Questions and Answers
What is a 401 K Plan?
What is the difference between Absolute Assignment and Collateral Assignment?
What is an Accelerated Death Benefit?
A policy provision that allows payment of death benefit before death if terminally ill.
What does an Accidental Death Benefit provide?
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What does it mean to Accumulate at Interest?
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What is Adhesion in insurance contracts?
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What does Adverse Selection refer to?
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What is the purpose of an Agency Agreement?
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Which of the following describes Agent Authorities?
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What is an Agent/Producer?
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What is included in an Agent's Report?
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What does aleatory mean in insurance?
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What is an Annual Renewable Term?
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Who is an Annuitant?
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What is an annuity?
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What is an appointment in the context of insurance?
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What is a Blackout Period?
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What is a Buy-Sell Agreement?
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What is a Cash Nonforfeiture Option?
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What does the Cash Settlement Option provide?
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What is cash value in insurance policies?
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What is the role of a commissioner in insurance?
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What does Conditional mean in the context of policy?
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Study Notes
Retirement Plans
- 401 K Plan: A retirement plan allowing employees to save a portion of their income with pre-tax dollars.
Insurance Assignments
- Absolute Assignment: Permanent and irrevocable transfer of rights and benefits by the policyholder.
- Collateral Assignment: Temporary and revocable transfer of benefits by the policyholder.
Death Benefits
- Accelerated Death Benefit: Allows partial or full payment of the death benefit before death if the insured is terminally ill.
- Accidental Death Benefit: Additional benefit paid if the insured dies within 90 days of an accident due to that accident.
Dividend Options
- Accumulate at Interest: The policy owner leaves dividends with the insurer to earn interest over time.
Contract Law
- Adhesion: Ambiguities in contracts are settled in favor of the insured since the insurer drafts the contract.
- Aleatory: Contract features unequal exchange of value, where one party may gain significantly more than the other.
Risk Management
- Adverse Selection: Tendency to insure higher-risk individuals, leading to potential financial losses.
Agency Relationships
- Agency Agreement: A legal document outlining the terms between the agent and the insurance company, specifying agent powers and compensation.
- Agent Authorities: Includes expressed (written power), apparent (assumed by public), and implied (assumed during business transactions).
Agent Roles
- Agent/Producer: Legal representative of an insurance company encompassing both agents and brokers.
- Agent's Report: Written report detailing the agent’s observations regarding the proposed insured's risks.
Insurance Policies
- Annual Renewable Term: Term life insurance allowing yearly renewal without proof of insurability, with increasing premiums.
- Annuitant: Individual who purchases an annuity, may not necessarily be the policy owner.
- Annuity: Contract ensuring income for a specified period or the annuitant's lifetime to mitigate the risk of outliving savings.
Business Considerations
- Buy-Sell Agreement: A life insurance arrangement where business partners insure each other, facilitating buyout of the deceased partner's share using death benefits.
Policy Options
- Cash Nonforfeiture Option: Lump-sum cash value payment received upon policy surrender, irrecoverable after surrender.
- Cash Value: Insurance policy’s equity available to owners, accumulating over time, also referred to as living benefit.
Regulatory Framework
- Commissioner: Public official overseeing the state’s insurance department, ensuring compliance with insurance laws.
Survivor Benefits
- Blackout Period: Timeframe between a child's 16th birthday and the surviving spouse's retirement age, during which survivor benefits are not provided.
Policy Conditions
- Conditional: Certain conditions must be satisfied for the policy to remain valid or benefits to be payable.
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Test your knowledge on essential insurance terms with these flashcards. Each card includes a key term along with its definition, helping you understand various concepts related to retirement plans and assignments. Perfect for students and professionals looking to refresh their knowledge.