life insurance – Flashcards

temporary protection that lasts only for a specified period of time. if the insured dies during the specified timeframe, the policy pays the death benefit to the beneficiaries. Term policies provide the greatest amount of coverage for the lowest premiums. It is pure death protection

premiums remain the same thoughout the life of the policy

level premium, as do all policies, but the face amount increases every year of the policy term

death benefit

level premium and a death benefit that decreases each year of the policy. Most commonly used with mortgage

insurance is covered for life, as long as the policy premiums are paid. Premiums and death benefits are both guaranteed, and they will remain level, as long as the policy is in force

the premium paid by the policyowner also does not change during the life of the policy or during the premium payment period

continuous premium whole life, charges a level annual premium for the lifetime of the insured and provides a level, guaranteed death benefit. it build cash value. straight life has the lowest annual premium among whole life policies.

specifies a set number of years during which the policyowner must pay premiums. After premium is paid up, the policy remains in force for the insureds lifetime. Limited pay policies have higher premiums than straight life policies because the premium payment period is condensed.

one time lump sum premium payment to provide a level death benefit to the maturity of the policy. Single premium policies generate immediate cash value due to the size of the lump sum premium payment.

Present the insured with a Disclosure authorization notice

a limited pay whole life policy would endows for the face amount at age 100. the premium is completely paid off in 20 years.

ROTH IRA

one year term option the dividend is utilized to purchase one year term insurance.

a nonqualified annuity plan Nonqualified plans are perfectly legal for selected employees to receive certain types of benefits. Before tax corporate dollars can be used for these plans, and they are not subject to government standards. Nonqualified plans are not tax deductible

a joint life policy would be the least expensive because the premiums are based on the average age, and the death benefit would be paid out at the first death.

an accelerated benefit provision can be made in a lump sum or in monthly installments over a specific period of time. this provision is given without an increase in premium

a modified endowment contract

entire contract

payor benefit rider

the coverage period

a mutual insurer

tax deductible

60 days

The annuitant assumes the risks on investment

paid up option

60 days The report relating to the examination must be filed no later than 60 days after the examination is complete

The beneficiary must have insurable interest in the insured. A beneficiary is the person or interest to whom the policy proceeds will be paid upon the death of the insured. Beneficiaries do not have interest in the policy holder.

A Stoli policy (Stranger originated life insurance policies are usually purchased by people who have no relationship with the insured with the intention of selling them for life settlements.

cause of loss A peril is a specific cause of loss insured in a policy.

As of the application date. If the full premium was submitted with the application and the policy was issued as requested, the policy coverage effective date would generally coincide with the date of application

Both the principal and interest will be liquidated over a selected period of time. Under the fixed period option (also called period certain), a specified period of years is selected, and equal installments are paid to the recipient. Both the principal and interest are liquidated together over the selected period of time.

seek higher returns these are not securities. They invest on a relatively aggressive basis to aim for higher returns. Like a fixed annuity, the equity indexed annuity has a guaranteed minimum interest rate. The current interest rate that is actually credited is often tied to a familiar index like the Standard and Poohs 500

split dollar amount Examples of nonqualified plans are individual annuities and deferred compensation plans for highly paid executives, split dollar insurance Section 162 executive bonus plans.

The full death benefit War or Military Service Clause specifically excludes or limits the insurer's liability for losses caused by war or active military service. If a life insurance policy does not have that exclusion, the benefits are paid to the beneficiary, as if the insured dies of any other cause.

Life Paid-up at age 65 Limited Pay Whole Life premiums are all paid by the time the insured reaches age 65. The policy endows when the insured turns 100. It is the premium paying period that is limited, not the maturity.

It is issued to group insurance participants. Before insurers may transact business in a specific state, they must apply for a license or certificate or Authority from the state department of insurance and meet any financial requirements set down by the state.

every 2 years every agent who sells, solicits, or negotiates long term care insurance in Minneosta must be licensed as an insurance producer for life and disability and complete a one time training course and the ongoing training every 24 months

en embedded deductible. Deductibles for a major medical plans can be paid in one of the following primary ways: a FLAT dollar deductible, a PER CAUSE deductible, and a MAXIMUM annual deductible FM PC

Required a premium increase each year

The rider is usually level term insurance

every 2 years

the full death benefit

Life paid up at Age 65 Limited Pay Whole Life premiums are all paid by the time the insured reaches age 65. The policy endows when the insured turns 100. It is the period that is limited, not the maturity.

It is issued to group insurance participants Before insurers may transact business in a specific state, they must apply for a license or Certificate of Authority

A STOLI Policy Stranger Oriented Life Insurance policies are usually purchased by people who have no relationship with the insured with intention of selling them for life settlements

cause of loss A peril is a specific cause of loss

as of the application date if the full premium was submitted with the application and the policy was issued as requested, the policy effective date would generally coincide with the date of application.

Owner's rights

paid up option this is different from paid up additions, in which the insured can use dividends to buy additional policies that increase the face amount of the original policy

Premiums paid on a 30,000 ife insurance group term life insuranc eplan for an employee

Revocable beneficiary

paid up option

extended coverage The extended term nonforfeitfture option has the same face amount as the original policy but for a shorter period of time

in 30 days. state law provides that if a time is not specified, the person shall comply with the request within 30 days and shall provide all documents ot material to the Commerissionar has qr

credit insurance Credit life insurance covers the life of a debtor in connection with a specific loan or other credit transaction

Monthly premium waiver and monthly income The Disability Income Benefit rider waives the policy premiums, just like the Waiver of Premium rider. Unlike the Waiver of Premium rider, it allows the insurer to receive a weekly or monthly income during the disability period.

Occurrence A clims made form provides coverage that occurs after a retroactive date and when a claim is made during the policy period. An occurrence form covers losses that start or are discovered during the policy period, regardless of when the date is actually reported and filed by the insured

insurance and cash account A universal policy has two components: an insurance component and a cash account The insurance component of a universal life policy is always annually renewable term insurance. The cash account accumulates on a tax deferred basis each year and earns either the guaranteed contract rate or the

It will decrease the benefits paid to the beneficiary

group Social security provides 3 types of benefits: Retirement, Disability and Survivors

misrepresentation

beneficiary the beneficiary is the person who receives the benefits from the insurance policy

the same face amount as in the whole life policy Under this option the insurer uses the policy cash value to convert to term insurance for the same face amount as the former permanent policy

Profit sharing plan A profit sharing plan is one where the employer will contribute monies into an employee's retirement plan when the company shows a profit. The others are all qualitfied plans, but company profit isn't an issue with them (401K, tax-sheltered annuity, HR 10 plan)

spendthrift provision When a life insurance policy contains a spendthrift provision, all rights of the beneficiary to change time of payment or amount of installments, surrender cash, borrow against, or assign for any purpose, are withdrawn and those parts of the policy that may give the beneficiary such rights are void.

Size of each installment The size of each installment determines the length of time that benefits are received under the Fixed Amount settlement option.

Premium amounts and surrender values

50,000 the face of the term policy would be the same as the face amount provided under the whole life policy

reinstatement provision

certain groups of employees only a tax sheltered annuity is a special tax favored retirement plan available only to certain groups of employees (nonprofit, education, other 501c3 organizations, including all employees in public education.)

multiple employer trust formed when several similary or related small companies join forces to create a large pool of people that insures a group. The MET purchases a single benefit plan that covers the employees of each of the companies involved.

coverage ends and the policy cannot be reinstated Once the cash surrender option is selected, the coverage is terminated, and the policy cannot be reinstated.

2500 An individual, who willfully violates this ACt enough to constitute a general pattern or business practice, will be subject to a penalty up to 2500

it will decrease the benefits paid

fixed period. the beneficiary would determine how long benefits would be paid. The insurer would determine how much would be paid in each installment.

It has the highest amount of insurance protection Under this option the insurer uses the policy cash value to convert to term insuirance for the same face value amount as the former permanent plsn

30 days State law provides that if a time is not specified, the person shall comply with the request within 30 days and shall provide all documents over to the Commissioner has requests

creating an estate Deferred annuities grow tax deferred, and are best suitable for accumulating retirement income or funds for children's college education.

the insured's premiums will be waived until she is 21.

they are required by state law to be included int he policy. Nonforfeiture values are required by state law to be included in the policy, and cannot be altered by the pollicyowner. A table showing the nonf for the next 20 years must be included.

10 days

insuring clause

1000 hours a year

Disputes regarding comsumer information would not be considered negative information

installment basis

issuring, publishing or circulating any illustration of sales information that is false, misleading or deceptive to policy benefits or terms. This includes oral statements

mode is the manner or frequency that the policyowner pays the policy premium

is a special tax favored retirement plan available only to certain groups of people (educational, religious, public education)

automatic premium loan added to contracts with a cash value at no additional charge. this is a special type of loan that prevents the unintentional lapse of a policy due to nonpayment of a premium

cross purchase plan each partner is owner, payor and beneficiary

invest on an aggressive basis in order to yield higher results. they have guaranteed minimum interest rates they are less riskier than variable annuities

defines how each policy will pay

covers the life of a debtor

10 days to notify commissioner of change of address, change of phone, etc.

contains the company's promise to pay

dividend checks

absolute and collateral

surviving beneficiary will continue receiveing 2/3 of the beenfi paid when both were alive

receives a master plan, and the employees receive certificate of insurance, NOT individual policies