Webce Life and Health, Questions and answers. 100% verified. Graded A

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Webce Life and Health, Questions and answers. 100% verified. Graded A Representations and Warranties - ✔✔Representations are statements the applicant makes on an application that are deemed t... o be true to the applicant's best knowledge. Warranties are statements the insurer makes in the contract. Underwriting vs. Actuarial Departments - ✔✔Two related insurance company functions. Through the process of _________, applications are assessed for insurability and to assign premium rates. The ________ department analyzes data to help estimate future losses and to produce rate tables. Managerial System vs. General Agency System - ✔✔Two variations of the career agency system in which producers represent a single company. One is headed by a company employee called a general manager (GM), the other by an independent contractor called a general agent (GA). Fraternal Insurance Company - ✔✔A non-profit form of insurance provider sponsored by an organization of people who share a common ethnic, religious, or vocational affiliation. Peril and Hazard - ✔✔Two related general insurance terms: Peril is the immediate cause of a loss (and the event that is insured against). Hazard is any condition that increases the risk of incurring a loss. Contract of adhesion - ✔✔A type of contract in which one party (the offeror) drafts the terms that must be accepted as-is by the offeree. Insurance policies are this type. Mutual Insurance Company - ✔✔A form of insurance company that is owned by policyowners. May distribute policy dividends (non-taxable) through participating policies. Independent Agency System - ✔✔An insurance distribution system in which the manager and producers are fully independent and not affiliated with any single insurer. Buyer's Guide and Policy Summary - ✔✔Two related disclosure documents that are required by most states to be presented to life and health insurance applicants at some point during the buying process. Risk - ✔✔A basic insurance term referring to the possibility of incurring a loss. Law of Large Numbers - ✔✔A mathematical principle that is the basis for predicting the odds of a loss occurring in a certain population in any given year. Social Security (OASDI) - ✔✔A federal insurance program that provides disability, death, and retirement benefits to covered workers and their qualifying beneficiaries. Agents vs. Brokers - ✔✔Two basic types of insurance producer: an ______ represents a single insurer and a _____ sells policies from multiple insurers. Reinsurance - ✔✔The process through which insurance companies spread large risks among other insurers. Domestic, Foreign, and Alien Insurers - ✔✔Insurers can be categorized by their state of domicile. There are three categories, known as _____, _____, and _____. Stock Insurance Company - ✔✔A form of insurance company that is owned by stockholders who may or may not also be policyowners. May distribute stock dividends (taxable). Admitted Insurer - ✔✔An insurer that has a certificate of authority in a given state is said to be an___________ insurer in that state. Express, Implied, and Apparent Authority - ✔✔Express authority—The right to sign an application as an agent for the insurer. Implied authority—Using a computer program to identify insurance needs and to recommend solutions. Apparent authority—Advising the applicant to not disclose on the application any important health facts that might reduce his or her insurability. Indemnity vs. Valued Contract - ✔✔Two forms of insurance contract. An indemnity contract bases policy benefits on reimbursement of actual losses. A valued contract bases benefits on a stated amount without regard for the value of the loss. Loss - ✔✔An unplanned reduction in economic value resulting from the occurrence of a covered peril. Medicare - ✔✔A federal insurance program that provides medical care benefits to covered workers (retirees). Underwriting - ✔✔The process by which an insurance company assesses an application to determine if it represents an insurable risk. Risk Management - ✔✔The natural process by which people contend with the perils faced daily, of which there are five common techniques. The five basic elements of a valid contract - ✔✔Offer, acceptance, consideration, competent parties, and legal purpose Concealment - ✔✔The willful nondisclosure of material facts on an application for the purpose of obtaining insurance. Insurable Risk (5 Criteria) - ✔✔Loss must be definable and measurable. The covered peril must be accidental or outside the insured's control. The risk must be shared by a large group of similar risks. The loss must not be catastrophic. The risk must not be generally excluded from coverage. Needs Approach - ✔✔The needs approach to determining life insurance needs is based on a detailed review of a person's specific situation. It examines personal and family income, liabilities, and assets, as well as future financial goals, to calculate the right amount of life insurance. Bring-Back Rule - ✔✔In estate planning, this rule requires life insurance policies transferred from the insured within 3 years before death to be returned to the decedent's estate for valuation purposes. Life Insurance "Living Benefits" - ✔✔Living benefits are made possible by the policy's cash value, which is always available to the policyowner through policy loans, withdrawals, and partial surrenders. The funds may be used for any purpose. Key Person Life Insurance - ✔✔If a key employee ends his or her employment, the employer can continue the policy in force. However, many employers choose to: sell the policy to the insured for an amount equal to its cash value surrender the policy or change insureds if allowed by the insurance company and applicable state law Annuity - ✔✔An insurance contract between a person and an insurer to distribute an accumulated sum of money over a certain period, including the person's lifetime. Annuities come in many forms, but they all have two common purposes: to accumulate money on a tax-deferred basis to distribute the accumulated money as income in a guaranteed amount for a guaranteed period (including the annuitant's life) Decreasing Term Life Insurance - ✔✔This form of term life features a death benefit that diminishes over time and premium that remains level for the term of the policy. Fully Insured Status (Social Security) - ✔✔To be considered fully insured, a worker must have 40 quarters of coverage. A fully insured worker is eligible for disability, retirement, and death benefits. Cross-Purchase Buy-Sell Agreement - ✔✔A type of buy-sell agreement in which each owner purchases a life insurance policy on each of the other owners. ERISA - ✔✔The Employee Retirement Income Security Act of 1974 (ERISA) protects the rights of employees covered under an employer-sponsored plan by stipulating minimum participation, vesting, and funding requirements. Irrevocable Beneficiary - ✔✔This beneficiary designation cannot be changed by the policyowner without that beneficiary's permission. Guaranteed Insurability Rider - ✔✔This life policy rider guarantees that additional coverage can be added to a whole life policy even if the insured has become uninsurable. Annuity Beneficiary - ✔✔The person the annuity owner chooses to receive the annuity contract's values if either the owner or the annuitant dies before annuitization. Whole Life Insurance - ✔✔Whole life insurance features a guaranteed cash value, a fixed guaranteed death benefit, level premiums, and coverage that can remain in effect as long as the insured lives (up to age 120). Its most basic form is called straight (or ordinary) whole life insurance. Buy-Sell Agreement - ✔✔A legal agreement through which two or more owners of a business arrange for the disposition of each owner's share of the business upon death. Expense Charge (Load Factor) - ✔✔The load factor reflects the costs the insurer expects to incur on the policy. In determining its load factor, an insurer is generally guided by three objectives: to cover total operating costs to provide a safety margin to contribute to profits or surplus Term Life Insurance - ✔✔This basic form of life insurance provides temporary protection and does not include a cash value while the insured is alive. Insurable Interest - ✔✔The financial interest a policyowner has in a person or property being insured, justifying the purchase of insurance. Annuitization - ✔✔The process through which a sum of money is converted into periodic payments through an annuity contract. Different for every age and annuity income option, annuity purchase rates are defined in terms of income dollars per $1,000 of accumulation. Variable Annuity - ✔✔An investment-focused annuity whose contract values vary in response to the contract's underlying assets and are therefore not guaranteed. Accelerated Benefit Rider - ✔✔Also available through a policy provision, the typical accelerated benefit rider allows up to 50 percent of the death benefit to be available to the eligible insured, though some policies allow up to 100 percent. This money may be used for any purpose. Third-Party Policy Ownership - ✔✔A policy ownership situation in which the life insurance policyowner and insured are two different people. In third-party ownership, the three parties to the contract are: the insurer, the owner, and the insured Premium Receipt - ✔✔Given to the applicant in return for the initial premium, this item provides interim coverage during underwriting. There are two basic types. The conditional receipt provides interim coverage only as long as the applicant is found to be insurable. The binding receipt (also called temporary insurance agreement) provides coverage regardless of insurability. Policy Dividend Options - ✔✔The five different ways in which a participating whole life policyowner may elect to receive policy dividends. Policy dividends are not guaranteed, but when they are paid, there are five common ways the policyowner may elect to receive them: take the cash reduce the premium accumulate at interest buy paid-up life insurance buy one-year term insurance Right to Examine ("Free Look") Provision - ✔✔his contract provision gives new policyowners a certain time within which to decide whether to keep the policy or to return it for a full refund. The free-look period begins when the policy is delivered to the owner. While 10 days is the shortest free-look period permitted in any state, some states require a longer free-look period in certain situations. Viatical Settlement - ✔✔An arrangement in which a noninsurance company or group of investors purchases a life insurance policy from a chronically or terminally ill insured. Viatical settlements provide chronically or terminally ill insureds a sum of money greater than their policy's cash value, making it more financially advantageous than simply surrendering the policy. How much is actually paid depends on factors that include the estimated life expectancy. Individual Retirement Account (IRA) - ✔✔The basic form of individual retirement plan available to individuals. These plans are also available to employees within certain types of small-employer retirement plans. Fair Credit Reporting Act (FCRA) - ✔✔This federal law sets forth procedures that credit reporting companies must follow to ensure confidentiality, accuracy of reporting, and proper use of credit information. The FCRA requires insurers that seek a credit rep [Show More]

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