1)increase cash value a. whole life paid at 65 \end{aligned} A) Tax-qualified annuities are used to accumulate IRA funds on a tax-deferred basis. &\begin{array}{lr|lr} What contract characteristic does this describe? Pertaining to insurance, what is the definition of a fiduciary responsibility? Whole life policy. Due to climate change, premiums are going up for certain types of insurance, such as flood insurance. All of the following are characteristics of group life insurance EXCEPT. d) Performing reviews of insured's coverage. b) Index used by stock companies (b) Most policies can be renewed without evidence of insurability. Which of the following best illustrates a c) Increases annually. Foreign. What is an exchange of a whole entire life policy for another? 5)an agreement is set, 1)Level term(cheapest insurance) face value stays the same The Waiver of Cost of Insurance rider is found in what type of insurance? A corporation is the owner and beneficiary of the key person life policy. CashJul1Jul315,500???? 1)tax qualified plans The following are all causes for the Insurance Commissioner to suspend or impose conditions upon the continuance of a producer's license EXCEPT 1. a) Remains level. -Both parties must follow certain conditions set forth in contract, -IRS classification of a policy that is overfunded &\text { Inventory }\\ Address of his principal office All of the following statements concerning coinsurance are true, EXCEPT . 4. All of the following are required signatures on a life insurance application EXCEPT. Type I rooms do not have wireless Internet access and are not available for the Business rental class. 2)non-qualified plans Why?". (d) annual premium and the annual policy dividend. (Choose from the following options) -Not invested in stock market An agent has authority to do all of the following, except: A. Countersign insurance contracts All of the following are personal uses of life insurance EXCEPT, All of the following are true of key person insurance except, D. The plan is funded by permanent insurance only. Rates. c) The policy will be voided. Insurance that is provided by the Federal or State Government and sex doesn't determine eligibility? Round Tree has 100 Type I rooms and 120 Type II rooms. 3)certified public accountants, Is insurance that is provided by the Federal or State government Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy? The 3 categories of private insurers site of incorporation? Who might receive dividends from a mutual insurer? Example: company that is incorporated in NJ and sells in NJ. 3,000, AccountsreceivableJul121,000???? Annual income An annuity whose based on the stock market index? The company records manufacturing costs by job number and uses a factory overhead applied rate to charge overhead costs to its products. Study with Quizlet and memorize flashcards containing terms like All of the following are true regarding group term life insurance, EXCEPT: a. D. Concealment 2)FCRA(fair credit reporting act) checks MIB report. B. c) The inspection report (a) universal life insurance. d) Paid-up option. C. Medical Background 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. Jul3125,500\begin{aligned} All of the following statements are TRUE concerning Debtor Groups EXCEPT Predicted needs of the family after the insured's death C. Application Get more out of your subscription* Access to over 100 million course-specific study resources b) Reduced paid-up Rebating is an unfair trade practice and is regulated by law. 3. Correct: B. A life insurance license. Taxes, Retirement, and Other Insurance Concep, State Laws, Rules, and Regulations Quizzes, Life Insurance Policy Provisions, Options and, Fundamentals of Financial Management, Concise Edition. B. Nonadmitted D. Reduction is a method of managing risk. b) To deter the policyowner from committing suicide Non-Participating (stock) Life Insurance Policy. \hline \text { Jul 1 } & 22,000 \\ 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. Which method makes the most sense for her to employ? Copyright 2009-2022 Tests.com LLC - All Rights Reserved. A persons assets & liabilities at their time of death. D. Offer D. Accident -receiving dividends(when declared) C. Loss of personal income \text{ ???? } D) An agent's report and inspection report provides personal information. _________ is a determination that a statement made as a warranty, or true. An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. Quarterly working capital levels for your firm for the next year are included in the following table. What kind of penalty would the IRA owner pay? A ____ contract requires that both parties perform certain duties. The policy is a contract of adhesion. b) An agent offers to share his commission with a policyholder. It has cash value that is invested into the stock market through mutual funds/securities. A debtor has an insurable interest in the life of a lender. Domestic Insurer -greater potential to grow the cash value but there is no guarantee The policy is issued for one year and may be renewed annually with evidence of insurability. Correct: Misrepresentation, False statement contained in the application, An intentional deception of the truth in order to induce another to part with something of value or to surrender a legal right. (4), 1)monthly Legal Purpose ADD( Accidental death and dismemberment??? Endowments means policy is what(2) things? -cash value options 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 _________. B. ____________ insurer is not a type of insurer. -age 100. d) Loss. Which of the following about decreasing term insurance is true? (a) blended family. -receiving dividends(when declared) 3)Family Policy(Limited but all fam members paid) Who assumes control over an insurance company's funds and management if it becomes insolvent? Statements in the application that are guaranteed true but later found to be false may result in what? b) Fluctuates. Premiums are taxable to the employee Insurance is designed to cover both intentional and unintentional losses. the underwriting process is approved for: They keep a high percentage of any interest earned on their policies Estate conservation Why do most states have a waiting period for couples applying for marriage licenses? When the producer exceeds the authority expressed in the agency contract and the insurer does not take action, which type of authority is created? B. Most insurance policies contain a specific limit that an insurer will pay for a single claim. Acceptance What type of term do you think would be least expensive a short term or a long? Life insurance prodceeds All of the following statements are true regarding mortgage protection insurance EXCEPT. Waive the premium if the INSURED becomes totally disabled. \text{Sales revenue}&&\$780,000\\ 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 The policy does not go into effect until the premium has been collected. (a) renewal provision The applicants(policy owner) An__________ represents the insurer. Increasing term 2)face amount is set - 20 pay life-premiums paid for 20 years and paid up at 65 Retention, Avoidance, and Transfer are all _________________. (a) matured. C. Hazards 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 . * 50% is paid D. They can decide when to pay their monthly premiums. -it pays the double indemnity, 1)accident occurs, person must die within 90 days 3)2 death benefit option The cost of a living rider is calculated by what? A. (b) current assumption whole life. \hline \text { Jul 31 } & 3,000 Which $50,000 life insurance contract if purchased when the insured was 32, would have the highest cash value when the insured is 50? B) They illustrate the nonguaranteed elements of the policy. If the conversion cost is the same for both types of rooms, would you recommend converting the office to a Type I or a Type II room? Contract or form of ownership is a ______________? Contract of adhesion All of the following are true of negligence, except: a. 2)Decreasing Term 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. (d) endowment insurance, Rachel needs permanent life insurance. Executive office All of the following statements about term insurance are true EXCEPT. Only the MIB will provide information about an applicant's medical history. Misrepresentation, Concealment and Deceit are all examples of what? \text{Accounts Receivable} & 199 & 96 & 99 & 604 \\ Tamara purchased a term insurance policy when she had high life insurance needs and limited income. Can term insurance be both renewable and convertible? B. If company pays dividends, then they are a? What characteristic must an annuity have if it is used to accumulate funds in an IRA? Which of the following types of insurance policies would perform the function of cash accumulation? 1)Statement of continued good health The face amount decreases as the amount owed on the mortgage decreases. Jul313,000\begin{aligned} 1) insured gets higher amount -If the insured dies, the policy payed out the PRINCIPAL SUM A life insurance policy is exchanged for an annuity. Alex, age 26, purchased a 20- payment whole life insurance policy. Which of the following is the best reason to purchase life insurance rather than annuities? 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. An agent told Carl about a form of life insurance in which Carl could select where the savings component is invested. 5)coverage begins Health insurance decreases your healthcare costs. Correct: A.A peril. 1) coverage is permanent d) An agent misrepresents policy benefits to convince a policyowner to replace policies. Rates How does having children affect the decisions that couples must make when considering a divorce? ____________ is the transfer of the right of recovery from the insured to the insurance company. (d) The policyowner can add to a policy's cash value at any time subject to policy guidelines. Modification to a policy is a _______________? Correct: A. An insurer that was incorporated in a DIFFERENT STATE that it is doing business in is a _____________??? In the needs approach, all of the following information is used to establish how much insurance needs to be purchased, EXCEPT: Mary should purchase $1.5 million ($75,000 x 20 working years remaining = $1,500,000). Life insurance is unique from other types of insurance in that it could perform the function of cash accumulation. Surviving family members may experience a reduction in their standard of living if the family breadwinner dies prematurely. Term. b. If a change in the application is necessary what is required? All of the following are true for indemnity insurance except that: a. premiums are based on separate risk pools often organized by employers. c) Denying coverage after a reasonable investigation has been conducted C. Consideration B. A. (b) tax-free exchange provision (receive dividends & the right to vote). D) adding cost of living coverage. (c) two-income earner family. In a conditional receipt if the policy holder dies before delivery of the policy what has to happen for the benefits to be paid? 3) Equity-Index annuity. An agent that enters into agreements with more than one insurer is called an: A _______ represents the insured in dealing with insurance companies. (b) Face amount decreases during the policy period, but premiums remain level. 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. C. Whole life The insured agrees to maintain insurance equal to some specified percentage of the value of the property. -The insurance dept. C. State Education Waiver Which of the following statements about a life insurance policy is (are) true? Now Tamara can afford whole life insurance. database of previously life and health insurance applications. Originating policy A contract between insurer and policy holder. All of the following are true about health insurance except: Purchasing health care can help save you from medical bankruptcy. This form of life insurance has fixed premiums and the cash value is not guaranteed. Policyholders EMPIRECOMPANYIncomeStatementFortheMonthEndedOctober31,2017, Salesrevenue$780,000Less:OperatingexpensesRawmaterialspurchases$264,000Directlaborcost190,000Advertisingexpense90,000Sellingandadministrativesalaries75,000Rentonfactoryfacilities60,000Depreciationonsalesequipment45,000Depreciationonfactoryequipment31,000Indirectlaborcost28,000Utilitiesexpense12,000Insuranceexpense8,000803,000Netloss$(23,000)\begin{array}{lcc} \text{Less: Operating expenses}\\ a. mentally counting backward from 1,0001,0001,000 Which of the following would least likely be considered a legitimate need that would be paid by insurance proceeds? Carl would like to purchase life insurance. 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? It requires evidence of insurability for renewal. Prepare the following details: Mobile number, serial number, or IMEI. b) Promptly forwarding premiums to the insurance company A surplus lines broker deals with direct writing companies only All of the following would be exempt from the producer licensing requirements EXCEPT: A) A customer service representative who discusses policies. c) 10 years. 2. 1) Competent Parties What are the two options in death benefit options? d) Decreases annually. Nature of risk 2)can be sold as a rider to a whole-life policy. C) Because an insurance company's strength and stability are two very crucial factors in its sustainability, independent rating services have formed to publish regular updates on the financial integrity of different insurance companies. The application is the basic source of information an insurer uses in the risk selection process. a. a) More active. Most professional liability insurance policies are written with an occurrence coverage trigger instead of a claims made trigger O c Insureds 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. All of the following are true of insurance except: Which of the following is NOT true about insurance? ~~~\text{Utilities expense}&12,000\\ A) Any distributions from MECs are taxable, including withdrawals and policy loans. c) To protect the policyowner 3)semi-annual When an insurance policy is not clear, the court will usually interpret in favor of the insured because of which characteristic? c) Low-income individuals and families -immediately considered fully paid up \end{array} Beneficiary's age C. Buy-Sell agreements are normally funded with a life insurance policy d) Blackout approach. The total of all requisitions of indirect materials issued during the month is$20,170.00. All of the following are business uses of life insurance EXCEPT considers Lloyds of London an Alien insurer D. Department of Treasury . The person who receives the benefit when insured dies. & \text { Depr } & 3,000 \\ Explain your answer. Most policies can be renewed for additional periods without evidence of insurability. B. Most agents try to collect the initial premium for submission with the application. D. The benefit is received tax free. As her friend, you have been asked to review the income statement and make necessary corrections. Healthcare in the United States is far outspent than any other nation, measured both in per capita spending and as a percentage of GDP. c) Smaller. (c) Interest credited to a policy's cash value is taxable to the policyowner in the year credited. \end{array} Errors and Omissions Coverage (E&O) is a name used to describe a type of professional liability insurance. d) Older. B. Where does group-life insurance come from? Hammond Corporation manufactures televisions. (a) limited-payment whole life insurance 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. WorkinProcessFactoryOverheadCash$229,040.0078,960.00250,558.00EmployeeIncomeTaxPayableSocialSecurityTaxPayableMedicareTaxPayable$33,880.0019,096.004,466.00. 1. c) Helping insureds to file claims What type of insurer has no capital stock? 1)temporary 3)riders & exclusions -But pays you interest, 1)Fixed annuity The NAAR for a life insurance policy is the difference between the DONT PICK IT!!!!!! The Boyle family can be described as a 2)collateral assignment-some or only one right assigned. d) All of the above. and is NOT a party to the contract. Whats the cheapest type of permanent insurance? b) Universal Life All The statements made on the application are called ______? ~~~\text{Direct labor cost}&190,000\\ 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? A _______ __ is the additional premium needed to get covered with high or substandard risk. (a) I only (b) II only 2)interest sensitive See Answer. a) A medical examination Correct: B. &\text { Accumulated depr.-equipment }\\ 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. a) Aleatory Beneficiaries are NOT required to sign the application unless they are also the owner. ~~~\text{Raw materials purchases}&\$264,000\\ A. Mutual life policy. 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 information about a customer must be used in determining annuity suitability EXCEPT C. The benefit is received as taxable income Rates are considered inadequate when they do not cover projected losses and expenses. &\text { Accounts payable }\\ A. contract of adhesion Explanation: (Life Insurance Policy Provisions, Options and Riders) A family term rider will provide term life insurance on a spouse and children. Hazard -guaranteed/fixed/level payment, -Immediate "annuitization phase" insured is always the borrower & the beneficiary=lender *The insured is diagnosed with terminal & chronicle illness B. Prepare a pie chart of on-time delivery performance for last month. Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE? \text{Dividend}& 19,000& \text { Net Inc } & 65,000 \\ 2) Transferring the risk How much life insurance should Sam advise . (d) paid-up. ~~~\text{Rent on factory facilities}&60,000\\ a) Agent's report Despite this, the country has significantly worse healthcare outcomes when compared to peer nations. b) A producer who handles insurer funds in a trust capacity. Which of the following information about the applicant is NOT included on Part 1 of the application for life insurance. 3)substandard-highest, 6 factors that are complete for policy 2 be paid? -its a rider 1)Domestic Insurer It is a type of tort. a) Lump-sum approach Cash values are available in whole life policies. 6)free-look period-$ back guaranteed. B) Fiduciary refers to a position of trust. c) Needs approach 1) mentally incompetent persons What are the permanent working capital needs of your company? An Insurance broker is responsible for what? B. 2) standard risk (c) face amount of the policy and the legal reserve. M327. 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. 1) preferred risk b. \end{array} Instructions Jul3117,000\begin{aligned} Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. c) 15% for early withdrawal c) Counselor What type of interest does universal life have? \hline & \text { Jul 31 } & 58,000 Which of the following is NOT an example of a business use of Life Insurance? b) Increasing Premium After Alex has made 20 premium payments, his life insurance policy is considered 3. 4. 4)Explain the policy and its provisions 3) Ordinary. Buy-sell agreements are normally funded with a life insurance policy. If there Is a risk of financial loss then there is a what? She meets the definition of total disability under Social Security. What (5) Factors for GIO & GIB. whose covered? b) The elderly 1) Family Maintenance(breadwinner) c. It is the failure to use ordinary care. Other factors that are named include "Mortgage underwriters, investment banks, rating agencies, and investors", "low mortgage interest rates, low short-term interest rates . A. (a) I only Which risk management type is shifting the risk of loss to a larger homogeneous group? b) Fixed income The companys president is concerned about the accuracy of the income statement. SalesrevenueLess:OperatingexpensesRawmaterialspurchasesDirectlaborcostAdvertisingexpenseSellingandadministrativesalariesRentonfactoryfacilitiesDepreciationonsalesequipmentDepreciationonfactoryequipmentIndirectlaborcostUtilitiesexpenseInsuranceexpenseNetloss$264,000190,00090,00075,00060,00045,00031,00028,00012,0008,000$780,000803,000$(23,000). What insurance concept is associated with the names Weiss and Fitch? \textbf{EMPIRE COMPANY}\\ C. Premiums are determined by age sex and occupation of each individuals certificate holder. 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? An individual applies for a life policy. -the insurer sets the terms of the contract and the applicant must adhere to them. B. If the insured commits suicide after the 2 year period, the policy will pay the death proceeds to the designated beneficiary the same as if the insured had died of natural causes. Correct: C. Concealment, A. 1) the premium amount Difference between Universal Life Insurance and Whole Life Insurance? A) The insurance policy usually has a provision specifying how a notice of loss is to be made to the insurance company. All of the following statements about the settlement of a claim are true EXCEPT. Surplus lines broker deals with admitted carriers only Who is not a party to the contract and receives the benefits when the insured dies? 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. Their premiums are lower By William Lb Qtjetjx, Author of . A. Members are assessed to fund the corporation. Conditional contract means the policy holder does what? An Insurance Broker is responsible for what? C. Waiver of Estoppel The death benefit varies according to investment experience. All of the following statements about universal life insurance are true EXCEPT Any withdrawal of a policy's cash value reduces the amount of the death benefit. D. Aleatory contract C. Risk However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. Pure risk ? All of the following are restricted persons concerning the formulation of an insurance contract except: A producer has __________ authority when he accepts premium on a lapsed policy, and the insurer reinstates the policy. Premiums are not tax deductible as a business expense What adds coverage and modifies coverage? A false statement in the application for insurance is_____________. 4)policy matures at age 100. An Insurer organized in another state than the state in which it is authorized to do business is known as which type of insurer? & \text{ ???? } A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called The following are all true regarding risk management, except: A. B) Money collected with respect to an insurance transaction must be held in a position of trust by the producer. 2) Binding Reciept. Home Office- what do the underwriters do. they evaluate 4 things- what are they(4)??? \end{array} (a) I only (b) II only A peril 4)Based on principle sum(rider) & capital sum(insurer) 50%, 3rd party ownership insurers issues policy to a lending institution Which type of life insurance makes sense for someone in this situation? D. Viatical settlement. a) To limit the insurer's liability after the 2 year waiting period d) The policy can be reinstated by paying back all policy loans and premiums. After insurer makes an offer, what must the applicant do? C. Application Involuntary Risk Question: 55.