all of the following are true of insurance except

All of the following statements concerning coinsurance are true, EXCEPT . C. Whole life Represent the insured's interest (c) human life value method c) Premium accountability. 3,000, AccountsreceivableJul121,000???? Insurance transfers risk but it does not__________ risk. Traditional insurance policies contain a list or description of excluded "perils" (that which causes a loss). (d) free look provision. and what two kinds? a) Payor rider. $ cant exceed indebtness. A contract that allows an insured to be restored to the same financial condition as prior to the loss is considered to be what type of contract? Insurance is designed to provide protection against which of the following? B) After a claim has been adjusted and is found to be covered under the policy, the insurer must pay the claim upon receipt of a signed proof of loss. D. Effect of inflation on income over time. Policyholders The gross premium charged must reflect, at least for competitive reasons, the actual cost of providing the insurance. -policy holder adheres to it &&\\ Study with Quizlet and memorize flashcards containing terms like All of the following are personal uses of life insurance EXCEPT A. 2)Decreasing term(premium is low) declining face value The __________ branch of the state government influences public policy regarding insurance laws. D) adding cost of living coverage. An inexperienced assistant accountant has prepared the following income statement for the month of October 2017. 1) coverage is permanent D) Using misrepresentation to convince a person to cancel an existing policy and buy a new one is called "twisting.". Which of the following is an example of liquidity in a life insurance contract? b) Cost of living rider. This is called. The interest rate credited to the cash value at the time of issuance remains fixed over the life of the policy. A linear programming model developed to maximize profit is used to determine how many reservations to accept for each rental class. D. Speculative Risk C. Premiums are tax deductible by the key employee b) The policy will not be affected. \end{array} Round Tree has 100 Type I rooms and 120 Type II rooms. C. Countersign insurance contracts D) Claims result from losses by a peril insured against in an insurance policy. (c) Interest credited to a policy's cash value is taxable to the policyowner in the year credited. Correct: A. a surplus lines broker places risks with nonadmitted insurers when coverage cannot be placed with admitted insurer carriers. The policy's cash value grows as the investments grow. Round Trees management makes a forecast of the demand by rental class for each night in the future. . b) Unilateral (D The employer is the owner, payor and beneficiary of the policy. The cash value available to the policyowner Which of the following about yearly renewable term insurance is true? Insurance is not designed to cover _____________ losses. The insurance provides protection for a specified period of time. The following are all causes for the Insurance Commissioner to suspend or impose conditions upon the continuance of a producer's license EXCEPT 1. C. Risk Correct: A. -cash value can lose value. Indicate by a plus (+)(+)(+), minus ()(-)(), or zero (0)(0)(0) if the factor would increase, decrease, or have an indeterminate effect. There is no limitation on the number of key employee plans in force at any one time B. CashJul1Jul315,500???? 3)mortality charge. Only one party is giving a legally enforceable promise- A one-sided contract is what? a) Juvenile Life Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value? D. The benefit is received tax free. C. Medical Background A) The amount of insurance of the life of any debtor may at no time exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor. Pro rata liability applies. Its controller resigned in October 2017. All of the following are methods of payment? C) common stock 4. (b) current assumption whole life. Premiums are taxable to the employee B. A company doing business in a different state than it is incorporated in and the stockholders/share holders have ownership rights 2)not payable in conjunction. (d) The policyowner can add to a policy's cash value at any time subject to policy guidelines. An insurer that is incorporated in the same state that they are doing business in is a_____________.? d) Blackout approach. -tax free accumulation of borrowing. b) Distributions before age 59 1/2 incur a 10% penalty on policy gains. An Insurance broker is responsible for what? c. continuous premium whole life b) Adjustable life The shifting of risk of loss to a larger homogeneous group is known as what? A) A policy summary must be delivered along with the policy and will provide the producer's name and address, the insurance company's home office address, the generic name of the policy issued, and premium, cash value, surrender value and death benefit figures for specific policy years. All of the following are true for indemnity insurance except that: a. premiums are based on separate risk pools often organized by employers. B) Once the cash surrender value option is selected, the coverage is terminated and the policy cannot be reinstated. C. Medical Background Which $50,000 life insurance contract if purchased when the insured was 32, would have the highest cash value when the insured is 50? &\begin{array}{l|lr} What is used for the underwriting department to determine insurability? The Terrorism Risk Insurance Program is administered by which of the following Federal entities? Get more out of your subscription* Access to over 100 million course-specific study resources \hline \text { Jul 31 } & 25,500 D) When immediate annuities are used to pay IRA benefits, distributions must begin no later than age 70 in order for the annuitant to avoid penalties. Statements in the application that are guaranteed true but later found to be false may result in what? C. Independent rating services evaluate and rate the financial ability of insurance companies B. Annually renewable term policies provide a level death benefit for a premium that Tax-qualified annuities are subject to IRA maximum contribution limits. c) Needs approach Cash value is the same as ___________ when the policy matures. Retention, Avoidance, and Transfer are all _________________. a) Offering additional coverage to clients \end{array} B. They keep a high percentage of any interest earned on their policies baseball, fishing | 2K views, 10 likes, 0 loves, 0 comments, 2 shares, Facebook Watch Videos from 800 Pound Gorilla Media: Robert talks about fishing in NYC, baseball, and growing up with protective. D) They must be signed by both the Producer and the applicant. Which method makes the most sense for her to employ? &\text { Inventory }\\ B) A "cost of living" rider adjusts the face amount of a policy to maintain the relationship of the face amount and increases in the cost of living. What is a statement in the application guaranteed true in all respects? D. Agents report. c) A person who handles assets or money belonging to others. A Contract that binds only one party to future performance, is a (n): A. -Voting. B. Beneficiarys age (receive dividends & the right to vote). Now Tamara can afford whole life insurance. c) Coverage ends but the policy can be reinstated at any time. 17,000, InventoryJul122,000???? Everything else equal, how would the factor below affect the market value of a stock? It is legal to list nonguaranteed values in the contract, but they must be specifically labeled as projected, not guaranteed values. Is claim still paid if there is a misstatement of age or sex? An individual applies for a life policy. C. Unilateral contract A. 3) policy builds cash-value Term life insurance provides the largest amount of coverage for the lowest amount of premium. A policy summary 2)Family Income(decreasing term-policy) In this case, the applicant will most likely need to fill out a Statement of Good Health. Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE? She meets the definition of total disability under Social Security. D. Alien B. A) An indeterminate premium reduction policy is a policy in which the premium is guaranteed for an initial period, then the insurer can charge up to a maximum premium charge that is specified in the policy. C. Waiver Correct: C. Consideration. The policy does not go into effect until the premium has been collected. All of the following are true of insurance except: a) protects against uncertainty b)means sharing of loss c)eliminates risk d)transfers risk Answer: Eliminates risk Question: Which of the following is NOT true about insurance? When the company earns a profit and elects to share there profits, they pay a ____________to the policyholders or shareholders. D. The policy is a bilateral contract However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. Correct: C. Unilateral contract. He would also like to invest in a mutual fund. Which of the following is the best reason to purchase life insurance rather than annuities? a) Lump-sum approach & \text { Depr } & 3,000 \\ c. It is the failure to use ordinary care. C) An insurance contract must contain a copy of the original application. -If the insured dies, the policy payed out the PRINCIPAL SUM C) Because an insurance company's strength and stability are two very crucial factors in its sustainability, independent rating services have formed to publish regular updates on the financial integrity of different insurance companies. A _______ __ is the additional premium needed to get covered with high or substandard risk. 2)Legal Purpose 3)Rider expires 60,65,75. D. Aleatory contract -pays an additional death benefit if the insured dies from an accident 1) Conditional Reciept (d) indeterminate-premium whole life. (b) reduced. Non-Participating (stock) Life Insurance Policy. What are the temporary needs? A debtor has insurable interest in the life of a lender ADD( Accidental death and dismemberment??? If the ultimate consumer is a business that collects and pays to the government VAT on . M327. Economics questions and answers. Which of the following would provide an underwriter with information concerning an applicant's health history? c) Increases annually. 3)Consideration What kind of penalty would the IRA owner pay? 1)absolute assignment-all rights are assigned -and the right to vote. The 7 paytest is used to determine if a policy is a _______? *Both not taxable. A) They must be given to all Life insurance applicants. a) The policyholders or stockowners of the company -Not a true insurance company may not be altered by an agent and must clearly state that it is not part of the contract. All renewable term policies are accepted without__________ and only with_____ collected. With a little work, an unused office area could be converted to a rental room. Hammond Corporation manufactures televisions. What is the MIB? Address of his principal office A contract between insurer and policy holder. Contract of adhesion Health insurance decreases your healthcare costs. Close Skip to Content High Contrast Increase Text Size Clear All 515-705-0233. Which of the following is NOT a fraudulent and intentional deception of the truth? 10 year level term A lender has an insurable interest in the life of a debtor, but only to the extent of the debt. c) The policy will be voided. 2)Foreign Insurer compulsion? considers Lloyds of London an Alien insurer The person who receives the benefit when insured dies. Executive office A company formed in a different country doing business in any state of American who owners are stockholders that receive dividends and have voting rights. What are two reasons that people deposit money in banks? 1. Reinsurer Assuming company. 5)an agreement is set, 1)Level term(cheapest insurance) face value stays the same When an applicant pays the initial premium the agent will give them a what? Copyright 2009-2022 Tests.com LLC - All Rights Reserved. A. a) To limit the insurer's liability after the 2 year waiting period Age, Sex, Occupation, Hobbies, Habits, Smoking or Non-Drug user or Non. Group life insurance is most often issued as guaranteed annual renewable term. Claim is still paid with an adjustment to the benefits. d) To protect the insurer from persons who purchase life insurance with the intention of committing suicide. Agent Sam is using the human life value approach to assess Mary's life insurance needs. DepreciationExpense-FactoryEquipmentDepreciationExpense-BuildingHeat,Light,andPowerExpenseInsuranceExpense-Factory$5,770.242,822.409,055.201,505.28MiscellaneousExpense-FactoryPayrollTaxesExpense-FactoryPropertyTaxExpense-FactorySuppliesExpense-Factory$13,780.4843,736.006,088.3218,063.36. The policy is a contract of adhesion 3) Increasing Term. All of the following statements are true of liability insurance, EXCEPT: Answer: liability coverage indemnifies the insured. Only the MIB will provide information about an applicant's medical history. EMPIRECOMPANYIncomeStatementFortheMonthEndedOctober31,2017, Salesrevenue$780,000Less:OperatingexpensesRawmaterialspurchases$264,000Directlaborcost190,000Advertisingexpense90,000Sellingandadministrativesalaries75,000Rentonfactoryfacilities60,000Depreciationonsalesequipment45,000Depreciationonfactoryequipment31,000Indirectlaborcost28,000Utilitiesexpense12,000Insuranceexpense8,000803,000Netloss$(23,000)\begin{array}{lcc} -low commissions Explain your answer. What are some of the questions asked on the application to determine the premium and risk classification of the insured? A color-coded map illustrating the current legal status of elective-specific abortion procedures in each of the individual 50 states of the United States of America; plus U.S. territories and federal district [a] As of January 31, 2023 Illegal Legally unclear or legal but no providers Legal before cardiac-cell activity [b] Legal through 15th week LMP (1st trimester) Legal through 18th week LMP . good health D. Breach of warranty -The insurance dept. What are the permanent working capital needs of your company? Endowments means policy is what(2) things? Any gain in the policy's cash value is . Limited-Pay Life & Single-Premium Policies? &\begin{array}{r|lr} the application is used at the primary source of info. 4)Consumer report=credit, -shorter time span for paying premiums Correct: Misrepresentation, False statement contained in the application, An intentional deception of the truth in order to induce another to part with something of value or to surrender a legal right. ~~~\text{Depreciation on sales equipment}&45,000\\ Who would be eligible to obtain SGLI? C. Loss of personal income When both parties to a contract must perform certain duties in order to make the contract enforceable, this is known as what? D. group credit insurance must have a suicide clause . What is the difference between renewable policy holder & Insurer? 1)Domestic Insurer If the insured commits suicide after the 2 year period, the policy will pay the death proceeds to the designated beneficiary the same as if the insured had died of natural causes. The company records manufacturing costs by job number and uses a factory overhead applied rate to charge overhead costs to its products. B) Money collected with respect to an insurance transaction must be held in a position of trust by the producer.

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