Life Insurance companies

Question 1

Types of Insurance Companies Based on Organization

Answer 1

• stock companies
• mutual companies

Question 2

Types of insurance companies based on insurance policies sold

Answer 2

-participating (PAR) Companies
- Non-participating (Non-par) policies

Question 3

These companies have stockholders. They are organized to provide stockholders with a profit.

Answer 3

Stock Companies

Question 4

Instead of having stockholders, these companies are owned by policyowners who have the right to vote for directors or trustees.

Answer 4

Mutual Companies

Question 5

Owners of these policies can potentially receive dividends. They share in the company’s divisible surplus.

Answer 5

Par policies

Question 6

Dividends are not provided to owners of these polices. Owners of these policies do not share in the company’s divisible surplus.

Answer 6

Non-par Policies

Question 7

Life insurance transactions are handled by

Answer 7

an agent or a broker

Question 8

an agent is the person given authority by the company to:

Answer 8

• describe company’s policies to the buyer
  -solicit applications for the policies
  -collect premiums for policies
• render service to prospects and to owners of policies issued by the company

Question 9

a_____ of insurance does not technically represent the company that he or she does business with

Answer 9

broker

Question 10

represents the company and has a contract with only one company

Answer 10

agent

Question 11

represents clients and can be accredited with several companies

Answer 11

broker