Taxes, Retirement, and Other Insurance Concepts

Question 1

principle under which it is assumed that the funds paid into the policy first will be paid out firs

Answer 1

FIFO

Question 2

principle applied to asset management in life insurance products, wnder which it is assumed that the funds paid into the policy last will be paid out first

Answer 2

LIFO

Question 3

maturity date

Answer 3

Policy endowment

Question 4

the right of a participant in a retirement plan to retain part or all of the benefits

Answer 4

vesting

Question 5

legal term used to identify an individual or entity that is not an insured under the contract, but that has legally enforceable right under it

Answer 5

third party ownership

Question 6

most third party contracts are written fro

Answer 6

business or minors

Question 7

allow someone living with a life threatening condition to sell thier existing life insurance policy and use the proceeds when they are most needed, before their death

Answer 7

viactical settlements

Question 8

in viactical settlements, the insured is known as

Answer 8

viators

Question 9

in viactical settlements, a ____ is a person other than the viator that enters the contract

Answer 9

provider

Question 10

in a viactical settlement, who represents the providers?

Answer 10

producers

Question 11

in a viactical settlement, who represents the insureds?

Answer 11

brokers

Question 12

refers to any financial transaction in which the owner of a life insurance policy sells a life insurance policy to a third party for some form of compensation, usually cash

Answer 12

life settlement

Question 13

refers to any activity relating to the solicitation and sale of a life settlement contract to a third party who has no insurable interest in the insured

Answer 13

business of life settlement

Question 14

refers to the owner of the life insurance policy who seeks to enter into a life settlement contract

Answer 14

owner

Question 15

establishes the terms under which the life settlement provider will pay compensation to the policyowner, in return for the assignment, transfer, sale, or release of any portion of the death benefit, policy ownership, beneficial interest, or interest in a trust

Answer 15

life settlement contract

Question 16

a person who, for compensation, solicits and negotiates a life settlement contract

Answer 16

life settlement broker

Question 17

a person (other than the owner) who enters into a life settlement contract with the owner

Answer 17

life settlement provider

Question 18

issued to the sponsoring organization, and covers the lives of more than one individual member of that group

Answer 18

group life insurance

Question 19

Group life insurance is usually written as what type of insurance?

Answer 19

annually renewable term

Question 20

The cost of coverage in group life insurance is based on what?

Answer 20

the ratio of men and women in the group

Question 21

two features that distinguish group insurance from individual insurance are

Answer 21

no need for evidence of insurability, insureds under the plan do not receive a policy because they are not the owner

Question 22

under group insurance, what do the participants recieve instead of a policy?

Answer 22

certificate of insurance

Question 23

under group insurance, what does the sponsor of the group receive?

Answer 23

master policy/contract

Question 24

characteristics needed for group insurance

Answer 24

purpose, size, turnover rate, financial strength

Question 25

if an employee terminates membership in the insured group, the employee has the right to convert to an individual policy without proving insurability at a standard rate, based on the individuals attained age

Answer 25

Conversion privelege

Question 26

conversionn privelege can be used to convert to every type except

Answer 26

term insurance

Question 27

How long does a terminating employee have to take the conversio policy

Answer 27

31 days

Question 28

if a master group contract is terminated, what is allowed?

Answer 28

Every individual who has been on th eplan fro more than 5 years can convert to individual permanent insurance of the same coverage

Question 29

when an employer pays all of the premiums

Answer 29

noncontributory plan

Question 30

under a noncontributory plan, an insurer will require ..

Answer 30

100% of eligible employees be included in a plan

Question 31

When the premiums of group insurance are shared between the employer and employees

Answer 31

contributory plan

Question 32

under a contributory plan, am dinsurer will require..

Answer 32

75% of eligible employees be included in the plan

Question 33

approved by the IRS and gives both the employer and employee benefits such as deductable contributions and tax-deferred growth

Answer 33

qualified retirement plan

Question 34

not subject to the requirements regarding participation, discrimination, and vesting found in qualified plans

Answer 34

nonqualified

Question 35

allows individuals to make tax deductable contributions until the age of 70 1/2.

Answer 35

individual retirement account (IRA)

Question 36

a form of an individual retirement account funded with after-tax contributions

Answer 36

Roth IRA