O c. The policyowner has the option of investing the cash value in several investment accounts. If the insured commits suicide after the 2 year period, the policy will pay the death proceeds to the designated beneficiary the same as if the insured had died of natural causes. A. contract of adhesion 2)interest sensitive 3) policy builds cash-value Surviving family members may experience a reduction in their standard of living if the family breadwinner dies prematurely. The money in a savings account A corporation is the owner and beneficiary of the key person life policy. Adverse selection is well controlled. a) More active. 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. A ______ will receive unfavorable tax treatment. Correct: A. -assignor=assignee Quarterly working capital levels for your firm for the next year are included in the following table. An Insurance Broker is responsible for what? The policy is a contract of adhesion \text{Sales revenue}&&\$780,000\\ Nonparticipating policy. (b) face amount of the policy and the total premiums that have been paid. How do premiums for yearly renewable term insurance change as an insured gets older? Which of the following is TRUE regarding assignment rights for . The __________ branch of the state government influences public policy regarding insurance laws. Close Skip to Content High Contrast Increase Text Size Clear All 515-705-0233. still matures at age 100, -premium is paid off at one time States regulate the procurement of business from nonadmitted carriers by regulating the brokers who place business with these carriers. -policy holder adheres to it Predicted needs of the family after the insured's death In the pamphlet, he includes the full name of his insurance agency and the type of insurance that he offers. Various life insurance programs for people who served in the military are called ______________? 2)Increase the face value c) Coverage ends but the policy can be reinstated at any time. A contract that allows an insured to be restored to the same financial condition as prior to the loss is considered to be what type of contract? Appoint a solicitor as his or her representative When the company earns a profit and elects to share there profits, they pay a ____________to the policyholders or shareholders. \end{aligned} B. It is levied on the price of a product or service at each stage of production, distribution, or sale to the end consumer. 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. \text{Inventory} & 201 & 505 & 905 & 52 \\ &\text { Retained Earnings }\\ This type of life insurance is called Rebating is an unfair trade practice and is regulated by law. C. It's a decreasing term insurance. Difference between Universal Life Insurance and Whole Life Insurance? The issuance of a policy or binder is not part of the consideration element of an insurance contract, it is part of the _______ ________. C. Independent rating services evaluate and rate the financial ability of insurance companies Premiums are not tax deductible as a business expense Waiver of premium is a rider that can be added to a life insurance policy, and not something to be obtained from the applicant. Liquidity in life insurance refers to availability of cash to the insured. The corporation also helps detect and prevent insurer impairments. - 20 pay life-premiums paid for 20 years and paid up at 65 c) To protect the policyowner Beneficiary's age c) Guides describing company financial integrity D. Aleatory contract \hline \text { Jul 1 } & 22,000 \\ 1)physical exam True or False: Under the Financial Responsibility Law, you are required to have insurance on any motor vehicle you own or drive, except motorcycles -Follows all conditions of contract & pays premium, -insurer says how policy works D. Effect of inflation on income over time. d. falsely believing that a spouse has been may not be altered by an agent and must clearly state that it is not part of the contract. Instructions \hline \text { Jul 1 } & \begin{array}{r} (4), 1)monthly The correct answer is: The premium decreases to zero by the end of the policy period. Estate conservation A. C. Buy-Sell agreements are normally funded with a life insurance policy 1)tax qualified plans In addition, they provide financial support for Tom's aged father and Nancy's aged mother. 4)explain policy & provisions (b) Prepare a correct income statement for October 2017. D. The ratings are available to the public good health If a change in the application is necessary what is required? 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. c. Premiums may be raised at renewal d. Group term insurance may cover the . She meets the definition of total disability under Social Security. d) Blackout approach. 1)Domestic Insurer All of the following are true of key person insurance EXCEPT ) The key employee is the insured. -ages 25,28,34,37,40 6)free-look period-$ back guaranteed. c) Smaller. \hline \text { Jul 31 } & 17,000 ADD( Accidental death and dismemberment??? Cash value is invested in the stock market. A state administered health insurance for the needy? -receiving dividends(when declared) d) All of the above. B. \textbf{EMPIRE COMPANY}\\ B. B. 6)Explain Free Look period-10-30 days- unconditional refund that begins when policy is delivered. The Boyle family can be described as a The employer is the owner . -also the agent may be required to initial the change, statement of health from insureds personal physician, What are 2 federal laws that protect policy holders & forms that must be completed? Example: company that is incorporated in NJ and sells in NJ. Insurance is considered a transfer of risk. a) Tax-qualified All of the following are true of insurance except: a) protects against uncertainty b)means sharing of loss c)eliminates risk d)transfers risk Answer: Eliminates risk Question: Which of the following is NOT true about insurance? A key person insurance policy will pay for costs of running the business and replacing the employee. All of the following are restricted persons concerning the formulation of an insurance contract except: A producer has __________ authority when he accepts premium on a lapsed policy, and the insurer reinstates the policy. II. (a) The insurance provides protection for a temporary period of time. b) Reduced paid-up the underwriting process is approved for: 2)Explain and collect any ratings Correct: B. 4)policy matures at age 100. -A Mec will receive unfavorable tax treatment 90-180 days. -tax free accumulation of borrowing. How has the Aswan High Dam affected the lives of Egyptians? 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. 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? -Both parties must follow certain conditions set forth in contract, -IRS classification of a policy that is overfunded 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. C) common stock 4. a) Universal life _________ is a determination that a statement made as a warranty, or true. C. A surplus lines broker accepts business only from non- resident agents 4)underwriting is complete B. 1) mentally incompetent persons Retention, Avoidance, and Transfer are all _________________. ~~~\text{Selling and administrative salaries}&75,000\\ Hammond Corporation manufactures televisions. Arrest History. A. 2) Binding Reciept. AccountsreceivableJul1Jul3121,000???? It does not include breach of contract. \hline (\$ 000) & 1 & 2 & 3 & 4 \\ 1. 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? The agent She has limited income and significant life insurance needs. Since they may receive a dividend (not guaranteed), such policies are known as participating policies. Should a key person die, the benefit is treated as a reimbursement to the business for loss of services from that key person. -Prepays portion of face amount if diagnosed with terminal illness. The safety margin is narrower, because the cost of the insurance to the policyholder cannot be adjusted at a later time. \hline & \text { Jul 31 } & 58,000 Only the MIB will provide information about an applicant's medical history. These individuals qualify for lower premiums than those in the other categories. Forms of interest and are Sensitive Whole Life, 1) Transfers risk to another insurer c) Counselor B) The plan is funded by permanent insurance only. (c) Most policies can be converted to a permanent life insurance policy. (6). (economy). The following are all true regarding risk management, except: A. (b) Most policies can be renewed without evidence of insurability. C. Social Security works exactly same as private insurance. Pertaining to insurance, what is the definition of a fiduciary responsibility? b) Hazard Does T-Mobile Insurance Cover Water Damage? B. The insured agrees to maintain insurance equal to some specified percentage of the value of the property. 2)Family Income(decreasing term-policy) All of the following statements about the settlement of a claim are true EXCEPT. Accidental Death Benefit Non-Participating (stock) Life Insurance Policy. Certificate holders may convert coverage to an individual policy without evidence of insurability. When an insured fails to disclose known facts in an application for insurance, he/she may be guilty of what? 2. A policy summary A) Any distributions from MECs are taxable, including withdrawals and policy loans. Social Security is designed to provide a base of economic security B. When a policy has reached its final destination and can be paid out in full is when the policy has ____________? 2)no cash-value 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. Who gets $$money when the policy holder dies? 14,500 \\ 3) Equity-Index annuity. 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. Members are assessed to fund the corporation. Accumulateddepr.-equipmentJul1DeprJul3155,0003,00058,000, RetainedEarningsJul165,000Dividend19,000NetInc65,000Jul31111,000\begin{aligned} SalesrevenueLess:OperatingexpensesRawmaterialspurchasesDirectlaborcostAdvertisingexpenseSellingandadministrativesalariesRentonfactoryfacilitiesDepreciationonsalesequipmentDepreciationonfactoryequipmentIndirectlaborcostUtilitiesexpenseInsuranceexpenseNetloss$264,000190,00090,00075,00060,00045,00031,00028,00012,0008,000$780,000803,000$(23,000). B) They illustrate the nonguaranteed elements of the policy. B) Once the cash surrender value option is selected, the coverage is terminated and the policy cannot be reinstated. A. \hline \text { Jul 31 } & 25,500 II. 17,000, InventoryJul122,000???? \text { Type I } & \$ 30 & \$ 35 & - \\ & &&\textbf{ Quarter } \\ \end{array} b) Index used by stock companies b) Larger. c) 15% for early withdrawal 1) cash value earns interest b) Promptly forwarding premiums to the insurance company C. Application Who might receive dividends from a mutual insurer? What (5) Factors for GIO & GIB. whose covered? B) bonds 3. Exclusions always exist, and there is a reason for each one. b) Fiduciary responsibility. 4)Consumer report=credit, -shorter time span for paying premiums ~~~\text{Direct labor cost}&190,000\\ Question: All of the following statements about professional liability insurance are true, EXCEPT: Select one: O a. After examining other manufacturing cost data, you have acquired additional information as follows. A policy that does not pay dividends to policyowners is a 1) premium schedule differ from whole life 1)premium payment (receive dividends & the right to vote). 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???? Findefch a Wife,' 'Pnrple and Fine -men,'^The' Day of Temptation,' ' Of Royal Blood,' etc., etc . b. it frequently includes coverage for losses due to casualty and theft. What adds coverage and modifies coverage? 3. Something of value is a __________________. The primary purpose of buying an annuity is? c. continuous premium whole life c) Fixed premium 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. A) They must be given to all Life insurance applicants. &\begin{array}{r|lr} a) Executive offer of the replacing company Applicant pays premium to make agreement. (d) Its use may be appropriate if a person wants paid-up life insurance by retirement. O b. If the insurance carried is less than required, the insurance may not cover the whole loss. 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 d) The Guaranty Corporation. Round Tree has 100 Type I rooms and 120 Type II rooms. B. Nonadmitted Explain your answer. Participating policy. (a) capital retention approach -Not invested in stock market C. Risk -20 pay life-paid up at 65 c) Helping insureds to file claims An annuity is exchanged for another annuity. 3)increase the length of coverage Department of Defense 1 / 25. D. Gender. a) Agent's report 4. Height Weight and Health conditions. After everything is signed & premium is collected What does the agent give to the policy holder? b) Fixed income (Choose from the following options) &\begin{array}{lr|rr} All of the following information about a customer must be used in determining annuity suitability EXCEPT 21,000 \\ Beneficiary's age is not a suitability factor. If the ultimate consumer is a business that collects and pays to the government VAT on . Jul3117,000\begin{aligned} d) Policy dividends. A) loss reserves 2. Who assumes control over an insurance company's funds and management if it becomes insolvent? D. Solicit applications on insurer's behalf Indicate by a plus (+)(+)(+), minus ()(-)(), or zero (0)(0)(0) if the factor would increase, decrease, or have an indeterminate effect. Correct: D. Represent the insured's interest, All of the following statements regarding financial rating services are correct, except. Yes, all T-mobile insurance plans cover cracked screens.You will have to pay a deductible fee which will depend on your device model. 3. 2. 3)according to the source of annuity income b) Cost of living rider. d) Loss. What type of insurer has no capital stock? ____________ is the transfer of the right of recovery from the insured to the insurance company. &\begin{array}{lr|lr} You should now have gotten the answer to your question "All of the following statements are true of liability insurance, EXCEPT:", which was part of Insurance MCQs & Answers. -the applicant must always initial the change There is a minimum guaranteed interest rate on all sub-accounts. A) An indeterminate premium reduction policy is a policy in which the premium is guaranteed for an initial period, then the insurer can charge up to a maximum premium charge that is specified in the policy. d) Buyer's Guide. D. A surplus lines broker places risks with nonadmitted insurers when coverage cannot be placed with admitted insurer carriers Which of the following statements about a life insurance policy is (are) true? (b) They increase at a decreasing rate. The application is the basic source of information an insurer uses in the risk selection process. A. Foregin Most insurance policies contain a specific limit that an insurer will pay for a single claim. All of the following statements regarding contracts of indemnity are true EXCEPT a. Which of the following statements about endowment policies is true? 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? 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). b. 2)Procures insurance 4 itself from another insurer, The tax benefit of annuities is tax deferred growth. 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? c) Conditional (a) Interest is credited monthly to a policy's cash value. A linear programming model developed to maximize profit is used to determine how many reservations to accept for each rental class. d) Contingent. 2)Decreasing term(premium is low) declining face value 1)temporary An insured owns a life insurance policy. Everything else equal, how would the factor below affect the market value of a stock? When an insurance policy is not clear, the court will usually interpret in favor of the insured because of which characteristic? 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 . 2) Transferring the risk Pure Risk. For example, a claim will be paid only is there has been a covered loss. c) Low-income individuals and families A securities license. -cash value options Now Tamara can afford whole life insurance. A contract between insurer and policy holder. Who is responsible for making sure the application is completed properly and all necessary info is obtained? What are (4) ways annuities are classified? To sell variable insurance what must you have? 1) Avoiding the risk Which risk management type is shifting the risk of loss to a larger homogeneous group? 2)non-qualified plans 2)FCRA(fair credit reporting act) checks MIB report. Pro rata liability applies. -7 pay test is used to determine If a policy is a MEC. Age, Sex, Occupation, Hobbies, Habits, Smoking or Non-Drug user or Non. B. C. Buy-Sell agreements are normally funded with a life insurance policy a) Year only. He would also like to invest in a mutual fund. c) A person who handles assets or money belonging to others. A Contract that binds only one party to future performance, is a (n): A. The applicant accepts the invitation by paying the ___________. Where does group-life insurance come from? B) The parent is responsible for the premium. 2)APS=medical records All of the following statements are correct about policy loan interest rates EXCEPT: (A) an insurance company can charge a fixed rate of interest up to a maximum of 10%, with some restrictions (B) an adjustable interest rate can be used if the insurance company follows a national corporate bond index (C) an adjustable interest rate can be used if the limit is based on the average monthly . All of the following statements concerning coinsurance are true, EXCEPT . 1. a) Material change 4. c. It is the failure to use ordinary care. database of previously life and health insurance applications. Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value? (c) both I & II (d) neither I or II. - Limited Pay Life The total of all requisitions of direct materials issued during the month is $252,230.00. a) Indeterminate Premium This is true whether a property or liability form; and regardless whether the insured is a commercial or personal lines client. D. Unilateral Contract Out of 20 yr or 30 yr which policy is less expensive? D. Financial Experience. C. Whole life b) The debtors eligible for insurance under the policy shall all be the debtors of the creditor(s). b) Policyholder A _______ __ is the additional premium needed to get covered with high or substandard risk. A monthly deduction is made from a policy's cash value for the cost of insurance protection. *The insured is diagnosed with terminal & chronicle illness 1)absolute assignment-all rights are assigned An insurer that is incorporated in the same state that they are doing business in is a_____________.? B) Money collected with respect to an insurance transaction must be held in a position of trust by the producer. -Take it or leave it contract Upon policy delivery, the producer may be required to obtain any of the following EXCEPT Group life insurance is most often issued as guaranteed annual renewable term. The parties in the insurance contract consist of whom? D. Funding against general company financial loss Which type of life insurance makes sense for someone in this situation? When the agent delivers the policy, collects the initial premium, and the applicant completes and acceptable statement of good health The CAS number shown in an entry is typically . 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} M327. C. Hazards a) An agent offers the use of his lake house to person as an inducement to buy. ~~~\text{Indirect labor cost}&28,000\\ What are some of the questions asked on the application to determine the premium and risk classification of the insured? The policyowner can add to a policy's cash value at any time subject to policy guidelines. The interest rate credited to the cash value at the time of issuance remains fixed over the life of the policy. d) Joint and Survivor, B) The Waiver of Cost of Insurance rider is found in Universal Life policies. . The insurance contract is a _________ because the court will usually interpret in favor of the insured when an insurance policy is not clear. d) Accumulations are tax deferred. -Voting. c) Increases annually. Occupation (Medic Information Bureau)? a) The amount of insurance on the life of any debtor may exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor. Which of the following is the basic source of information used by the company in the risk selection process? S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. Waive the premium if the INSURED becomes totally disabled. A. All of the other statements are true. -guaranteed/fixed/level payment, -Immediate "annuitization phase" A. a) the risk is transferred to the insurer b)the insured may retain part of the risk through deductibles . Insurance is not designed to cover _____________ losses. Some life insurance policies offer cash values that can be borrowed at any time and used for immediate needs. 2. c. Using the payback period, which project should Bill choose? 2)Straight Life An agent and an applicant for a life insurance policy fill out and sign the application. D. Reduction is a method of managing risk. An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. (b) Cash value accumulation is slow to moderate. -guarantee a stream of income to the person purchasing it known as the annuitant. Correct: B. There are many legitimate need-based expenses that can be paid by life insurance proceeds, from groceries to retirement income. Whoso. Which of the following documents must be provided to the policyowner or applicant during policy replacement? ~~~\text{Depreciation on factory equipment}&31,000\\ Which of the following about a VUL insurance policy is (are) true? All of the following are required signatures on a life insurance application EXCEPT. When a policy is non-contributory how much is paid? The policy is issued for one year and may be renewed annually with evidence of insurability. (d) sandwiched family. They keep a high percentage of any interest earned on their policies The company records manufacturing costs by job number and uses a factory overhead applied rate to charge overhead costs to its products. (d) yearly renewable term, Which statement is true concerning premature death and life expectancy? For this amount of production, total factory overhead is estimated to be $396,000.00. Correct: A. b. Where can you find insurance coverage after being rejected by your insurance company for too many claims in the past year? d) Fair Credit Reporting Act. (3), 1)bank trust officer Rates are considered inadequate when they do not cover projected losses and expenses. Buy-sell agreements are normally funded with a life insurance policy. d. The total of all cost sheets completed during the month is $628,880.00. \end{aligned} 1) preferred-low Which of the following would provide an underwriter with information concerning an applicant's health history? C. State Education Waiver D) The suicide provision protects the company from those individuals who purchase life insurance with the intention of committing suicide. All of the following are methods of payment?