life and disability

Question 1

Stock companies that exist for the sole purpose of generating profits for their stockholders

Answer 1

non-participating companies

Question 2

401 K

Answer 2

Portion of pre-tax salaries into investment accounts where it grows tax deferred. Employers match and investment choice is directed by employees

Question 3

403 B

Answer 3

Public schools and non profits. Pre-tax contributions and tax deferred growth

Question 4

absolute assignment

Answer 4

owner transfers the owners entire interest in the policy to the assignee

Question 5

accelerated death benefit rider

Answer 5

requires the insurer to pay out part of the death benefit (~50%) if insured has a diagnosis of a particular illness likely to cause death in 12 months

Question 6

accident only policies

Answer 6

helps pay the health care costs that result from an accident

Question 7

accumulate at interest dividend

Answer 7

The dividends are left in a sales account to accumulate interest at a set amount specified in the policy. Dividends are not taxable, but interest is

Question 8

actuary

Answer 8

person who tracks lifespan and chance of illness or accident based on specific factors

Question 9

additional children coverage

Answer 9

covered from the moment of birth until 31 days, adopted children treated like newborns

Question 10

additional insured term rider

Answer 10

whole life to insured, convertible life term riders on family members or business partners

Question 11

Additional Paid up insurance dividend/Paid up additions option

Answer 11

Dividends used as a single net premium payment on a miniature paid up whole life policy. Automatic dividend option when no other is selected

Question 12

AD&D (accidental death/dismemberment) Rider

Answer 12

Accidental loss of life, limb or vision. Lump sum only when medical problems (not sickness) is direct result of accident. Death within 90 days, value policy not indemnity.

Question 13

AD&D specifications

Answer 13

1 hand, foot, or eye, =100% of capital sum. 2 hands, feet, or eyes=full pay out

Question 14

Adjustable life

Answer 14

Components of policy is adjustable to meet needs of policy holder. Proof of insurance is required if increase in benefit is wanted

Question 15

Adult disabled children

Answer 15

covered entire lives as long as they are incapable of taking care of themselves. proof of disability required 31 days after 18th birthday

Question 16

Adverse selection

Answer 16

tendency that high risk people are more likely to apply for insurance than low risk people are

Question 17

Agent/ producer

Answer 17

Will be you, acting as a legal representative for insurance company

Question 18

Agent responsibilities

Answer 18

Explain the underwriting process to the applicant and
provide disclosures as required by law.
* If the agent makes a mistake on the agent’s portion
of the application, the agent should correct the change
and sign or initial the correction.
* Make certain that premium checks are filled out correctly,
signed, and made payable to the company, not to the agent.
* If an agent collects a premium check while out of the office, the agent should give the client a temporary hand-written receipt and then mail or a deliver an official receipt.
* Many companies require the agent to deliver a policy in
person. The reason for this is to explain the terms of the
policy and, if a policy is rated, to explain the reason why.
* Unless a conditional receipt is used, the agent should explain that the Insured will not be covered until the policy is delivered, no matter how many good faith delivery
attempts are made by the agent.

Question 19

agreement

Answer 19

Offer + acceptance

Question 20

Aleatory

Answer 20

agreements where the payouts to the insured depend on an uncertain event or outcome

Question 21

annually renewable term

Answer 21

term after the level term policy where you can extend coverage without proof of insurance. premium goes up each year, max age is 65

Question 22

Reentry term

Answer 22

two premium levels for renewal for people who can prove insurability and for people who can’t

Question 23

annual stop loss limit

Answer 23

a measure that limits the max amount for which insurance can be responsible for in a stated time period

Question 24

annuity (period) certain options

Answer 24

added to a straight life or joint and survivor annuity means the insurance company must continue making payments after the death of the annuitant or annuitants

Question 25

assignment

Answer 25

having payments go directly from health care companies to the providers with the permission of the insured

Question 26

assignment clause

Answer 26

the procedure where the transfer is accomplished

Question 27

automatic premium loan rider

Answer 27

if policy owner doesnt pay the premium and grace period expires, the company will automatically make a loan against cash value to pay premium

Question 28

average indexed monthly earnings

Answer 28

average earnings over time

Question 29

aviation exclusion rider

Answer 29

excludes coverage for death while flying

Question 30

Base/basic medical plans

Answer 30

Medical, hospital, surgical. No deductible and only covers most basic of health care needs

Question 31

basic hospital policy

Answer 31

pays for every expense in hospital except doctors and surgeons. Daily benefit rate/dollar amount includes all except room and board

Question 32

basic medical policy

Answer 32

non-surgical services of physicians for the treatment of accident or illness

Question 33

basic surgical policy

Answer 33

covers the cost of surgery, including surgeons anesthesioligists, and post op care

Question 34

beneficiary

Answer 34

person who is paid when claim is submitted

Question 35

blanket policies

Answer 35

medical expense coverage designed to pay injuries or death associated with accidents only

Question 36

Blue cross/shield

Answer 36

local self governing insurance providers Covers hospital bills with Coss, doctor bills with Shield. Fee for service plan emphasize reduced costs through negotiation

Question 37

Broker

Answer 37

representative of the insured, not the insurance company

Question 38

buying insurance

Answer 38

transfer of a portion of your risk to the insurer

Question 39

Buy-sell agreement/Business continuation plan

Answer 39

the business has the right to buy the share of the company from the deceased owners estate at an agreed upon price

Question 40

cancelable policy

Answer 40

may be cancelled at anytime without having a reason. refund of the unearned portion of previously paid premiums is required

Question 41

cancellation provision

Answer 41

the insured has the right to cancel the policy at any time without affecting any pending claims

Question 42

cash out

Answer 42

taking the money nullifies the 3 year right of reinstatement privileges

Question 43

cash dividend option

Answer 43

the company sending policy owner a check with the dividend value on the anniversary date WHOLE LIFE POLICIES

Question 44

Cash settlement option

Answer 44

lump sum check

Question 45

cash value options

Answer 45

borrowing against the cash value, using a living trust, or surrendering and terminating the policy

Question 46

cash value taxation

Answer 46

growth of money is tax deferred. if the policy lapses or is surrendered, money after that point is taxed as well as any cash value that exceeds premiums paid DEATH BENEFIT IS ALWAYS TAX FREE

Question 47

Certificate of insurance

Answer 47

identification card and booklet explaining the coverage

Question 48

change of occupation provision

Answer 48

insured must notify company when occupation changes. if not reported and insured makes a claim, the company will adjust the benefits based on the already paid premium

Question 49

claim form provision

Answer 49

the company must provide claim forms to the insured within 15 days of receiving the notification loss

Question 50

COBRA

Answer 50

continued group coverage for former employees for specified period of time. doesnt apply if you were fired for gross misconduct

Question 51

Coinsurance

Answer 51

the company and the insured will share the payment of covered expenses after the deductible

Question 52

collateral assignment

Answer 52

when a policy is transferred to a creditor and the creditor names itself as the beneficiary

Question 53

combination policy

Answer 53

a hybrid of permanent and temporary coverage

Question 54

common disaster clause

Answer 54

if both the insured and the beneficiary die in result of the same accident, unless the beneficiary outlives the insured by 60 days, no one gets any money

Question 55

community rating

Answer 55

combines claims history over a class of groups that are similare in nature and may even be in a similar geographical area

Question 56

comprehencive major medical plan

Answer 56

combination of base plan with a major medical policy

Question 57

concealment

Answer 57

intentional nondisclosure of material facts

Question 58

conditionally renewable

Answer 58

right to terminate policy in case of "trigger event"

Question 59

conditional receipt

Answer 59

policy will be in effect on date of application or medical exam, whichever is later.

Question 60

consideration clause

Answer 60

states that insured must give the premium and fill out application to be considered

Question 61

consumer credit report

Answer 61

done without knowledge or consent of insured, 7 year time limit on financial report (10 year for bankruptcy)

Question 62

consumer directed health plan

Answer 62

high deductible policy pre tax advantage, plus a pre funded savings account you can use to cover the deductibles and use later on in retirement

Question 63

consumer inspection report

Answer 63

background report, client can contact company and make corrections or request corrective investigation

Question 64

contestable clause

Answer 64

AFTER first 2 years incontestable if: it was an honest mistake, and if youre a life or group health insurer fraud

Question 65

contingent secondary beneficiary

Answer 65

the one who will receive the death benefit if the primary beneficiary is no longer living at the time of the insureds death

Question 66

continuous premium whole life

Answer 66

the default premium

Question 67

contract of adhesion

Answer 67

non negotiable contract (take it or leave it)

Question 68

contributory plan

Answer 68

all or part of the cost of coverage must be paid by individual group members

Question 69

Conversion privilege from group to individual

Answer 69

New policy face value cant exceed old one 31 day grace period (60 if employees werent notified ) If insured dies during grace period death benefit still paid term life is converted to whole life

Question 70

Conversion (whole life)

Answer 70

proof of insurability from whole life to term life

Question 71

convertible term

Answer 71

can turn term into whole wo proving insurability. Premium goes up

Question 72

Coordination of benefits clause

Answer 72

if family has 2 group policies, each family member is deemed to have only one promary policy. the other spouses policy will be secondary

Question 73

copay

Answer 73

flat dollar amount insured pays out of pocket each time service is rendered

Question 74

copy of the application provision

Answer 74

info in the application is represenation. insurer must attach copy to group policy

Question 75

cost of living rider

Answer 75

cost of policy may go up but so will the face value (if cost of living goes up so does the face value. Basically an increasing term policy)

Question 76

critical illness policy

Answer 76

pays its benefit when you show youve contracted the disease. paid to you as you wish

Question 77

cross purchase plans

Answer 77

the partners own the life insurance policies on each other

Question 78

currently insured

Answer 78

worked less than 10 years, only eligible for survivor benefits

Question 79

Declined risks

Answer 79

applicants who are to risky to insure

Question 80

decreasing term (mortgage protection insurance)

Answer 80

face value decreases over time. typically used to pay off mortgage

Question 81

deffered annuity

Answer 81

postponed payouts

Question 82

deferred compensation plan

Answer 82

postponed payouts

Question 83

deferred compensation plan

Answer 83

employer pays the employee in the furure for work done today in retirement, the employee can surrender the policy and take cash value when hes in a lower tax bracket

Question 84

difined benefit pension plans

Answer 84

guaranteed specific retirement benefit paid for by employer

Question 85

defined contribution pension plans

Answer 85

employer contributes a specific amount each year to the plan. employee responsible for choosing the investment from choices provided

Question 86

disability income insurance