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30 Cards in this Set
- Front
- Back
Which rider would allow the insured to buy additional coverage at special times without a medical exam?
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Guaranteed insurability
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All the following statements are true regarding a disability income rider except:
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The monthly income is based on a % of the death benefit of the policy to which it is attached.
*This monthly income is based on a percentage of the faceamount of the policy to which it is attached. |
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Which rating would be considered best of the following choices?
a. Fitch BBB+ b. AM Best B++ c. Moody Baa1 d. Standard and Poor A- |
Moody Baa1
*his is the best rating of the four and is considered a rank number 4 on the chart |
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The incorrect statement concerning the cost of living rider would be:
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There is usually a premium increase for the additional protection if the insured can prove insurability.
*The insured does not have to prove insurability for the increase in death benefit. |
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All the following are true concerning MIB except:
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MIB gets its information from claim forms and physicians.
*Medical Information Bureau gets its information only from underwriters. |
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One of the underwriter's duties is classification of the risk. Which of the following would be incorrect concerning classification?
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A preferred risk is reflected in the mortality table.
*The mortality table reflects a standard or average risk. |
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The purpose for this rider is to provide money for the insured to pay for medical and nursing care expenses if diagnosed with terminal illness.
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Accelerated Benefits
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Which of the following is true concerning AIDS testing and underwriting?
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policy may not contain exclusions for AID/HIV losses.
*Insurers cannot limit or deny coverage for due to aids. They can refuse to issue a policy if the insured tests positive for aids. MIB will record a positive aids test as an unspecified blood disorder and each insurer would be required to do their own testing. |
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The State of California's required financial report includes all the following information except:
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The company's declined policy results.
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__________ guarantees that when a contract is annuitized, the income payments will be based on the greater of the actual contract value or a minimum payout base.
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Guaranteed Minimum Income Benefits
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Money returned to policyholders from an insurance company`s earnings is called:
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Policy dividends.
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Which of the following statements about the MIB is not true?
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Insurance companies may use MIB reports to decline a policy.
*The insurance company must have other factors to refuse the application. |
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Which of the following is a significant difference between individual policies and Group Life Insurance contracts?
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Group underwriting is based on averages, such as the average age, the average working conditions and the average health condition of the group members
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All the following companies rate insurance companies financial strength except:
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Fitch's Investor Service
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An accelerated death benefit rider (also known as living needs rider) in a life insurance policy allows which of the following?
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The policyowner may receive a portion of the proceeds prior to the death under certain circumstances.
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How do the level term rider on a Family Maintenance Policy and the decreasing term rider on a Family Income policy differ from all other level and decreasing term riders in that:
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These riders are used to produce income instead of a death benefit.
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Sometimes a substandard risk is also called _____________
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Rated
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All of the following are true regarding surplus except:
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Shareholder surplus is 50% of the capital.
*Shareholder Surplus is 50% of the underwriting income profit for a stock insurance company that is taxed in theyear earned. |
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All the following are disadvantages of the Traditional Net Cost Method except:
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The dividends and premium payments are projections.
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Morbidity tables are used by insurance companies to calculate:
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The likelihood of sickness.
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Usually companies offer several options when a policy is rated. Below are all true except:
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Charge for a lower age than the actual age
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Which of the following is a true statement?
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Critical Illness riders pay benefits upon first diagnosis of a covered condition, and doesn`t need to result in death.
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____________ is the amount by which an insurance company's assets exceed its liabilities and capital.
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Earned surplus
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What are the two methods most often used to compare the cost of life insurance policies?
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Interest Adjusted Cost Method and Traditional Net Cost.
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In the event of a loss, the insured is required to submit all of the following except:
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A completed Statement of the acting doctor.
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All of the following statements pertaining to life insurance premiums are correct except:
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In establishing premium rates, a company must assume it will earn a high rate of interest on its invested premiums
*The insurer assumes a low rate of interest in order to make sure they collect enough premium to meet their contractual obligations. |
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Jason has been disabled for 5 years and his policy had a waiver of premium rider. Which of the following is true?
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The premiums that were paid would have no effect on the either the cash value or the death benefit.
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The following are guidelines that help avoid unfair underwriting for the risk of HIV/AIDS except:
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The insurer cannot deny coverage based solely on results from two different medical samples
*The insurer MAY decline a potential insured for coverage if his/her medical sample shows positive for AIDS/HIV on two different tests. |
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Higher retention rates are advantages for all parties involved in life insurance because:
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Lower expenses and lower product prices.
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Jackson is paying $100 per month for his universal life policy which has a waiver of monthly deduction. Jackson was disabled 5 years. Which of the following is true?
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Jackson's mortality and expense charges would be paid however no money will be paid into the cash account.
*The waiver of monthly deduction on a universal life product only pays the mortality and expense deduction owed monthly. It does not pay any money into the cash account. |