Life Insurance Basics Flashcards

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.

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.