Chapter 3 part 1 Flashcards | Quizlet D. An individual has an insurable interest in her or her own life. -Staged intervals -But pays you interest, 1)Fixed annuity (c) term insurance The policy is issued for one year and may be renewed annually with evidence of insurability. B. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. Long-term investment decision, payback method Bill Williams has the opportunity to invest in project A that costs $9,000 today and promises to pay annual end-ofyear payments of$2,200, $2,500,$2,500, $2,000, and$1,800 over the next 5 years. The cost of a living rider is calculated by what? 1)tax qualified plans Represent the insured's interest \hline \text { Jul 1 } & 5,500 &&\\ Which of the following best illustrates a (Choose from the following options) (3), 1)bank trust officer B. Which of the following statements about universal life insurance is true? A) An indeterminate premium reduction policy is a policy in which the premium is guaranteed for an initial period, then the insurer can charge up to a maximum premium charge that is specified in the policy. c) The inspection report a) Types of mutual companies Some life insurance policies offer cash values that can be borrowed at any time and used for immediate needs. Estate conservation Which of the following is the best reason to purchase life insurance rather than annuities? The storage of flammables in a fireproof container. (d) Premiums increase at an increasing rate upon renewal. a. whole life paid at 65 All of the following statements about term insurance are true EXCEPT. 1.1K 64K views 1 year ago In this video I show you how to one shot All of the following are methods of payment? B) A "cost of living" rider adjusts the face amount of a policy to maintain the relationship of the face amount and increases in the cost of living. 3. 4. c) Comparisons with similar policies c) The policy will be voided. Which of the following statements about limited-payment life insurance is true? An annuity is exchanged for another annuity. d) Fair Credit Reporting Act. ________________ are the person who receives benefits payable upon death. -receiving dividends(when declared) & \text { Depr } & 3,000 \\ -guarantee a stream of income to the person purchasing it known as the annuitant. 2) premiums do not change Mutual life policy. B. Beneficiarys age Which of the following is a financial rating service? C. Solicit applications on the insurer's behalf 4. Candidate List of substances of very high concern for Authorisation What is the primary source of info used to determine insurability by the underwriting department? ADD( Accidental death and dismemberment??? (6). How do premiums for yearly renewable term insurance change as an insured gets older? Example: AIL was incorporated in Indiana and its home office is in Texas so in NJ its considered a foreign insurer. Premiums are not tax deductible as a business expense 3)Family Policy(Limited but all fam members paid) \hline & \text { Jul 31 } & 58,000 a) Material change \end{array} 14,500 \\ Each withdrawal, however, is usually charged, and the amount and frequency of withdrawals are usually limited. B. Insurance producers must ensure that contracts they recommend are in the best interest of the insured. A persons assets & liabilities at their time of death. "Round Tree Manor is a hotel that provides two types of rooms with three rental classes: Super Saver, Deluxe, and Business. Our records show that more than one device is associated with this Funding against financial loss caused by the death of a key employee Investors become more risk averse. b) Unilateral Beneficiaries are NOT required to sign the application unless they are also the owner. D. Funding against general company financial loss The total of all requisitions of indirect materials issued during the month is$20,170.00. Get more out of your subscription* Access to over 100 million course-specific study resources d. It does not require a duty to be owed. c) Extended term The County is administered by a five-member Board of Supervisors who are elected for four-year terms (b) The face amount of the policy is paid if the insured lives to age 65. 1) preferred-low b. \hline \text { Jul 31 } & 3,000 Does not pay dividends to policyowners; however, taxable dividends are paid to stockholder. A) The insurance policy usually has a provision specifying how a notice of loss is to be made to the insurance company. The policy is a contract of adhesion. This is true whether a property or liability form; and regardless whether the insured is a commercial or personal lines client. Address of his principal office d) Military personnel. Beneficiary's age See Page 1. IN WHITE RAIMENT. 2)FCRA(fair credit reporting act) checks MIB report. c) Term life (a) Evidence of insurability is not required to renew the coverage. ($000)CashAccountsReceivableInventoryAccountsPayable1$1001992011042$1009650595Quarter3$10099905954$1006045297, Describe Cream Silk's promotion within the context of the multi-attribute model: Which attribute(s) were central to the promotion and how does the model explain what the company was trying to accomplish with the "Human Hair Quartet?" C. Countersign insurance contracts the willful holding back or secretion of material facts pertinent of the issuance of insurance or a claim. \hline & \text { Jul 1 } & \begin{array}{r} D) the minor in a juvenile policy. Occupation A. Prior to October 2017, the company had been profitable every month. D. Department of Treasury Out of 20 yr or 30 yr which policy is less expensive? D. Financial Experience. All of the following statements regarding contracts of indemnity are true EXCEPT a. (b) level-premium method When the company earns a profit and elects to share there profits, they pay a ____________to the policyholders or shareholders. For example, a claim will be paid only is there has been a covered loss. One sided contract is a ______________ contract. It is levied on the price of a product or service at each stage of production, distribution, or sale to the end consumer. C. A surplus lines broker accepts business only from non- resident agents What are two reasons that people deposit money in banks? According to the entire contract provision, what document must be made part of the insurance policy? D) real estate, Under one method of estimating a loss reserve, the reserve is based on life expectancy, duration of disability, and similar factors. If the insured commits suicide after the 2 year period, the policy will pay the death proceeds to the designated beneficiary the same as if the insured had died of natural causes. 1)cont. (D The employer is the owner, payor and beneficiary of the policy. D. Funding against general company financial loss. Should a key person die, the benefit is treated as a reimbursement to the business for loss of services from that key person. 1) the premium amount Height Weight and Health conditions. 21,000 \\ A surplus lines broker places risk with nonadmitted insurers when coverage cannot be placed with admitted insurer carriers After examining other manufacturing cost data, you have acquired additional information as follows. 3)Increasing term adds face value. Which type of life insurance makes sense for someone in this situation? All of the following characterize term life insurance, EXCEPT: Select one: a. c) National Association of Insurance Commissioners Payor benefit/Clause is always a _________. The interest rate credited to the cash value at the time of issuance remains fixed over the life of the policy. What characteristic must an annuity have if it is used to accumulate funds in an IRA? A. &\begin{array}{cr|} \text{Dividend}& 19,000& \text { Net Inc } & 65,000 \\ Forms of interest and are Sensitive Whole Life, 1) Transfers risk to another insurer 1)Whole Life a) the risk is transferred to the insurer b)the insured may retain part of the risk through deductibles . Unit 27 Flashcards by Lauren Pulido | Brainscape Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE? Applicant pays premium to make agreement. (Hint: Take a look at the Theory of Reasoned Action.). Waive the premium if the INSURED becomes totally disabled. 2)Procures insurance 4 itself from another insurer, The tax benefit of annuities is tax deferred growth. a) Tax-qualified ____________ is the transfer of the right of recovery from the insured to the insurance company. 2)non-qualified plans Why do most states have a waiting period for couples applying for marriage licenses? C. it is often experience-rated, with premrums based on expected losses. \end{aligned} 4) Joint-Life policy(business part) Insurance policy of 2 or more D. The flexible premium. Companies may have immediate legal obligations following the inclusion of a substance in the Candidate List on this website including in particular Articles 7, 31 and 33 of the REACH Regulation. ~~~\text{Advertising expense}&90,000\\ \hline \text { Jul 31 } & 25,500 Suitability B) In insurance, fraud is the intentional misrepresentation of material information that is crucial when deciding whether or not to write a contract for an applicant. Who assumes control over an insurance company's funds and management if it becomes insolvent? Errors and Omissions Coverage (E&O) is a name used to describe a type of professional liability insurance. Conditional Contract D) When immediate annuities are used to pay IRA benefits, distributions must begin no later than age 70 in order for the annuitant to avoid penalties. b) 5 years only. B. Health insurance decreases your healthcare costs. Exclusions always exist, and there is a reason for each one. \end{array} C. Social Security works exactly same as private insurance. If the corporation collects the policy benefit, then B. Twisting d) Policy dividends. Predicted needs of the family after the insured's death Attempting to determine how much insurance an individual would require based upon their finacial objectives is known as. C. A husband or wife has an insurable interest in their spouse d) Joint and Survivor, B) The Waiver of Cost of Insurance rider is found in Universal Life policies. Correct: C. Consideration. b) Promptly forwarding premiums to the insurance company A Contract that binds only one party to future performance, is a (n): A. All of the following information about a customer must be used in determining annuity suitability EXCEPT Most professional liability insurance policies are written with an occurrence coverage trigger instead of a claims made trigger O c Insureds They become permanently disabled Correct: D. Represent the insured's interest, All of the following statements regarding financial rating services are correct, except. a) More active. 3)substandard risk. (c) They decrease at a constant rate. (c) The number of times the coverage can be renewed is limited. (a) The insurance provides protection for a temporary period of time. 2. Free Standardized Tests Flashcards about Health&Life - StudyStack 3)Explain any riders or exclusion insurable interest must exist. How does having children affect the decisions that couples must make when considering a divorce? All of the following statements are correct about policy loan interest rates EXCEPT: (A) an insurance company can charge a fixed rate of interest up to a maximum of 10%, with some restrictions (B) an adjustable interest rate can be used if the insurance company follows a national corporate bond index (C) an adjustable interest rate can be used if the limit is based on the average monthly . Chapter 11 - Life Insurance. B) Fiduciary refers to a position of trust. d) An agent misrepresents policy benefits to convince a policyowner to replace policies. Observers and analysts have attributed the reasons for the 2001-2006 housing bubble and its 2007-10 collapse in the United States to "everyone from home buyers to Wall Street, mortgage brokers to Alan Greenspan". The total factory payroll for the month according to the payroll register is $308,000.00, distributed as follows. Annually renewable term policies provide a level death benefit for a premium that Jason Mackenzie Alexander argues morality is a form of social technology - it is context specific and it can go out-of-date &\text { Accounts receivable }\\ 3. Compensating executives A mutual insurance company does not have what? Which of the following statements concerning buy-sell agreements is true? B) Underwriters. Accidental Death Benefit 5)coverage begins - 20 pay life-premiums paid for 20 years and paid up at 65 \hline && \text { Jul 1 } & 65,000 \\ Poor adaptation to climate change further widens the gap between what people can afford and the costs of insurance, as risks increase. The insurance provides protection for a specified period of time. What is the term for a cause of loss, such as the theft of a car? Correct: C. Unilateral contract. Jul3119,500\begin{aligned} D. Term life. Who are considered to be restricted persons concerning the formulation of an insurance contract. 3 of them? What else must he include? A life insurance license. \underline{\hspace{40pt}}. All of the following are true of insurance EXCEPT It transfers risk. When the producer exceeds the authority expressed in the agency contract and the insurer does not take action, which type of authority is created? -usually mutual fund security B) After a claim has been adjusted and is found to be covered under the policy, the insurer must pay the claim upon receipt of a signed proof of loss. A. 1)Level Agents and producers must place business through an insurer with the lowest rated If company pays dividends, then they are a? C. Risk C. Certain Risk 1) Conditional Reciept Home Office- what do the underwriters do. they evaluate 4 things- what are they(4)??? c. Premiums may be raised at renewal d. Group term insurance may cover the . and what two kinds? An Insurance Broker is responsible for what? The employer is the owner . 3)according to the source of annuity income c) Whole Life - If the insured suffers a dismemberment the policy pays the CAPITAL SUM which is 50% of the principal sum. -Take it or leave it contract a) Premium amounts and surrender values Company A carries 1/3 of the total coverage ($20,000 + $40,000 = $60,000). ch 7 Flashcards | Quizlet D. Aleatory contract A corporation is the owner and beneficiary of the key person life policy. a) Lump-sum approach (a) I only (b) II only Rebating is an unfair trade practice and is regulated by law. A. d) Living need rider. C. Domestic [Solved] All of the following are true of insurance EXCEPT It transfers a) Payor rider. How has the Aswan High Dam affected the lives of Egyptians? Terms that apply to the insurer not the applicant. C. Hazards c) Low-income individuals and families A person cannot buy insurance unless that person is in a position to suffer a financial loss. Which of the following statements is not correct regarding rates and premiums? Premiums are not tax deductible as a business expense. (a) Interest is credited monthly to a policy's cash value. 1)absolute assignment-all rights are assigned c) Conditional When an insured fails to disclose known facts in an application for insurance, he/she may be guilty of what? &\text { Accounts payable }\\ d) All of the above. a) Withdrawals are not taxable. O c. The policyowner has the option of investing the cash value in several investment accounts. Misappropriation or illegal withholding of the policyholder's money. It is used to help adequacy and equity in rates. a) Accepted accounting principal. d) 15 years. b) 10% for early withdrawal See Answer. What type of insurer has no capital stock? (b) They increase at a decreasing rate. 5)Survivorship Life Policy (policy holder pays themselves). Which of the following does not constitute the consideration in the insurance transaction? 2)face amount is set Each policy pays a percentage of the loss based on the percentage of coverage that policy provides. b) Fiduciary responsibility. CashJul1Jul315,500???? Warranty -low commissions A buy-sell agreement is simply a contract that establishes what will be done with a business in the event that an owner dies. In the pamphlet, he includes the full name of his insurance agency and the type of insurance that he offers. D. A surplus lines broker deals with admitted carriers only Liquidity in life insurance refers to availability of cash to the insured. &\begin{array}{lr|rr} Question: All of the following statements about professional liability insurance are true, EXCEPT: Select one: O a. c) Conditional ~~~\text{Direct labor cost}&190,000\\ It is legal to list nonguaranteed values in the contract, but they must be specifically labeled as projected, not guaranteed values. Contract or form of ownership is a ______________? \hline (\$ 000) & 1 & 2 & 3 & 4 \\ -sex doesn't determine eligibility. A conditional contract requires both the insurer and policyowner to meet certain conditions before the contract can be executed, unlike other types of policies, which put the burden of condition on either the insurer or the policyowner. \hline & \text { Jul 31 } & 19,500 Which of the following would be the best option that would help the surviving spouse of the insured to put her child through daycare after the insured's death? Breach of warranty b) An agent offers to share his commission with a policyholder. (b) face amount of the policy and the total premiums that have been paid. They keep a high percentage of any interest earned on their policies The policyowner has a variety of options for investment of the cash value. A __________ represents the insured. Cash values are available in whole life policies. -The insurer would pay the face amount of the policy minus the past due premium. What is the difference between renewable policy holder & Insurer? A company doing business in the same state it was incorporated in and owned by the policy holders. a sheet where the agent lists any additional info about insured including: habits,financial status, or anything that may be important for the underwriting department to determine the risk involved. Correct: Misrepresentation, False statement contained in the application, An intentional deception of the truth in order to induce another to part with something of value or to surrender a legal right. Cash values can be borrowed at any time c) Copy of the original application Their premiums are lower Liquidity in life insurance refers to availability of cash to the insured through cash values. \end{aligned} 5)Explain when coverage begins An agent that enters into agreements with more than one insurer is called an: A _______ represents the insured in dealing with insurance companies. -pays an additional death benefit if the insured dies from an accident 2) form of interest sensitive life insurance(current market conditions influence the cash value) \textbf{For the Month Ended October 31, 2017}\\ B. B. (4), 1)monthly d. What is NOT invested in the stock market but pays you interest? Healthcare in the United States - Wikipedia Cause of potential loss to property such as fire, windstorm, hail, flood, etc. (1), In Universal life, what options can the policy owner have with the premium payments to do? Insurance is designed to provide protection against which of the following? B. A. A policy summary Which kind of agent enters into agreements with more than one insurer? \end{array} \\ &\begin{array}{lr|lr} Life insurance policy premium charged the policyowner that can be less than that guaranteed in the contract, premium increases gradually during the first few years and then levels off, All of the following statements are true regarding mortgage protection insurance EXCEPT. Estimated direct labor costs for next year are$440,000.00. Correct: D. Concealment. Copyright 2009-2022 Tests.com LLC - All Rights Reserved. A. 3) Ordinary. Conditional contract means the policy holder does what? Appoint a solicitor as his or her representative A. signed waiver of premium c. Do you think that the government has the right to make and enforce laws that affect family life? D. A surplus lines broker places risks with nonadmitted insurers when coverage cannot be placed with admitted insurer carriers a) Offering additional coverage to clients b) Hazard Its controller resigned in October 2017. It is used to pay off the balance on the mortgage. All of the following statement regarding credit life insurance are true, except: A. credit life insurance may be written on either and individual or group basis. -below market interest rates on borrowing Newborns after how many days become covered in a child rider? 1) cash value earns interest Government Relations: New Challenges and the Ongoing Erosion of Is claim still paid if there is a misstatement of age or sex? The applicant's medical background is addressed in Part 2 - Medical Information. Everything else equal, how would the factor below affect the market value of a stock? d) Paid-up option. A) The amount of insurance of the life of any debtor may at no time exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor. Various life insurance programs for people who served in the military are called ______________? c) Accelerated benefit rider. An agent told Carl about a form of life insurance in which Carl could select where the savings component is invested. If there Is a risk of financial loss then there is a what? also known as acceptance. (c) face amount of the policy and the legal reserve. &\text { Rental Class }\\ Journalize the entry to transfer the total of all cost sheets completed from Work in Process to Finished Goods. CPI (consumer price index) without evidence. Rates. b) Outline of coverage a) Agent's report 6)Explain Free Look period-10-30 days- unconditional refund that begins when policy is delivered. II. Yes, all T-mobile insurance plans cover water damage. 4)Offer and Acceptance, -direct and identifiable interest in that persons life/as well as financial interest. Life expectancy has increased in the U.S. over the last century. (c) Most policies can be converted to a permanent life insurance policy. All of the following are required signatures on a life insurance application EXCEPT. d) Making claims payments which clearly indicate under which coverage payment has been made. The issuance of a binder is the result of the ___________________ of an offer. 2)Legal Purpose A SEC registration. a) Aleatory (economy). Coverage is available in $50,000 increments up to the maximum of $400,000. compulsion? II. D) When replacement is involved, a producer must perform the following duties: sign replacement notice (and keep a copy), provide a list of items being replaced, leave all brochures/sales material used in the sale, take new application, submit "Copy to Replacement" notice, and it attach to application. Whoso. 2)Increase the face value What is the primary source of info for the underwriting department to determine insurability? -insured can stop paying premiums at certain age or after a period of time c) Helping insureds to file claims -7 pay test is used to determine If a policy is a MEC. Medical exams provide information on current health. -the premiums are paid for a limited time only. -policy holder adheres to it An__________ represents the insurer. *The insured is diagnosed with terminal & chronicle illness 2)explain any ratings All of the following are true of key person insurance EXCEPT . 1)policy owner can increase/decrease/ or skip premium payments I. An underwriter will consider each of the following factors when evaluating a risk, except: A. paperspast.natlib.govt.nz 1)increase cash value Benefits received are considered income taxable D. Concealment SalesrevenueLess:OperatingexpensesRawmaterialspurchasesDirectlaborcostAdvertisingexpenseSellingandadministrativesalariesRentonfactoryfacilitiesDepreciationonsalesequipmentDepreciationonfactoryequipmentIndirectlaborcostUtilitiesexpenseInsuranceexpenseNetloss$264,000190,00090,00075,00060,00045,00031,00028,00012,0008,000$780,000803,000$(23,000). Due to climate change, premiums are going up for certain types of insurance, such as flood insurance. This is called. B) A fiduciary is a producer who handles insurer funds in a trust capacity. Is There An Objective Morality? IAI TV c) Needs approach There is no limitation on the number of key employee plans in force at any one time B. D. Claim History B) Passing examination with 75% or higher score. A. The following are all true regarding risk management, except: A. 3)they provide insurance to members. B) Human life value approach is determined by the loss of income that would result with the death of the insured, after making adjustments for expenses, inflation, etc. C. Premiums are tax deductible by the key employee Who is not a party to the contract and receives the benefits when the insured dies? Healthcare in the United States is far outspent than any other nation, measured both in per capita spending and as a percentage of GDP. a) To limit the insurer's liability after the 2 year waiting period