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Life Insurance
| Question | Answer |
|---|---|
| McCarran-Ferguson Act | Gave power to regulate insurance back to the states |
| Who gives authority to the TDI and the Commissioner? | Texas Legislature |
| The commissioner is appointed by | The governor |
| How often does the commissioner examine insurers? | Every 5 years |
| What doesn't the commissioner have the power to do? | Prosecute |
| Life, Accident, Health, and Hospital Guaranty Association coverage amounts | "UP TO": $300k for DB, $100k CV of life ins, $100k fixed annuities |
| What is the penalty for acting as an agent without a license? | Up to $500, Class B misdemeanor |
| What percentage of an agents sales have to be to the general public? | At least 25% |
| how long is a temporary license good for? | 90 days |
| Maximum number of companies an agent can represent? | No maximum |
| An agent's appointment to an insurance company is good until | It is withdrawn |
| Number of hours of CE required per 2 year period | 30 |
| Number of CE hours required to be in ethics per 2 year period | 2 |
| At least ________% hours must be done in a classroom setting | 50 |
| Grace period for CE? | None |
| Agents need to keep a record of CE for the past ___ years. | 4 |
| How many officers need to be licensed for a corp or bank to be licensed? | 1 |
| What must banks provide in the branch when selling annuities? | Seperate and distinct areas w/no literature that says FDIC insured. |
| What can life and health insurance counselors do that regular agents can't? | charge fees for their research and recommendations |
| Is commingling an unfair trade practice? | No, but it is illegal |
| What is the term for misrepresenting or making incomplete comparisons to replace existing policies? | Twisting |
| If someone has their license revoked, ho long must they wait to reapply? | 5 yrs/60 mos |
| McCarran-Ferguson Act | Gave power to regulate insurance back to the states |
| Who gives authority to the TDI and the Commissioner? | Texas Legislature |
| The commissioner is appointed by | The governor |
| How often does the commissioner examine insurers? | Every 5 years |
| What doesn't the commissioner have the power to do? | Prosecute |
| Life, Accident, Health, and Hospital Guaranty Association coverage amounts | "UP TO": $300k for DB, $100k CV of life ins, $100k fixed annuities |
| What is the penalty for acting as an agent without a license? | Up to $500, Class B misdemeanor |
| What percentage of an agents sales have to be to the general public? | At least 25% |
| how long is a temporary license good for? | 90 days |
| Maximum number of companies an agent can represent? | No maximum |
| An agent's appointment to an insurance company is good until | It is withdrawn |
| Number of hours of CE required per 2 year period | 30 |
| Number of CE hours required to be in ethics per 2 year period | 2 |
| At least ________% hours must be done in a classroom setting | 50 |
| Grace period for CE? | None |
| Agents need to keep a record of CE for the past ___ years. | 4 |
| How many officers need to be licensed for a corp or bank to be licensed? | 1 |
| What must banks provide in the branch when selling annuities? | Seperate and distinct areas w/no literature that says FDIC insured. |
| What can life and health insurance counselors do that regular agents can't? | charge fees for their research and recommendations |
| Is commingling an unfair trade practice? | No, but it is illegal |
| What is the term for misrepresenting or making incomplete comparisons to replace existing policies? | Twisting |
| If someone has their license revoked, ho long must they wait to reapply? | 5 yrs/60 mos |
| McCarran-Ferguson Act | Gave power to regulate insurance back to the states |
| Who gives authority to the TDI and the Commissioner? | Texas Legislature |
| The commissioner is appointed by | The governor |
| How often does the commissioner examine insurers? | Every 5 years |
| What doesn't the commissioner have the power to do? | Prosecute |
| Life, Accident, Health, and Hospital Guaranty Association coverage amounts | "UP TO": $300k for DB, $100k CV of life ins, $100k fixed annuities |
| What is the penalty for acting as an agent without a license? | Up to $500, Class B misdemeanor |
| What percentage of an agents sales have to be to the general public? | At least 25% |
| how long is a temporary license good for? | 90 days |
| Maximum number of companies an agent can represent? | No maximum |
| An agent's appointment to an insurance company is good until | It is withdrawn |
| Number of hours of CE required per 2 year period | 30 |
| Number of CE hours required to be in ethics per 2 year period | 2 |
| At least ________% hours must be done in a classroom setting | 50 |
| Grace period for CE? | None |
| Agents need to keep a record of CE for the past ___ years. | 4 |
| How many officers need to be licensed for a corp or bank to be licensed? | 1 |
| What must banks provide in the branch when selling annuities? | Seperate and distinct areas w/no literature that says FDIC insured. |
| What can life and health insurance counselors do that regular agents can't? | charge fees for their research and recommendations |
| Is commingling an unfair trade practice? | No, but it is illegal |
| What is the term for misrepresenting or making incomplete comparisons to replace existing policies? | Twisting |
| If someone has their license revoked, ho long must they wait to reapply? | 5 yrs/60 mos |
| Making any oral or written statement that is false or derogatory as to the financial condition of any insurer is known as | Defamation |
| At least ___% of total premiums must be drawn from persons other than the agents family and business relationships | 25% |
| Advertisements containing untrue or misleading statements about another insurer | Disparagement |
| Men have higher________ | Mortality |
| Women have higher ________ | Morbidity |
| Penalties for unfair competition and unfair practices | $500 fine, Class A misdemeanorq |
| How many days notice must the commissioner give for a hearing? | 10 |
| The venue for any court action involving the TDI and an agent | Travis County District Court |
| Agent must report an address change or felony to TDI within ___ days | 30 |
| Maximum fine the commissioner can assess | $25,000 |
| Advertisments must be kept on file for | 3 years |
| Advertising created by an agent requires | Prior written approval by the sponsoring insurer |
| What proves that you have group insurance? | Certificate of insurance |
| ___ days to convert a group plan to an individual policy after termination | 31, no proof of insurability required |
| Group insurance cannot cover only certain employees | False, except if the employer pays all of the premium |
| What type of organization cannot purchase group insurance | A group of unrelated individuals who get together for the sole purpose of buying insurance |
| Credit life cannot exceed | The amount of debt |
| Credit life insurance can be included in with the rest of the costs in a contract. | False, must be seperate |
| Credit life insurance must end within ___ days of scheduled maturity date | 15 |
| Death benefits are taxable | False |
| What is taxable on a cash value surrender of life ins? | Profits/Interest |
| What is taxable on an annuity? | Gains, tax defd until realized |
| What type of 1035 transfer cannot be done without having to pay taxes? | Annuity to life insurance |
| Once a MEC | Always a MEC |
| How is a distribution from a MEC taxed? | LIFO |
| Why would you buy single premium life insurance? | Estate planning |
| Dividends from MECS are taxable | True, but no 10% penalty |
| What are the only tax deductible premiums? | Premiums paid by an employer for group insurance |
| What is the only group benefit taxable when received by the employee? | Disability income |
| Who must sign the insurance contract for a key person? | The agent, the policyowner, and the key person |
| A buy-sell agreement between 2-3 partners is known as | Cross purchase |
| Who buys the policy in an entity purchase? | The employer |
| Who pays the taxes on executive bonuses? | The executive |
| How long does it take to get disability benefits from SS after applying? | 5 months |
| To count as total disability, how long must the disability last? | At least 12 months |
| How long does it take to be fully insured by SS? | 10 yrs, 40 quarters |
| The most important non-qualified retirement plans | Annuities |
| What is the IRC for a Keogh? | HR-10 |
| How many employees qualify you for SIMPLE? | Less than 100 |
| Who must contribute in a simple? | The employer |
| Who does not qualify to participate in a 403b? | Government employees |
| Gross Permium = Net Premium + | Expense |
| Type of insurance known as pure protection | Term |
| Age considered when term insurance is converted | Attained age |
| Amortized | Decreasing term |
| Who needs to provide proof of insurability on a jumping juvenile policy with the payor provision? | Both the juvenile and the premium payor |
| What type of policy is a combination of whole life and term? | Adjustable life |
| When might you have to provide proof of insuarability again in an adjustable life policy? | If the death benefit is increased |
| This type of policy is know for having flexible premiums | Universal |
| Unbundled insurance | universal |
| Variable policies have a minimum _______, but no guarantee of________ | Death benefit, earnings/cash value |
| Type of insurance that is like buying term and investing the difference in the market | Variable Universal Life |
| Known as vanishing premium | Interest sensitive |
| Identifies that parties to the contract and the legal purpose of the contract and other basic details | Insuring clause |
| If its not found here, it isn't part of the contract | Entire contract clause |
| Free look for life insurance =____, for senior products = _____ | 10 days, 30 days |
| Consideration | Premium plus fees |
| Grace period | 31 days from premium due date |
| Does a policy loan affect the cash value? | No |
| How long are life insurance policies contestable? | 2 years |
| how long before suicide is covered? | 2 years |
| If there is a mistatement of age or sex? | Adjust the benefit |
| The insured has to die within how many hours for the common disaster clause to apply? | 120 hours |
| What is not an incidence of ownership? | Payment of premium |
| Who chooses the settlement option if the owner hasn't? | The beneficiary |
| To be considered terminal, how long must you have to live? | Less than 2 years |
| What age is looked at when using guaranteed insurability? | Attained age |
| What happens to cash values and dividends if waiver of premium is excercised? | Nothing changes, continue to grow on schedule |
| What is the death benefit if the return of premium rider is in affect? | Face amount + Premiums paid |
| Accidental death only applies if the insured dies within ____ days of the accident | 90 |
| In AD&D, if you lose one hand insurance pays | 50% |
| What guarantees that an annuitant will receive income if they outlive their life expectancy? | The insurance co's general assets |
| Who supervises variable annuities? | SEC |
| What is not required for a contract to be legal? | Equitable terms or counteroffer |
| When is insurable interest required? | At date of issue |
| Who uses the law of large numbers? | Actuaries |
| When is the social security blacout period? | From the time the youngest child turn 16, to when the spouse turns 60 |
| How is the face value affected by loans? | It is not |
| An agent from outside Texas is considered | A non-resident |
| Dividends on stock companies are | Taxable in year paid |
| Dividends on mutual companies are | Not taxable |
| Participating plans | Receive dividends |
| Non-perticipating plans | No dividends |
| Lloyds association rules | 10, 10, LloydsCan write up to 10 times assets, at least 10 underwriters, must use Lloyds in name |
| The company that wrote the original policy being reinsured | Ceding company |
| Company accepting the policy to be reinsured | Assuming company |
| Facultative | A policy-by-policy approach to reinsurance |
| Also known as field underwriters | Agents |
| knowingly giving up a right | Waiver |
| Answers to questions on the insurance application are considered to be | Representations |
| Best way to prove you work for an insurance co | Using their paperwork |
| How many companies may an agent represent? | no limit |
| Free look period | 10 days |
| If there is any ambiguity in the contract terms, ruling will be in favor of the insured or the beneficiary | Adhesion |
| Unequal consideration between premium and benefit | Aleatory |
Created by:
johnkirking
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