Podcast
Questions and Answers
Which premium payment mode will require an overall higher premium?
Which premium payment mode will require an overall higher premium?
What is policy replacement?
What is policy replacement?
A new policy is issued while an existing policy is terminated or reissued with a reduction in cash value.
What document describes the specific information about a policy?
What document describes the specific information about a policy?
Policy Summary
What is the purpose of the agent's report during the application process?
What is the purpose of the agent's report during the application process?
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What is the purpose of key person insurance?
What is the purpose of key person insurance?
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What type of policy is typically issued without proof of insurability from the insured?
What type of policy is typically issued without proof of insurability from the insured?
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If someone wants to buy a life insurance policy that will provide lifetime protection against premature death, what type of life insurance policy should it be?
If someone wants to buy a life insurance policy that will provide lifetime protection against premature death, what type of life insurance policy should it be?
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What type of policy issues certificates of insurance to the insureds?
What type of policy issues certificates of insurance to the insureds?
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When planning for survivor protection in life insurance, what needs to be considered?
When planning for survivor protection in life insurance, what needs to be considered?
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A business is the owner and beneficiary of a key-person life policy. When the business collects the policy benefit, how is it taxed?
A business is the owner and beneficiary of a key-person life policy. When the business collects the policy benefit, how is it taxed?
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What is included in part 2 of a life insurance application?
What is included in part 2 of a life insurance application?
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Life insurance may be used to pay state inheritance taxes and federal estate taxes, eliminating the need to sell assets from the estate. What is this called?
Life insurance may be used to pay state inheritance taxes and federal estate taxes, eliminating the need to sell assets from the estate. What is this called?
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What are the three factors that determine the premium for a particular life insurance policy?
What are the three factors that determine the premium for a particular life insurance policy?
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If an insured changes his payment plan from monthly to annually, what happens to the total premium?
If an insured changes his payment plan from monthly to annually, what happens to the total premium?
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Who is the beneficiary on a key-person life insurance policy?
Who is the beneficiary on a key-person life insurance policy?
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When must insurable interest exist in a life insurance policy?
When must insurable interest exist in a life insurance policy?
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What type of insurance would perform the function of cash accumulation?
What type of insurance would perform the function of cash accumulation?
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What does 'liquidity' mean in a life insurance policy?
What does 'liquidity' mean in a life insurance policy?
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If an applicant for a life insurance policy and the potential insured are two different people, what would be the underwriter's main concern?
If an applicant for a life insurance policy and the potential insured are two different people, what would be the underwriter's main concern?
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When must the policy summary for a life insurance policy be delivered to the policy owner?
When must the policy summary for a life insurance policy be delivered to the policy owner?
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What is the term that describes the frequency and the amount of the premium payment?
What is the term that describes the frequency and the amount of the premium payment?
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What is the main purpose of the regulation on life insurance policy illustrations?
What is the main purpose of the regulation on life insurance policy illustrations?
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Who must have insurable interest in the insured?
Who must have insurable interest in the insured?
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How does the premium mode affect the total premium paid for insurance for the year?
How does the premium mode affect the total premium paid for insurance for the year?
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What document must a producer provide to the insured during policy replacement?
What document must a producer provide to the insured during policy replacement?
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In calculating the amount of life insurance needed, what is the needs approach based on?
In calculating the amount of life insurance needed, what is the needs approach based on?
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Who is a replacing insurer?
Who is a replacing insurer?
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What are the personal uses of life insurance?
What are the personal uses of life insurance?
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What type of life insurance offers an applicant a cash value element?
What type of life insurance offers an applicant a cash value element?
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An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?
An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?
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What type of insurance creates an immediate estate?
What type of insurance creates an immediate estate?
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What term describes the fee a person pays an insurance company to receive coverage?
What term describes the fee a person pays an insurance company to receive coverage?
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Who is responsible for the contents of insurance advertisements?
Who is responsible for the contents of insurance advertisements?
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What are illustrations in a life insurance policy?
What are illustrations in a life insurance policy?
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What is a blackout period for social security benefits?
What is a blackout period for social security benefits?
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Mortality tables are used by insurance companies to predict what?
Mortality tables are used by insurance companies to predict what?
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What is the main responsibility of a company's underwriting unit?
What is the main responsibility of a company's underwriting unit?
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At what point does coverage begin when an agent issues a conditional receipt for a life insurance policy?
At what point does coverage begin when an agent issues a conditional receipt for a life insurance policy?
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What is insurance underwriting?
What is insurance underwriting?
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What are the three main instances when insurable interest exists in life insurance?
What are the three main instances when insurable interest exists in life insurance?
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Study Notes
Life Insurance Basics
- Monthly premium payments lead to a higher overall premium compared to annual payments.
- Policy replacement involves issuing a new policy while terminating or reissuing an existing one with reduced cash value.
- A Policy Summary document provides specific information about an insurance policy.
- The agent's report offers personal observations about the proposed insured to assist in underwriting.
- Key person insurance aims to mitigate financial loss due to the death of an essential employee.
- Group policies are typically issued without requiring proof of insurability from the insured.
- Permanent life insurance provides lifetime protection against premature death.
- Group policies issue certificates of insurance to members insured under the policy.
- Survivor protection planning must consider the insured’s assets, liabilities, and survivors’ needs.
- Key-person life policy benefits are received tax-free by the employer as the owner and beneficiary.
- Part 2 of a life insurance application contains medical information about the prospective insured.
- Estate conservation utilizes life insurance to cover state inheritance and federal estate taxes, preventing asset liquidation.
- Premium determination factors include mortality, interest, and expenses.
- Switching from monthly to annual payment plans decreases the total premium.
- The beneficiary of a key-person life insurance policy is the employer.
- Insurable interest must exist at the time of application in life insurance policies.
- Life insurance serves as a vehicle for cash accumulation.
- Liquidity refers to the availability of cash value in a life insurance policy.
- If the applicant and the insured are different individuals, underwriters must assess insurable interest between them.
- The policy summary must be delivered to the policy owner when the policy is delivered.
- Premium mode describes the frequency and amount of premium payments.
- Regulations for life insurance policy illustrations help consumers make informed purchasing decisions.
- The policy owner must have insurable interest in the insured person.
- More frequent premium payments typically lead to higher total annual premiums.
- During policy replacement, producers must provide a Notice Regarding Replacement to the insured.
- The needs approach considers the family’s predicted needs following the insured's premature death when calculating necessary insurance coverage.
- The replacing insurer is the company that issues a new policy when a replacement occurs.
- Personal uses of life insurance include survivor protection, estate creation, conservation, cash accumulation, and liquidity.
- Permanent insurance, like whole life, offers a cash value component to the insured.
- A variable life insurance policy may show significant fluctuations in cash value from month to month.
- Life insurance creates an immediate estate for beneficiaries upon the insured's death.
- Premium is the fee paid to the insurance company for coverage.
- Insurance companies are responsible for the content of any advertisements they produce.
- Illustrations in policies depict non-guaranteed elements related to life insurance.
- The blackout period for social security benefits refers to when a surviving spouse temporarily receives no benefits.
- Mortality tables help predict life expectancy and death rates for various demographic groups.
- The underwriting unit's main responsibility is to engage in risk selection for insurance policies.
- Coverage begins upon the later date between the application submission and the completion of a medical exam if a conditional receipt is issued.
- Insurance underwriting is the process of risk assessment and classification.
- Insurable interest exists in three primary scenarios: for one's own life, a family member's life, or a business partner/financial obligation relationship.
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Test your knowledge of key concepts in life insurance with these flashcards. Each card presents a question or term that is crucial to understanding life insurance and its workings. Ideal for individuals preparing for insurance exams or wanting to reinforce their knowledge.
