3.14.20

Question 1

policyowner

Answer 1

the person entitled to exercise the righrts and privileges int the policy
pays premiumn to the insurance company

Question 2

insurer (principal)

Answer 2

the company who issues an insurance policy
issues policy to the policy owner
pays benefit to beneficiary

Question 3

two kinds of risk

Answer 3

pure and speculative

Question 4

pure

Answer 4

loss

Question 5

speculative

Answer 5

gain or loss

Question 6

adverse selection

Answer 6

insuring of risks that are more prone to losses than the average risk

Question 7

law of large numbers

Answer 7

want more people so that there’s a larger pool of people to split costs between

Question 8

agent/producer

Answer 8

a legal rep of an insurance company, agents or broker

Question 9

insurance is really just…

Answer 9

a transfer of risk.

Question 10

beneficiary

Answer 10

received benefit upon insured’s (policy owner) death

Question 11

insurable interest must only exist…

Answer 11

at the time of application

Question 12

insurable interest

Answer 12

the possibility of losing money or something of value in the event of loss

Question 13

4 elements of a legal contract

Answer 13

agreement
consideration
competent parties
legal purpose

Question 14

agreement

Answer 14

offer and acceptance

Question 15

consideration

Answer 15

applicant - representations and premium

Question 16

competent parties

Answer 16

legal age
mentally competent
not under the influence of drugs and alcohol

Question 17

legal purpose

Answer 17

not against public policy

Question 18

difference between warranty + representation

Answer 18

warranty - undeniably true
rep - not guaranteed to be true
misrep - accidentally not true

Question 19

solicitation of insurance

Answer 19

an attempt to persuade a person to buy an insurance policy

Question 20

how to make correction on application

Answer 20

one line through, insured’s initials, new answer

Question 21

difference between premium receipt and conditional receipt

Answer 21

when policy is made
premium receipt - when it is issued with the application
conditional receipt - letting them know this is based on if we do it exactly as applied for, we will backdate

Question 22

conditional receipt

Answer 22

says that coverage will be effective either on the date of the application or the date of the medical exam, whiever occurs last, as long as the applicant is found to be insurable as a standard risk, and policy is issued exactly as applied for

Question 23

bond

Answer 23

$2,500 or 5% of the premiums brokered in the previous year, whiever is greater, but not to exceed 50,000 dollars total aggregiate liberty

Question 24

misrepresentation

Answer 24

false, misleading, or deceptive statements about policy terms or benefits

Question 25

rebating

Answer 25

offering benefits or services not specified in the policy

Question 26

defamation

Answer 26

maliciously critical statements about a person or company

Question 27

false advertising

Answer 27

untrue, deceptive, or misleading statements in insurance advertising

Question 28

twisting

Answer 28

misleading comparison of policies to persuade insured to cancel or switch policies

Question 29

unfair discrimination

Answer 29

discrimination in rates, premiums, or benefits

Question 30

advertising

Answer 30

any type of communication intende to create interest in life insurance, an insurer, or to induce someone to buy, change, or retain an insurance policy

Question 31

an illustration is a

Answer 31

presentation or depiction that includes nonguaranteed elements of a policy of individual or group life insurance over a period of time

Question 32

credit life

Answer 32

exempt from all the laws

Question 33

suitability

Answer 33

``` age income and existing assets financial situation, experience objective net worth tax status risk tolerance ```

Question 34

provisions

Answer 34

define the characteristics of an insurance contract and are fairly universal from one policy to the next

Question 35

riders

Answer 35

are added to a pplicy to modify provisions that already exist, and they cost extra

Question 36

options

Answer 36

offer insurers and insureds ways to invest or distribute a sum of money available in a life policy

Question 37

consideration

Answer 37

something of value that each party gives to the other (binding force in any contract)

Question 38

indemnity

Answer 38

a principle of reimbursement on which insurance is based; in the event of loss, an insurer reimburses the insureds or beneiciaries for the loss

Question 39

lump sum

Answer 39

payment of the entire benefit in one sum

Question 40

minor

Answer 40

a person under legal age

Question 41

principal

Answer 41

the face value of the policy; the original amount invested before the earnings

Question 42

NAIC

Answer 42

National Association of Insurance Commisioners, an organization composed of insurance Commissioners from all states and jurisdictions formed to resolve insurance regulatory issues

Question 43

principal

Answer 43

the face value of the policy; the original amount invested before the earnings

Question 44

ownership rights

Answer 44

name and change the beneficiary right to the policy cash value, dividends, and loans select settlement options assign the policy

Question 45

who has ownership rights

Answer 45

the policyowner

Question 46

2 ways assignment can happen (giving away policyowner rights)

Answer 46

absolute - all rights of ownership, permanent, eg Life Policy on a spouse collateral - partial rights, temporary, eg credit insurance

Question 47

reinstatement

Answer 47

policy lapses, restoring it

Question 48

how to reinstate

Answer 48

apply within the maximum time limit provide proof of insurability pay all back premiums plus interest repay outstanding loans plus interest

Question 49

incontestability

Answer 49

prevents an insurer from denying a claim due to the statements in the application after the policy has been in force for 2 years

Question 50

exclusions

Answer 50

types of risks the policy will not cover

Question 51

types of exclusions

Answer 51

W - war and military service A - aviation (amateur pilots) S - suicide H - hazardous occupations or hobbies

Question 52

suicide

Answer 52

2 years - premiums paid | after 2 years - full death benefit

Question 53

3 categories of riders

Answer 53

disability affect disability amount covering additional insured