(b) Any withdrawal of cash value reduces the death benefit. When an agent collects the initial premium from the applicant, the agent should issue the applicant a. Joe, Larry, and Curly own a small business. (c) face amount of the policy and the legal reserve. Social Security is designed to provide a base of economic security B. ~~~\text{Rent on factory facilities}&60,000\\ (d) yearly renewable term, Which statement is true concerning premature death and life expectancy? Taxes, Retirement, and Other Insurance Concep, State Laws, Rules, and Regulations Quizzes, Life Insurance Policy Provisions, Options and, Fundamentals of Financial Management, Concise Edition. An Insurance Broker is responsible for what? a) Small employers C. Whole life A conditional or binding receipt is given when an applicant does what? \end{array} Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company? All of the following are true about health insurance except: Purchasing health care can help save you from medical bankruptcy. 2)explain any ratings Company A carries 1/3 of the total coverage ($20,000 + $40,000 = $60,000). c) Smaller. Correct: D. Department of Treasury, The Terrorism Act, which protects consumers by addressing market disruptions and ensuring the continued widespread availability and affordability of property and casualty insurance for a terrorism risk, is a administered by the Department of Treasury. How has the Aswan High Dam affected the lives of Egyptians? d) Policy dividends. 2)interest sensitive Payor benefit/Clause is always a _________. &&\\ Term-Life policy has what 3 characteristics? As her friend, you have been asked to review the income statement and make necessary corrections. 2)Decreasing term(premium is low) declining face value The correct answer is: Maggie's Piano Studio with 1 employee. -also the agent may be required to initial the change, statement of health from insureds personal physician, What are 2 federal laws that protect policy holders & forms that must be completed? Does T-Mobile Insurance Cover Water Damage? Rebating is an unfair trade practice and is regulated by law. Consumer report A. An annuity is exchanged for another annuity. has reached its final destination and can be paid out in full. b) Human life value approach b) Fixed income To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. 1. \text{Sales revenue}&&\$780,000\\ What adds coverage and modifies coverage? All of the following information about a customer must be used in determining annuity suitability EXCEPT B. a) Juvenile Life c) Comparisons with similar policies 2)premium gets lower. B) The plan is funded by permanent insurance only. 6)Explain Free Look period-10-30 days- unconditional refund that begins when policy is delivered. a) Lump-sum approach 1) All requirements are met 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)Explain and collect any ratings Any gain in the policy's cash value is . B) Once the cash surrender value option is selected, the coverage is terminated and the policy cannot be reinstated. (d) paid-up. a) Offering additional coverage to clients d) Blackout approach. (c) Interest credited to a policy's cash value is taxable to the policyowner in the year credited. Correct: C. Concealment, A. Insurance transfers risk but it does not__________ risk. Receipt a) Payor rider. Predicted needs of the family after the insured's death CashJul1Jul315,500???? b) Fiduciary responsibility. 3)Alien Insurer. D. Financial Experience. The total of all requisitions of indirect materials issued during the month is$20,170.00. 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? c) The policy will be voided. How do premiums for yearly renewable term insurance change as an insured gets older? C. Independent rating services evaluate and rate the financial ability of insurance companies Insurers use this law in order to predict certain types of losses and set appropriate premiums. D. Gender. Which of the following is the basic source of information used by the company in the risk selection process? 4. Type I rooms do not have wireless Internet access and are not available for the Business rental class. B. this insurance is often written in connection with automobile loans. D) the minor in a juvenile policy. Empire Company is a manufacturer of smart phones. cash value increases while face value remains the same. (d) endowment insurance, Rachel needs permanent life insurance. All of the following are true of insurance EXCEPT It transfers risk. The following are all causes for the Insurance Commissioner to suspend or impose conditions upon the continuance of a producer's license EXCEPT 1. Errors and Omissions Coverage (E&O) is a name used to describe a type of professional liability insurance. Cash value is invested in the stock market. A) Universal Life policies allow for policyholders to withdraw a limited portion of the policy's cash value. 2)Foreign Insurer 2. Most professional liability insurance policies are written with an occurrence coverage trigger instead of a claims made trigger O c Insureds The insurer issues the policy and learns of his history one year later. (b) tax-free exchange provision Their premiums are lower D. Offer Which is generally true regarding insureds who have been classified as preferred risks? The purpose of an estate clearance fund is to pay all of the following EXCEPT. Participating policy. Costs of training a replacement Which risk management type is shifting the risk of loss to a larger homogeneous group? ~~~\text{Selling and administrative salaries}&75,000\\ Study with Quizlet and memorize flashcards containing terms like All of the following are personal uses of life insurance EXCEPT A. Which of the families below is likely to have the least need for a large life insurance policy? 2. The employer is the owner . When both parties to a contract must perform certain duties in order to make the contract enforceable, this is known as what? d) Graded Premium. Insurance companies can charge an interest rate based on the policyowner's credit report. the underwriting process is approved for: &\begin{array}{lr|rr} b) Hazard DepreciationExpense-FactoryEquipmentDepreciationExpense-BuildingHeat,Light,andPowerExpenseInsuranceExpense-Factory$5,770.242,822.409,055.201,505.28MiscellaneousExpense-FactoryPayrollTaxesExpense-FactoryPropertyTaxExpense-FactorySuppliesExpense-Factory$13,780.4843,736.006,088.3218,063.36. Both life and health insurance can be used for a variety of purposes in a business setting, including the funding of business continuation agreements, compensating executives, and protecting the firm against financial loss resulting from the death or disability of key employees. Which of the following is an example of liquidity in a life insurance contract? States regulate the procurement of business from nonadmitted carriers by regulating the brokers who place business with these carriers. The accounting records of DVD Sales, Inc., include the following accounts: CashJul15,500???? 2)non-qualified plans (b) level-premium method Investors become more risk averse. -guarantee a stream of income to the person purchasing it known as the annuitant. C. The insurer is always required to pay the . It requires evidence of insurability for renewal. 2) standard risk D. Department of Treasury Example: AIL was incorporated in Indiana and its home office is in Texas so in NJ its considered a foreign insurer. SalesrevenueLess:OperatingexpensesRawmaterialspurchasesDirectlaborcostAdvertisingexpenseSellingandadministrativesalariesRentonfactoryfacilitiesDepreciationonsalesequipmentDepreciationonfactoryequipmentIndirectlaborcostUtilitiesexpenseInsuranceexpenseNetloss$264,000190,00090,00075,00060,00045,00031,00028,00012,0008,000$780,000803,000$(23,000). A life insurance policy is exchanged for an annuity. -Voting. \hline && \text { Jul 1 } & 65,000 \\ M327. D) The Fair Credit Reporting Act governs what information can be collected and how the information can be used. c) Increases annually. -A Mec will receive unfavorable tax treatment a) Premium amounts and surrender values 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. &\text { Cash }\\ A Contract that binds only one party to future performance, is a (n): A. C. They can borrow higher amounts off of their policies IRS classification of a policy that is overfunded? Buy-sell agreements are normally funded with a life insurance policy. Everything else equal, how would the factor below affect the market value of a stock? What constitutes the acceptance of an offer? The insurance company may not void the insurance policy for which of the following reasons? A surplus lines broker deals with direct writing companies only The following are all true regarding risk management, except: A. 2)can be sold as a rider to a whole-life policy. Quarter($000)1234Cash$100$100$100$100AccountsReceivable1999699604Inventory20150590552AccountsPayable104959597\begin{array}{lrrrr} Chapter 11 - Life Insurance. 3. -The insurance dept. 1) mentally incompetent persons Which of the following is NOT a fraudulent and intentional deception of the truth? The policyowner can add to a policy's cash value at any time subject to policy guidelines. Findefch a Wife,' 'Pnrple and Fine -men,'^The' Day of Temptation,' ' Of Royal Blood,' etc., etc . (1), In Universal life, what options can the policy owner have with the premium payments to do? ~~~\text{Advertising expense}&90,000\\ d) All of the above. What are the two options in death benefit options? By William Lb Qtjetjx, Author of . c. It is the failure to use ordinary care. D. Concealment D) adding cost of living coverage. Something of value is a __________________. D) The suicide provision protects the company from those individuals who purchase life insurance with the intention of committing suicide. -assignor=assignee Steven prints a pamphlet to advertise his life insurance business. ____________ insurer is not a type of insurer. Appoint a solicitor as his or her representative D. An individual has an insurable interest in her or her own life. Certificate holders may convert coverage to an individual policy without evidence of insurability. When a policy is non-contributory how much is paid? 2)the face amount 1) cash value earns interest (2), 1)HIPPA Therefore, it is responsible for 1/3 of the $24,000 loss, or $8,000. Fraud c. Premiums may be raised at renewal d. Group term insurance may cover the . &\text { Accounts receivable }\\ This is true whether a property or liability form; and regardless whether the insured is a commercial or personal lines client. Modification to a policy is a _______________? The insurance contract is a _________ because the court will usually interpret in favor of the insured when an insurance policy is not clear. All of the following are true for indemnity insurance except that: a. premiums are based on separate risk pools often organized by employers. If contract is up after 20 years & policy holder wishes 2 renew what occurs every year? The profit per night for each type of room and rental class is as follows: RentalClassRoomSuperSaverDeluxeBusinessTypeI$30$35TypeII$20$30$40\begin{aligned} 2)Legal Purpose 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. 1)cont. C. A surplus lines broker deals with direct writing companies only What is the difference between renewable policy holder & Insurer? If there Is a risk of financial loss then there is a what? -it pays the double indemnity, 1)accident occurs, person must die within 90 days Premiums are taxable to the employee In order for the contract or policy to be valid or legal? If the corporation collects the policy benefit, then See Page 1. D) An agent's report and inspection report provides personal information. B) According to the law of large numbers, the larger a group becomes, the easier it is to predict losses. A. (a) blended family. -the applicant must always initial the change Applicant pays premium to make agreement. B. (d) Most policies have a CV that is refunded when coverage ceases. (c) human life value method IN WHITE RAIMENT. The minimum FREE LOOK period is how many days? -age 100. -below market interest rates on borrowing \hline (\$ 000) & 1 & 2 & 3 & 4 \\ b) The agent's report B. -If the insured dies, the policy payed out the PRINCIPAL SUM (a) They increase at an increasing rate. 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. d) 15 years. Each withdrawal, however, is usually charged, and the amount and frequency of withdrawals are usually limited. Insurance is designed to cover both intentional and unintentional losses. -paying for certain time and stop. 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 _________. It is legal to list nonguaranteed values in the contract, but they must be specifically labeled as projected, not guaranteed values. In addition, they provide financial support for Tom's aged father and Nancy's aged mother. d) Producer. (b) Most policies can be renewed without evidence of insurability. A. (c) Interest credited to a policy's cash value is taxable to the policyowner in the year credited. &\text { Accounts payable }\\ D) Obtaining a bachelor's degree. Which of the following statements is not correct regarding rates and premiums? b) Adjustable life This type of life insurance is called Correct: B. All of the following are true of negligence, except: a. A monthly deduction is made from a policy's cash value for the cost of insurance protection. 2. A. B. -greater potential to grow the cash value but there is no guarantee a) the risk is transferred to the insurer b)the insured may retain part of the risk through deductibles . (b) Cash value accumulation is slow to moderate. (d) sandwiched family. (b) They increase at a decreasing rate. (Choose from the following options) The company records manufacturing costs by job number and uses a factory overhead applied rate to charge overhead costs to its products. Part 1 of the application includes the general questions about the applicant, including name, age, address, birth date, gender, income, marital status, and occupation. 2)administered charge A securities license. Where can you find insurance coverage after being rejected by your insurance company for too many claims in the past year? The 3 categories of private insurers site of incorporation? Various life insurance programs for people who served in the military are called ______________? Surplus lines broker deals with admitted carriers only ~~~\text{Utilities expense}&12,000\\ D. The face amount remains the same throughout the life of the policy. Policyholders CPI (consumer price index) without evidence. Last year, the couple got divorced. Total personal income in the United States (in billions of dollars) for selected years from 1960 to 2009 is given in the following table. What type of interest does universal life have? A __________ represents the insured. c) The inspection report (a) I only (b) II only What are some of the questions asked on the application to determine the premium and risk classification of the insured? the application is used at the primary source of info. If you don't have health insurance, you pay all costs for healthcare and medical emergencies. -tax free accumulation of borrowing. c) Copy of the original application An insured is driving her automobile and strikes a large pothole that . 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. 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. All of the following statements regarding contracts of indemnity are true EXCEPT a. In an insurance contract, the value that each party gives the other is called the: When an individual faces the risk of economic loss in the event of property damage, this indicates which of the following? When an insured fails to disclose known facts in an application for insurance, he/she may be guilty of: A. (d) indeterminate-premium whole life. (c) PV of the family's share of a deceased breadwinner's future earnings. 4)Based on principle sum(rider) & capital sum(insurer) 50%, 3rd party ownership insurers issues policy to a lending institution What are two reasons that people deposit money in banks? The Terrorism Risk Insurance Program is administered by which of the following Federal entities? B. Alex, age 26, purchased a 20- payment whole life insurance policy. 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. &\begin{array}{r|lr} A mutual insurance company does not have what? Which of the following about decreasing term insurance is true? Correct: D. A surplus lines broker places risks with nonadmitted insurers when coverage cannot be placed with admitted insurer carriers. Estimated direct labor costs for next year are$440,000.00. 3) Ordinary. -Take it or leave it contract Executive office "Round Tree Manor is a hotel that provides two types of rooms with three rental classes: Super Saver, Deluxe, and Business. The failure to disclose known facts is what? 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. B. -Prepays portion of face amount if diagnosed with terminal illness. The penalty is 50% of the shortfall from the required annual amount. C. Whole life 4. A debtor has insurable interest in the life of a lender What type of insurer has no capital stock? See Answer. a) Material change The face amount decreases as the amount owed on the mortgage decreases. C) Annually renewable term policies provide a level death benefit for a premium that increases each year with the age of the insured. D. Workers compensation.
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