Life Insurance Basics

Submit

5. A written statement summarizing the features and elements of a policy is

Suitability

Comparative method

Policy summary

Replacement

Submit

7. LA state rules indicate that illustrations must state that policy issuance may depend on answers to health questions.

True

False

8. The two types of partnership funding methods include the cross purchase method and the entity purchase method.

True

False

9. A replacing insurer is the company that issues the new policy.

True

False

Submit

11. A ________________________ life insruance policy is any poclicy that distributes its non-taxable divdends to policyowners by cash payments, reduced premiums, units of paid up insurance, a savings program, or by the purchase of term insurance. (This permits the insurer to establish a more generous margin in the form of an intentional overcharge which will be returned to the policyholder if not needed.)

Submit

12. Agents performing transaction involving any variable products are required to be registered with the _____________

Financial Industry Regulatory Authority

Explanation

Financial Industry Regulatory Authority

Submit

13. A non-participating (stock) life insurance policy does NOT pay dividends to policyowners.

True

False

However, tax dividends are paid to stockholders. Narrower safety margins because the cost of the insurance to the policyholder cannot be adjusted at a later time.

Explanation

However, tax dividends are paid to stockholders. Narrower safety margins because the cost of the insurance to the policyholder cannot be adjusted at a later time.

14. The employee would need to give permission for "Key Person" coverage.

True

False

Submit

17. Buy-sell funding is a personal use of life insurance.

True

False

18. A physical exam is not required for ordinary life insurance.

True

False

Submit

20. When insurers plans to seek and use information from investigartors, they must first provide the applicatnt or insured with a written ___________________________________________.

Field Underwriter

Subpoena

Disclosure of Insurance Information

Disclosure Authorization Notice

21. Industrial or Home Service Insurance are written in small amount (less than 1000)

True

False

22. The cost of 1 year of mortality + (commissions + taxes+ advertising + profit margin) =

Net Premium

Gross Annual Premium

Net Annual Premium

Higher Premium

23. As a general rule, the lower your frequency of payments, the higher your premium.

True

False

24. Determining Lump Sum Needs includes does not include which of the following:

Bequests or charity

Retirement Income

Insurance Against Suicide

Spousal Education

25. Debt Concellation does not pay off debts.

True

False

Submit

27. Estate tax, day care, and insurance premiums are considered lump sum needs.

True

False

28. Which Person Use of Life Insurance is NOT correctly matched wit the explanation

Estate Conversion-- important for young families that have not yet had time to accumulate assets.

Survivor Protection- Survivors maintain their lifestyle in the event of death.

Cash Accumulation--Guarantees that the amount of money will be available when needed (ie. whole life policy).

Liquidity-- availability of cash to the policy owner.

29. A stock purchase method is

When the corporation buys on policy on each shareholder.

When each partner buys a policy on the other.

When the partnerships buys the policies on the partners.

When each stockholder buys a policy on each of the others.

30. The agent (field underwriter) must complete the following:

Help prevent adverse selection

Complete the application

Collect the Initial Premium (and issuing receipt if applicable)

Properly solicit applicants.

Submit

31. Which of the following are lump sum needs associated with death

Charity

Final Medical Expenses

Children's Education

Rent or Mortgage Payments

Submit

Life Insurance Basics

1. Permanent policies remain in effect until age _____________.

2.

What first name or nickname would you like us to use?

2. For executive bonuses (aka IRS section 162 Plan)-- the amount of the raise is tax-deductible to the employer and income is ________ to the employee.

3. The predicted needs of family after the premature death of the insured is referred to as the _______ approach.

4. Net Premium + Expense (Loading) = ________________________

5. A written statement summarizing the features and elements of a policy is

6. Cash values accumulate based upon a specific portfolio of stocks without guarantees of performance. Keep pace with inflation--determined by the value of the securities backing it.

7. LA state rules indicate that illustrations must state that policy issuance may depend on answers to health questions.

8. The two types of partnership funding methods include the cross purchase method and the entity purchase method.

9. A replacing insurer is the company that issues the new policy.

10. Formulata for Net Premium= Mortality - ____________

12. Agents performing transaction involving any variable products are required to be registered with the _____________

13. A non-participating (stock) life insurance policy does NOT pay dividends to policyowners.

14. The employee would need to give permission for "Key Person" coverage.

15. Retention of advertisement files is ________ years.

16. During Human Life Value Apporach, you determine insured's after-tax income from ___________ to retirement.

17. Buy-sell funding is a personal use of life insurance.

18. A physical exam is not required for ordinary life insurance.

19. ___________________________ method is when the partnership buys the policies on the partners (better for more than 2 partners).

20. When insurers plans to seek and use information from investigartors, they must first provide the applicatnt or insured with a written ___________________________________________.

21. Industrial or Home Service Insurance are written in small amount (less than 1000)

22. The cost of 1 year of mortality + (commissions + taxes+ advertising + profit margin) =

23. As a general rule, the lower your frequency of payments, the higher your premium.

24. Determining Lump Sum Needs includes does not include which of the following:

25. Debt Concellation does not pay off debts.

26. The risk selection and classifaction process is referred to as ___________________.

27. Estate tax, day care, and insurance premiums are considered lump sum needs.

28. Which Person Use of Life Insurance is NOT correctly matched wit the explanation

29. A stock purchase method is

30. The agent (field underwriter) must complete the following:

31. Which of the following are lump sum needs associated with death