

A

$1,200

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16
Q

What signatures must sign the application

A

Insured
Owner
Agent

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17
Q

In a fixed annuity, during the annuity period interest rates rises. What happens to payout

A

Payout stays the same (life)

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18
Q

Which of the following promises full income for the lifetime of two annuitants

A

A joint and survivor life annuity

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19
Q

The policy owner possesses complete control of the policy except

A

An irrevocable beneficiary has been named on the policy

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20
Q

The gross premium for life insurance policy is made up of

A

Expense loading
Interest
Mortality costs

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21
Q

A plan that meets requirements of the federal government in order to receive favorable tax treatment is

A

Qualified

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22
Q

A deferred compensation plan is not

A

Tax free

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23
Q

A joint and full survivor settlement option on an annuity will pay until

A

The second insured dies

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24
Q

If the employer pays the whole premium on a group policy the plan is called

A

Non contributory

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25
Q

In Florida how many people are needed to qualify for group life insurance

A

No minimum

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26
Q

The annuitant wishes to have their annuity pay until their death, with no further payments to anyone. What type of annuity should they get

A

Straight life annuity

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27
Q

Under a SEP, the max contribution that can be made on an employees behalf is

A

$40,000

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28
Q

What report reflects an applicants mode of living, and exposure to abnormal hazards

A

Inspection report

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29
Q

A policy owner commits suicide 2 1/2 years after the policy is issued. What will the company pay

A

Face amount

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30
Q

Insurance underwriting is the process of

A

Selection of risk
Classifying of risk
Rating of risk

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31
Q

What report reflects an applicants mode if living, and exposure to abnormal hazards

A

Inspection report

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32
Q

What is the disadvantage of a fixed annuity

A

Loss of purchasing power

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33
Q

Where ate franchise life plans used

A

Groups too small for group

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34
Q

A family Oman uses which type of insurance further head of the family

A

Whole life

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35
Q

Before payout begins, accumulation units must be converted to

A

Annuity units

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36
Q

The incontestable clause is two years from when

A

Issue date

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37
Q

What will pay the policy owner an amount that does not exceed the guaranteed cash value

A

Policy loan

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38
Q

In order to maximize policy death benefits for a beneficiary which dividend option should be selected

A

Paid up additions

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39
Q

The max amount of insurance for dependents can be what percent of employees coverage

A

50%

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40
Q

Life insurance is considered what type of contract

A

Valued contract

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41
Q

The type of hazard that arises from an attitude or state of mind that causes indifference to loss is

A

Morale

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42
Q

The minimum number of employees needed by a corporation to set up a group variable annuity is

A

25

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43
Q

Who all are considered to have an insurable interest

A

Employer
Spouse
Business partner

44
Q

What is always an exclusion clause in a life policy

A

Suicide

45
Q

What policy is paid up early and endows at age 100

A

20- pay life

46
Q

All of the following can be used to determine group benefits excepts

A

Age

47
Q

What can be used to determine group benefits

A

Earnings
Employment position
Flat benefit

48
Q

An insurer can delay payment of a policy loan for

A

6 months

49
Q

Morale hazard is characterized by

A

Lifestyle

50
Q

The type of insurance that would not make a good retirement vehicle

A

Term

51
Q

The insurances cancels her policy, but wants coverage for remainder of her life she would choose a

A

Reduced paid up?????

52
Q

The agents report is found where in the application

A

Part 3

53
Q

The primary insurance amount PIA is equal to

A

Full workers retirement at 65

54
Q

Who regulates retirement plans in Florida

A

ERISA

55
Q

Legal reserves show on the balance sheet as

A

Future liabilities

56
Q

What is found on the front page of all insurance policies

A

Insuring clause

57
Q

What best describe the fifth dividend option

A

One year term

58
Q

Stock insurance companies usually sell what type of policies

A

Non-participating

59
Q

What type of policies do mutual companies usually sell

A

Participating

60
Q

Name the dividend options

A

Paid up additions
One year term
Cash

61
Q

Under a group policy the termination clause states the employee

A

Has 31 days to convert to individual policy

62
Q

What are the necessities for a risk to be insurable

A

A reasonably predictable loss
A definite loss
Exposure of large group

63
Q

What describes a 20 year limited pay life policy

A

Payment for 20 years and endows at 100

64
Q

To calculate the tax free portion of each annuity payment, you would use

A

Exclusion ratio

65
Q

Most group life plans use which type of insurance

A

Annual renewable term

66
Q

When can an immediate annuity begin the benefit payment phase

A

As soon as it is purchased

67
Q

An annuity owner received $600 a month, and the value of each annuity unit is $3, how many units did he receive monthly

A

$200

68
Q

The authority that’ve granted by way if the agents contract is

A

Expressed

69
Q

Which feature of an insurance contract states that only one party had any further obligation.

A

Unilateral

70
Q

How soon must cash surrender values become available to insured in an ordinary life policy

A

3 years

71
Q

T has a policy in which the cash value increased to a point where the corridor was utilized

A

Universal option 1

72
Q

Which feature on a life insurance policy allows an insured to stop paying premiums and takes paid up policy with a face amount less than that of the original policy

A

Non forfeiture option

73
Q

List the 3 types of hazards

A

Moral-alcoholism
Morale -indifference to loss
Physical-medical history, blindness, deafness.

74
Q

4 ways to handle risk

A

Avoidance
Reduction
Retention
Transfer

75
Q

What is a peril

A

Cause of loss

76
Q

Risk in insurance terminology refers to

A

Uncertainty of financial loss

77
Q

All of the following are elements of insurable risk except

A

The loss must be unpredictable

78
Q

Characteristics of moral hazards are

A

Stealing, smoking, drinking, and being drunk.

79
Q

Characteristics of morale hazard includes

A

Jay walking, careless

80
Q

What does domestic insurer mean.

A

Incorporated in the state they ate doing business in ( Florida)

81
Q

What does foreign insurer mean

A

Incorporated in another state

82
Q

What does alien insurer mean

A

Operating in another country

83
Q

Define a value contract

A

Pays a specific amount in the event of loss

84
Q

Define indemnity

A

Reimburses or pays the amount of the loss (health insurance)

85
Q

Define expressed authority

A

Powers specifically stated in contract

86
Q

Define implied authority

A

Not specifically stated in the contract, but is assumed authority needed to conduct business

87
Q

Define apparent authority

A

The appearance of a relationship between the agent and principal based on words or actions

88
Q

Name the term policies

A

Level-stats the same.

Decreasing-mortgage and credit insurance.

Increasing-increase at specific times… Cost of living rider

Annual renewable- premiums increase…renews each year without proof of insurability.

89
Q

The entire contract includes what

A

Policy
Copy of application
Riders

90
Q

Define insuring clause

A

Insurers promise to pay benefits

Explains the scope of coverage

91
Q

Define consideration clause

A

Policy owner agrees to pay premium

92
Q

Explained reinstatement clause

A

3 years to do 3 things
Payback all premiums plus interest
Payback any loans
Proof of insurability

93
Q

Identify the non forfeiture options

A

Reduced paid up
Extended term-automatic option
Cash-cash surrender

94
Q

Identify the dividend options

A 
Cash
Reduce premium
Accumulation at interest
Paid up additions 
One year term
95
Q

Name the types of riders

A 
Guaranteed insurability
Waiver of premium
Automatic premium loan
Payor provision
Accidental death
Return I'd premium Ryder
COLA
Other insurers riders
96
Q

Name the dividend options

A 
( CRAPO)
Cash payment
Reduce premium
Accumulate at interest
Paid up additions
One year term
97
Q

Where Is the insuring clause found in a policy

A

On the cover page

98
Q

How long is free look

A

14 days

99
Q

When does free look begin

A

At physical policy delivery

100
Q

What does automatic premium loan provide

A

Insurer can pay insured premium from cash value

101
Q

What are the 3 parts of a life insurance application

A

Part I-General
Part II- Medical
Part III- Agent report

102
Q

What is the purpose of the MIB

A

Hold down insurance cost

103
Q

The max fixed policy loan interest that an insurance company can charge in Florida is

A

10 percent

104
Q

What plan is used when only the employee contributes

A

Non contributory

100%

105
Q

The max fixed policy loan interest that an insurance company can charge in Florida is

A

10 percent

106
Q

What plan is used when only the employee contributes

A

Non contributory

100%

107
Q

What part of the insured is the payment of premium

A

Consideration

Life Insurance (1 decks)

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