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life > Vocab > Flashcards

Vocab Flashcards

1
Q

Premium receipt

A

issued when premiums are collected with application

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2
Q

Conditional receipt

A

Coverage effective on date of app or date of medical exam whichever occurs LAST as long is policy is issued as applied for

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3
Q

C.C.o. A.L.

A
  1. Agreement 2. Consideration 3. Competent Parties 4. Legal Purpose
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4
Q

Consideration

A

Insurance gives promise to pay and consumer gives application AND premium

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5
Q

ALEATORY

A

Sounds like A Lottery….means an UNEQUAL exchange. Think we buy a $1 ticket, and win a million

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6
Q

Standard Premium

A

Average health pays a standard payment

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7
Q

Preferred Premium

A

Someone that is in better health

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8
Q

Substandard Premium

A

Someone with a health condition would pay higher premium

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9
Q

PERSONAL

A

Means private between insured and agent/agency

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10
Q

ADHESION

A

Take it or leave it.

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11
Q

UNILATERAL

A

One sided promise

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12
Q

CONDITIONAL

A

Conditions must be met

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13
Q

Statement of good health

A

Person says yes, I am as healthy as I am today as when I filled out the application

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14
Q

INSURED

A

Person who death triggers the claim

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15
Q

REPLACMENT

A

Think BIG FROWNY FACE…Someone has a policy and we move to new company. In the real world there are good reasons to replace, however MAKE SURE it’s in the best interest of customer and document this and SAVE the documents. AND NEVER cancel old policy before new policy is issued.

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16
Q

UNDERWRITING

A

Risk Selection and Classification process. They decide if person is insurable and what premium to charge.

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17
Q

ADVERSE SELECTION

A

Insurance protect themselves by refusing or restricting coverage for bad risks or by charging a higher rate.

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18
Q

Insurable Interest

A

Policy own life - family member (spouce/kids) - business partner, key employee or someone who has a financial obligation to policyowner.

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19
Q

Valid insurable interest in life insurance

A

MUST exist at time of application

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20
Q

Application

A

Written request to an insurance company to issue a policy.

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21
Q

Consumer report (Think credit report)

A

Credit, character, employment record, hobbies, habbits

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22
Q

Consumer reports must be advised in writing is___ days

A

Within 3 days of request

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23
Q

Investigative consumer report

A

More in-depth investigation through associates, friends, neighbors.

24
Q

MIB

A

Medical Information Bureau (exists to uncover any misrepresentations and prevent concealment. Adverse medical information cannot be the only reason for denial

25
Q

Paramedical report

A

Completed by a paramedic or a registered nurse.

26
Q

Attending physician statement

A

Completed by the applicant’s medical Doctor

27
Q

Medical exams for insurance are paid by

A

The insurance company

28
Q

HIV Testing

A

The insurer must disclose they are testing for this and may obtain written permission from applicant.

29
Q

HIPPA

A

Federal Law, Protected Health Information (PHI)

30
Q

STOLI Stranger Originated Life Insurance

A

Can’t buy a policy on random person

31
Q

Policy Delivery

A

Personal delivery is best, mail is ok. Receipt is advisable, once delivered free look period begins.

32
Q

Explaining provisions, riders, exclusions

A

Agent’s responsibility at drop off

33
Q

By law, when we take an application, we MUST provide a buyer’s guide

A

Generic Info about Insurance policies, provided at time of application. Talks about similar policies and cost comps.

34
Q

Policy Summary

A

Specific info about policy includes agent’s name, address, insurer’s full name, general name of policy, premium, rider, living benefits and surrender value

35
Q

Illustrations for life Insurance

A

Marketing piece. Distinguishes guaranteed and projected amounts, clearly state not part of contract, Id’s those values not guaranteed. An agent cannot alter these in any way.

36
Q

US Patriot act -

A

Federal law, anti-money laundering and terrorism. Requires SAR’s, continual training and appointed insurance employee to oversee.

37
Q

SAR Suspicious Activity Report

A

Transactions of $5,000 or more red flags, fake Id’s etc

38
Q

Statements provided by applicant for insurance is considered to be ______________

A

Representations

39
Q

Insurance is a means of ___________risk

A

Transferring risk

40
Q

Four types of Life Insurace

A

Term Life - Whole Life - Universal Life - Variable

41
Q

Term life

A

Basics: Temporary. Lest expensive. No cash value. No loans. Matures at death.
Types: level - increasing - decreasing
Features: renewable - convertible
Uses: Max protection - Lowest cost - Increasing term for riders - decreasing for debtors.

42
Q

Types of Term Life policies

A

increasing term (death benefit rises)
Return of premium policy
———–
level term (same rate every month death benefit remains the same)
Most used with life situations like parent with young kids
————–
decreasing term (same cost monthly but the death benefit decreases) used for people that want to make sure their mortgage gets covered. As the amount they owe goes down, they don’t need as much money to cover the mortgage.

43
Q

Convertible

A

Right to convert at expiration - evidence of insurable is not required - Premium may be higher - Priced at insured attained (current) age.

44
Q

Renewable

A

Right to renew at expiration - evidence of insuribility is not required - Priced at the insured’s attained age (current age)

45
Q

Renewable

A

Right to renew at expiration - evidence of insurability is not required - Priced at the insured’s attained age (current age)

46
Q

Traditional Whole Life Insurance

A

Also called cash value insurance, also called permanent protection - Living Benefits - Cash value equals face amount at insure’s age of 100.

47
Q

Living Benefits

A

The owner can access what’s in cash value. they can loan the money to themselves.

48
Q

Single Premium

Limited Pay

Straight Life

A

Some can pay one lump sum to pay for entire policy in one time.
Limited pay: Pay set number of years or to a specific age. Let’s say they pay through retirement age.

Straight life, same monthly payment till age 100.

49
Q

Adjustable Life

A

The policy owner may adjust the premium payment period, the face amount, and the coverage period.
Suitable as insureds whose incomes are unpredictable.

50
Q

Universal Life Insurance

A

Adjustable life insurance. When you see the “U” in Universal remind yourself that person can adjust the premium up or down. Guaranteed interest rate. This is the only one that a person can take a withdrawal instead of a loan. Also, you can skip a payment a long as the cash value exceeds the premium. They will choose either a level death benefit or increasing. See next slide.

51
Q

Universal Life Option A. Level Death Benefit

Option B. Increasing Death Benefit

A

Death benefit remains the same.

Death benefit - recipient receives not only the face value but also whatever is in the cash value.

52
Q

Variable life Insurance

A

When you see a V in variable, remind yourself two lines in a “V” mean you need two licenses. A life license AND securities license. Variable license is governed by both State AND Federal Government. Remember two lines in “V”. Who would want Variable Life insurance? Someone who wants to decide how their money will be invested (i.e. stocks/bonds, stocks, but just technology company…percentage amounts, etc. Cash value is not guaranteed. This is not put into the general account. This is put into a separate account. Variable life insurance, the POLICY OWNER bears the investment risk.

53
Q

What is Variable Universal Life?

A

Dually regulated state and federal, regulated by SEC and FINRA. Agents must be registerd with FINRA, Have security license. . Remember “V” and “U”.

54
Q

Interest Sensitive whole Life

A

also called Current Assumption,

55
Q

Indexed Life Insurance

A

Follows performance on the S&P 500, guaranteed minimum rate, and face amount increases annually to adjust for inflation.

56
Q

Joint Life

vs.

Survivorship life or Survivor Life or Joint SURVIVOR

A

Insured 2 or more, premium based on joint age, but death benefit paid upon last person’s death. Policy for people who want to leave money to their kids, or cats… or maybe a family of siblings want to leave a scholarship behind.

life (3 decks)

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