Life Insurance Basics Flashcards

(30 cards)

1
Q

What is cash value?

A

equity accumulated in permanent life insurance.

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2
Q

what is an estate?

A

a persons net worth.

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3
Q

what is an illustration?

A

presentation or depiction of non guarenteed elements of a life insurance policy aka policy summary.

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4
Q

what is liquidation?

A

selling assets in order to raise capital.

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5
Q

what is lump sum?

A

payment of entire benefits in one lump sum.

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6
Q

what is solvency?

A

ability to meet financial obligations.

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7
Q

what is insurable interest?

A

probability of losing money or something of value in the event of a loss.

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8
Q

what are the personal uses of life insurance?

A
  1. survivor protection
  2. estate
  3. cash accumulation
  4. liquidity
  5. estate conversion
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9
Q

What are the approaches to determining amount of personal life insurance?

A
  1. human life value

2. needs approach

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10
Q

what is human life approach?

A

gives estimate based on income, inflation, number of years till retirement, and the time value of money.

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11
Q

what is needs approach?

A

predicted based on the needs of the family.

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12
Q

What is a buy sell agreement?

A

legal contract that explains what will be done with the business in the event than an owner dies or becomes disabled.

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13
Q

What is key person insurance?

A

take out insurance to cover the loss of a key employee.

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14
Q

what is term insurance?

A

covered for a specifed number of time. Also known as pure life insurance.

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15
Q

What is permanent life insurance?

A

remain in effect till age 100

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16
Q

what is fixed life insurance or annuities.

A

offer guarenteed minimum or fixed benefits.

17
Q

what is variable insurance?

A

cash value accumulates based upon a specfic portfolio of stocks.

18
Q

What is premium payment mode?

A

frequency in which the policy owner pays the premium.

19
Q

What is solication?

A

attempt to persuade someone to buy an insurance policy.

20
Q

How long must copies of an illustartion must be held onto after a policy is no longer enforce?

21
Q

What is a policy summary?

A

written statement descrbining features and elements of a policy being issued. AKA illustration.

22
Q

What is a buyers guide?

A

provides basic general information about insurance policies.

23
Q

waht is conservation?

A

atteempt made by the existing insuer to dissuade a current policy owner from the replacement of a life insurance policy or annuity.

24
Q

what is existing insurer?

A

insurance company whose policy or contract will be changed or affected in a manner or described within the definition of replacement.

25
What is existing policy or contract?
means an indviudal life insurance plicy or annuity contract in force.
26
What is replacing insurer?
insurance company that isues or proposes to issue a new policy or contract that replaces an existing policy.
27
what is conditional receipt?
states coverage will start on the date of the application or medical exam which ever comes last.
28
what are the parts of an application?
1. general information 2. medical information 3. agents reports
29
what is an attending physcian statement (APS)
gives medical history information on applicant.
30
What is premium receipt?
receit issued when premiums are collected with the application.