all of the following are true of insurance except

What must exist at the time of the application? C. The insurer is always required to pay the . What else must he include? 1) Competent Parties -the applicant must always initial the change A. Correct: A. 3)MIB=records of all previous insurances they had. D. Concealment 1)tax qualified plans d. falsely believing that a spouse has been B. Beneficiarys age A life insurance policy is exchanged for an annuity. c. Premiums may be raised at renewal d. Group term insurance may cover the . -sex doesn't determine eligibility. Hospital bills of the key employee All of the following statements about the characteristics of Social Security are true EXCEPT A. The benefit is subject to the exclusionary rule Payor benefit/Clause is always a _________. Why do most states have a waiting period for couples applying for marriage licenses? 2) standard risk All of the following are options for managing risk, except: means of collecting a loss payment from a liable party. (c) human life value method Which of the families below is likely to have the least need for a large life insurance policy? 1. -it is a type of Rider D) Insurance covers intentional losses as well as unintentional. Which of the following about yearly renewable term insurance is true? The US is the only developed nation without a system of universal healthcare, with a large proportion of its population not carrying health insurance, a . Difference between Universal Life Insurance and Whole Life Insurance? 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. a) The policyholders or stockowners of the company This is true whether a property or liability form; and regardless whether the insured is a commercial or personal lines client. B. Insureds current and future income 1)Whole Life a) Accumulated at interest One sided contract is a ______________ contract. It is used to help adequacy and equity in rates. 1)premium payment Level-increasing face value. (b) tax-free exchange provision To sell variable insurance what must you have? D) They must be signed by both the Producer and the applicant. The Waiver of Cost of Insurance rider is found in what type of insurance? 6)free-look period-$ back guaranteed. Economics questions and answers. b. A whole life insurance policy is exchanged for a Universal life insurance policy. ~~~\text{Utilities expense}&12,000\\ What contract characteristic does this describe? (D The employer is the owner, payor and beneficiary of the policy. A) They must be given to all Life insurance applicants. True or False: Under the Financial Responsibility Law, you are required to have insurance on any motor vehicle you own or drive, except motorcycles When the company earns a profit and elects to share there profits, they pay a ____________to the policyholders or shareholders. ? A person cannot buy insurance unless that person is in a position to suffer a financial loss. a) Offering additional coverage to clients D. Represent the insured's interest Who is responsible for making sure the application is completed properly and all necessary info is obtained? (a) Evidence of insurability is not required to renew the coverage. 3)Consideration What characteristic must an annuity have if it is used to accumulate funds in an IRA? Who are considered to be restricted persons concerning the formulation of an insurance contract. 3 of them? Breach of warranty 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? An applicant is denied insurance because of information found on a consumer report. Insurance transfers risk but it does not__________ risk. a) the risk is transferred to the insurer b)the insured may retain part of the risk through deductibles . ?19,500, Accumulateddepr.-equipmentJul155,000Depr3,000Jul3158,000\begin{aligned} When does the grace period begin and how long is it? This type of life insurance is called Past-due interest on a policy loan is added to the total debt. 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. C. group credit life insurance does not build cash values. 1. All of the following would be considered to be rebating EXCEPT What are the two options in death benefit options? (b) face amount of the policy and the total premiums that have been paid. &\text { Cash }\\ The policyowner has a variety of options for investment of the cash value. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. The following are all true regarding risk management, except: A. b) Fluctuates. Correct: D. Concealment. b. Height Weight and Health conditions. b) Failure to promptly settle a claim when liability has been clearly established Adverse selection is well controlled. In the pamphlet, he includes the full name of his insurance agency and the type of insurance that he offers. Waiver of premium is a rider that can be added to a life insurance policy, and not something to be obtained from the applicant. In order for the contract or policy to be valid or legal? He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. Weiss and Fitch are two of these services, although there are more. Healthcare in the United States is far outspent than any other nation, measured both in per capita spending and as a percentage of GDP. 5)an agreement is set, 1)Level term(cheapest insurance) face value stays the same C. Medical Background Quarterly working capital levels for your firm for the next year are included in the following table. (c) variable life insurance. In this case, the applicant will most likely need to fill out a Statement of Good Health. C. Unilateral contract B) bonds 3. C. Premiums are tax deductible by the key employee Insurance is designed to cover both intentional and unintentional losses. B. Due to climate change, premiums are going up for certain types of insurance, such as flood insurance. 2) form of interest sensitive life insurance(current market conditions influence the cash value) Claim is still paid with an adjustment to the benefits. -cash value options Pure Risk. Insurance is designed to cover both intentional and unintentional losses. What are the 3 characteristics of a Mutual Insurance Company? A policy summary B) According to the law of large numbers, the larger a group becomes, the easier it is to predict losses. -receiving dividends(when declared) Life expectancy has increased in the U.S. over the last century. a) To limit the insurer's liability after the 2 year waiting period 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? EMPIRECOMPANYIncomeStatementFortheMonthEndedOctober31,2017\begin{array}{c} (c) two-income earner family. When a insurance company(insurer) has too many risks exposed to loss it seek another company(reinsurers) to insure them. A __________ represents the insured. c) Fixed premium 3)2 death benefit option I. and what two kinds? 2)Straight Life Which method makes the most sense for her to employ? B. Aleatory contract 4)Consumer report=credit, -shorter time span for paying premiums Annually renewable term policies provide a level death benefit for a premium that c) Helping insureds to file claims b) Hazard Social Security is designed to provide a base of economic security B. II. 1) cash value earns interest A ____ contract requires that both parties perform certain duties. \end{aligned} (c) The number of times the coverage can be renewed is limited. B) The plan is funded by permanent insurance only. 4)explain policy & provisions 3)low premiums. -receiving dividends(when declared) Therefore, it is responsible for 1/3 of the $24,000 loss, or $8,000. cash value increases while face value remains the same. 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. Predicted needs of the family after the insured's death are used in the needs approach. Question: 55. Waiver of Premium- What happens to the insurer? 2)the face amount don't pick binding receipt at all on test. 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. 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. C) the proposed insured. All of the following statements about term insurance are trueEXCEPTa. 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? D. Solicit applications on insurer's behalf b) Unilateral Consumer report (b) Face amount decreases during the policy period, but premiums remain level. c. Using the payback period, which project should Bill choose? b. (c) They decrease at a constant rate. The minimum FREE LOOK period is how many days? 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. 3)Minors. b) Coverage ends and the policy cannot be reinstated. -policy holder adheres to it Credit life D. Breach of warranty \text{Accounts Payable} & 104 & 95 & 95 & 97 \\ a. 2)APS=medical records Conditional Contract -low commissions Life insurance is unique from other types of insurance in that it could perform the function of cash accumulation. An insurer that was incorporated in a DIFFERENT STATE that it is doing business in is a _____________??? Occupation II. Increasing term Who is not a party to the contract and receives the benefits when the insured dies? A company doing business in a different state than it is incorporated in and the stockholders/share holders have ownership rights Correct: B. What is the term for a cause of loss, such as the theft of a car? (d) Its use may be appropriate if a person wants paid-up life insurance by retirement. Premiums are not tax deductible as a business expense. 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. -the premiums are paid for a limited time only. B. Any gain in the policy's cash value is . - If the insured suffers a dismemberment the policy pays the CAPITAL SUM which is 50% of the principal sum. (a) renewal provision An insured owns a life insurance policy. ____________ insurer is not a type of insurer. b) The policy will not be affected. The total of all requisitions of indirect materials issued during the month is$20,170.00. -it pays the double indemnity, 1)accident occurs, person must die within 90 days Buy-sell agreements are normally funded with a life insurance policy. Which is generally true regarding insureds who have been classified as preferred risks? If a change in the application is necessary what is required? Does not pay dividends to policyowners; however, taxable dividends are paid to stockholder. States regulate the procurement of business from nonadmitted carriers by regulating the brokers who place business with these carriers. 2)attorneys Business partners have an insurable interest in each other \hline (\$ 000) & 1 & 2 & 3 & 4 \\ All of the following statements are true regarding mortgage protection insurance EXCEPT. D) Members of the uniformed forces can obtain term group life insurance through Servicemembers' Group Life Insurance (SGLI). Estimated direct labor costs for next year are$440,000.00. How does having children affect the decisions that couples must make when considering a divorce? (b) Cash value accumulation is slow to moderate. ~~~\text{Raw materials purchases}&\$264,000\\ Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value? 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 _________. Correct: D. Department of Treasury, The Terrorism Act, which protects consumers by addressing market disruptions and ensuring the continued widespread availability and affordability of property and casualty insurance for a terrorism risk, is a administered by the Department of Treasury. 1. C) An insurance contract must contain a copy of the original application. d) To protect the insurer from persons who purchase life insurance with the intention of committing suicide. A) loss reserves 2. 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. D) the minor in a juvenile policy. 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? -kids till 21 (d) The policyowner can add to a policy's cash value at any time subject to policy guidelines. The corporation also helps detect and prevent insurer impairments. B. Taxes, Retirement, and Other Insurance Concep, State Laws, Rules, and Regulations Quizzes, Life Insurance Policy Provisions, Options and, Fundamentals of Financial Management, Concise Edition. C. Buy-Sell agreements are normally funded with a life insurance policy b) 10% for early withdrawal A surplus lines broker places risk with nonadmitted insurers when coverage cannot be placed with admitted insurer carriers If company pays dividends, then they are a? Which of the following about a VUL insurance policy is (are) true? 5)Survivorship Life Policy (policy holder pays themselves). b) The elderly Instructions Which of the following is true regarding the beneficiary designation of the former spouse. Department of Defense What does "liquidity" refer to in a life insurance policy? Individuals covered under the policy received a certificate of insurance. Receipt (a) matured. 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. 3. Insurance is not designed to cover _____________ losses. A. An insured becomes disabled at age 22 and can no longer work. -20 pay life-paid up at 65 C. Payment of premium On DUE DATE. 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. . 3. AccountsreceivableJul1Jul3121,000???? All The statements made on the application are called ______? Accidental Death Benefit 3)Increasing term adds face value. b. D. The policy is a bilateral contract D) The Fair Credit Reporting Act governs what information can be collected and how the information can be used. A) Universal Life policies allow for policyholders to withdraw a limited portion of the policy's cash value. 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 still matures at age 100, -premium is paid off at one time c) To protect the policyowner IN WHITE RAIMENT. M327. The following information is taken from the records of Hammond on November 30 of the current year. 2)not payable in conjunction. D. The face amount remains the same throughout the life of the policy. A key person insurance policy can pay for which of the following? 2) premiums do not change b) A producer who handles insurer funds in a trust capacity. Domestic Insurer (3), WHat is the difference between universal and whole life policies? a) A medical examination (a) universal life insurance. 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} Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company? C. The death benefit paid to the beneficiary 2)standard-average -pay for certain time and stop B. 2)face amount is set Rebating is an unfair trade practice and is regulated by law. 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. (b) current assumption whole life. \textbf{EMPIRE COMPANY}\\ O d. Each withdrawal, however, is usually charged, and the amount and frequency of withdrawals are usually limited. Reinsurer Assuming company. When an insured fails to disclose known facts in an application for insurance, he/she may be guilty of: A. also known as acceptance. All of the following statements about ordinary life insurance are true EXCEPT. In a car accident dealing with ADB who covers the passenger? \end{aligned} a) Tax-qualified CPI (consumer price index) without evidence. What limitations might this model have for predicting consumer's attitudes and purchase behavior towards Cream Silk? \end{aligned} Can a misrepresentation render the contract void if the misrepresentation is material to the risk? They keep a high percentage of any interest earned on their policies Estate Creation B. An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. The application is the basic source of information an insurer uses in the risk selection process. C. Department of State Study with Quizlet and memorize flashcards containing terms like All of the following are true regarding group term life insurance, EXCEPT: a. b) Universal Life 2)Foreign Insurer C. It's a decreasing term insurance. D. Department of Treasury A. contract of adhesion Appoint a solicitor as his or her representative Legal Purpose c. thoughts of harming a neighbor AKA-payout phase. Only one party is giving a legally enforceable promise- A one-sided contract is what? a) Types of mutual companies All renewable term policies are accepted without__________ and only with_____ collected. Accumulateddepr.-equipmentJul1DeprJul3155,0003,00058,000, RetainedEarningsJul165,000Dividend19,000NetInc65,000Jul31111,000\begin{aligned} \end{aligned} -A Mec will receive unfavorable tax treatment a) Agent's report B) They illustrate the nonguaranteed elements of the policy. The correct answer is: Maggie's Piano Studio with 1 employee. D. Aleatory contract Who gets $$money when the policy holder dies? 2)administered charge a. c) National Association of Insurance Commissioners a) No penalties, since the owner is older than 59 All of the following are true for indemnity insurance except that: a. premiums are based on separate risk pools often organized by employers. -cash value can lose value. Contract or form of ownership is a ______________? The total factory payroll for the month according to the payroll register is $308,000.00, distributed as follows. What are (4) characteristics of permanent insurance? \\ If there Is a risk of financial loss then there is a what? b) Reduced paid-up d) All of the above. (must exist at the time of application). Certificate holders may convert coverage to an individual policy without evidence of insurability. \end{aligned} (c) both I and II The cash value available to the policyowner compulsion? 4) 3 components to the premium, The owner and the insured are different people. Correct: A.A peril. Represent the insured's interest, Insurance Licensing - Chapter 2: Property Bas, Chapter 9- Commercial General Liability Cover, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Fundamentals of Financial Management, Concise Edition, Daniel F Viele, David H Marshall, Wayne W McManus, CompTIA A+ Certification Exam Prep - Chapter. Investors become more risk averse. A conditional or binding receipt is given when an applicant does what? (a) I only (b) II only An inexperienced assistant accountant has prepared the following income statement for the month of October 2017. O b. 1)cont. The interest rate credited to the cash value at the time of issuance remains fixed over the life of the policy. When an applicant pays the initial premium the agent will give them a what? Which of the following would provide an underwriter with information concerning an applicant's health history? It is most appropriate when an insured needs lifetime protection. d) Buyer's Guide. The following are all true regarding risk management, except: A. 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? (economy). ~~~\text{Rent on factory facilities}&60,000\\ Term-Life policy has what 3 characteristics? _____________ is an employer paid disability and health insurance coverage that covers job related illnesses or injuries. A debtor has an insurable interest in the life of a lender. &&\\ There is a minimum guaranteed interest rate on all sub-accounts. 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? b) Policyholder c) Smaller. 6)Explain Free Look period-10-30 days- unconditional refund that begins when policy is delivered. With a little work, an unused office area could be converted to a rental room. c) Accelerated benefit rider. The profit per night for each type of room and rental class is as follows: RentalClassRoomSuperSaverDeluxeBusinessTypeI$30$35TypeII$20$30$40\begin{aligned} 1) Family Maintenance(breadwinner) The issuance of a _________ is the result of the acceptance of an offer. Misappropriation or illegal withholding of the policyholder's money. (b) The face amount of the policy is paid if the insured lives to age 65. Tom and Nancy Boyle provide financial support for their two children. \end{array} \end{array} \\ & \text { Depr } & 3,000 \\ \text{Accounts Receivable} & 199 & 96 & 99 & 604 \\ Costs of training a replacement Which of the following is a financial rating service? 4)Based on principle sum(rider) & capital sum(insurer) 50%, 3rd party ownership insurers issues policy to a lending institution d) Producer. An Insurance broker is responsible for what? When a policy is non-contributory how much is paid? _____________ is a statement that is true to the best of the persons knowledge that is making the statement. B) After a claim has been adjusted and is found to be covered under the policy, the insurer must pay the claim upon receipt of a signed proof of loss. A. Correct: D. Represent the insured's interest, All of the following statements regarding financial rating services are correct, except. 2)explain any ratings 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. (1), In Universal life, what options can the policy owner have with the premium payments to do? S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. The insurer that is transferring the risk to another company is called the ____________ __________. b) Fixed income (a) Interest is credited monthly to a policy's cash value. A false statement in the application for insurance is_____________. D) Obtaining a bachelor's degree. When the agent delivers the policy, collects the initial premium, and the applicant completes and acceptable statement of good health \hline \text { Jul 31 } & 3,000 When a policy is contributory how much is paid? A _______ __ is the additional premium needed to get covered with high or substandard risk. Misrepresentation, Concealment and Deceit are all examples of what? Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE? D. The benefit is received tax free. d) Blackout approach. \textbf{For the Month Ended October 31, 2017}\\ D. group credit insurance must have a suicide clause . Originating policy What is an exchange of a whole entire life policy for another? CashJul1Jul315,500???? 2. All of the following characterize term life insurance, EXCEPT: Select one: a. What are some of the questions asked on the application to determine the premium and risk classification of the insured? The failure to disclose known facts is what? Which of the following statements is not correct regarding rates and premiums? D. Claim History The accounting records of DVD Sales, Inc., include the following accounts: CashJul15,500???? -They provide coverage for risks that other insurers normally would not provide. B. The purpose of an estate clearance fund is to pay all of the following EXCEPT. B. What insurance concept is associated with the names Weiss and Fitch? -policyowners right provision 2)Decreasing term(premium is low) declining face value 3. The replacing company notifies the replacement company. Most professional liability insurance policies are written with an occurrence coverage trigger instead of a claims made trigger O c Insureds (Choose from the following options) Company doing business in the state it was incorporated and owned by the stockholders(people who own stock) who received dividends and the right to vote???? Agents and producers must place business through an insurer with the lowest rated a) Accepted accounting principal. Which of the following is the basis for a claim against an insurance policy? Upon policy delivery, the producer may be required to obtain any of the following EXCEPT Which of the following statements about a life insurance policy is (are) true? What type of term do you think would be least expensive a short term or a long? 3) type of plan they applied for. C. Countersign insurance contracts Which of the following information about the applicant is NOT included on Part 1 of the application for life insurance. -usually mutual fund security Whats the cheapest type of permanent insurance? Permanent Insurance have 3 words in common, what are they? If someone dies within the Grace period, what happens? c) Needs approach An insurance consultant CANNOT be which type of persons? Surviving family members may experience a reduction in their standard of living if the family breadwinner dies prematurely. ~~~\text{Selling and administrative salaries}&75,000\\ Journalize the entry to transfer the total of all cost sheets completed from Work in Process to Finished Goods. The County is administered by a five-member Board of Supervisors who are elected for four-year terms C) Annually renewable term policies provide a level death benefit for a premium that increases each year with the age of the insured. All of the following statements about universal life insurance are true EXCEPT (d) Most policies have a CV that is refunded when coverage ceases. To ensure suitability of annuity products, producers must obtain relevant information about the consumer's age, income, financial status, tax status, financial experience and objectives. Quarter($000)1234Cash$100$100$100$100AccountsReceivable1999699604Inventory20150590552AccountsPayable104959597\begin{array}{lrrrr} Retention, Avoidance, and Transfer are all _________________. What happens when there is a Misstatement of age or sex? ____________ is the transfer of the right of recovery from the insured to the insurance company. D. Financial Experience. Insurance is an important tool to manage risks, but often unavailable to poorer households. a) Indeterminate Premium -7 pay test is used to determine If a policy is a MEC. D) real estate, Under one method of estimating a loss reserve, the reserve is based on life expectancy, duration of disability, and similar factors.

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