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44 Cards in this Set
- Front
- Back
- 3rd side (hint)
A worker can receive Social Security Retirement Benefits
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at any age after 62.
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Disability Income Benefits are considered taxable income to the disabled person when
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The recipient’s employer paid the premiums.
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Representation
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The unintentional concealment of a non-material fact on an application
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What are the three types of authority that an agent has under the concept of agency law?
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Express authority, implied authority, and apparent authority.
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How can a person, with a recurring ailment, purchase health insurance at standard rates?
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Coverage can be issued with a rider excluding a specified condition
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What does life insurance guaranty ?
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A specified sum of money on the death of the insured.
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What is the purpose of life insurance ?
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To provide financial protection against loss, to create an estate ( money machine)
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What does an annuity provide ?
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A stream of income
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Name the two periods of time an annuity could be for ?
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For life or for a specified time ( very rare)
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What is the concept called, that predicts the approximate number of deaths that should occur in a certain group of people in a given period of time ?
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Law of Large Numbers
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List the two types of risks ?
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Pure and Speculative
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What is the difference between the two types of risk ?
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Speculative has the chance of both loss or gain ( Race Track- Investing) Pure risk has only the chance of loss ( Life and Health insurance)
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Which kind of risk is insurable ?
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Pure
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What is a Peril ?
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An event that causes a loss
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What causes a Peril ?
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A hazard
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Give example of a Hazard Peril Risk
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Hazard - lightning
Peril - fire Risk loss of life or building |
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Give an example of a Hazard Peril Risk
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Slippery road causes a out of control car which has an accident to person and or property
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Hazard peril risk
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Hazard - slippery road
Peril - car out of control Risk - Property damage or bodily injury |
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hazards Physical
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Physical : blind, family traits
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Hazards Moral
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Moral stealing, smoking, (drinking, drugs, dishonesty) acceptance of illegal behavior addiction
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What kind of hazard is it when an employee takes merchandise without paying for it ?
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Moral
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What kind of hazard is it when you are late for an appointment ? Reckless driving ?
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Morale
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List and describe the 4 ways to cope with risk ?
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Avoidance - don't fly
Reduction - smoke alarm Retention - self insured Transference - buys insurance |
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Name two types of life insurance companies
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Stock company
Mutual company |
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Who is ineligible for Life, Health, and Variable Annuity appointments in Florida ?
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Veteran's Administration employees and Funeral Directors
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Adverse selection
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People in bad health keep their policies enforce longer than people in good health
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What kind of insurance companies write more than one line of insurance ?
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Multiline
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Stock Company
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Stockholders own the company and elect the board of directors, non-par, and no dividends
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Mutual Company
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Policyholders own the company and elect the board of directors, must issue par policies ( dividends )
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In a Mutual Company what is a dividend
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Refund of overpayment - Extra expense
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What is a company called that helps an insurance company transfer a portion of its risk?
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Reinsurers
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What kind of insurance company is non-profit and has a lodge system ?
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Fraternal Benefit Society
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What is another name for Home Service Insurers?
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Debit Insurer / Industrial Insurer
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What is the insurance called that is sold by a Home Service Insurer ?
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Industrial
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What are the restrictions on Universal Life receiving favorable tax treatment ?
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Death benefits must be greater than cash by a government %
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A (corridor) is required if cash approaches the death benefit so policy does not become a MEC.
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How does Universal Life Insurance work?
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Preminum accumulates depending on how much of the insurer's premiums is credited to the cash after expenses and the amount needed monthly to fund the insurance face value of the policy ( ART )
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The cash accumulates currently tax free.
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What is the character of Universal life insurance ?
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Flexible premium and adjustable benefits, cash debited with expenses, credited with interest ( guaranteed and current)
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ART insurance, loans and / or partial withdraws, interest sensitive.
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Why was variable life insurance developed ?
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To keep up with inflation
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What is the difference between variable whole life insurance and whole life insurance ?
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In VL, cash is in separate accounts, invested in stock, need dual license
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Whole life the cash grows according to a table.
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Who regulates retirement plans ?
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ERISA - it overrides any state laws
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ERSA - Employee Retirement Income Security act
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What does vesting in a pension plan mean ?
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Vesting refers to the employee's right to benefits or contributions accrued normally goes from 0% to 100% on a time schedule ERISA
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What is the fifth dividend ?
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Allows insured to buy one-year term insurance equal to the cash value.
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What is the original purpose of the fifth dividend ?
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To fill the gap in policy owner's coverage caused by borrowing money from his policy.
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How mush one-year term can be purchased under the fifth dividend ?
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It can equal the current cash value of the policy
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