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Life Insurance

QuestionAnswer
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An agent's appointment to an insurance company is good until It is withdrawn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