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Exam A

Life insurance CA

QuestionAnswer
An annuity that is purchased with a lump sums premium and whose benefits begin after 12 months is called a Single premium deferred annuity
A Technique used to determine the amount of life insurance needed by focusing on the projected earning potential of an insured is called Human life value approach
When replacing a policy the producer must present the applicant with a Notice Regarding Replacement of Life Insurance At the time of taking the application
The possibility of a financial loss incurred by a life insurance company for the premature death of an insured is known as a Risk
The Medical Information Bureau (MIB) is a nonprofit trade association that maintains Medical information on applicants for life and health insurance
A person who signs a fraudulent claim form may be found guilty of Perjury
Which policy is a combination of annual renewable term insurance and interest-sensitive cash value Universal Life
The right to a full refund of premium for insureds age 60 or older is 30 days
The premium modes can be best described as the Frequency of premiums
Intentionally omitting a history of heart problems on an application is Concealment
A Tax-Sheltered annuity (TSA) is a qualified plan available for Nonprofit organizations
The intent of replacement regulations is to protect the Policy Owner
Which provision allows a lapsed policy to be put back in force Reinstatement
According to the California Department of Insurance an insurer whose articles of incorporation are registered in Oslo, Norway is considered a Alien (Another Country)
Mortality is defined as the Rate of death
Characteristics of a group life insurance The insurance is written as a master policy Members receive a certificate of insurance Conversion rights without evidence of insurability must be offered
When a producer collects the initial premium and issues a conditional receipt, the receipt May allow life insurance companies to start coverage before policy delivery
The law of large numbers allows an insurance company to predict the expected losses among Members of a group of individuals with similar risk
If an insurers legal reserve funds are found to be less than the minimum required by law the insurer is considered Insolvent
Which type of policy would be suitable to protect the balance of a home mortgage Decreasing term
When must insurable interest exist At the time of application
The rider that provides for partial payment of the death benefit in advance to help with nursing or convalescent home expenses is the Long term care
Which annuity payout options guarantees the return of all the principal invested in the contract Refund life annuity
Participating policies Pay dividends to policyholders They have an intentional overcharge of premium They are commonly issued by mutual insurers
Insurance contracts are based upon a doctrine which requires all parties to the contract to be honest . This is known as the doctrine of Utmost good Faith
According to the California Insurance Code, life-only producers must keep records of their transactions for at least 5 years
Offer and Acceptance Consideration Competent parties Characteristics of Contract
Fixed Annuity’s Premiums are invested in the general account Interest rates are guaranteed Insurer assumes the investment risk
In a group policy, the employer receives Master Contract
The risk of a loss to an insurance company is also referred to as a Exposure
With a modified premium whole life contract, premium payments are Lower in the early years of the contract: A modified life is a type of whole life policy that charges a lower premium and then a higher level premium for the remainder of the insureds life
If a misstatement of age is discovered during the prodcessing of a life insurance claim, the insurer will Adjust the death benefit
The pay-in time for deferred annuities is known as the Accumulation period
Statements made by an applicant on an application for insurance are considered to be Representations
The cause of a loss is known as a/an Peril
When a producer, broker, or solicitor handles premiums for an insurer, they are acting in which of the following capacities A Fiduciary is a person acting in a position of trust, such as in handling of premiums
What is the risk classification for those who are incurable but have a higher than average risk? Substandard- (higher risk) also referred to as rated
The option that pays a specified amount to the annuitant with no remaining value payable to a beneficiary is Life only-(pure life or straight life) The payment ceases at the annuitants death and pays no payments to beneficiary
Money borrowed from a life insurance policy’s cash value is Not Taxable- Money borrowed against cash value not taxable , however, the insurance co charges interest on outstanding policy loans.
An insured who submits a fraudulent claim to an insurer is an example of a/an Moral hazard
Selling which of the following polices would require a license issued by FINRA Variable Universal life
Premium mode means Frequency of premiums
Social security was created to protect against Sickness in old age Premature death Disability
What document describes a legal document which would dictate who can buy a deceased partners share of the business and for what Buy-sell agreement
Which of the following must an insurer obtain in order to transact insurance within a given state. Certificate of Authority
When the insured selects the extended term non forfeiture option, the cash value will be used to purchase term insurance with what face amount Equal to the original policy for as long as the cash values will purchase.
If a policy allows the policy owner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a Guaranteed insurability rider
What is true regarding the annuity period It may last for the lifetime of the annuitant
Who can make a fully deductible contribution to a traditional IRA Individual who has earned income
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured Joint life policy
What is the term for a sales campaign conducted through the mail Direct response
To sell variable life insurance policies, an agent must receive all of the following A life insurance license FINRA registration A securities license
Indexed annuity Medium risk has higher income potential and set amount will not drop below set level can change according to index like stock market
The transfer of a possible financial loss to another party refers to Insurance
The Type of whole life insurance where premiums are payable over the whole life of the insured at age 100 is called Ordinary ( straight) life
What are methods of handling risk (STARR) Sharing, transfer, avoidance, reduction, and retention
What do Social Security benefits include Retirement benefits, disability benefits, and survivor benefits
Life insurance death benefit paid in a lump sum to a beneficiary is Generally free of taxes if taken as a lump sum
Two business partners own life insurance on each other. If one partner dies which contract will allow the surviving partner to use the death benefit to purchase the deceased business Buy-Sell agreement
The type of policy that can be changed from one that does not have cash value to one that does is a Convertible term policy
Which document describes the specific features and elements of a policy Policy Summary
The Attempt that an insurer makes to keep its existing insurance policy in force after receipt of a notice of replacement from another company is called Conservation
If an annuitant dies before the annuitization period, what proceeds will the beneficiary receive? Accumulation value or the premiums paid, whichever is greater
Life-only agents are NOT Allowed 24-hour care coverage this is only for accident and health agents
The Accelerated Benefit (living Needs) rider Simply advance payment of the death benefit many insurance companies do not charge for the living rider
Characteristics if The Accelerated Benefit (living Needs) rider Simply an advance payment of death benefit, Insured must be diagnosed with terminal illness, Provides early payment of a portion of death benefit
If the cash value exceeds the premiums paid in a whole life policy, what are the tax consequences if the policy is surrendered. The portion that exceeds the premium paid is taxable
When one party prepares the contract and the other party either accepts or rejects the contract, it is a Contract of adhesion (Take it or leave it)
Which rider may increase the value of the policy due to an increase in the Consumer Price Index (CPI) Cost of living Rider
When completing an application for life insurance, a producer should do which of the following Witness the applicant’s signature
Speculative risk are Not insurable they involve the opportunity for either loss or gain like gambling
Which policy provision includes the application and the first premium from the insured and the promise to pay from the insurer Consideration
The guaranteed insurability rider allows the policyowner to purchase additional insurance at the insureds Attained age
A life policy that covers two lives and provides for payment of the death benefit upon the death of the first insured is called Joint Life-the death benefit is paid upon the first death only
Whose signature is required to make changes to a written application for a life insurance policy? Applicant-changes on an application must be initialed or signed by the applicant
A producer who knowingly misrepresents material information for the purpose of inducing a client to lapse, forfeit, change or surrender a life insurance policy or annuity has committed an illegal practice known as Twisting
Underwriting is the process of Determining the company’s risk regarding a proposed insured
An arrangement where the employer and employee agree to purchase and fund life insurance on an employee is known as a Split dollar Plans
What is true about a joint and survivor life annuity Benefits will stop when the last annuitant dies
A contract agreement for life insurance is composed of a Offer and acceptance
Term limit on liability refers to the Death Benefit of a life insurance policy
A policy that combines whole life on the breadwinner and term on the spouse and children is called a Family policy (family protection) combines whole life with term insurance. To cover family members in a single policy, providing coverage on every member of a family
Which nonforfeiture values maintains the original face value of the contract but sacrifices the length of the contract Extended term
What method of handling risk is self-insurance Retention : self insurance when the insured accepts the responsibility for the loss before the insurance co pays
Created by: Sandradiazbohr