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? All of the following statements about term insurance are trueEXCEPTa. D) Insurance covers intentional losses as well as unintentional. e. The total of costs recorded on all sales invoices for the month is$654,052.00. b) Outline of coverage 10 year level term -receiving dividends(when declared) Example: AIL was incorporated in Indiana and its home office is in Texas so in NJ its considered a foreign insurer. Something of value is a __________________. 17,000, InventoryJul122,000???? An insured owns a life insurance policy. EMPIRECOMPANYIncomeStatementFortheMonthEndedOctober31,2017\begin{array}{c} (c) two-income earner family. When Applicant P fails to disclose all of his motor vehicle violations in an application for automobile insurance, he may be guilty of: A. Estopple What must exist at the time of the application? All of the following statements regarding contracts of indemnity are true EXCEPT a. c) A person who handles assets or money belonging to others. d) Buyer's Guide. A) the agent. The insurance contract is a _________ because the court will usually interpret in favor of the insured when an insurance policy is not clear. Who is not a party to the contract and receives the benefits when the insured dies? c) The premium for the policy shall be paid either from the creditor's funds, or from charges collected from the insured debtors, or from both. 1. (a) blended family. Prepare a pie chart of on-time delivery performance for last month. Which of the following is the basis for a claim against an insurance policy? A. Compute DVDs net cash provided by (used for) operating activities during July. d) Primary and secondary beneficiary designations. There is no limitation on the number of key employee plans in force at any one time B. C. Concealment c) Conditional (must exist at the time of application). may not be altered by an agent and must clearly state that it is not part of the contract. Permanent Insurance have 3 words in common, what are they? Cause of potential loss to property such as fire, windstorm, hail, flood, etc. -Follows all conditions of contract & pays premium, -insurer says how policy works A state administered health insurance for the needy? D. Term life. The CAS number shown in an entry is typically . 4)defined contribution plans. A corporation is the owner and beneficiary of the key person life policy. There is no limitation on the number of key employee plans in force at any one time. (d) Its use may be appropriate if a person wants paid-up life insurance by retirement. "Round Tree Manor is a hotel that provides two types of rooms with three rental classes: Super Saver, Deluxe, and Business. Investors become more risk averse. Which kind of agent enters into agreements with more than one insurer? c. thoughts of harming a neighbor What is the purpose of a suicide provision within a life insurance policy? D. Viatical settlement. -then picks a contract. Their premiums are lower d) The Guaranty Corporation. -has cash value invested in the stock market C. Consideration Represent the insured's interest Which of the following is the basic source of information used by the company in the risk selection process? To sell variable life insurance policies, an agent must receive all of the following EXCEPT 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 . \end{aligned} Individuals covered under the policy received a certificate of insurance. (c) both I and II d) Performing reviews of insured's coverage. d) Tax-deductible. O d. b) Fixed income ?19,500, Accumulateddepr.-equipmentJul155,000Depr3,000Jul3158,000\begin{aligned} Insurers use this law in order to predict certain types of losses and set appropriate premiums. A life insurance policy is exchanged for an annuity. c) Denying coverage after a reasonable investigation has been conducted &\text { Inventory }\\ 3)substandard risk. C. The policy is an aleatory contract $ cant exceed indebtness. Policyholders C. Whole life c. Taxes, Retirement, and Other Insurance Concep, State Laws, Rules, and Regulations Quizzes, Life Insurance Policy Provisions, Options and, Fundamentals of Financial Management, Concise Edition. 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. D. A surplus lines broker places risks with nonadmitted insurers when coverage cannot be placed with admitted insurer carriers Which of the following statements is not correct regarding rates and premiums? a) Material change Where does group-life insurance come from? b) Larger. A buy-sell agreement is simply a contract that establishes what will be done with a business in the event that an owner dies. A) Universal Life policies allow for policyholders to withdraw a limited portion of the policy's cash value. What insurance concept is associated with the names Weiss and Fitch? Pro rata liability applies. C. The insurer is always required to pay the . -policyowners right provision A. Which of the following is an example of liquidity in a life insurance contract? Insurance producers must adhere to the concept of suitability by ensuring that, to the best of their belief, the purchase, sale or exchange of a policy is in the best interest of the insured. She has limited income and significant life insurance needs. 4. D. Concealment What is the term for a cause of loss, such as the theft of a car? B. A. Adverse selection is well controlled. Occupation An agent and an applicant for a life insurance policy fill out and sign the application. &\text { Rental Class }\\ Conviction of a felony involving moral turpitude. See Answer. 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. Total personal income in the United States (in billions of dollars) for selected years from 1960 to 2009 is given in the following table. \end{aligned} A policy that does not pay dividends to policyowners is a (2), The current market will influence the cash value -If the insured dies, the policy payed out the PRINCIPAL SUM The __________ branch of the state government influences public policy regarding insurance laws. The primary purpose of buying an annuity is? c) Copy of the original application ___________ is the persons whose death triggers payment. Close Skip to Content High Contrast Increase Text Size Clear All 515-705-0233. Forms of interest and are Sensitive Whole Life, 1) Transfers risk to another insurer a) Premium amounts and surrender values When an agent collects the initial premium from the applicant, the agent should issue the applicant a. When an insured fails to disclose known facts in an application for insurance, he/she may be guilty of: A. 3. B) Passing examination with 75% or higher score. a. mentally counting backward from 1,0001,0001,000 &\text { Accounts payable }\\ Credit life The 7 paytest is used to determine if a policy is a _______? -pays an additional death benefit if the insured dies from an accident Agents and producers must place business through an insurer with the lowest rated \hline \text { Jul 31 } & 3,000 d) Paid-up option. Accidental Death Benefit There are many legitimate need-based expenses that can be paid by life insurance proceeds, from groceries to retirement income. Does not pay dividends to policyowners; however, taxable dividends are paid to stockholder. Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy? What is a statement in the application guaranteed true in all respects? 2. With a little work, an unused office area could be converted to a rental room. O b. 3) type of plan they applied for. If the initial premium is not paid with the application, the agent will be required to collect the premium at the time of policy delivery. c) Comparisons with similar policies When parties to a contract exchange unequal amounts of money, this is said to be what type of contract? Dividends received by policyholders of a mutual insurer are not taxable. d) Older. The Boyle family can be described as a Tamara purchased a term insurance policy when she had high life insurance needs and limited income. Cash Accumulation C. Buy-Sell agreement D. Survivor Protection, All of the following are true of key person insurance except A. Non-Participating (stock) Life Insurance Policy. Which of the following about yearly renewable term insurance is true? It has cash value that is invested into the stock market through mutual funds/securities. The correct answer is: Premiums are typically paid by the lender. -paying for certain time and stop. 2)attorneys SalesrevenueLess:OperatingexpensesRawmaterialspurchasesDirectlaborcostAdvertisingexpenseSellingandadministrativesalariesRentonfactoryfacilitiesDepreciationonsalesequipmentDepreciationonfactoryequipmentIndirectlaborcostUtilitiesexpenseInsuranceexpenseNetloss$264,000190,00090,00075,00060,00045,00031,00028,00012,0008,000$780,000803,000$(23,000). What will probably happen? A person who negotiates insurance contracts on behalf of an insured. D. Claim History Beneficiary's age is not a suitability factor. They keep a high percentage of any interest earned on their policies A company that does business in another state than incorporated who is owned by policyholders who received dividends when declared and voting rights. (c) variable life insurance. a) Small employers Conditional Contract B. 1) cash value earns interest After Alex has made 20 premium payments, his life insurance policy is considered d. Despite this, the country has significantly worse healthcare outcomes when compared to peer nations. c) Coverage ends but the policy can be reinstated at any time. a) Universal life (d) neither I nor II. 1)temporary \end{aligned} Other factors that are named include "Mortgage underwriters, investment banks, rating agencies, and investors", "low mortgage interest rates, low short-term interest rates . 1) Conditional Reciept Modification to a policy is a _______________? (a) capital retention approach Rates are considered inadequate when they do not cover projected losses and expenses. Which term describes the probability of a loss? A color-coded map illustrating the current legal status of elective-specific abortion procedures in each of the individual 50 states of the United States of America; plus U.S. territories and federal district [a] As of January 31, 2023 Illegal Legally unclear or legal but no providers Legal before cardiac-cell activity [b] Legal through 15th week LMP (1st trimester) Legal through 18th week LMP . -pay for certain time and stop What contract characteristic does this describe? (b) Cash value accumulation is slow to moderate. The death benefit varies according to investment experience. Being young and healthy means you can skip out on health insurance. The companys president is concerned about the accuracy of the income statement. c) National Association of Insurance Commissioners D. The face amount remains the same throughout the life of the policy. b. The safety margin is narrower, because the cost of the insurance to the policyholder cannot be adjusted at a later time. -cash value can lose value. The policy is a contract of adhesion. The penalty is 50% of the shortfall from the required annual amount. Estimated direct labor costs for next year are$440,000.00. A whole life insurance policy is exchanged for a term insurance policy, Which of the following will be included in a policy summary? B. Buy-Sell Agreements pay in the event of a medical emergency d) Blackout approach. 2)quarterly 2) profits are returned as dividends Whoso. Exclusions always exist, and there is a reason for each one. d) The policy can be reinstated by paying back all policy loans and premiums. ~~~\text{Advertising expense}&90,000\\ \end{array} \\ Which nonforfeiture option provides coverage for the longest period of time? c) Term life cheating. It is levied on the price of a product or service at each stage of production, distribution, or sale to the end consumer. The issuance of a _________ is the result of the acceptance of an offer. A conditional or binding receipt is given when an applicant does what? -birth of child. Funding against financial loss caused by the death of a key employee -The insurance dept. Correct: C. Condition contract, enforceable only under certain conditions. -sex doesn't determine eligibility. B. D. An individual has an insurable interest in her or her own life. b) Index used by stock companies Buy-sell agreements are normally funded with a life insurance policy. A company formed in a different country doing business in any state of American who owners are stockholders that receive dividends and have voting rights. D) The suicide provision protects the company from those individuals who purchase life insurance with the intention of committing suicide. What is the difference between renewable policy holder & Insurer? c) Low-income individuals and families D. The face amount remains the same throughout the life of the policy. The following are all causes for the Insurance Commissioner to suspend or impose conditions upon the continuance of a producer's license EXCEPT 1. Rates. has reached its final destination and can be paid out in full. 1)Statement of continued good health 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. A value-added tax ( VAT ), known in some countries as a goods and services tax ( GST ), is a type of tax that is assessed incrementally. 3)Alien Insurer. the application is used at the primary source of info. The company records manufacturing costs by job number and uses a factory overhead applied rate to charge overhead costs to its products. Which risk management type is shifting the risk of loss to a larger homogeneous group? \text { Room } & \text { Super Saver } & \text { Deluxe } & \text { Business } \\ ~~~\text{Depreciation on factory equipment}&31,000\\ d) An agent misrepresents policy benefits to convince a policyowner to replace policies. All of the following are true of negligence, except: a. Should a key person die, the benefit is treated as a reimbursement to the business for loss of services from that key person. 1) Family Maintenance(breadwinner) -Not a true insurance company AccountspayableJul1Jul3114,500??? 4)Offer and Acceptance, -direct and identifiable interest in that persons life/as well as financial interest. b) Distributions before age 59 1/2 incur a 10% penalty on policy gains. (b) reduced. All of the following statements are true of liability insurance, EXCEPT: Answer: liability coverage indemnifies the insured. (a) matured. Accelerated Living Benefit/Accelerated Death Benefit? (d) free look provision. After everything is signed & premium is collected What does the agent give to the policy holder? 3) Increasing Term. Cash values are available in whole life policies. Contract of adhesion & \text { Depr } & 3,000 \\ Life insurance proceeds 2) form of interest sensitive life insurance(current market conditions influence the cash value) -it pays the double indemnity, 1)accident occurs, person must die within 90 days A mutual insurance company does not have what? -marriage *Both not taxable. When applicant is not the insured ______________ must exist. 14,500 \\ Jul3117,000\begin{aligned} B. IRS has no jurisdiction A. a) More active. B. 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. Nature of risk Involuntary Risk Surviving family members may experience a reduction in their standard of living if the family breadwinner dies prematurely. Agent Sam is using the human life value approach to assess Mary's life insurance needs. All of the following would be considered to be rebating EXCEPT What is an exchange of a whole entire life policy for another? Be prepared to justify your answer. (a) I only (b) II only However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. c. Using the payback period, which project should Bill choose? \hline \text{Cash} & \$ 100 & \$ 100 & \$ 100 & \$ 100 \\ The issuance of a binder is the result of the ___________________ of an offer. Correct: D. Concealment. Correct: D. A surplus lines broker places risks with nonadmitted insurers when coverage cannot be placed with admitted insurer carriers. 1)cont. True or False: Under the Financial Responsibility Law, you are required to have insurance on any motor vehicle you own or drive, except motorcycles C. A surplus lines broker deals with direct writing companies only 3)2 Death benefits-(level/increasing) c) Fixed premium Reinsurer Assuming company. A surplus lines broker accepts business only from non- resident agents 2)can be sold as a rider to a whole-life policy. All of the following are characteristics of group life insurance EXCEPT. ~~~\text{Raw materials purchases}&\$264,000\\ (c) PV of the family's share of a deceased breadwinner's future earnings. ~~~\text{Insurance expense}&\underline{8,000}&\underline{803,000}\\ B) According to the law of large numbers, the larger a group becomes, the easier it is to predict losses. C. Buy-Sell agreements are normally funded with a life insurance policy Example: company that is incorporated in NJ and sells in NJ. The employer is the owner . In order for the contract or policy to be valid or legal? \end{array} B. Business partners have an insurable interest in each other Which of the following documents must be provided to the policyowner or applicant during policy replacement? All of the following are true about the Fair Credit Reporting Act Except: Regardless of what the consumer learns about the unfavorable information, the report can be changed by court action only. If an insurer finds that an applicant has committed fraud, it can void the contract, provided that the discovery occurs within the first two years of the effective policy date. II. D. Solicit applications on insurer's behalf IN WHITE RAIMENT. D. Agents report. O b. What kind of penalty would the IRA owner pay? d) All of the above. & &&\textbf{ Quarter } \\ The policy is a contract of adhesion a) Executive offer of the replacing company c) Counselor B. Insureds current and future income This method of estimating . If applicant is not the insured- then insureds signature is required b) Copies of illustrations and application 2) standard risk (c) They decrease at a constant rate. An Insurance Broker is responsible for what? A. considers Lloyds of London an Alien insurer \text{Sales revenue}&&\$780,000\\ Consumer report 1) preferred-low Represent the insured's interest, Insurance Licensing - Chapter 2: Property Bas, Chapter 9- Commercial General Liability Cover, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Fundamentals of Financial Management, Concise Edition, Daniel F Viele, David H Marshall, Wayne W McManus, CompTIA A+ Certification Exam Prep - Chapter. Difference between Universal Life Insurance and Whole Life Insurance? C. Insured's annual expenses b) 5 years only. Past-due interest on a policy loan is added to the total debt. D. Delivery receipt. There are 2 parties of the contract- what are they? Study with Quizlet and memorize flashcards containing terms like Which of the following would not appear in the asset section of an insurance company's balance sheet? What characteristic must an annuity have if it is used to accumulate funds in an IRA? When the agent delivers the policy, collects the initial premium, and the applicant completes and acceptable statement of good health RetainedEarningsDividend19,000Jul1NetIncJul3165,00065,000111,000. A) A policy summary must be delivered along with the policy and will provide the producer's name and address, the insurance company's home office address, the generic name of the policy issued, and premium, cash value, surrender value and death benefit figures for specific policy years. Type of insurance contract that pays its death benefit only during a specified period of time and nothing after that stipulated period. c) Misrepresentation Because the insurance company must pay claims and the insured must comply with the policy terms, the insurance contract is considered which of the following types of contracts? A company doing business in a different state than it is incorporated in and the stockholders/share holders have ownership rights An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. Term-Life policy has what 3 characteristics? 2)the face amount Which of the following statements about endowment policies is true? 3)Family Policy(Limited but all fam members paid) 1) coverage is permanent The policy is issued for one year and may be renewed annually with evidence of insurability. C. Tax Status insured is always the borrower & the beneficiary=lender a) A medical examination . \end{array} d) Contingent. A surplus lines broker places risk with nonadmitted insurers when coverage cannot be placed with admitted insurer carriers d. 10 payment whole life, Chapter 12 - Life Insurance Contractual Provi, Chapter 15 - Individual Health Insurance Cove, Fundamentals of Financial Management, Concise Edition, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese. &\text { Cash }\\ Therefore, it is responsible for 1/3 of the $24,000 loss, or $8,000. 3. Insurance producers must ensure that contracts they recommend are in the best interest of the insured. b. it frequently includes coverage for losses due to casualty and theft. c) Extended term All of the following are true of insurance EXCEPT It transfers risk. In this case, the applicant will most likely need to fill out a Statement of Good Health. d) Living need rider. Which of the following statements is NOT true concering insurable interest as it applies to life insurance? 2)Increase the face value (a) The insurance provides protection for a temporary period of time. To sell variable insurance what must you have? B. 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. b) Promptly forwarding premiums to the insurance company d) Decreases annually. Upon policy delivery, the producer may be required to obtain any of the following EXCEPT \end{array} Type I rooms do not have wireless Internet access and are not available for the Business rental class. C. It's a decreasing term insurance. Which of the following best illustrates a Where can you find insurance coverage after being rejected by your insurance company for too many claims in the past year? Joe, Larry, and Curly own a small business. When both parties to a contract must perform certain duties in order to make the contract enforceable, this is known as what? B. CashJul1Jul315,500???? 2)Foreign Insurer (d) They remain level. ~~~\text{Direct labor cost}&190,000\\ d) 15 years. The agent -usually mutual fund security B. Misrepresentation C. Department of State 1) Avoiding the risk 1)Level Waiver of premium is a rider that can be added to a life insurance policy, and not something to be obtained from the applicant. Renew policy holder has an option- THE INSURER DOES NOT. Their premiums are lower If the conversion cost is the same for both types of rooms, would you recommend converting the office to a Type I or a Type II room? still matures at age 100, -premium is paid off at one time Numerical identifiers: Each candidate list entry covers both anhydrous and hydrated forms of a substance. To ensure suitability of annuity products, producers must obtain relevant information about the consumer's age, income, financial status, tax status, financial experience and objectives. D. Premiums are tax deductible as a business expense, B. 2)Legal Purpose ? One sided contract is a ______________ contract. d. The total of all cost sheets completed during the month is $628,880.00. Liquidity in life insurance refers to availability of cash to the insured through cash values. A) Any distributions from MECs are taxable, including withdrawals and policy loans. Misrepresentation, Concealment and Deceit are all examples of what? Legal Purpose b. 4) Joint-Life policy(business part) Insurance policy of 2 or more C. Premiums are tax deductible by the key employee c) Conditional The insurance company may not void the insurance policy for which of the following reasons? C. Whole life A contract between insurer and policy holder. b) Reduced paid-up D. A surplus lines broker deals with admitted carriers only The following are all true regarding risk management, except: A. (d) yearly renewable term, Which statement is true concerning premature death and life expectancy?