c) Copy of the original application 1) preferred risk Last year, the couple got divorced. InventoryJul1Jul3122,000???? When the producer exceeds the authority expressed in the agency contract and the insurer does not take action, which type of authority is created? \hline \text { Jul 31 } & 17,000 c. continuous premium whole life II. The insurance provides protection for a specified period of time. Everything else equal, how would the factor below affect the market value of a stock? There is no limitation on the number of key employee plans in force at any one time. Which of the following statements is NOT true concering insurable interest as it applies to life insurance? Which kind of agent enters into agreements with more than one insurer? the application is used at the primary source of info. c) Variable Premium Round Tree has 100 Type I rooms and 120 Type II rooms. A. 3. 4)settlement options, 1)stand alone policy 2)Straight Life D. Claim History B) According to the law of large numbers, the larger a group becomes, the easier it is to predict losses. B. Aleatory contract D. group credit insurance must have a suicide clause . 1) Conditional Reciept 1)increase cash value Total personal income in the United States (in billions of dollars) for selected years from 1960 to 2009 is given in the following table. What constitutes the acceptance of an offer? d) An insurer may exclude any debtors as to whom evidence of individual insurability is not satisfactory to the insurer. -Prepays portion of face amount if diagnosed with terminal illness. 3)mortality charge. 4. B) The plan is funded by permanent insurance only. (1), In Universal life, what options can the policy owner have with the premium payments to do? ? An insurer that was incorporated in a DIFFERENT STATE that it is doing business in is a _____________??? Appoint a solicitor as his or her representative Only one party is giving a legally enforceable promise- A one-sided contract is what? 1. -pay for certain time and stop Cash Accumulation C. Buy-Sell agreement D. Survivor Protection, All of the following are true of key person insurance except A. A. What is the term for a cause of loss, such as the theft of a car? b) 10% for early withdrawal D) When immediate annuities are used to pay IRA benefits, distributions must begin no later than age 70 in order for the annuitant to avoid penalties. Weiss and Fitch are two of these services, although there are more. All of the following statements about the settlement of a claim are true EXCEPT. 1)Whole Life States regulate the procurement of business from nonadmitted carriers by regulating the brokers who place business with these carriers. -pays an additional death benefit if the insured dies from an accident 1) cash value earns interest -receiving dividends(when declared) B. Correct: C. Concealment, A. Endowments means policy is what(2) things? Statements in the application that are guaranteed true but later found to be false may result in what? and is NOT a party to the contract. It is most appropriate when an insured needs lifetime protection. (b) II only Claim is still paid with an adjustment to the benefits. The replacing company notifies the replacement company. A. Investors become more risk averse. The designation will be void/. Which of the following is an example of an unfair claims settlement practice? What type of term do you think would be least expensive a short term or a long? \end{array} D) Using misrepresentation to convince a person to cancel an existing policy and buy a new one is called "twisting.". D. Agents report. It is the specific cause of loss. 2)Explain and collect any ratings a) Payor rider. Level-increasing face value. What are the two options in death benefit options? C. A surplus lines broker deals with direct writing companies only D. They can decide when to pay their monthly premiums. \end{aligned} \text { Type I } & \$ 30 & \$ 35 & - \\ A. D) The suicide provision protects the company from those individuals who purchase life insurance with the intention of committing suicide. C. Premiums are tax deductible by the key employee A mutual insurer has no stock, and is owned by the policyholders. 1) mentally incompetent persons D. Offer \end{array} Newborns after how many days become covered in a child rider? When an agent is handling the premiums that belong to an insurance company, they are acting in a fiduciary capacity. _______ pays dividends to the stock holder. & \text { Depr } & 3,000 \\ How does having children affect the decisions that couples must make when considering a divorce? Each withdrawal, however, is usually charged, and the amount and frequency of withdrawals are usually limited. Which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation? (a) matured. Which nonforfeiture option provides coverage for the longest period of time? b) Fixed income C. Unilateral contract (d) The policyowner can add to a policy's cash value at any time subject to policy guidelines. The ___________ controls all rights of the contract. 1)policy owner can increase/decrease/ or skip premium payments d) Fair Credit Reporting Act. An agent tells an insured that if he replaces his current insurance policy with a newer one, his dividends will be higher and his premium will be slightly lower. Carl would like to purchase life insurance. Round Trees management makes a forecast of the demand by rental class for each night in the future. 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 ~~~\text{Indirect labor cost}&28,000\\ B. IRS has no jurisdiction (c) human life value method \hline & \text { Jul 31 } & 58,000 A lender has an insurable interest in the life of a debtor, but only to the extent of the debt. The following are all true regarding risk management, except: A. What term life insurance provision will permit Tamara to switch her term insurance to whole life insurance without having to show that she is still insurable? Which is generally true regarding insureds who have been classified as preferred risks? C. The death benefit paid to the beneficiary -has cash value invested in the stock market 4)Based on principle sum(rider) & capital sum(insurer) 50%, 3rd party ownership insurers issues policy to a lending institution Poor adaptation to climate change further widens the gap between what people can afford and the costs of insurance, as risks increase. An Insurance broker is responsible for what? _____________ is a statement that is true to the best of the persons knowledge that is making the statement. \end{aligned} &\begin{array}{lr|rr} Which of the following is NOT an example of a business use of Life Insurance? 3)according to the source of annuity income -Voting. -They provide coverage for risks that other insurers normally would not provide. Rates are considered inadequate when they do not cover projected losses and expenses. Hammond Corporation manufactures televisions. Part 1 of the application includes the general questions about the applicant, including name, age, address, birth date, gender, income, marital status, and occupation. c) A person who handles assets or money belonging to others. D. The benefit is received tax free. B. A. What is an exchange of a whole entire life policy for another? Which of the following would provide an underwriter with information concerning an applicant's health history? A color-coded map illustrating the current legal status of elective-specific abortion procedures in each of the individual 50 states of the United States of America; plus U.S. territories and federal district [a] As of January 31, 2023 Illegal Legally unclear or legal but no providers Legal before cardiac-cell activity [b] Legal through 15th week LMP (1st trimester) Legal through 18th week LMP . \end{aligned} A state administered health insurance for the needy? (b) reduced. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. The agent D. Funding against general company financial loss \text{Dividend}& 19,000& \text { Net Inc } & 65,000 \\ When the application is submitted without the premium its considered an invitation for the insurer to make an offer. A SEC registration. If a change in the application is necessary what is required? a) Universal life An underwriter will consider each of the following factors when evaluating a risk, except: A. 2)Foreign Insurer 2)collateral assignment-some or only one right assigned. insured is always the borrower & the beneficiary=lender A ____ contract requires that both parties perform certain duties. 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). Agent Sam is using the human life value approach to assess Mary's life insurance needs. \end{array} An agent has authority to do all of the following, except: A. Countersign insurance contracts 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. Despite this, the country has significantly worse healthcare outcomes when compared to peer nations. c. Manufacturing expense accounts and their balances for the month are as follows: DepreciationExpense-FactoryEquipment$5,770.24MiscellaneousExpense-Factory$13,780.48DepreciationExpense-Building2,822.40PayrollTaxesExpense-Factory43,736.00Heat,Light,andPowerExpense9,055.20PropertyTaxExpense-Factory6,088.32InsuranceExpense-Factory1,505.28SuppliesExpense-Factory18,063.36\begin{array}{lrlrr}\text { Depreciation Expense-Factory Equipment } & \$ 5,770.24 & \text { Miscellaneous Expense-Factory } & \$ 13,780.48 \\ \text { Depreciation Expense-Building } & 2,822.40 & \text { Payroll Taxes Expense-Factory } & 43,736.00 \\ \text { Heat, Light, and Power Expense } & 9,055.20 & \text { Property Tax Expense-Factory } & 6,088.32 \\ \text { Insurance Expense-Factory } & 1,505.28 & \text { Supplies Expense-Factory } & 18,063.36\end{array} c) Fixed premium 2)FCRA(fair credit reporting act) checks MIB report. 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. B. 1 / 25. What must exist at the time of the application? Limited-Pay Life & Single-Premium Policies? D. Breach of warranty D. Alien & &&\textbf{ Quarter } \\ Premiums are taxable to the employee -insured can stop paying premiums at certain age or after a period of time This is called. d) Joint and Survivor, B) The Waiver of Cost of Insurance rider is found in Universal Life policies. Who is not a party to the contract and receives the benefits when the insured dies? \end{array} 2) profits are returned as dividends &\begin{array}{l|lr} An agent told Carl about a form of life insurance in which Carl could select where the savings component is invested. - If the insured suffers a dismemberment the policy pays the CAPITAL SUM which is 50% of the principal sum. B) Once the cash surrender value option is selected, the coverage is terminated and the policy cannot be reinstated. 4)policy matures at age 100. B. Who appoints the state insurance regulator in many states? Is interest always gained in Universal Life Policy? All of the following are options for managing risk, except: means of collecting a loss payment from a liable party. c) Premium accountability. The premium is guaranteed for an initial period and then the insurer can charge up to a maximum premium charge in what type of policy? Term life insurance provides the largest amount of coverage for the lowest amount of premium. (a) Interest is credited monthly to a policy's cash value. 3)Consideration Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy? The correct answer is: Maggie's Piano Studio with 1 employee. -guarantee a stream of income to the person purchasing it known as the annuitant. Beneficiary's age The cost of insurance protection is referred to as what? \underline{\hspace{40pt}}. _____________ is an employer paid disability and health insurance coverage that covers job related illnesses or injuries. Which of the following statements about endowment policies is true? b. Explanation: (Life Insurance Policy Provisions, Options and Riders) A family term rider will provide term life insurance on a spouse and children. 3)2 Death benefits-(level/increasing) C. Consideration A) Tax-qualified annuities are used to accumulate IRA funds on a tax-deferred basis. Question: All of the following statements about variable life insurance are true EXCEPT O a. Where does group-life insurance come from? In a conditional receipt if the policy holder dies before delivery of the policy what has to happen for the benefits to be paid? B. c) Disclosure rule SalesrevenueLess:OperatingexpensesRawmaterialspurchasesDirectlaborcostAdvertisingexpenseSellingandadministrativesalariesRentonfactoryfacilitiesDepreciationonsalesequipmentDepreciationonfactoryequipmentIndirectlaborcostUtilitiesexpenseInsuranceexpenseNetloss$264,000190,00090,00075,00060,00045,00031,00028,00012,0008,000$780,000803,000$(23,000). Which of the following statements about limited-payment life insurance is true? -the applicant must always initial the change 1)Statement of continued good health The __________ branch of the state government influences public policy regarding insurance laws. &\text { Inventory }\\ Misappropriation or illegal withholding of the policyholder's money. Insurance is considered a transfer of risk. Type of insurance contract that pays its death benefit only during a specified period of time and nothing after that stipulated period. Various life insurance programs for people who served in the military are called ______________? It has cash value that is invested into the stock market through mutual funds/securities. What are two reasons that people deposit money in banks? b) Fluctuates. (c) Interest credited to a policy's cash value is taxable to the policyowner in the year credited. C. State Education Waiver Buy-sell agreements are normally funded with a life insurance policy. C. Medical Background EMPIRECOMPANYIncomeStatementFortheMonthEndedOctober31,2017\begin{array}{c} *Both not taxable. Coverage is available in $50,000 increments up to the maximum of $400,000. D) When replacement is involved, a producer must perform the following duties: sign replacement notice (and keep a copy), provide a list of items being replaced, leave all brochures/sales material used in the sale, take new application, submit "Copy to Replacement" notice, and it attach to application. A debtor has an insurable interest in the life of a lender. (6). B) They illustrate the nonguaranteed elements of the policy. 1)tax qualified plans D. The policy is a bilateral contract \end{array} \\ 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 _________. Medical exams provide information on current health. D) Insurance covers intentional losses as well as unintentional. All of the following statements are true of liability insurance, EXCEPT: Answer: liability coverage indemnifies the insured. To sell variable life insurance policies, an agent must receive all of the following EXCEPT Which of the following types of insurance policies would perform the function of cash accumulation? There are many legitimate need-based expenses that can be paid by life insurance proceeds, from groceries to retirement income. 2)standard-average All of the following are types of insurers except: The ________ Branch of the state government influences public policy regarding insurance laws. &\text { Cash }\\ All of the following would be considered to be rebating EXCEPT Correct: B. An inexperienced assistant accountant has prepared the following income statement for the month of October 2017. \hline \text { Jul 31 } & 3,000 Who are considered to be restricted persons concerning the formulation of an insurance contract. 3 of them? a) Indeterminate Premium ~~~\text{Raw materials purchases}&\$264,000\\ The insurer's promise to pay a covered loss and the insured's payment of the first premium, are examples of: A. Pro rata liability applies. Correct: A.A peril. C. Application Which of the following about yearly renewable term insurance is true? 1) the premium amount 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. Foregin (d) free look provision. -greater potential to grow the cash value but there is no guarantee A _______ __ is the additional premium needed to get covered with high or substandard risk. Can a misrepresentation render the contract void if the misrepresentation is material to the risk? Members are assessed to fund the corporation. a) More active. a) To limit the insurer's liability after the 2 year waiting period the underwriting process is approved for: c) Needs approach The total of all requisitions of indirect materials issued during the month is$20,170.00. What kind of penalty would the IRA owner pay? when the applicant/owner is not the insured-3rd party \hline It is legal to list nonguaranteed values in the contract, but they must be specifically labeled as projected, not guaranteed values. b) Larger. Group life insurance is most often issued as guaranteed annual renewable term. What is the MIB? 2)APS=medical records b. Correct: C. Consideration. Correct: B. insurable interest must exist. \hline & \text { Jul 31 } & 19,500 a) the risk is transferred to the insurer b)the insured may retain part of the risk through deductibles . 4) Joint-Life policy(business part) Insurance policy of 2 or more A. d. The total of all cost sheets completed during the month is $628,880.00.
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