Life Insurance Fundamentals Quiz

Module 1: Foundations of Life Insurance

• Single Premium Policy: A policy requiring only one premium payment.
• Policy Fee: A fixed amount added to the premium, regardless of policy size.
• Policy Reserve: A reserve held for a policy.
• Required Premiums: Calculated based on applicant's age, plan choice, and desired face amount.
• Premium Payment Modes: Calculated by dividing annual premiums by desired payment frequency, multiplied by a conversion factor.
• Insured/Insurer/Beneficiary: In a life insurance contract, the insured is the person whose life is insured, the insurer provides coverage, and the beneficiary receives the policy proceeds in case of death.

Module 2: Basic Plans

• Convertible Term Insurance: Term insurance that can be changed to permanent insurance without evidence of insurability.
• Dividends: Not guaranteed, amounts from previous years, and are related to policy cost.

Module 3: Riders

• Waiver of Premium Rider: Attached to a policy to stop further premium payments in the case of disability.
• Accidental Death and Dismemberment Rider: A rider covering accidental death and dismemberment.
• Total Disability Monthly Income Rider: A rider providing income payments for total disability.
• Disability Benefit: Not paid if disability is self-inflicted.
• Waiver of Premium: Only effective for total or permanent disabilities.
• Accidental Death Rider: Reduced benefits when accidental death rider is activated.
• Disability Benefits: Not paid in the following cases: self-inflicted injuries, policies with loans, those resulting solely from sickness, or if policy dividends are exhausted.

Module 4: Risk Selection

• Risk Selection: Individuals with higher-than-standard risk factors, like poor health or risky jobs, have higher premiums.
• Risks: Classified as acceptable or unacceptable, regular or irregular, standard, substandard, complete, or incomplete.
• Substandard Risk: Risks requiring different premium rates due to health conditions or lifestyle factors.
• Hazardous Occupations: Occupations that expose the insured to a degree of danger or unhealthy working conditions, potentially at increased premium rates.
• Anti-selection: Insurance companies accepting individuals with an unexpectedly high risk of claims.

Module 5: Policy Provisions

• Legal Contract: Parties must be legally competent.
• Insurable Interest: Exists at policy inception and loan's time.
• Contract Execution: The contract takes effect when the first premium is paid.
• Beneficiary: A person or entity designated to receive death benefits.

Module 6: Group Insurance

• Group Insurance Applications: Employees fill out enrollment or registration cards.
• Policy Change: May be adjusted to an individual policy in the event of leaving a company.
• Benefits: Include accidental death and dismemberment, expense reimbursements, and disability benefits.

Module 7: Health Insurance

• Health Insurance Benefits: Include coverage for accidental death, dismemberment, expenses, and disability income.
• Disability Benefits: Exclusion for self-inflicted injuries, policy loans and exhausted dividends.

Module 8: Annuities

• Annuities: Produce cash payments over time, instead of a lump sum.
• Income Sources: From premiums and investments.
• Policy Reserves: Future obligations of the insurance company.

Module 9: IC Rules and Code of Ethics

• Income Sources: From premium payments and investments.
• Insured Companies: Owned by policyholders (Mutual) or stockholders (Stock).
• Advertising Regulations: Restrictions on advertising and required confidentiality of client information.

Test your knowledge on the foundations of life insurance, including single premium policies, policy fees, and the roles of the insured, insurer, and beneficiary. This quiz covers essential terms and concepts from various modules, helping you understand basic plans and riders. Enhance your understanding of life insurance and its key components.