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Questions and Answers
What is a 401k plan?
What is a 401k plan?
What does Absolute Assignment refer to in insurance?
What does Absolute Assignment refer to in insurance?
What is Collateral Assignment?
What is Collateral Assignment?
What allows full or partial payment of the death benefit before the insured's death?
What allows full or partial payment of the death benefit before the insured's death?
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What is an Accidental Death Benefit?
What is an Accidental Death Benefit?
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What is the 'Accumulate at Interest' Dividend Option?
What is the 'Accumulate at Interest' Dividend Option?
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The contract created by the insurer is in favor of the insured regarding ambiguities.
The contract created by the insurer is in favor of the insured regarding ambiguities.
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What is Adverse Selection in insurance?
What is Adverse Selection in insurance?
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What is indicated by an Agency Agreement or Agency Contract?
What is indicated by an Agency Agreement or Agency Contract?
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What are 'Agent Authorities'?
What are 'Agent Authorities'?
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Who is referred to as an Agent/Producer?
Who is referred to as an Agent/Producer?
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What is an Agent's Report?
What is an Agent's Report?
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What does the term Aleatory refer to?
What does the term Aleatory refer to?
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What is an Annual Renewable Term?
What is an Annual Renewable Term?
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Who is an Annuitant?
Who is an Annuitant?
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What is an Annuity?
What is an Annuity?
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What does Appointment refer to in insurance?
What does Appointment refer to in insurance?
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What is a Blackout Period?
What is a Blackout Period?
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What is a Buy-Sell Agreement?
What is a Buy-Sell Agreement?
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What is the Cash Nonforfeiture Option?
What is the Cash Nonforfeiture Option?
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What is the Cash Settlement Option?
What is the Cash Settlement Option?
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What is Cash Value in an insurance policy?
What is Cash Value in an insurance policy?
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Who is a Commissioner in insurance?
Who is a Commissioner in insurance?
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Study Notes
Retirement and Insurance Concepts
- 401k Plan: A qualified retirement plan allowing employees to save a portion of their income using pre-tax dollars, promoting tax advantages for retirement savings.
- Accelerated Death Benefit: A policy provision enabling the insured to receive all or part of the death benefit if diagnosed with a terminal illness, providing financial assistance during difficult times.
- Buy-Sell Agreement: A life insurance strategy for businesses where partners insure each other's lives, ensuring the surviving partners can buy the deceased's share, maintaining business continuity.
Assignment Types
- Absolute Assignment: A permanent and irrevocable transfer of a policy's rights or benefits from the policy owner, often used to secure loans against the policy.
- Collateral Assignment: A temporary and revocable transfer of benefits, commonly utilized to secure a loan while retaining ownership rights.
Insurance Provisions
- Accidental Death Benefit: An optional rider ensuring an additional payout if the insured dies due to an accident within 90 days, offering added security for beneficiaries.
- Cash Nonforfeiture Option: Allows the policyowner to receive a lump-sum payment for the policy's current cash value upon surrender, with no option for reinstatement.
Dividend and Policy Options
- Accumulate at Interest: A dividend option where dividends are left with the insurer to grow and earn interest, providing additional value to the policy.
- Cash Settlement Option: Upon policy maturity, beneficiaries receive the entire proceeds as a lump-sum payment, providing immediate financial support.
Legal and Regulatory Aspects
- Agency Agreement: A legal contract defining the relationship between an agent and an insurance company, specifying agent actions and compensation.
- Commissioner: A state public official overseeing the insurance department, responsible for enforcing insurance laws and regulations.
Roles and Responsibilities
- Agent/Producer: Individuals who sell or assist in the sale of insurance, officially representing the insurer and acting in the best interest of clients.
- Agent's Report: A documented disclosure from the agent to the insurer detailing observations about the proposed insured's risks, crucial for underwriting decisions.
Risk and Contract Principles
- Adverse Selection: A phenomenon where individuals with higher risk are more likely to seek insurance coverage, potentially leading to increased costs for insurers.
- Aleatory Contract: An agreement characterized by an unequal exchange of value, where one party may gain significantly more than the other, typical in insurance policies.
Other Important Terms
- Annual Renewable Term: A life insurance type allowing yearly renewal without proof of insurability, with premiums that increase at each renewal, catering to short-term insurance needs.
- Cash Value: The portion of a policy representing the equity that can be accessed by the policyowner, also referred to as living benefit or policy savings, accumulating over time.
- Blackout Period: The interval when Social Security Survivor Benefits are unavailable to a widow(er), occurring between the youngest child turning 16 and the widow(er) reaching retirement age.
- Appointment: The process through which an insurer officially authorizes an agent to represent them, establishing a formal relationship for selling insurance products.
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Description
Test your understanding of key retirement and insurance concepts, including 401k plans, accelerated death benefits, and buy-sell agreements. Learn how these concepts impact financial decision-making and business continuity. Perfect for students and professionals in finance or insurance fields.