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Cards In This Set
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What type of insurance would be used for a Return of Premium rider?
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Increasing Term The Return of Premium Rider is achieved by using increasing term insurance. When added to a whole life policy it provides that at death prior to a given age, not only is the original face amount payable, but also all premiums previously paid are payable to the beneficiary.
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What is the benefit of choosing extended term as a nonforfeiture option?
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It has the highest amount of insurance protection. Under this option the insurer uses the policy cash value to convert to term insurance for the same face amount as the former permanent policy. The duration of the new term coverage lasts for as long a period as the amount of cash value will purchase.
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Which of the following entities can legally bind coverage?
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InsurerOnly insurers, not agents, can bind coverage.
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An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?
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RevocableIf her husband is named as the revocable beneficiary, the insured would be the policyowner and could make changes to the contract. Her husband would receive any death benefit.
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The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract? a)Adhesion
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ConditionalA conditional contract requires both the insurer and policyowner to meet certain conditions before the contract can be executed, unlike other types of policies, which put the burden of condition on either the insurer or the policyowner.
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A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid?
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The benefits will be coordinated. Benefits will be coordinated when individuals are covered under two or more health plans.
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A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as
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Survivor protectionLife insurance can provide the funds necessary for the survivors of the insured to be able to maintain their lifestyle in the event of the insured's death. This is known as survivor protection.
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Which of the following provisions is mandatory for health insurance policies?
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Physical examination and autopsy Physical examination and autopsy is a mandatory provision required by law.
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The legal process that gives the insurer, after payment of a loss, the right to seek recovery from a third party that was responsible for the loss is known as
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Subrogation.subrogation is a provision found in most insurance policies that gives the insurer, after payment of a loss caused by a third party, the insured's rights to recovery against that third party. The insurer's rights are only to the extent of the loss payment.
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Social Security Supplement (SIS) or Social Security Riders would provide for the payment of income benefits in each of the situations below EXCEPT
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When the amount payable under Social Security is more than the amount payable under the rider.These riders provide benefits when the amount payable under Social Security is less than the amount payable under the rider (in this case only the difference will be paid).
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an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a
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Settlement option. settlement option is exercised when an immediate annuity is purchased with the face amount at death or with the cash value at surrender.
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Who can make a fully deductible contribution to a traditional IRA?
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An individual not covered by an employer-sponsored plan who has earned income Individuals who are not covered by an employer-sponsored plan may deduct the full amount of their IRA contributions regardless of their income level.
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Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?
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Those who have been insured under the plan for at least 5 yearsIf the master contract is terminated, every individual who has been on the plan for at least 5 years will be allowed to convert to individual insurance of the same coverage.
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Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe?
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Presumptive disabilityPresumptive disability is a provision that is found in most disability income policies which specifies the conditions that will automatically qualify the insured for full disability benefits.
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All of the following are examples of third-party ownership of a life insurance policy EXCEPTA company purchases a life insurance policy on their manager, who is an important part of the operation.c)When an insured purchased a new home, the insured made an absolute assignment of a life insurance policy to the mortgage company.d)An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan.
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An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan. A collateral assignment is the transfer of some or all of the death benefits of the policy to a creditor as security for a loan, but does not give the creditor the rights of ownership. In the event of the insured's death, the creditor would only be able to recover that portion of the policy's proceeds equal to the creditor's remaining interest in the loan.
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