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Faces high catastrophic loss exposure
Is part of a large group of homogeneous exposure units
Has a market value difficult to determine
Holds no hardship to the owner should it be lost or damaged
If a mutual company goes public, it demutualizes
Mutual companies issue policies referred to as participating
Policy dividends issued by mutual companies are guaranteed and not taxable
Dividends allow policyholders to share in a mutual companies divisible surplus
Elected by the people of California every four years
Selected by the Governor as an appointee
Is a representative to the National Association of Insurance Commissioners (NAIC)
Capable of becoming the conservator of a financially impaired, or insolvent, insurer
Marketing plans to offer free insurance as an inducement to buy or rent real property are prohibited
Acts of fair and unfair discrimination are prohibited
Agents are not permitted to advertise that an insurer is a member of any insurance guaranty association
The act of twisting could result in a license suspension for up to three years
A licensee has 30 days to update a change in address
Licensees are required to have an in-state residential address
Loss of a precious professional license could result in the automatic denial of the life-only license application
A plea of nolo contendere is considered a conviction, thus it could hinder attempts to obtain a life-only license
Tommy Greene and Associates
Thomas Greene, CLU, & Company
Greene Insurance Agency
None of the would ever be automatically approved
As a life insurance product, future proceeds are tax free.
She has a 30 day free look period in case she changes her mind.
Since she only has a few more years before she retires, she should invest with the objective tho make as much money as possible. Her time horizon is limited.
She will have to begin taking withdrawals within six months of receiving the proceeds.
75% of eligible employees must elect to join the plan.
100% of eligible employees must participate.
75% of employees must elect to join the plan.
100% of employees must be allowed to participate.
The new policy will be term life. The employee pays all premiums.
The new policy will be term life. The employer will pay a portion of the cost.
The new policy will be cash value. The employer will pay a portion of the cost.
The new policy will be cash value. The employee pays all the premiums.
Executive Bonus Plan
Split Dollar Plan
Deferred Compensation Plans
Life with refund option, life with 10 years certain, straight life
Straight life, life with ten years certain, life refund option
Life with ten year certain, life with refund option, straight life
Life with refund option, straight life, life with 10 years certain
Interest only option
One-year term option
Reduce the nest premium payment
Accumulate with interest
$2,000 or less in coverage and premiums collected by agent.
$10,000 coverage and premiums paid by mail.
$50,000 coverage and premiums paid by mail.
$100,000 coverage and premiums collected by agent.
Variable Universal Life
Accelerated Death Benefit
Accidental Death Benefit
Accidental Death and Dismemberment
Cost of Living
The client is covered during underwriting.
The agent faces potential suspension or revocation of their license.
The client is not covered during underwriting since binders only start once underwriting is complete.
Since the medical exam hasn't been completed yet, the client is not covered at all.
Every week your client plays $20 on the lotto.
Any action that could do harm to your clients well-being such as reckless driving.
Your client invest 5% of his salary into the defined benefit plan at his work.
All of the above situations involve some risk.
Identification of their relationship to the insurance company.
License number must appear in the same size font as the phone number.
Must not include any title, designations, or licenses that are not currently held.
All of the above.
Qualified and unfunded
Fully funded and non-qualified
Qualified and non-qualified
Contributory and noncontributory
Automatic Premium Loan
Accelerated (Living) Benefit
Assignment of Benefit
Life with Period Certain
Life Income (Straight Life)
Life Refund Income
The new policy will require no further premium payments.
The new policy will expire in 10 years.
The new death benefit is much lower than the original policy.
The new policy will be in effect until the age of 100, or until she dies, whichever occurs first.
The replacement insurer must notify the insurer within 3 days of the potential replacement.
The agent and the applicant must sign a statement as to whether replacement will be involved in the transaction.
A copy of the signed replacement disclosure must be left with the applicant.
Copies of any written illustration or comparisons used in the process of making the replacement do not need to be included with the submitted application.
Names of patients treated by member physicians.
Cause of death when death benefits are paid.
Medical conditions found during underwriting.
Amounts of life insurance applied for by all applicants.
They are particularly well suited to help families deal with estate tax burdens.
The face amounts are often for $1,000,000 or more.
The face amount is payable after the first death.
As a form of joint life, it covers two individuals on the same policy.
Mutual insurers are owned by the shareholders, and issue participating policies.
Stock insurers are owned by the shareholders, and issue non-participating policies.
Stock dividends are tax-free while policy dividends are taxable.
Non-participating policies can pay out dividends to the policyholders.
Accept or deny the application after an exploratory hearing.
Deny the application without hearing.
Accept the application as other licenses have no bearing on this application.
Accept the application for a two year provisional license.
Reinsure any risk in excess of state retention limits.
Possess enough assets to cover its liabilities.
Maintain an amount at least equal to its required minimum paid-in capital.
Contribute a specific amount of capital reserves to the state.
An Endowment to the age of 65
Life Paid-up at 65
A 30-Year Term Plan
A civil penalty of up to $5,000 if his actions were not willful and $10,000 fine they were.
A cease and desist order will be issued.
A hearing will be called.
Darren will be charged with a felony and/or up to 10 years in jail.
Places property & casualty insurance with non-admitted carriers.
Negotiates life settlement contracts between an owner and providers.
Sells single premium immediate annuities to seniors.
Assists beneficiaries in filing a claim on a life insurance policy.
Protects an agent in the case of unintentional negligence.
Has very low deductibles.
Does not protect the agent if the case against him/her is frivolous.
One-year term option
Accumulated at interest option
Reduced paid up option
Paid-up additions option
The name of the insurer, the name of the client, and the name of the producer.
Vanishing premiums if the policy becomes paid up with non-guaranteed elements paying future premiums.
An interest rate for non-guaranteed elements that is less than the earned interest rate of the disciplined current scale.
Depictions of policy performance being less favorable than the insurer's illustrated scale.
The total premiums paid are added to the death benefit.
The total premiums paid is returned to the insured when the policy is cancelled.
These policies typically have a higher premium than policies without this feature.
Increasing term insurance is use to provide this additional benefit.
The insurance company can keep the initial premium paid.
The client is still covered for 90 days on the conditional receipt.
The insurance company must refund the entire premium paid.
The client will pay an increased premium.
Full retirement age is 65 for all persons born after 1937.
Fully insured status can be achieved by paying the FICA tax for forty quarters/credits.
Retirement age is based upon the worker's birth year.
The worker's full retirement benefits are determined by the PIA.
The period of time in which a policy can be rescinded due to the applicants intentional or unintentional misstatements on the application.
The period of time in which the policy is still in force despite non-payment.
The period of time after the youngest child reaches 16, but before the widow reaches 60, in which the surviving spouse receives no Social Security benefits.
The period of time in which an employee is not yet eligible to join a group life insurance plan.
Flexible Premium Immediate Annuity
Single Premium Deferred Annuity
Single Premium Immediate Annuity
Flexible Premium Deferred Annuity
The job with the most hours worked each week on average.
The job with the highest income.
The job the insured is most closely trained for professionally.
The job that is most hazardous.
Any time you wish once proving you are insurable for the additional coverage.
At specified ages or date after providing evidence of insurance.
Without proof of insurability when the cost of living increases.
Without evidence of insurability at specified ages or dates.
The policy is incontestable. Full claim will be paid.
The policy will be rescinded as it is contestable.
The proceeds payable will be adjusted.
The shortage of premium will be deducted from the death benefit.
Reinstatement, entire contract, incontestability
Aviation, suicide, incontestability
Pre-existing conditions, entire contract, grace period
Right to return, reinstatement, war clause
Unequal exchange in value.
Only one party to the contract is bound by a legally enforceable obligation.
If in dispute, the courts rule in favor of the insured, not the insurer.
Both parties to the contract are required to disclose to the other all material information.
Annuities create an instant estate, while life insurance liquidate an estate.
Annuities provide a tax free income in retirement.
Life insurance can be funded monthly, while annuities require a lump-sum funding.
Life insurance creates an instant estate, while annuities liquidate a sum of money.
Hearing $ eating
Dressing & seeing
Speaking & sleeping
Mobility & bathing
Odds of sickness versus odds of disability.
Odds of dying versus the odds of disability.
Odds of sickness versus the odds of dying.
They are virtually the same concept.
Mandatory & optional
Permissive & mandatory
Mandatory & permissive
Mandatory & unknown
Ordinary whole life, modified whole life, single premium whole like
Single premium whole life, modifies whole life, ordinary whole life
Modified whole life, ordinary whole life, single premium whole life
Modified whole life, single premium whole life, ordinary whole life
Purchase an individual annuity for any face amount using the 1035 exchange privilege.
Purchase another term policy and increase his death benefit without proof of insurability.
Convert to a whole life policy for the same face amount without proof of insurability.
Convert to another term policy with a lower face amount without proof of insurability.
Any document referenced by the policy
A copy of the application
Life paid-up at 65
Endowment at 65
It dictates that if the insured and beneficiary die together, and the order of death is unknown, the beneficiary is presumed to have died first.
It protects the death benefit from attachment by creditors after the insured passes away.
It keeps the policy from being cancelled if, after two years, it is discovered that there was an error, concealment, or misrepresentation by the policy owner.
It keeps the policy from lapsing should the premium go unpaid by borrowing from the cash value.
Will see an increase in its face value each year by a set percentage.
Will increase or decrease along with the CPI. The premium will adjust accordingly. No evidence of insurability is required.
Will only increase with the inflation rate. There will be an additional premium charged, but no evidence of insurability is required.
Will allow the insured to purchase additional insurance with evidence of insurability.
Possible arson activity
Ratings and claims abuses by the insurers
Possible fraudulent claims by the insured
Unfair trade practices by the insurer
ESOP's invest in a portfolio of stock selected by the employer.
Profit-sharing plans allow employees to share in the employer's success.
Defined benefit plans are often linked to an employee's years of service.
Defined benefit and defined contribution plans have different penalties for early distribution.
Mortgage redemption (decreasing term/mortgage protection)
Joint life (first-to-die)
They are likely to be larger in nonparticipating policies.
They are not taxable and are not guaranteed.
Stock insurers pay dividends to policy owners, mutual insurers pay dividends to shareholders.
They are guaranteed to be paid and they are taxable.
If the policy has not been returned, whether or not a premium was paid.
Under no circumstance; there is no coverage until the 10-day period has passed.
If the premium has been paid and the policy has not been returned.
Only if the policy is returned.
The insurer pays monthly disability income to the premium payor.
The insured is only covered to age 18, then the policy expires.
The owner of the policy is disabled or has died.
At age 21 or 25, the death benefit is reduced by up to 50%.
18 or 19, if unmarried and a student in elementary or secondary school
22 or 23, if unmarried and a college student
Interest-only to age 40
Deductibility of premiums, taxable death benefits
Non-deductibility of premiums, non-taxable death benefits
Deductibility of premiums, non-taxable death benefits
Non-deductibility of premiums, taxable death benefits
Only when the cash value equals the death benefit
At any time
Within 30 days of an interest payment
Only if there are no outstanding loans
One business day
At least 24 hours
Prior to entering the home
Three calendar days