Surviving family members may experience a reduction in their standard of living if the family breadwinner dies prematurely. 5)coverage begins He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. A ______ will receive unfavorable tax treatment. Which of the families below is likely to have the least need for a large life insurance policy? The applicant has been shown to be a poor personal credit risk. Insurance is designed to provide protection against which of the following? 1)Statement of continued good health a. The Terrorism Risk Insurance Program is administered by which of the following Federal entities? The parties in the insurance contract consist of whom? -Can't lose value A producer wishing to appeal the final order of the commissioner would appeal to???? What type of interest does universal life have? 2)Foreign Insurer 2) premiums do not change 3)premium is collected Jul3117,000\begin{aligned} (3), WHat is the difference between universal and whole life policies? b. Which type of risk involves the possibility of loss or gain? (a) limited-payment whole life insurance To sell variable life insurance policies, an agent must receive all of the following EXCEPT The terrorism risk insurance program reauthorization act provides for a terrorism insurance program administered by which federal entity? O d. (a) renewal provision (c) variable life insurance. b) Universal Life 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 . (2), The current market will influence the cash value All of the following are restricted persons concerning the formulation of an insurance contract except: A producer has __________ authority when he accepts premium on a lapsed policy, and the insurer reinstates the policy. Correct: B. A monthly deduction is made from a policy's cash value for the cost of insurance protection. (c) two-income earner family. We participate at both the national and state levels as a leading advocate in the judicial, legislative, and regulatory environment to ensure that Members' concerns are heard by lawmakers on issues that impact medical professional liability. 2)can be sold as a rider to a whole-life policy. Which of the following is an example of an unfair claims settlement practice? c) Needs approach Steven prints a pamphlet to advertise his life insurance business. C. Medical Background \text{Less: Operating expenses}\\ What term life insurance provision will permit Tamara to switch her term insurance to whole life insurance without having to show that she is still insurable? Misappropriation or illegal withholding of the policyholder's money. In a car accident dealing with ADB who covers the passenger? C. Conditional contract A corporation is the owner and beneficiary of the key person life policy. It does not include breach of contract. \end{aligned} (economy). A. ADD( Accidental death and dismemberment??? 1)increase cash value c) Disclosure rule (c) both I and II Coverage is available in $50,000 increments up to the maximum of $400,000. Surplus lines broker deals with admitted carriers only 4)Consumer report=credit, -shorter time span for paying premiums 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. Correct: B. b) Coverage ends and the policy cannot be reinstated. Jul313,000\begin{aligned} 1. Which of the following statements about endowment policies is true? States regulate the procurement of business from nonadmitted carriers by regulating the brokers who place business with these carriers. All of the following are options for managing risk, except: means of collecting a loss payment from a liable party. c) Helping insureds to file claims \end{aligned} -A Mec will receive unfavorable tax treatment There is no limitation on the number of key employee plans in force at any one time B. Poor adaptation to climate change further widens the gap between what people can afford and the costs of insurance, as risks increase. Round Trees management makes a forecast of the demand by rental class for each night in the future. Their premiums are lower D. Reduction is a method of managing risk. An agent tells an insured that if he replaces his current insurance policy with a newer one, his dividends will be higher and his premium will be slightly lower. Insurance is an important tool to manage risks, but often unavailable to poorer households. The person who receives the benefit when insured dies. -Prepays portion of face amount if diagnosed with terminal illness. Reinsurer Assuming company. When the company earns a profit and elects to share there profits, they pay a ____________to the policyholders or shareholders. _____________ is a statement that is true to the best of the persons knowledge that is making the statement. Insurance producers must ensure that contracts they recommend are in the best interest of the insured. 3)low premiums. c. Do you think that the government has the right to make and enforce laws that affect family life? 3. Which of the following is an example of liquidity in a life insurance contract? a) Consumer Privacy Act The Human Life Value Approach to determining the value of an individual's life requires the calculation of probable future earnings of the insured, which involves wages, expenses, inflation, amount of time until retirement, and the time value of money. 4)explain policy & provisions \hline \text{Cash} & \$ 100 & \$ 100 & \$ 100 & \$ 100 \\ 1. A contract that allows an insured to be restored to the same financial condition as prior to the loss is considered to be what type of contract? (a) matured. A. 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? 2)Procures insurance 4 itself from another insurer, The tax benefit of annuities is tax deferred growth. There are many legitimate need-based expenses that can be paid by life insurance proceeds, from groceries to retirement income. Example: AIL was incorporated in Indiana and its home office is in Texas so in NJ its considered a foreign insurer. Warranty Question: All of the following statements about variable life insurance are true EXCEPT O a. ____________ is a statement that is true to the best of the persons knowledge that is making the statement. The __________ branch of the state government influences public policy regarding insurance laws. If the insured becomes disabled, the rider allows the cost of insurance to be waived, with the exception of premium costs required to accumulate cash value, Who must notify the replacement company of a policy that is being replaced? b) The policy will not be affected. -If the insured dies, the policy payed out the PRINCIPAL SUM Being young and healthy means you can skip out on health insurance. Cash value is invested in the stock market. 1)premium payment -receiving dividends(when declared) Daycare is considered to be among these expenses. Correct: C. Unilateral contract. B) Money collected with respect to an insurance transaction must be held in a position of trust by the producer. This method of estimating . Tamara purchased a term insurance policy when she had high life insurance needs and limited income. The agent Modification to a policy is a _______________? What type of term do you think would be least expensive a short term or a long? -assignor=assignee A person who negotiates insurance contracts on behalf of an insured. Contract of adhesion What is NOT invested in the stock market but pays you interest? They keep a high percentage of any interest earned on their policies True or False: Under the Financial Responsibility Law, you are required to have insurance on any motor vehicle you own or drive, except motorcycles ____________ is the transfer of the right of recovery from the insured to the insurance company. The following information is taken from the records of Hammond on November 30 of the current year. A contract between insurer and policy holder. D. Viatical settlement. (c) human life value method \end{aligned} Which type of life insurance makes sense for someone in this situation? b) Reduced paid-up exclusions: when the accident occurs within an illness,disease, or mental infirmity. Correct: A. a surplus lines broker places risks with nonadmitted insurers when coverage cannot be placed with admitted insurer carriers. The cost of a living rider is calculated by what? (b) reduced. (c) The number of times the coverage can be renewed is limited. c) A person who handles assets or money belonging to others. Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value? Question: 55. Cash Accumulation C. Buy-Sell agreement D. Survivor Protection, All of the following are true of key person insurance except A. This form of life insurance has fixed premiums and the cash value is not guaranteed. Whats the cheapest type of permanent insurance? A. \textbf{EMPIRE COMPANY}\\ \end{array} \hline \text { Jul 31 } & 3,000 3) policy builds cash-value Accelerated Living Benefit/Accelerated Death Benefit? A conditional or binding receipt is given when an applicant does what? & \text{ ???? } A. b) Larger. All of the following are true of insurance EXCEPT It transfers risk. c) Whole Life 3)certified public accountants, Is insurance that is provided by the Federal or State government D. A surplus lines broker places risks with nonadmitted insurers when coverage cannot be placed with admitted insurer carriers It is used to pay off the balance on the mortgage. (b) They increase at a decreasing rate. The insurer's promise to pay a covered loss and the insured's payment of the first premium, are examples of: A. Correct: C. Consideration. A buy-sell agreement is simply a contract that establishes what will be done with a business in the event that an owner dies. Alex, age 26, purchased a 20- payment whole life insurance policy. -cash value options (d) indeterminate-premium whole life. -policy holder adheres to it 21,000 \\ However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. d. It does not require a duty to be owed. b. it frequently includes coverage for losses due to casualty and theft. D. Concealment All of the following groups may purchase group health insurance coverage, EXCEPT: Groups must have at least two employees to be eligible for group insurance coverage. By William Lb Qtjetjx, Author of . \hline \text { Jul 1 } & \begin{array}{r} An individual applies for a life policy. (b) Most policies can be renewed without evidence of insurability. \end{array} C. Application (c) both I & II (d) neither I nor II. Term life insurance provides pure death protection. 2)people under the influence of drugs or alcohol One sided contract is a ______________ contract. It is used to help adequacy and equity in rates. Traditional insurance policies contain a list or description of excluded "perils" (that which causes a loss). A life insurance policy is exchanged for an annuity. -policyowners right provision a. mentally counting backward from 1,0001,0001,000 Only the MIB will provide information about an applicant's medical history. (c) They decrease at a constant rate. Example: company that is incorporated in NJ and sells in NJ. b) Outline of coverage The issuance of a _________ is the result of the acceptance of an offer. Claim is still paid with an adjustment to the benefits. Statements in the application that are guaranteed true but later found to be false may result in what? The ___________ controls all rights of the contract. 4)annual, Everytime you have a payment due. In this particular instance the applicant did not commit intentional fraud. An underwriter will consider each of the following factors when evaluating a risk, except: A. Social Security is designed to provide a base of economic security B. \text { Type II } & \$ 20 & \$ 30 & \$ 40 Credit life (D The employer is the owner, payor and beneficiary of the policy. When a replacement is involved, a replacing insurance company is responsible for all of the following EXCEPT: Provide a copy of the Important Notice Regarding Replacement of Life Insurance to the applicant. The following are all true regarding risk management, except: A. insurable interest must exist. a) The policyholders or stockowners of the company 14,500 \\ Reinsurance has 2 types of policys, what are they? Pro rata liability applies. If an insurer is incorporated in Rhode Island, but primarily does business in New York, what type of insurer would it be considered in New York? After insurer makes an offer, what must the applicant do? Nature of risk When does the grace period begin and how long is it? *The insured is diagnosed with terminal & chronicle illness What are some of the questions asked on the application to determine the premium and risk classification of the insured? An insured owns a life insurance policy. Prior to October 2017, the company had been profitable every month. a) Remains level. Who might receive dividends from a mutual insurer? Whole life policy. The replacing company notifies the replacement company. \hline & \text { Jul 31 } & 19,500 A. The US is the only developed nation without a system of universal healthcare, with a large proportion of its population not carrying health insurance, a . a) Year only. Which of the following is NOT a fraudulent and intentional deception of the truth? a) Using arbitration when the insured and insurer cannot reach agreement B. 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. 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. b) State attorney general ~~~\text{Depreciation on factory equipment}&31,000\\ d) An insurer may exclude any debtors as to whom evidence of individual insurability is not satisfactory to the insurer. All of the following statements concerning coinsurance are true, EXCEPT . When a insurance company(insurer) has too many risks exposed to loss it seek another company(reinsurers) to insure them. Terms that apply to the insurer not the applicant. C. A husband or wife has an insurable interest in their spouse Which nonforfeiture option provides coverage for the longest period of time? 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. InventoryJul1Jul3122,000???? Copyright 2009-2022 Tests.com LLC - All Rights Reserved. The policy is a conditional contract The companys president is concerned about the accuracy of the income statement. 2)premium gets lower. If the corporation collects the policy benefit, then In addition, they provide financial support for Tom's aged father and Nancy's aged mother. Who is not a party to the contract and receives the benefits when the insured dies? Which of the following is usually true of a participating life insurance policy? An insured becomes disabled at age 22 and can no longer work. (a) I only (b) II only 2)attorneys c) The policy will be voided. The insurance company may not void the insurance policy for which of the following reasons? Eight Summoning Eyes need to be placed to summon the Ender Dragon and players need to have 450 Dragon Weight to have a chance of getting the sword. \end{array} A. 1. Accumulateddepr.-equipmentJul1DeprJul3155,0003,00058,000, RetainedEarningsJul165,000Dividend19,000NetInc65,000Jul31111,000\begin{aligned} 3)Consideration c) Conditional This type of life insurance is called and is NOT a party to the contract. - 20 pay life-premiums paid for 20 years and paid up at 65 3,000, AccountsreceivableJul121,000???? A life insurance license. (c) Interest credited to a policy's cash value is taxable to the policyowner in the year credited. Life insurance is unique from other types of insurance in that it could perform the function of cash accumulation. The requirement that producers must account for all insurance funds collected, and without the expressed consent of the insurance company(ies) are not permitted to co-mingle those funds with their own funds is known as -pay for certain time and stop What are the permanent working capital needs of your company? -20 pay life-paid up at 65 A. Premiums are not tax deductible as a business expense Which of the following statements concerning buy-sell agreements is true? In the needs approach, all of the following information is used to establish how much insurance needs to be purchased, EXCEPT: Mary should purchase $1.5 million ($75,000 x 20 working years remaining = $1,500,000). 1) Family Maintenance(breadwinner) Any profit realized in the operation will be used to provide dividends to stockholders as well as surplus funds that may be used as a buffer for future adverse experience. Level-increasing face value. IRS classification of a policy that is overfunded? A. 6)Explain Free Look period-10-30 days- unconditional refund that begins when policy is delivered. 3) Increasing Term. C. Payment of premium \text{Accounts Payable} & 104 & 95 & 95 & 97 \\ \hline & \text { Jul 31 } & 58,000 a) The amount of insurance on the life of any debtor may exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor. B. D. Unilateral Contract In order for the contract or policy to be valid or legal? Past-due interest on a policy loan is added to the total debt. b) Conditional receipt 1. B. 1)cont. B) According to the law of large numbers, the larger a group becomes, the easier it is to predict losses. B) A fiduciary is a producer who handles insurer funds in a trust capacity. The company records manufacturing costs by job number and uses a factory overhead applied rate to charge overhead costs to its products. An insurance company that was incorporated in a different state it is doing business in and pays dividends to its policyholders is known as a _________. D) Using misrepresentation to convince a person to cancel an existing policy and buy a new one is called "twisting.". Applicant pays premium to make agreement. Which of the following about the use of ordinary life insurance is true? What adds coverage and modifies coverage? Liquidity in life insurance refers to availability of cash to the insured through cash values. d) Loss. (a) They increase at an increasing rate. D. Financial Experience. Life insurance prodceeds 3) Retaining the risk. An insured is driving her automobile and strikes a large pothole that . Prepare the following details: Mobile number, serial number, or IMEI. Medical exams provide information on current health. All of the following statements regarding contracts of indemnity are true EXCEPT a. Costs of training a replacement D. A surplus lines broker deals with admitted carriers only WorkinProcessFactoryOverheadCash$229,040.0078,960.00250,558.00EmployeeIncomeTaxPayableSocialSecurityTaxPayableMedicareTaxPayable$33,880.0019,096.004,466.00. Cash values can be borrowed at any time Correct: C. Condition contract, enforceable only under certain conditions. _____________ is an employer paid disability and health insurance coverage that covers job related illnesses or injuries. Individuals covered under the policy received a certificate of insurance. On DUE DATE. 2) profits are returned as dividends B. \hline 3. Non-Participating (stock) Life Insurance Policy. B. this insurance is often written in connection with automobile loans. & &&\textbf{ Quarter } \\ d) An agent misrepresents policy benefits to convince a policyowner to replace policies. ~~~\text{Raw materials purchases}&\$264,000\\ Domestic Insurer 2)Decreasing term(premium is low) declining face value The total of all requisitions of direct materials issued during the month is $252,230.00. Most agents try to collect the initial premium for submission with the application. 2)explain any ratings Correct: D. Represent the insured's interest, All of the following statements regarding financial rating services are correct, except. 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. (a) capital retention approach &\text { Inventory }\\ C. The death benefit paid to the beneficiary c) Denying coverage after a reasonable investigation has been conducted What are the 3 characteristics of a Mutual Insurance Company? The profit per night for each type of room and rental class is as follows: RentalClassRoomSuperSaverDeluxeBusinessTypeI$30$35TypeII$20$30$40\begin{aligned} James purchased yearly renewable term insurance. The premium is guaranteed for an initial period and then the insurer can charge up to a maximum premium charge in what type of policy? Which of the following is true regarding the beneficiary designation of the former spouse. What is the purpose of a suicide provision within a life insurance policy? C) Completing pre-licensing training. b) Distributions before age 59 1/2 incur a 10% penalty on policy gains. A debtor has an insurable interest in the life of a lender. Waiver of premium is a rider that can be added to a life insurance policy, and not something to be obtained from the applicant. 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. Estate conservation C. it is often experience-rated, with premrums based on expected losses. Legislative advocacy is essential to Physicians Insurance/MedChoice's purpose to protect, defend, and support our Members. b. 1) Competent Parties 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. also known as acceptance. 4) 3 components to the premium, The owner and the insured are different people. All of the other statements are true. 4. The insured agrees to maintain insurance equal to some specified percentage of the value of the property. B. Beneficiary's age is not a suitability factor. Everything else equal, how would the factor below affect the market value of a stock? Represent the insured's interest Which of the following is a financial rating service? B) Passing examination with 75% or higher score. (a) universal life insurance. Insurance companies can charge an interest rate based on the policyowner's credit report. (d) They remain level. I. The safety margin is narrower, because the cost of the insurance to the policyholder cannot be adjusted at a later time. c) 15% for early withdrawal C) An insurance contract must contain a copy of the original application. c. thoughts of harming a neighbor (a) present value of future benefits and the present value of future premiums. baseball, fishing | 2K views, 10 likes, 0 loves, 0 comments, 2 shares, Facebook Watch Videos from 800 Pound Gorilla Media: Robert talks about fishing in NYC, baseball, and growing up with protective. Originating policy Type I rooms do not have wireless Internet access and are not available for the Business rental class. What happens when a policy is surrendered for its cash value? \hline \text { Jul 1 } & 5,500 &&\\ Endowments means policy is what(2) things? the willful holding back or secretion of material facts pertinent of the issuance of insurance or a claim. *Both not taxable. -receiving dividends(when declared) C. Insured's annual expenses d) 50% tax on the amount not distributed as required. C. Whole life A linear programming model developed to maximize profit is used to determine how many reservations to accept for each rental class. What will probably happen? Legal Purpose When both parties to a contract must perform certain duties in order to make the contract enforceable, this is known as what?
all of the following are true of insurance except
