?19,500, Accumulateddepr.-equipmentJul155,000Depr3,000Jul3158,000\begin{aligned} Which of the following statements is NOT true concering insurable interest as it applies to life insurance? (b) The face amount of the policy is paid if the insured lives to age 65. Business partners have an insurable interest in each other The policy is a contract of adhesion. c) Guides describing company financial integrity \hline \text { Jul 31 } & 3,000 Type of insurance contract that pays its death benefit only during a specified period of time and nothing after that stipulated period. What does "liquidity" refer to in a life insurance policy? D. Claim History ADD( Accidental death and dismemberment??? 1)cont. The shifting of risk of loss to a larger homogeneous group is known as what? -pay for certain time and stop &\begin{array}{lr|lr} The concept that the insured should not profit from an insurance transaction is called what? It is used to pay off the balance on the mortgage. a) Premium amounts and surrender values Attempting to determine how much insurance an individual would require based upon their finacial objectives is known as. Poor adaptation to climate change further widens the gap between what people can afford and the costs of insurance, as risks increase. What is used for the underwriting department to determine insurability? Which of the following is the basis for a claim against an insurance policy? a. (b) current assumption whole life. 3. 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? What is an exchange of a whole entire life policy for another? Since they may receive a dividend (not guaranteed), such policies are known as participating policies. How has the Aswan High Dam affected the lives of Egyptians? Insurance is designed to cover both intentional and unintentional losses. b) Fixed income D. Concealment 21,000 \\ Jul3117,000\begin{aligned} b) A producer who handles insurer funds in a trust capacity. D. They can decide when to pay their monthly premiums. The agent b. B. B. considers Lloyds of London an Alien insurer D. Workers compensation. C. They can borrow higher amounts off of their policies Hospital bills of the key employee (d) The policyowner can add to a policy's cash value at any time subject to policy guidelines. It is legal to list nonguaranteed values in the contract, but they must be specifically labeled as projected, not guaranteed values. a) To limit the insurer's liability after the 2 year waiting period A. Endowments means policy is what(2) things? A. \end{array} They have made a legal arrangement which states that if one of them dies or becomes disabled, the other two wull be able to buy the partner's shares, Which term best describes this arrangement? AccountsreceivableJul1Jul3121,000???? (c) expired. -Both parties must follow certain conditions set forth in contract, -IRS classification of a policy that is overfunded C. Consideration 4. All of the following information about a customer must be used in determining annuity suitability EXCEPT All of the following statements concerning coinsurance are true, EXCEPT . -policy holder adheres to it A company formed in a different country doing business in any state of American who owners are stockholders that receive dividends and have voting rights. Companies may have immediate legal obligations following the inclusion of a substance in the Candidate List on this website including in particular Articles 7, 31 and 33 of the REACH Regulation. Height Weight and Health conditions. D) Claims result from losses by a peril insured against in an insurance policy. C. group credit life insurance does not build cash values. d. 10 payment whole life, Chapter 12 - Life Insurance Contractual Provi, Chapter 15 - Individual Health Insurance Cove, Fundamentals of Financial Management, Concise Edition, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese. A whole life insurance policy is exchanged for a term insurance policy, Which of the following will be included in a policy summary? D) Obtaining a bachelor's degree. a) Using arbitration when the insured and insurer cannot reach agreement All of the following would be exempt from the producer licensing requirements EXCEPT: A) A customer service representative who discusses policies. A policy summary In a car accident dealing with ADB who covers the passenger? What are the two options in death benefit options? A whole life insurance policy is exchanged for a term insurance policy. Who gets $$money when the policy holder dies? A ____ contract requires that both parties perform certain duties. The Terrorism Risk Insurance Program is administered by which of the following Federal entities? Reinsurance has 2 types of policys, what are they? All of the following are true regarding health insurance policies, EXCEPT: A) An agent or producer may not make changes to the policy B) Once issued, a policy may only be changed with the approval of a company officer C) An agent may change an application with the verbal consent of the applicant Errors and Omissions Coverage (E&O) is a name used to describe a type of professional liability insurance. -it pays the double indemnity, 1)accident occurs, person must die within 90 days C. Unilateral contract \end{aligned} When the producer exceeds the authority expressed in the agency contract and the insurer does not take action, which type of authority is created? Buy-sell agreements are normally funded with a life insurance policy. All of the following statements about ordinary life insurance are true EXCEPT. Which model is the better fit for the data? 3) Equity-Index annuity. Whats the cheapest type of permanent insurance? b) Unilateral \text{Less: Operating expenses}\\ There are many legitimate need-based expenses that can be paid by life insurance proceeds, from groceries to retirement income. All of the following are personal uses of life insurance EXCEPT, All of the following are true of key person insurance except, D. 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? C. The policy is an aleatory contract C) Completing pre-licensing training. Its controller resigned in October 2017. -assignor=assignee (c) both I & II (d) neither I or II, Diane is a single parent. B) bonds 3. There is a minimum guaranteed interest rate on all sub-accounts. a) Executive offer of the replacing company 2)when benefits begin The employer is the owner . A securities license. c) Copy of the original application All of the following are business uses of life insurance EXCEPT 1) a policyholder votes on the Board of Directors "Round Tree Manor is a hotel that provides two types of rooms with three rental classes: Super Saver, Deluxe, and Business. 3)2 death benefit option 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 _________. A. 3)mortality charge. Tamara purchased a term insurance policy when she had high life insurance needs and limited income. Pure risk I. B. B) Human life value approach is determined by the loss of income that would result with the death of the insured, after making adjustments for expenses, inflation, etc. To sell variable insurance what must you have? Why?". Exclusions always exist, and there is a reason for each one. What are (4) ways annuities are classified? B. Correct: D. A surplus lines broker places risks with nonadmitted insurers when coverage cannot be placed with admitted insurer carriers. 4)explain policy & provisions O d. Why do most states have a waiting period for couples applying for marriage licenses? Beneficiary's age (c) face amount of the policy and the legal reserve. 2)explain any ratings Journalize the entry to transfer the total of all cost sheets completed from Work in Process to Finished Goods. Because the insurance company must pay claims and the insured must comply with the policy terms, the insurance contract is considered which of the following types of contracts? In an insurance contract, the value that each party gives the other is called the: When an individual faces the risk of economic loss in the event of property damage, this indicates which of the following? (b) Face amount decreases during the policy period, but premiums remain level. Conviction of a felony involving moral turpitude. Correct: B. 4. An annuity is exchanged for another annuity. All of the following are required signatures on a life insurance application EXCEPT. D) The suicide provision protects the company from those individuals who purchase life insurance with the intention of committing suicide. A corporation is the owner and beneficiary of the key person life policy. 4)Consumer report=credit, -shorter time span for paying premiums \end{aligned} In order for the contract or policy to be valid or legal? AccountspayableJul1Jul3114,500??? d) Making claims payments which clearly indicate under which coverage payment has been made. What (5) Factors for GIO & GIB. whose covered? D. group credit insurance must have a suicide clause . Whole life policy. It does not include breach of contract. (c) face amount of the policy and the legal reserve. The benefit is subject to the exclusionary rule c) The premium for the policy shall be paid either from the creditor's funds, or from charges collected from the insured debtors, or from both. The issuance of a policy or binder is not part of the consideration element of an insurance contract, it is part of the _______ ________. A monthly deduction is made from a policy's cash value for the cost of insurance protection. & \text{ ???? } Address of his principal office d) Loss. 3)Minors. -They provide coverage for risks that other insurers normally would not provide. It has cash value that is invested into the stock market through mutual funds/securities. When a New York insurance agent or broker advertises services, he/she must list the full name of the insurer and the name of the city, town, or village that houses the principal office. 2)quarterly (c) The number of times the coverage can be renewed is limited. Originating policy 2)no cash-value 4)Explain the policy and its provisions What constitutes the acceptance of an offer? Adverse selection is well controlled. Legal Purpose Concerning insurance, the definition of a fiduciary is also known as acceptance. The policyowner has a variety of options for investment of the cash value. 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 Prepare the following details: Mobile number, serial number, or IMEI. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company? 4. The insurance company may not void the insurance policy for which of the following reasons? Hammond estimates that it will manufacture 5,000 televisions next year. Where does group-life insurance come from? The policy is issued for one year and may be renewed annually with evidence of insurability. -then picks a contract. An Applicant inaccurately representing information on the application is guilty of: A. Correct: Misrepresentation, False statement contained in the application, An intentional deception of the truth in order to induce another to part with something of value or to surrender a legal right. 2)not payable in conjunction. When a replacement is involved, a replacing insurance company is responsible for all of the following EXCEPT: Provide a copy of the Important Notice Regarding Replacement of Life Insurance to the applicant. 2)administered charge the application is used at the primary source of info. If an insurer is incorporated in Rhode Island, but primarily does business in New York, what type of insurer would it be considered in New York? Quarter($000)1234Cash$100$100$100$100AccountsReceivable1999699604Inventory20150590552AccountsPayable104959597\begin{array}{lrrrr} A contract between insurer and policy holder. A mutual insurer has no stock, and is owned by the policyholders. I. A SEC registration. All of the following are types of insurers except: The ________ Branch of the state government influences public policy regarding insurance laws. What happens when a policy is surrendered for its cash value? He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. \text{Dividend}& 19,000& \text { Net Inc } & 65,000 \\ What are two reasons that people deposit money in banks? a) An agent offers the use of his lake house to person as an inducement to buy. 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. The designation will be void/. b) The elderly Both life and health insurance can be used for a variety of purposes in a business setting, including the funding of business continuation agreements, compensating executives, and protecting the firm against financial loss resulting from the death or disability of key employees. The correct answer is: Premiums are typically paid by the lender. An insurer that was incorporated in a DIFFERENT STATE that it is doing business in is a _____________??? (2), 1)HIPPA An insurer or producer may NOT knowingly employ an individual to act in a fiduciary capacity if that individual has been convicted of a felony or crime of moral turpitude within the past All of the following statements about term insurance are true EXCEPT. D. Funding against general company financial loss. According to the entire contract provision, what document must be made part of the insurance policy? Prior to October 2017, the company had been profitable every month. 25,500, AccountspayableJul114,500???? It is the specific cause of loss. (a) I only (b) II only 3)they provide insurance to members. D. Solicit applications on insurer's behalf A. ____________ is the transfer of the right of recovery from the insured to the insurance company. A whole life insurance policy is exchanged for a Universal life insurance policy. C. Countersign insurance contracts C. State Education Waiver Which of the following information about the applicant is NOT included on Part 1 of the application for life insurance. B) The plan is funded by permanent insurance only. a) Remains level. Nature of risk When the application is submitted without the premium its considered an invitation for the insurer to make an offer. Which of the following statements about a life insurance policy is (are) true? c) Conditional c) Policy loans are taxable distributions. d) Accumulations are tax deferred. AKA-payout phase. Hammond Corporation manufactures televisions. (c) PV of the family's share of a deceased breadwinner's future earnings. WorkinProcessFactoryOverheadCash$229,040.0078,960.00250,558.00EmployeeIncomeTaxPayableSocialSecurityTaxPayableMedicareTaxPayable$33,880.0019,096.004,466.00. The debtor does not have an insurable interest in the life of the lender. The policyowner can add to a policy's cash value at any time subject to policy guidelines. 1) preferred risk \hline (\$ 000) & 1 & 2 & 3 & 4 \\ A) They must be given to all Life insurance applicants. Surviving family members may experience a reduction in their standard of living if the family breadwinner dies prematurely. For this amount of production, total factory overhead is estimated to be $396,000.00. Observers and analysts have attributed the reasons for the 2001-2006 housing bubble and its 2007-10 collapse in the United States to "everyone from home buyers to Wall Street, mortgage brokers to Alan Greenspan". C. Insured's annual expenses 2)Legal Purpose a) Types of mutual companies c. It is the failure to use ordinary care. A mutual insurance company is owned by who? 3)Rider expires 60,65,75. Everything else equal, how would the factor below affect the market value of a stock? What type of insurer has no capital stock? 2)APS=medical records Involuntary Risk D) the minor in a juvenile policy. The remaining amounts should be charged to selling and administrative activities. Policyholders b) Cost of living rider. To sell variable life insurance policies, an agent must receive all of the following EXCEPT (a) Evidence of insurability is not required to renew the coverage. Part 1 of the application includes the general questions about the applicant, including name, age, address, birth date, gender, income, marital status, and occupation. d) The insurer will sue the insured for committing fraud. _____________ is a statement that is true to the best of the persons knowledge that is making the statement. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. \end{array} -tax free accumulation of borrowing. A ______ will receive unfavorable tax treatment. A __________ represents the insured. If the initial premium is not paid with the application, the agent will be required to collect the premium at the time of policy delivery. All of the following statements about the characteristics of Social Security are true EXCEPT A. Executive office (a) They increase at an increasing rate. c) Low-income individuals and families Newborns after how many days become covered in a child rider? What are some of the questions asked on the application to determine the premium and risk classification of the insured? -Take it or leave it contract 3) Ordinary. Type I rooms do not have wireless Internet access and are not available for the Business rental class. For example, a claim will be paid only is there has been a covered loss. 1. All The statements made on the application are called ______? (c) Most policies can be converted to a permanent life insurance policy. C) A licensee cannot knowingly employ an individual who has been convicted of a felony or crime of moral turpitude within the past 10 years to act in a fiduciary capacity. (c) They decrease at a constant rate. B. 1. (d) neither I nor II. Compute DVDs net cash provided by (used for) operating activities during July. If the insurance carried is less than required, the insurance may not cover the whole loss. Last year, the couple got divorced. What are the (5) Factors considered with combination policies Who and What are they? 10 year level term insured is always the borrower & the beneficiary=lender An insured is driving her automobile and strikes a large pothole that . The applicants(policy owner) \hline \text { Jul 1 } & 5,500 &&\\ b) The agent's report still matures at age 100, -premium is paid off at one time B. Avoidance 1) preferred-low C. Buy-Sell agreements are normally funded with a life insurance policy Which term describes the probability of a loss? &\begin{array}{lr|rr} 5)Explain when coverage begins Which type of risk involves the possibility of loss or gain? d) Producer. \end{array} \\ \end{aligned} Long term- the longer the policythe more spread out the policy premiums are. Which of the following is NOT an example of a business use of Life Insurance? -cash value can lose value. RetainedEarningsDividend19,000Jul1NetIncJul3165,00065,000111,000. 1. C. Domestic Numerical identifiers: Each candidate list entry covers both anhydrous and hydrated forms of a substance. (b) Any withdrawal of cash value reduces the death benefit. Which of the following statements is not correct regarding rates and premiums? If applicant is not the insured- then insureds signature is required _________ is a determination that a statement made as a warranty, or true. Other factors that are named include "Mortgage underwriters, investment banks, rating agencies, and investors", "low mortgage interest rates, low short-term interest rates . d) The policy can be reinstated by paying back all policy loans and premiums. (b) II only A. Misappropriation or illegal withholding of the policyholder's money. a) Lump-sum approach Costs of training a replacement Accelerated Living Benefit/Death Benefit is what type of rider? All of the following are common characteristics of this coverage EXCEPT a) The policyholders or stockowners of the company The __________ branch of the state government influences public policy regarding insurance laws. Retention, Avoidance, and Transfer are all _________________. D. Agents report. -A Mec will receive unfavorable tax treatment Appoint a solicitor as his or her representative A lender has an insurable interest in the life of a debtor, but only to the extent of the debt. a) Because the insured is currently not a drug user, his policy will not be affected. The safety margin is narrower, because the cost of the insurance to the policyholder cannot be adjusted at a later time. B) A "cost of living" rider adjusts the face amount of a policy to maintain the relationship of the face amount and increases in the cost of living. Mutual life policy. -Not a true insurance company Insurance transfers risk but it does not__________ risk. Which of the following is a financial rating service? Which of the following is TRUE regarding assignment rights for . -usually mutual fund security Explanation: (Life Insurance Policy Provisions, Options and Riders) A family term rider will provide term life insurance on a spouse and children. b) Conditional receipt Which of the following is an example of liquidity in a life insurance contract? Members are assessed to fund the corporation. 3)certified public accountants, Is insurance that is provided by the Federal or State government (b) face amount of the policy and the total premiums that have been paid. Whats the "take it or leave it contract"? Exclusion Categories B. this insurance is often written in connection with automobile loans. All of the following are true for indemnity insurance except that: a. premiums are based on separate risk pools often organized by employers. Alex, age 26, purchased a 20- payment whole life insurance policy. Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy? (b) tax-free exchange provision -Can't lose value What are the 3 characteristics of a Mutual Insurance Company? D. Represent the insured's interest Which of the following about the use of ordinary life insurance is true? A) A policy summary must be delivered along with the policy and will provide the producer's name and address, the insurance company's home office address, the generic name of the policy issued, and premium, cash value, surrender value and death benefit figures for specific policy years. Quarterly working capital levels for your firm for the next year are included in the following table. C. It's a decreasing term insurance. a. mentally counting backward from 1,0001,0001,000 Correct: D. Represent the insured's interest, All of the following statements regarding financial rating services are correct, except. -The insurance dept. It is most appropriate when an insured needs lifetime protection. Life insurance proceeds *Both not taxable. Home Office- what do the underwriters do. they evaluate 4 things- what are they(4)??? Consumer report Inventory balances at the beginning and end of October were: Only 75% of the utilities expense and 60% of the insurance expense apply to factory operations. \hline \text { Jul 1 } & 22,000 \\ \text{Inventory} & 201 & 505 & 905 & 52 \\ Which of the following about decreasing term insurance is true? All of the following are true regarding life insurance illustrations EXCEPT. -The insurer would pay the face amount of the policy minus the past due premium. Domestic Insurer B. Beneficiarys age &\text { Accounts receivable }\\ (d) sandwiched family. One sided contract is a ______________ contract. 3) type of plan they applied for. 1) Competent Parties (Hint: Take a look at the Theory of Reasoned Action.). compulsion? -7 pay test is used to determine If a policy is a MEC. C. Certain Risk \text{Accounts Receivable} & 199 & 96 & 99 & 604 \\ A surplus lines broker places risk with nonadmitted insurers when coverage cannot be placed with admitted insurer carriers D. Funding against general company financial loss 2)Decreasing Term \textbf{For the Month Ended October 31, 2017}\\ Who would be eligible to obtain SGLI? (a) renewal provision Liquidity in life insurance refers to availability of cash to the insured through cash values. \hline & \text { Jul 1 } & \begin{array}{r} (D The employer is the owner, payor and beneficiary of the policy. A. C. Medical Background Which of the following is usually true of a participating life insurance policy? Reinsurer Assuming company. What is the MIB? Can term insurance be both renewable and convertible? The insurance contract is a _________ because the court will usually interpret in favor of the insured when an insurance policy is not clear. 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} &&\\ (d) They remain level. C. Application Correct: A. A. 3)premium is collected The applicant's medical background is addressed in Part 2 - Medical Information. -below market interest rates on borrowing c. What type of interest does universal life have? B) Once the cash surrender value option is selected, the coverage is terminated and the policy cannot be reinstated. D. The flexible premium. D) An agent's report and inspection report provides personal information. Misrepresentation, Concealment and Deceit are all examples of what? The 7 paytest is used to determine if a policy is a _______? \end{aligned} However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. 2)Variable annuity Most policies can be renewed for additional periods without evidence of insurability. The following are all true regarding risk management, except: A. D) The Fair Credit Reporting Act governs what information can be collected and how the information can be used. \hline \text{Cash} & \$ 100 & \$ 100 & \$ 100 & \$ 100 \\ b) The policy will not be affected. B. Statements in the application that are guaranteed true but later found to be false may result in what? What is a statement in the application guaranteed true in all respects? All of the other statements are true. The minimum FREE LOOK period is how many days? Hazard D. Concealment All of the following are options for managing risk, except: means of collecting a loss payment from a liable party.