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my underwing n group
life underwriting, group insurance, and retirement plans
| Question | Answer |
|---|---|
| Underwriting is the name of the process used by insurers to rate risk. Once the risk has been rated it is classified. What is the classification for an individual that would pose the least amount of risk to the insurer? | preferred |
| Once the insurer had looked at the facts pertaining to a life insurance applicant, the insurer will categorize the risk and calculate premiums based on... | risk classification and mortality, interest earnings and expenses |
| what would have the greatest impact the underwriting process for risk on an individual? He/she is grossly overweight He/she likes to bungee jump He/she owns a snowmobile He/she takes trips overseas | grossly overweight |
| All of the following are commonly used when investigating the insurability of an applicant EXCEPT An attending physician's statement A credit report Contacting the Medical Information Bureau (MIB) Talking to the neighborhood watch | talking to the neighborhood watch |
| What is not expected from a producer as part of the field undrwrtng? -The prdcr notes the applicant's physical appearance -should note how many children the applicant has in the house. -should note the habits and lifestyle of the applicant. | The producer should note how many children the applicant has in the house. |
| What is the main purpose of the MIB? | prevent fraud and misrepresentation |
| The agent's report, in which an agent can comment on the client, the situation and/or circumstances, or any other thing that the agent thinks is noteworthy, is located in which part of the application? | part III |
| For a life insurance policy, when can a statement of good health be required? | when and application is made with no initial premium |
| Who completes a medical report when required by the insurance underwriters? | a physician or paramedic |
| t or f The FCRA requires insurers to explain the reason(s) behind any issued denials of coverage. | false |
| True or False The FCRA is a federal law The FCRA was enacted in 1970 The FCRA requires insurers to identify the source of the information provided to them in a credit report. | True |
| Insurance companies investigate potential insureds before issuing a policy. In which report would the insurer have information about a prospective insured's lifestyle? | inspection report |
| What kind of safeties or guarantees is provided by the Fair Credit Reporting Act? | It requires that the applicant for insurance be informed that a consumer report may be requested |
| Marcus is an applicant for a standard risk policy. When is he considered to be covered? | The insurer mails the policy for delivery (which had the initial one month premium submitted with the application) |
| The M.I.B. (Medical Information Bureau) is a valuable tool in the insurance industry. Is it true or false that The medical information contained in the M.I.B is received from insurance applications. | true |
| t or f The American Medical Association operates the M.I.B. | false |
| t or f An applicant can request a report directly from the M.I.B | false |
| t or f The agent has the duty of making sure the applicant receives an M.I.B. report. | false |
| Is the Fair Credit Reporting Act a state law | no |
| Part III of the application contains | the agents report |
| The regulation of insurance at the state level was the result of | McCarran-Ferguson Act In 1945 the McCarran Ferguson Act resulted in mandates that insurance would be regulated by the states. |
| How is a life insurance agent similar to a field underwriter? | they see the applicant |
| When conducing business, a life insurance agent can use which of the following titles? Investment advisor Financial planner Financial consultant None of the above | none of the above |
| Insurance companies are required by the ___________ to notify an applicant, in writing, that an investigative consumer report may be made on him? | fair credit reporting act |
| What is the maximum benefit period of Preliminary term for interim coverage | 11 months |
| Which of the following is NOT part of the insurance underwriting process? The selection of risks The notifying of risks The rating of risks The classifying of risks | the notifying of risks |
| The part of the application that provides information about an applicant such as financial condition, character, purpose of sale, and how long the agent has known the applicant is | the agents report |
| Mrs. Selleck runs a Christmas store and needs $200,000 of permanent life insurance in June. Because her business is cyclical she is "cash poor" until October. How can Mrs. Selleck obtain the insurance she needs? | Preliminary term for interim coverage |
| Under the Fair Credit Reporting Act, when an applicant has been denied insurance coverage because of information contained in a consumer report, the applicant is entitled to | The right to obtain disclosure of the source of the information in the consumer report. |
| Group insurance regulations require that in order to be considered an eligible group, certain criteria must be met. In order for a professional association to be considered an eligible group they must | Been an active association for at least two years Hold regular meetings Have a constitution and bylaws |
| A certificate of insurance must be provided to each insured is a standard for group insurance | yes |
| Group insurance plans have certain characteristics and provisions. T or F following is a standard group insurance provision? A grace period of 30 days for nonpayment of premium A copy of the application must be provided to each insured. | false |
| t or f Groups are rated based on average age, proportion of men to women, and larger groups pay lower premiums | true |
| t or f group plans require a medical exam | false |
| Group policies must include an option to convert from the group policy to an individual policy if | The individual loses coverage due to loss of employment and the individual loses coverage because the master policy was cancelled |
| The Acme Plumbing Company has just made arrangements for group term life insurance. Which employees would most likely be excluded from this insurance? Full time employees Part time employees Retired employees None of the Above | part time employees |
| Acme Plumbing is purchasing a group life plan for its employees. What type of plan is most common for this type of purchase? | annual renewable term |
| Which of the following is a false statement regarding group credit life policies? The premium paid by debtor There is a limit on amount of insurance per debtor The debtor is the beneficiary None fo the above | The debtor is the beneficiary The premiums are paid solely by the debtor. There is a limit on the amount of insurance per debtor. The creditor is the beneficiary |
| Mr. Jones was laid off from the Acme Company on August 3rd. He died on August 30th. Under The Acme Company group policy, what would the insurer pay? | the full face amount of the policy A terminated employee has coverage for 31 days after leaving his employer. The insurer would pay the full face value to the beneficiaries. |
| Mrs. Brown owns a boutique. She has 20 employees that are covered by a group life policy from Sunflower Insurance. What is true if Mrs. Brown decides not to renew her policy and ceases paying the premiums? | Sunflower Insurance will notify Mrs. Brown, who will then notify her employees of the cancellation |
| What conversion rights does a surviving spouse have under a group plan? | The spouse has the same rights that the employee had |
| Joy's employer pays the entire premium on the company group policy. This type of plan is called | non-contributory |
| Employees may NOT be classified for group life insurance by which of the following? Job responsibilities Union or nonunion status Department Sex or age | sex or age |
| What kind of group would be covered by a franchise life insurance plan? | Groups smaller than the minimum number required by state law to cover a group of people that do not qualify for true group insurance |
| The SGLI (Servicemember's Group Life Insurance) provides coverage for personnel enlisted in the service. What type of coverage is the basic coverage issued to an eligible member under the SGLI program? | term insurance |
| What is the maximum amount of insurance available for dependents under an employee's group coverage? | 50% of the employees coverage |
| What is required to qualify for assctn group life? must be part of at least 3 associations The group is organized for the sole purpose of purchasing insurance The group has at least 2 members The group has been in existence for a 2 years | The group has been in existence for a 2 years |
| A fraternal benefit program should Be incorporated under state law | no, not a requirement |
| A fraternal benefit program should have Noted charitable and benevolent functions Have regularly scheduled meetings Have an organized lodge system with regular meetings | yes |
| In order to be considered an association, a group must | Have been in existence for 2 years or more AND be a natural group |
| The Acme Baking Company just purchased group life insurance plans for its employees. What will the employees receive as proof/evidence of their insurance? | A certificate of insurance |
| Which of the following would not qualify for a group life policy? Multiple employer trusts Employer-employee groups Trade unions Family groups | family groups |
| Neighborhood Plumbing Company has decided to let their group insurance coverage that they have with Global Insurance Company terminate. What correctly states the obligations of the parties involved | Neighborhood Plumbing Company must notify their employees |
| Which of the following cannot be used to determine group benefits? Age Earnings Flat benefit Employment position | age |
| The normal conversion benefit available to terminated employees under a group life insurance policy is: | The employees may convert to an individual whole life policy within 31 days without having to submit evidence of insurability |
| Which of the following is true about VGLI (Veterans Group Life Insurance)? It is convertible term insurance It is 5-year renewable insurance Both of the above Neither of the above | both of the above |
| Some retirement plans are deem nonqualified and do not have the tax benefits of qualified plans. A nonqualified plan | Can be a deferred compensation plan |
| Qualified retirement plans need to be approved by the IRS. When an employee withdraws from a qualified plan, | the withdrawal is taxable |
| Traditional IRAs are a way for individuals, especially those without employer funded retirement plans, to save for retirement. t or f Based on their adjusted gross income, some people can deduct IRA contributions. | true |
| Traditional IRAs are a way for individuals, especially those without employer funded retirement plans, to save for retirement. t or f Withdrawals can be made prior to age 59 | true |
| Traditional IRAs are a way for individuals, especially those without employer funded retirement plans, to save for retirement. t or f First time homebuyers can withdraw $10,000 with no tax liability | false |
| Traditional IRAs are a way for individuals, especially those without employer funded retirement plans, to save for retirement. t or f Based on their situation, some can deduct all of their contributions to their IRA | true |
| Mia moved to a new city to take a new job. When she finally got around to transferring the funds from her IRA to a new IRA she was surprised to see that she was assessed a tax of 20%. Why was this tax assessed? | She took more than 60 days to complete the transfer |
| Shondra wants to begin to receive payments from her traditional IRA without incurring negative tax consequences. At what age can she begin to receive the payments and not have the consequences? | 59 1/2 |
| A 'matching element' is part of | 401 (k) |
| what is deemed a qualified retirement plan? | Defined benefit plan and Defined Contribution plan |
| what is responsible for the regulation of retirement plans? | ERISA (Employee Retirement Income Security Act of 1974) is a federal law that regulates retirement plans within a state |
| Retirement plans are important to employers because | Retirement plans attract good employees and help employees in retirement |
| Jasmine has a Roth IRA. At what point in her life must she take distribution? | she is not required to take a distribution |
| In order for a retirement plan to be qualified, it must allow enrollment of all employees who have: | Completed 1 year of service and reached age 21 |
| what correctly lists the requirements for a defined benefit pension plan? | Definite determinable benefits; Systematic payment of benefits; Primarily retirement benefits |
| Which of the following is provided in a money purchase plan? Fixed contributions/fixed benefits Undefined contributions/undefined benefits Undefined contributions/fixed benefits Fixed contributions/undefined benefits | Fixed contributions/undefined benefits |
| What is the maximum amount that an employee can contribute to a SEP? | 25% of his/her compensation up to a maximum of $49,000, whichever is less. |
| Which of the following is NOT a defined contribution plan? Employee stock ownership plans (ESOP) Profit sharing plans Money purchase plan Salary Sharing Plans | salary sharing plan |
| Which of the following is an example of a non-tax advantage of retirement plans for employees that is not an advantage for the employer? Good business reputation Forced Savings Increased productivity Attracting key employees | forced savings |
| ___________ are retirement plans which are similar to Keoghs | corporate plans |
| Carol wants to start saving in a Traditional IRA. What is the latest age that she can start saving in a traditional IRA? | 70 1/2 |
| Employee contributions must be vested after 2 years is a requirement of a qualified corporate retirement program | false, Employee contributions are vested immediately |
| Tim is in good health. If he takes receipt of his Traditional IRA funds before _________, a tax penalty would be imposed. | 59 1/2 |
| At what point are an employee's contributions into a qualified retirement vested? | immediately |
| Which of the following is a plan that meets requirements for the federal government in order to receive favorable tax treatment? Section 192 Qualified Income valuation Non-qualified | qualified |
| Sandy's company has a corporate retirement plan. Which of the following plans could she have? 401(k) CIRA 403b DTDA | 401(k) |
| Roth IRAs are different from traditional IRAs.There is no tax on withdrawals is not true about Roth IRAs? | withdrawals are taxed |
| Roth IRAs are different from traditional IRAs. Interest on contributions is not taxable is not true about Roth IRAs? | interest is taxable |
| Roth IRAs are different from traditional IRAs. Interest. Qualified distributions must occur after 2 years in the event of the death or disability of the individual with the account is not true about Roth IRAs? | With a Roth IRA - qualified distributions must occur after 5 years in the event of the death or disability of the individual with the account |
| Roth IRAs are different from traditional IRAs. High-income individual may not have a Roth IRA is not true about Roth IRAs? | they may have a roth ira |
| Kenny wants to start collecting from his traditional IRA, but he doesn't want to incur any penalties. At what age should he start collecting from his traditional IRA to avoid penalties? | 59 1/2 |
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