Podcast
Questions and Answers
What is a 401 K Plan?
What is a 401 K Plan?
- A qualified retirement plan where the employee can set aside income with pre-tax dollars (correct)
- A savings account with tax penalties
- A stock investment plan
- A type of life insurance
What is the difference between Absolute Assignment and Collateral Assignment?
What is the difference between Absolute Assignment and Collateral Assignment?
- There is no difference
- Absolute is temporary while Collateral is permanent
- Absolute is permanent and irrevocable; Collateral is temporary and revocable (correct)
- Absolute is revocable while Collateral is irrevocable
What is an Accelerated Death Benefit?
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?
What does an Accidental Death Benefit provide?
What does it mean to Accumulate at Interest?
What does it mean to Accumulate at Interest?
What is Adhesion in insurance contracts?
What is Adhesion in insurance contracts?
What does Adverse Selection refer to?
What does Adverse Selection refer to?
What is the purpose of an Agency Agreement?
What is the purpose of an Agency Agreement?
Which of the following describes Agent Authorities?
Which of the following describes Agent Authorities?
What is an Agent/Producer?
What is an Agent/Producer?
What is included in an Agent's Report?
What is included in an Agent's Report?
What does aleatory mean in insurance?
What does aleatory mean in insurance?
What is an Annual Renewable Term?
What is an Annual Renewable Term?
Who is an Annuitant?
Who is an Annuitant?
What is an annuity?
What is an annuity?
What is an appointment in the context of insurance?
What is an appointment in the context of insurance?
What is a Blackout Period?
What is a Blackout Period?
What is a Buy-Sell Agreement?
What is a Buy-Sell Agreement?
What is a Cash Nonforfeiture Option?
What is a Cash Nonforfeiture Option?
What does the Cash Settlement Option provide?
What does the Cash Settlement Option provide?
What is cash value in insurance policies?
What is cash value in insurance policies?
What is the role of a commissioner in insurance?
What is the role of a commissioner in insurance?
What does Conditional mean in the context of policy?
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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