Or, Bill can invest $9,000 in project B that promises to pay annual end-of-year payments of$1,500, $1,500,$1,500, $3,500, and$4,000 over the next 5 years. 4)policy matures at age 100. 1. b) The debtors eligible for insurance under the policy shall all be the debtors of the creditor(s). Business partners have an insurable interest in each other Liquidity in life insurance refers to availability of cash to the insured through cash values. C. They can borrow higher amounts off of their policies 3)premium is collected Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy? A) Any distributions from MECs are taxable, including withdrawals and policy loans. What is the primary source of info used to determine insurability by the underwriting department? A life insurance license. In terms of social security, what is the name for the time period after the youngest child of a family turns 16 and before the surviving spouse may start receving retirement benefits? 1)tax qualified plans Modification to a policy is a _______________? You cannot sell a variable policy without what? You should now have gotten the answer to your question "All of the following statements are true of liability insurance, EXCEPT:", which was part of Insurance MCQs & Answers. Which of the following is the basis for a claim against an insurance policy? A mutual insurer has no stock, and is owned by the policyholders. 2)Straight Life If the insurance carried is less than required, the insurance may not cover the whole loss. Group life insurance is most often issued as guaranteed annual renewable term. Question: All of the following statements about professional liability insurance are true, EXCEPT: Select one: O a. 3)Minors. Quarterly working capital levels for your firm for the next year are included in the following table. Any profit realized in the operation will be used to provide dividends to stockholders as well as surplus funds that may be used as a buffer for future adverse experience. Tom and Nancy Boyle provide financial support for their two children. Correct: D. A surplus lines broker places risks with nonadmitted insurers when coverage cannot be placed with admitted insurer carriers. Liquidity in life insurance refers to availability of cash to the insured. Quarter($000)1234Cash$100$100$100$100AccountsReceivable1999699604Inventory20150590552AccountsPayable104959597\begin{array}{lrrrr} Which of the following information about the applicant is NOT included on Part 1 of the application for life insurance. They keep a high percentage of any interest earned on their policies Can a misrepresentation render the contract void if the misrepresentation is material to the risk? 6)Explain Free Look period-10-30 days- unconditional refund that begins when policy is delivered. A. signed waiver of premium WorkinProcess$229,040.00EmployeeIncomeTaxPayable$33,880.00FactoryOverhead78,960.00SocialSecurityTaxPayable19,096.00Cash250,558.00MedicareTaxPayable4,466.00\begin{array}{lrlr}\text { Work in Process } & \$ 229,040.00 & \text { Employee Income Tax Payable } & \$ 33,880.00 \\ \text { Factory Overhead } & 78,960.00 & \text { Social Security Tax Payable } & 19,096.00 \\ \text { Cash } & 250,558.00 & \text { Medicare Tax Payable } & 4,466.00\end{array} c) Comparisons with similar policies Pure risk Which of the following statements about a life insurance policy is (are) true? Which of the following statements about endowment policies is true? &\text { Accumulated depr.-equipment }\\ Most policies can be renewed for additional periods without evidence of insurability. c) Smaller. After everything is signed & premium is collected What does the agent give to the policy holder? C. Certain Risk With a little work, an unused office area could be converted to a rental room. If there Is a risk of financial loss then there is a what? B. Twisting e. The total of costs recorded on all sales invoices for the month is$654,052.00. Which type of life insurance makes sense for someone in this situation? I. What must exist at the time of the application? *The insured is diagnosed with terminal & chronicle illness D. Funding against general company financial loss. 3)semi-annual The policy is a contract of adhesion -Not invested in stock market _________ is a determination that a statement made as a warranty, or true. A) An indeterminate premium reduction policy is a policy in which the premium is guaranteed for an initial period, then the insurer can charge up to a maximum premium charge that is specified in the policy. Premiums are not tax deductible as a business expense. What type of term do you think would be least expensive a short term or a long? 4)defined contribution plans. Correct: D. Concealment. 1) coverage is permanent Correct: B. Who are considered to be restricted persons concerning the formulation of an insurance contract. 3 of them? What limitations might this model have for predicting consumer's attitudes and purchase behavior towards Cream Silk? According to the entire contract provision, what document must be made part of the insurance policy? It is the specific cause of loss. The cash value available to the policyowner The primary purpose of buying an annuity is? Who gets $$money when the policy holder dies? On DUE DATE. An insurer that was incorporated in a different state that it is doing business in. If someone dies within the Grace period, what happens? 1) Family Maintenance(breadwinner) _____________ is an employer paid disability and health insurance coverage that covers job related illnesses or injuries. -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? Which of the following statements about universal life insurance is true? 3)Family Policy(Limited but all fam members paid) If company pays dividends, then they are a? The ___________ controls all rights of the contract. A _______ __ is the additional premium needed to get covered with high or substandard risk. (a) matured. The Aspect of the Dragons is obtained by defeating any Ender Dragon in the Dragon's Nest (except Superior) located at the bottom of The End. 3)according to the source of annuity income -The insurer would pay the face amount of the policy minus the past due premium. SalesrevenueLess:OperatingexpensesRawmaterialspurchasesDirectlaborcostAdvertisingexpenseSellingandadministrativesalariesRentonfactoryfacilitiesDepreciationonsalesequipmentDepreciationonfactoryequipmentIndirectlaborcostUtilitiesexpenseInsuranceexpenseNetloss$264,000190,00090,00075,00060,00045,00031,00028,00012,0008,000$780,000803,000$(23,000). 21,000 \\ 2)attorneys ~~~\text{Utilities expense}&12,000\\ Acceptance Endowments means policy is what(2) things? Why do most states have a waiting period for couples applying for marriage licenses? Rates Which of the following is NOT an example of a business use of Life Insurance? D) adding cost of living coverage. Now Tamara can afford whole life insurance. \text { Type II } & \$ 20 & \$ 30 & \$ 40 d) Making claims payments which clearly indicate under which coverage payment has been made. 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 _________. The 4 characteristics of a universal life policy are? ____________ is a statement that is true to the best of the persons knowledge that is making the statement. O c. The policyowner has the option of investing the cash value in several investment accounts. c) 15% for early withdrawal a. whole life paid at 65 \end{aligned} Correct: A. The penalty is 50% of the shortfall from the required annual amount. a) An agent offers the use of his lake house to person as an inducement to buy. B. Nonadmitted The application is the basic source of information an insurer uses in the risk selection process. Their premiums are lower (b) variable life insurance 167 views, 0 likes, 3 loves, 8 comments, 10 shares, Facebook Watch Videos from Saint Barnabas Episcopal Church Greensboro, NC: 5th Sunday after Epiphany. b) An agent offers to share his commission with a policyholder. What is the purpose of a suicide provision within a life insurance policy? (b) Any withdrawal of cash value reduces the death benefit. Jul313,000\begin{aligned} a) Remains level. 1) preferred-low It requires evidence of insurability for renewal. Which $50,000 life insurance contract if purchased when the insured was 32, would have the highest cash value when the insured is 50? An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. (b) face amount of the policy and the total premiums that have been paid. A. Its controller resigned in October 2017. B) The reduced paid-up nonforfeiture option would provide protection until the insured reaches 100, but the face amount is reduced to what the cash would buy. When the producer exceeds the authority expressed in the agency contract and the insurer does not take action, which type of authority is created? c. Using the payback period, which project should Bill choose? D. Unilateral Contract -provides income for retirement Cash Accumulation C. Buy-Sell agreement D. Survivor Protection, All of the following are true of key person insurance except A. Estate Creation B. When a New York insurance agent or broker advertises services, he/she must list the full name of the insurer and the name of the city, town, or village that houses the principal office. D. Accident Pertaining to insurance, what is the definition of a fiduciary responsibility? 2) Transferring the risk What is the difference between renewable policy holder & Insurer? 4)underwriting is complete d) Paid-up option. II. 1) Conditional Reciept A. d) Primary and secondary beneficiary designations. Company doing business in the state it was incorporated and owned by the stockholders(people who own stock) who received dividends and the right to vote???? 2)Legal Purpose The insurer issues the policy and learns of his history one year later. d) Living need rider. Prior to October 2017, the company had been profitable every month. An Insurer organized in another state than the state in which it is authorized to do business is known as which type of insurer? CashJul1Jul315,500???? (Medic Information Bureau)? Hammond estimates that it will manufacture 5,000 televisions next year. \hline \text { Jul 31 } & 17,000 B. C. A husband or wife has an insurable interest in their spouse Be prepared to justify your answer. ____________ is the transfer of the right of recovery from the insured to the insurance company. Carl would like to purchase life insurance. Part 1 of the application includes the general questions about the applicant, including name, age, address, birth date, gender, income, marital status, and occupation. A policy summary An insurer that was incorporated in a DIFFERENT STATE that it is doing business in is a _____________??? An agent and an applicant for a life insurance policy fill out and sign the application. may not be altered by an agent and must clearly state that it is not part of the contract. In order for the contract or policy to be valid or legal? (c) PV of the family's share of a deceased breadwinner's future earnings. &\begin{array}{lr|rr} When an insured fails to disclose known facts in an application for insurance, he/she may be guilty of what? If the corporation collects the policy benefit, then What characteristic must an annuity have if it is used to accumulate funds in an IRA? Question: 55. C) common stock 4. The policy is issued for one year and may be renewed annually with evidence of insurability. Occupation C) Completing pre-licensing training. By William Lb Qtjetjx, Author of . D. An individual has an insurable interest in her or her own life. Each policy pays a percentage of the loss based on the percentage of coverage that policy provides. 3)Increasing term adds face value. 4)Offer and Acceptance, -direct and identifiable interest in that persons life/as well as financial interest. II. Annual income Arrest History. D. The policy is a bilateral contract C. Application Jul3119,500\begin{aligned} b. it frequently includes coverage for losses due to casualty and theft. What does it mean when a policy is limited pay life? d) Fiscal responsibility. 3) Retaining the risk. C. Payment of premium Which of the following about the use of ordinary life insurance is true? They have made a legal arrangement which states that if one of them dies or becomes disabled, the other two wull be able to buy the partner's shares, Which term best describes this arrangement? He would also like to invest in a mutual fund. b) A producer who handles insurer funds in a trust capacity. -and the right to vote. B. Aleatory contract -A Mec will receive unfavorable tax treatment There is no limitation on the number of key employee plans in force at any one time B. 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. a) Withdrawals are not taxable. 1)Level Should a key person die, the benefit is treated as a reimbursement to the business for loss of services from that key person. -assignor=assignee Upon policy delivery, the producer may be required to obtain any of the following EXCEPT b) Coverage ends and the policy cannot be reinstated. -Can't lose value D. Claim History (c) both I & II (d) neither I or II, Diane is a single parent. A contract that allows an insured to be restored to the same financial condition as prior to the loss is considered to be what type of contract? Which of the following about a VUL insurance policy is (are) true? AccountsreceivableJul1Jul3121,000???? (Hint: Take a look at the Theory of Reasoned Action.). A SEC registration. CPI (consumer price index) without evidence. C) A licensee cannot knowingly employ an individual who has been convicted of a felony or crime of moral turpitude within the past 10 years to act in a fiduciary capacity. To sell variable insurance what must you have? Who assumes control over an insurance company's funds and management if it becomes insolvent? \hline && \text { Jul 1 } & 65,000 \\ I. ~~~\text{Selling and administrative salaries}&75,000\\ D) The Fair Credit Reporting Act governs what information can be collected and how the information can be used. 3)certified public accountants, Is insurance that is provided by the Federal or State government Misappropriation or illegal withholding of the policyholder's money. 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. 3)increase the length of coverage Which of the following is an example of an unfair claims settlement practice? A. C. Countersign insurance contracts Term-Life policy has what 3 characteristics? Close Skip to Content High Contrast Increase Text Size Clear All 515-705-0233. EMPIRECOMPANYIncomeStatementFortheMonthEndedOctober31,2017\begin{array}{c} 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? When the agent delivers the policy, collects the initial premium, and the applicant completes and acceptable statement of good health Waive the premium if the INSURED becomes totally disabled. Type of insurance contract that pays its death benefit only during a specified period of time and nothing after that stipulated period. Foreign. Numerical identifiers: Each candidate list entry covers both anhydrous and hydrated forms of a substance. It is used to pay off the balance on the mortgage. b) Failure to promptly settle a claim when liability has been clearly established Which of the following is true regarding the beneficiary designation of the former spouse. The following are all true regarding risk management, except: A. D. Represent the insured's interest the willful holding back or secretion of material facts pertinent of the issuance of insurance or a claim. When a replacement is involved, a replacing insurance company is responsible for all of the following EXCEPT: Provide a copy of the Important Notice Regarding Replacement of Life Insurance to the applicant. 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. 2)Foreign Insurer ?19,500, Accumulateddepr.-equipmentJul155,000Depr3,000Jul3158,000\begin{aligned} ________________ are the person who receives benefits payable upon death. B) the applicant. ? Beneficiaries are NOT required to sign the application unless they are also the owner. We participate at both the national and state levels as a leading advocate in the judicial, legislative, and regulatory environment to ensure that Members' concerns are heard by lawmakers on issues that impact medical professional liability. (2), 1)HIPPA 1)temporary b) Human life value approach Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value? 3)low premiums. Warranty A Contract that binds only one party to future performance, is a (n): A. Home Office- what do the underwriters do. they evaluate 4 things- what are they(4)??? -the insurer sets the terms of the contract and the applicant must adhere to them. An insurer or producer may NOT knowingly employ an individual to act in a fiduciary capacity if that individual has been convicted of a felony or crime of moral turpitude within the past A securities license. An individual applies for a life policy. 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. \end{aligned} c) Fixed premium The person who receives the benefit when insured dies. Insurance transfers risk but it does not__________ risk. An Insurance broker is responsible for what? Various life insurance programs for people who served in the military are called ______________? 1. -tax free accumulation of borrowing. A. All of the following are true of insurance except: a) protects against uncertainty b)means sharing of loss c)eliminates risk d)transfers risk Answer: Eliminates risk Question: Which of the following is NOT true about insurance? (c) Most policies can be converted to a permanent life insurance policy. -policyowners right provision a) More active. (economy). Correct: C. Consideration. c) Term life b) The elderly The terrorism risk insurance program reauthorization act provides for a terrorism insurance program administered by which federal entity? When a policy is contributory how much is paid? 3)they provide insurance to members. Indicate by a plus (+)(+)(+), minus ()(-)(), or zero (0)(0)(0) if the factor would increase, decrease, or have an indeterminate effect. a) Because the insured is currently not a drug user, his policy will not be affected. \end{array} (c) conversion provision Agents and producers must place business through an insurer with the lowest rated Accelerated Living Benefit/Death Benefit is what type of rider? All of the following statements about ordinary life insurance are true EXCEPT. Renew policy holder has an option- THE INSURER DOES NOT. ~~~\text{Rent on factory facilities}&60,000\\ The policyowner has a variety of options for investment of the cash value. Which of the following is NOT a fraudulent and intentional deception of the truth? The Waiver of Cost of Insurance rider is found in what type of insurance? B. C. The insurer is always required to pay the . 3)substandard-highest, 6 factors that are complete for policy 2 be paid? Represent the insured's interest The requirement that producers must account for all insurance funds collected, and without the expressed consent of the insurance company(ies) are not permitted to co-mingle those funds with their own funds is known as \end{array} Fraud When must insurable interest exist in a life insurance policy? A. c) Helping insureds to file claims Copyright 2009-2022 Tests.com LLC - All Rights Reserved. 25,500, AccountspayableJul114,500???? Rates are considered inadequate when they do not cover projected losses and expenses. A. All of the following statements are true regarding mortgage protection insurance EXCEPT. Costs of training a replacement ______________ is defined as restoring the insured to the same financial condition as before the loss. \text{Inventory} & 201 & 505 & 905 & 52 \\ D) The Life and Health Insurance Guaranty Corporation protects Maryland residents who are policyholders, insureds, beneficiaries, annuitants, and assignees of life and health insurance policies, annuities, and supplemental contracts, if the insurer issuing the policies fails to perform its contractual obligations because it becomes impaired. II. -Both parties must follow certain conditions set forth in contract, -IRS classification of a policy that is overfunded (b) single-parent family. The following information is taken from the records of Hammond on November 30 of the current year. A. -paying for certain time and stop. Which of the following about decreasing term insurance is true? C) the proposed insured. A. The money in a savings account How does having children affect the decisions that couples must make when considering a divorce? (c) both I & II (d) neither I or II. The correct answer is: Maggie's Piano Studio with 1 employee. $ cant exceed indebtness. D) They must be signed by both the Producer and the applicant. \end{array} \\ The policy's cash value grows as the investments grow. (c) They decrease at a constant rate. 2) form of interest sensitive life insurance(current market conditions influence the cash value) When an agent is handling the premiums that belong to an insurance company, they are acting in a fiduciary capacity. 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 type of insurer has no capital stock? -7 pay test is used to determine If a policy is a MEC. -They provide coverage for risks that other insurers normally would not provide. is proved to be untrue, whether intended as a falsehood or not, and may void the contract. 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? a) the risk is transferred to the insurer b)the insured may retain part of the risk through deductibles . What is the term for a cause of loss, such as the theft of a car? a) Accepted accounting principal. 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. 2)the face amount 2. Statements in the application that are guaranteed true but later found to be false may result in what? Insurance is considered a transfer of risk. 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. &\text { Inventory }\\ 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. Conviction of a felony involving moral turpitude. When will coverage begin? All The statements made on the application are called ______? (b) level-premium method b. Coverage is available in $50,000 increments up to the maximum of $400,000. 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 . &\text { Retained Earnings }\\ Cash value is invested in the stock market. All of the following statements about term insurance are trueEXCEPTa. Which of the following is a financial rating service? All of the following statements are correct about policy loan interest rates EXCEPT: (A) an insurance company can charge a fixed rate of interest up to a maximum of 10%, with some restrictions (B) an adjustable interest rate can be used if the insurance company follows a national corporate bond index (C) an adjustable interest rate can be used if the limit is based on the average monthly . This is true whether a property or liability form; and regardless whether the insured is a commercial or personal lines client. (2), The current market will influence the cash value Jason Mackenzie Alexander argues morality is a form of social technology - it is context specific and it can go out-of-date C. A surplus lines broker deals with direct writing companies only d) Decreases annually. Increasing term ($000)CashAccountsReceivableInventoryAccountsPayable1$1001992011042$1009650595Quarter3$10099905954$1006045297, Describe Cream Silk's promotion within the context of the multi-attribute model: Which attribute(s) were central to the promotion and how does the model explain what the company was trying to accomplish with the "Human Hair Quartet?" A. (c) Interest credited to a policy's cash value is taxable to the policyowner in the year credited. (d) paid-up. Reinsurer Assuming company. B. Dividends received by policyholders of a mutual insurer are not taxable. 4)Consumer report=credit, -shorter time span for paying premiums c) Premium accountability. 1) the premium amount -sex doesn't determine eligibility. Explanation: (Life Insurance Policy Provisions, Options and Riders) A family term rider will provide term life insurance on a spouse and children. A linear programming model developed to maximize profit is used to determine how many reservations to accept for each rental class. An insured is driving her automobile and strikes a large pothole that . Exclusions always exist, and there is a reason for each one. Life insurance policy premium charged the policyowner that can be less than that guaranteed in the contract, premium increases gradually during the first few years and then levels off, All of the following statements are true regarding mortgage protection insurance EXCEPT. C. Whole life B. B. Marital Status ____________ insurer is not a type of insurer. \text{Accounts Payable} & 104 & 95 & 95 & 97 \\ Correct: C. Condition contract, enforceable only under certain conditions. \end{array} The total factory payroll for the month according to the payroll register is $308,000.00, distributed as follows. Estate conservation C. Waiver of Estoppel All of the following statements about the settlement of a claim are true EXCEPT. All of the following are required signatures on a life insurance application EXCEPT. B. B. b) Fiduciary responsibility. The gross premium charged must reflect, at least for competitive reasons, the actual cost of providing the insurance. Poor adaptation to climate change further widens the gap between what people can afford and the costs of insurance, as risks increase. When a policy has reached its final destination and can be paid out in full is when the policy has ____________? Which of the following about yearly renewable term insurance is true? If you don't have health insurance, you pay all costs for healthcare and medical emergencies. Originating policy Tax-qualified annuities are subject to IRA maximum contribution limits. There is a minimum guaranteed interest rate on all sub-accounts. There are many legitimate need-based expenses that can be paid by life insurance proceeds, from groceries to retirement income. Which of the following documents must be provided to the policyowner or applicant during policy replacement? She meets the definition of total disability under Social Security. \hline \text { Jul 1 } & 22,000 \\ B. Beneficiarys age -it is a type of Rider C. Tax Status When an applicant pays the initial premium the agent will give them a what? d) Fair Credit Reporting Act. What are two reasons that people deposit money in banks? AKA-payout phase. 2)Decreasing term(premium is low) declining face value insurable interest must exist. In this case, the applicant will most likely need to fill out a Statement of Good Health. 3)mortality charge. An agent tells an insured that if he replaces his current insurance policy with a newer one, his dividends will be higher and his premium will be slightly lower. a) A medical examination After Alex has made 20 premium payments, his life insurance policy is considered