Q 49-72

Question 1

Family Term Benefit Rider

Answer 1

Family covered by one policy (Whole life on parent, term on spouse / children. One fee covers all children after age 15 days (natural/adopted)

Question 2

Accidnetal Death Benefit

Answer 2

Extra cost rider requires Co. pay additional benefit if insured dies within 90 days of accident “double indemnity”

Question 3

Guarenteed Insurability Benefit Rider

Answer 3

extra cost rider permits the policy owner to buy additional policies at specific ages w/o evidence of insurability 25 +3years till 40

Question 4

Waiver of Premium Benefit

Answer 4

extra cost rider requires Co. take over and pay premiums if totally disabled for 6 months. Refund for 6 months made.

Question 5

Payor Benefit Rider

Answer 5

extra cost rider that pays for juvinile insured if owner dies/disabled

Question 6

Mutual Company

Answer 6

Co. that is owned and controlled by policy holders who receive non-taxable dividends from participating policies

Question 7

Stock Company

Answer 7

Co. that is owned by shareholders or stock holders

Question 8

Factors that make up a premium

Answer 8

Factors determine cost: 1. Mortality (minus) 2. Interest (plus) 3. Expenses - including commisitons/profit

Question 9

Dividends

Answer 9

Return of a portion of the surplus of a “participating policy” - return of prem., not taxable - not guarenteed. Based on current estimates only.

Question 10

Participating Policies and Non-Participating Policies

Answer 10

Participating Policies = return portion of Co. surplus - Non-Participating policies = do not return any surplus

Question 11

Dividend Options

Answer 11

CRAPY - Cash, Reduce next years premium, Accumulate at taxable interest (gives most $ if cash in), Paid up additions (most DB), Yearly renewable term

Question 12

Legal Reserves

Answer 12

Money required by state to hold to pay expected future death claims.

Question 13

Beneficiary

Answer 13

Person named to receive proceeds of policy at death. - Divorce spouse is considered to have “died” and will not be paid

Question 14

Per Capita / Per Stirpes

Answer 14

Per Capita - Leaves proceeds equally to all surviving beneficiaries. - Leaves share of beneficiary who has died to children of decnedant

Question 15

Policy Sales Illustrations

Answer 15

Sales proposals/illustrations must show guarenteed values and clearly identified dividends as estimates only. Must be left with client and signed by agent.

Question 16

C.O.L.A. Cost of living adj / R.O.P. Return of prem

Answer 16

COLA - rider increases DB automatically, as CPI (Consumer Price Index) increases // ROP - rider that increases DB with term equal to cumulative prem

Question 17

Application

Answer 17

Written request to Co. with personal facts, medical history, agents statement, formalized by insured signature. Photo copy included in policy itself

Question 18

Warranty

Answer 18

100% true statement. This degree of accuracy is not required on an insurance application. Any error will create a breach of contract and void policy

Question 19

Representations

Answer 19

Answers on an application are true “to the best of the insured’s knowledge”. Non-material facts could be forgotten or left our and still be ok

Question 20

Misrepresentations

Answer 20

False representations (answers) on an ins app. If intentional and with intent to gain a financial advantage, then can be fraud. May be contested for 2 years

Question 21

Incontestable Clause

Answer 21

After 2 years from issue date any misrepresentation on an app is “incontestable”

Question 22

Suicide Clause

Answer 22

Ins. Co will refund only the prem paid (w/o interest), if insured commits suicide with in 2 years of policy

Question 23

Conditional Reciept

Answer 23

Recipt given by the ins co during the underwritting process. Ins wil be in force only if co finds the insured an acceptable risk. Reciept does not bind co.

Question 24

“Offer”

Answer 24

When prospective client sends a complete and signed application and the first months premium to the company, they are making an offer.