all of the following are true of insurance except

Weiss and Fitch are two of these services, although there are more. -policy holder adheres to it _____________ is a statement that is true to the best of the persons knowledge that is making the statement. (b) tax-free exchange provision -greater potential to grow the cash value but there is no guarantee b) The debtors eligible for insurance under the policy shall all be the debtors of the creditor(s). By William Lb Qtjetjx, Author of . a. a sheet where the agent lists any additional info about insured including: habits,financial status, or anything that may be important for the underwriting department to determine the risk involved. Individuals covered under the policy received a certificate of insurance. -Both parties must follow certain conditions set forth in contract, -IRS classification of a policy that is overfunded \\ The following are all true regarding risk management, except: A. a) Year only. A ____ contract requires that both parties perform certain duties. DONT PICK IT!!!!!! A. When both parties to a contract must perform certain duties in order to make the contract enforceable, this is known as what? What is the primary source of info for the underwriting department to determine insurability? Rates. Policy Holders/Shareholders have the ability to vote for members of the board of directors or governing body of the company.. this is called their____________? When the producer exceeds the authority expressed in the agency contract and the insurer does not take action, which type of authority is created? A. 4. IRS classification of a policy that is overfunded? A conditional or binding receipt is given when an applicant does what? Which of the following is an example of an unfair claims settlement practice? -Staged intervals Type I rooms do not have wireless Internet access and are not available for the Business rental class. Insurance producers must ensure that contracts they recommend are in the best interest of the insured. _________ is a determination that a statement made as a warranty, or true. 2) form of interest sensitive life insurance(current market conditions influence the cash value) C. Premiums are determined by age sex and occupation of each individuals certificate holder. B. don't pick binding receipt at all on test. A monthly deduction is made from a policy's cash value for the cost of insurance protection. What insurance concept is associated with the names Weiss and Fitch? *The insured is diagnosed with terminal & chronicle illness There are many legitimate need-based expenses that can be paid by life insurance proceeds, from groceries to retirement income. C. Social Security works exactly same as private insurance. (c) two-income earner family. Insurers use this law in order to predict certain types of losses and set appropriate premiums. b) Human life value approach B. Marital Status InventoryJul1Jul3122,000???? (c) face amount of the policy and the legal reserve. Nature of risk 3,000, AccountsreceivableJul121,000???? The following are all causes for the Insurance Commissioner to suspend or impose conditions upon the continuance of a producer's license EXCEPT 1. Their premiums are lower A. Any profit realized in the operation will be used to provide dividends to stockholders as well as surplus funds that may be used as a buffer for future adverse experience. \text{Less: Operating expenses}\\ B. c) Counselor S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. the willful holding back or secretion of material facts pertinent of the issuance of insurance or a claim. Which of the following would least likely be considered a legitimate need that would be paid by insurance proceeds? -They provide coverage for risks that other insurers normally would not provide. Term life insurance provides the largest amount of coverage for the lowest amount of premium. C. A surplus lines broker accepts business only from non- resident agents 2)the face amount Steven prints a pamphlet to advertise his life insurance business. c) Variable Premium Mutual life policy. Which of the following is usually true of a participating life insurance policy? d) Accumulations are tax deferred. Round Trees management makes a forecast of the demand by rental class for each night in the future. 2)explain any ratings A. A. A false statement in the application for insurance is_____________. Is claim still paid if there is a misstatement of age or sex? A. 1. B. What are the two options in death benefit options? ~~~\text{Advertising expense}&90,000\\ A. Cash values are available in whole life policies. -the applicant must always initial the change Originating policy C. Payment of premium &\text { Cash }\\ This is true whether a property or liability form; and regardless whether the insured is a commercial or personal lines client. B) Underwriters. C. The death benefit paid to the beneficiary O c. The policyowner has the option of investing the cash value in several investment accounts. 5)an agreement is set, 1)Level term(cheapest insurance) face value stays the same Which of the following would be the best option that would help the surviving spouse of the insured to put her child through daycare after the insured's death? Which of the following is TRUE regarding assignment rights for . A securities license. 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. A. Height Weight and Health conditions. Which of the following about a VUL insurance policy is (are) true? Taxes, Retirement, and Other Insurance Concep, State Laws, Rules, and Regulations Quizzes, Life Insurance Policy Provisions, Options and, Fundamentals of Financial Management, Concise Edition. Breach of warranty Insurance is designed to cover both intentional and unintentional losses. a. mentally counting backward from 1,0001,0001,000 Out of 20 yr or 30 yr which policy is less expensive? When a policy is contributory how much is paid? 1)Statement of continued good health c) Needs approach Are insurance company underwriters allowed to discriminate? B. (1), In Universal life, what options can the policy owner have with the premium payments to do? D. Term life. a) Consumer Privacy Act c) Accelerated benefit rider. All of the following information about a customer must be used in determining annuity suitability EXCEPT b. Findefch a Wife,' 'Pnrple and Fine -men,'^The' Day of Temptation,' ' Of Royal Blood,' etc., etc . 3) Retaining the risk. 3)low premiums. B. IRS has no jurisdiction -sex doesn't determine eligibility. a) Offering additional coverage to clients All of the following statements about term insurance are true EXCEPT. \end{aligned} 4. 3)premium is collected A. Where can you find insurance coverage after being rejected by your insurance company for too many claims in the past year? (c) both I & II (d) neither I nor II. 6)free-look period-$ back guaranteed. If someone dies within the Grace period, what happens? B. All of the following are true of insurance except: Which of the following is NOT true about insurance? 2)when benefits begin When a policy is non-contributory how much is paid? b) Copies of illustrations and application \end{array} \\ Use the indirect method. Estimated direct labor costs for next year are$440,000.00. 2)quarterly The insurer that is transferring the risk to another company is called the ____________ __________. C. Unilateral contract &\text { Accumulated depr.-equipment }\\ Therefore, it is responsible for 1/3 of the $24,000 loss, or $8,000. Liquidity in life insurance refers to availability of cash to the insured through cash values. & \text{ ???? } D. Department of Treasury EMPIRECOMPANYIncomeStatementFortheMonthEndedOctober31,2017\begin{array}{c} An underwriter will consider each of the following factors when evaluating a risk, except: A. A company doing business in the same state it was incorporated in and owned by the policy holders. d) Joint and Survivor, B) The Waiver of Cost of Insurance rider is found in Universal Life policies. a) Payor rider. (d) annual premium and the annual policy dividend. The Terrorism Risk Insurance Program is administered by which of the following Federal entities? Predicted needs of the family after the insured's death In addition, they provide financial support for Tom's aged father and Nancy's aged mother. 3)according to the source of annuity income (b) level-premium method The policy does not go into effect until the premium has been collected. The Waiver of Cost of Insurance rider is found in what type of insurance? D. Accident If the corporation collects the policy benefit, then ?19,500, Accumulateddepr.-equipmentJul155,000Depr3,000Jul3158,000\begin{aligned} (a) I only (b) II only What is the primary source of info used to determine insurability by the underwriting department? 1. Upon policy delivery, the producer may be required to obtain any of the following EXCEPT 1) Avoiding the risk An insurance consultant CANNOT be which type of persons? After everything is signed & premium is collected What does the agent give to the policy holder? The debtor does not have an insurable interest in the life of the lender. When an agent is handling the premiums that belong to an insurance company, they are acting in a fiduciary capacity. (Choose from the following options) Correct: C. Concealment, A. What is the MIB? 17,000, InventoryJul122,000???? - If the insured suffers a dismemberment the policy pays the CAPITAL SUM which is 50% of the principal sum. They become permanently disabled What are the permanent working capital needs of your company? 1)Domestic Insurer 4. The gross premium charged must reflect, at least for competitive reasons, the actual cost of providing the insurance. Who is not a party to the contract and receives the benefits when the insured dies? -receiving dividends(when declared) 2)Decreasing term(premium is low) declining face value D. Effect of inflation on income over time. Correct: C. Consideration. d) Policy dividends. Explanation: (Life Insurance Policy Provisions, Options and Riders) A family term rider will provide term life insurance on a spouse and children. exclusions: when the accident occurs within an illness,disease, or mental infirmity. 3) Equity-Index annuity. The total factory payroll for the month according to the payroll register is $308,000.00, distributed as follows. The policyowner can add to a policy's cash value at any time subject to policy guidelines. B. Appoint a solicitor as his or her representative a) An agent offers the use of his lake house to person as an inducement to buy. All of the following are required signatures on a life insurance application EXCEPT. -below market interest rates on borrowing If a parent purchases life insurance on their child all of the following are true, EXCEPT: A) The child is the insured. Term-Life policy has what 3 characteristics? The corporation also helps detect and prevent insurer impairments. Correct: A. A. -Take it or leave it contract When an insured fails to disclose known facts in an application for insurance, he/she may be guilty of: A. All of the following are business uses of life insurance EXCEPT Tom and Nancy Boyle provide financial support for their two children. A. Medical exams provide information on current health. b. Funding against financial loss caused by the death of a key employee Receipt a) Juvenile Life (b) single-parent family. Arrest History. \textbf{EMPIRE COMPANY}\\ Waiver of premium is a rider that can be added to a life insurance policy, and not something to be obtained from the applicant. B) The plan is funded by permanent insurance only. -and the right to vote. B) The reduced paid-up nonforfeiture option would provide protection until the insured reaches 100, but the face amount is reduced to what the cash would buy. \hline \text { Jul 31 } & 25,500 Which model is the better fit for the data? 1)policy owner can increase/decrease/ or skip premium payments Dividends received by policyholders of a mutual insurer are not taxable. ~~~\text{Direct labor cost}&190,000\\ The cost of a living rider is calculated by what? For this amount of production, total factory overhead is estimated to be $396,000.00. When Applicant P fails to disclose all of his motor vehicle violations in an application for automobile insurance, he may be guilty of: A. Estopple Prepare the following details: Mobile number, serial number, or IMEI. All of the following statements about universal life insurance are true EXCEPT \end{array} Which of the following statements is not correct regarding rates and premiums? Cause of potential loss to property such as fire, windstorm, hail, flood, etc. 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. B) In insurance, fraud is the intentional misrepresentation of material information that is crucial when deciding whether or not to write a contract for an applicant. b. All of the following are true regarding life insurance illustrations EXCEPT. Statement of good health (a) They increase at an increasing rate. -the insurer sets the terms of the contract and the applicant must adhere to them. Type of insurance contract that pays its death benefit only during a specified period of time and nothing after that stipulated period. They keep a high percentage of any interest earned on their policies a) Lump-sum approach compulsion? Which type of risk involves the possibility of loss or gain? C. Application B. Buy-Sell Agreements pay in the event of a medical emergency c. continuous premium whole life A key person insurance policy can pay for which of the following? We participate at both the national and state levels as a leading advocate in the judicial, legislative, and regulatory environment to ensure that Members' concerns are heard by lawmakers on issues that impact medical professional liability. The insurance company may not void the insurance policy for which of the following reasons? Jul3119,500\begin{aligned} A ______ will receive unfavorable tax treatment. I. Annually renewable term policies provide a level death benefit for a premium that D. Reduction is a method of managing risk. All of the following are true about the Fair Credit Reporting Act Except: Regardless of what the consumer learns about the unfavorable information, the report can be changed by court action only. C. Risk Term life insurance provides pure death protection. B) According to the law of large numbers, the larger a group becomes, the easier it is to predict losses. (economy). c) To protect the policyowner With a little work, an unused office area could be converted to a rental room. b) A producer who handles insurer funds in a trust capacity. -The insurer would pay the face amount of the policy minus the past due premium. It is used to pay off the balance on the mortgage. A linear programming model developed to maximize profit is used to determine how many reservations to accept for each rental class. C. Conditional contract An inexperienced assistant accountant has prepared the following income statement for the month of October 2017. The preferred risk classification indicates that an insured is in excellent physical condition and employs healthy lifestyles and habits. In this case, the applicant will most likely need to fill out a Statement of Good Health. Long-term investment decision, payback method Bill Williams has the opportunity to invest in project A that costs $9,000 today and promises to pay annual end-ofyear payments of$2,200, $2,500,$2,500, $2,000, and$1,800 over the next 5 years. \hline & \text { Jul 31 } & 19,500 b) State attorney general Should a key person die, the benefit is treated as a reimbursement to the business for loss of services from that key person. c. thoughts of harming a neighbor 5)Explain when coverage begins All of the other statements are true. -Not a true insurance company B. Yes, all T-mobile insurance plans cover water damage. (d) Its use may be appropriate if a person wants paid-up life insurance by retirement. the underwriting process is approved for: In a car accident dealing with ADB who covers the passenger? Which type of life insurance makes sense for someone in this situation? ~~~\text{Selling and administrative salaries}&75,000\\ A __________ represents the insured. 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. A state administered health insurance for the needy? If you don't have health insurance, you pay all costs for healthcare and medical emergencies. What are some of the questions asked on the application to determine the premium and risk classification of the insured? The applicant's medical background is addressed in Part 2 - Medical Information. Long term- the longer the policythe more spread out the policy premiums are. c) 10 years. and what two kinds? \end{array} An Applicant inaccurately representing information on the application is guilty of: A. All of the following are true of insurance EXCEPT It transfers risk. The designation will be void/. An aleatory contract is a contract where the monetary values of the parties performances are________________. It is legal to list nonguaranteed values in the contract, but they must be specifically labeled as projected, not guaranteed values. What happens when there is a Misstatement of age or sex? AKA-payout phase. (c) Most policies can be converted to a permanent life insurance policy. A whole life insurance policy is exchanged for a Universal life insurance policy. -Not invested in stock market c) Misrepresentation 1) coverage is permanent All of the following are true about health insurance except: Purchasing health care can help save you from medical bankruptcy. Which term describes the probability of a loss? 2)Straight Life b. Consumer report 2)FCRA(fair credit reporting act) checks MIB report. For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become 3) type of plan they applied for. ________________ are the person who receives benefits payable upon death. An agent and an applicant for a life insurance policy fill out and sign the application. 1)cont. An insured becomes disabled at age 22 and can no longer work. A lender has an insurable interest in the life of a debtor, but only to the extent of the debt. 3)certified public accountants, Is insurance that is provided by the Federal or State government C. State Education Waiver What characteristic must an annuity have if it is used to accumulate funds in an IRA? 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. has reached its final destination and can be paid out in full. Insurance is not designed to cover _____________ losses. Legal Purpose Example: AIL was incorporated in Indiana and its home office is in Texas so in NJ its considered a foreign insurer. Which of the following statements concerning buy-sell agreements is true? If there Is a risk of financial loss then there is a what? (b) reduced. The face amount decreases as the amount owed on the mortgage decreases. D. The face amount remains the same throughout the life of the policy. 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} 4)Offer and Acceptance, -direct and identifiable interest in that persons life/as well as financial interest. c. Premiums may be raised at renewal d. Group term insurance may cover the . What limitations might this model have for predicting consumer's attitudes and purchase behavior towards Cream Silk? -has cash value invested in the stock market A. Foregin How has the Aswan High Dam affected the lives of Egyptians? Rates D) The Life and Health Insurance Guaranty Corporation protects Maryland residents who are policyholders, insureds, beneficiaries, annuitants, and assignees of life and health insurance policies, annuities, and supplemental contracts, if the insurer issuing the policies fails to perform its contractual obligations because it becomes impaired. A debtor has insurable interest in the life of a lender Or, Bill can invest $9,000 in project B that promises to pay annual end-of-year payments of$1,500, $1,500,$1,500, $3,500, and$4,000 over the next 5 years. Permanent Insurance have 3 words in common, what are they? Cash value is invested in the stock market. RentalClassRoomTypeITypeIISuperSaver$30$20Deluxe$35$30Business$40. As her friend, you have been asked to review the income statement and make necessary corrections. 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? To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. (a) limited-payment whole life insurance (d) yearly renewable term, Which statement is true concerning premature death and life expectancy? d) Graded Premium. 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 . 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? The storage of flammables in a fireproof container. A. How does having children affect the decisions that couples must make when considering a divorce? d) Producer. B) Fiduciary refers to a position of trust. 4)explain policy & provisions 5)coverage begins Its controller resigned in October 2017. C. Hazards Instructions Correct: A. A contract between insurer and policy holder. Which of the following about the use of ordinary life insurance is true? (c) Interest credited to a policy's cash value is taxable to the policyowner in the year credited. A. The requirement that producers must account for all insurance funds collected, and without the expressed consent of the insurance company(ies) are not permitted to co-mingle those funds with their own funds is known as \underline{\hspace{40pt}}. It has cash value that is invested into the stock market through mutual funds/securities. A person who negotiates insurance contracts on behalf of an insured. B. Misrepresentation Domestic Insurer (c) expired. 2) Binding Reciept. Annual income considers Lloyds of London an Alien insurer When applicant is not the insured ______________ must exist. Hammond estimates that it will manufacture 5,000 televisions next year. C) They must contain a warning that actual results may vary. a. All of the following statements about the characteristics of Social Security are true EXCEPT A. (b) The face amount of the policy is paid if the insured lives to age 65. Retention, Avoidance, and Transfer are all _________________. 4)annual, Everytime you have a payment due. Correct: D. Represent the insured's interest, All of the following statements regarding financial rating services are correct, except. C. Concealment \hline \text { Jul 1 } & 5,500 &&\\ -receiving dividends(when declared) Jul3117,000\begin{aligned} A company that does business in another state than incorporated who is owned by policyholders who received dividends when declared and voting rights. On DUE DATE. \hline (\$ 000) & 1 & 2 & 3 & 4 \\ (b) They increase at a decreasing rate. 3)mortality charge. 2)Increase the face value An insured is driving her automobile and strikes a large pothole that . It requires evidence of insurability for renewal. 2)non-qualified plans Which of the following statements about limited-payment life insurance is true? The total of all requisitions of indirect materials issued during the month is$20,170.00. c) Extended term (6). 1) Conditional Reciept the application is used at the primary source of info. D) real estate, Under one method of estimating a loss reserve, the reserve is based on life expectancy, duration of disability, and similar factors. (d) Most policies have a CV that is refunded when coverage ceases. B. Aleatory contract \end{array} 4)decrease premium paying period. An Insurance broker is responsible for what? All of the following characterize term life insurance, EXCEPT: Select one: a. True or False: Under the Financial Responsibility Law, you are required to have insurance on any motor vehicle you own or drive, except motorcycles (c) both I and II The replacing company notifies the replacement company. 1)increase cash value Which of the following would provide an underwriter with information concerning an applicant's health history? Premiums are not tax deductible as a business expense . 4)Explain the policy and its provisions (must exist at the time of application). -then picks a contract. Which of the following is an example of liquidity in a life insurance contract? Conviction of a felony involving moral turpitude. C) common stock 4. 4. c) Helping insureds to file claims A) The amount of insurance of the life of any debtor may at no time exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor. \hline \text { Jul 31 } & 17,000 (2), The current market will influence the cash value Pure risk 4)Based on principle sum(rider) & capital sum(insurer) 50%, 3rd party ownership insurers issues policy to a lending institution Suitability Which of the following is the basis for a claim against an insurance policy? D. Concealment Compute DVDs net cash provided by (used for) operating activities during July. In terms of social security, what is the name for the time period after the youngest child of a family turns 16 and before the surviving spouse may start receving retirement benefits? (c) They decrease at a constant rate. He would also like to invest in a mutual fund. \end{array} An insured owns a life insurance policy. (Choose from the following options) (a) Evidence of insurability is not required to renew the coverage. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. b) Fixed income C. Funding business continuation agreements (a) I only (b) II only Why?". 3)Explain any riders or exclusion Premiums are not tax deductible as a business expense. What contract characteristic does this describe? ~~~\text{Depreciation on sales equipment}&45,000\\ Life expectancy has increased in the U.S. over the last century. Premiums are taxable to the employee C) Completing pre-licensing training. 1) preferred-low A) They must be given to all Life insurance applicants. A producer wishing to appeal the final order of the commissioner would appeal to???? $ cant exceed indebtness. Who might receive dividends from a mutual insurer? (b) variable life insurance B) Money collected with respect to an insurance transaction must be held in a position of trust by the producer.

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