A Modified Endowment Contract (MEC) is best described as A life insurance contract which accumulates cash values higher than the IRS will allow An annuity contract which was converted from a life insurance contract A modified life contract which enjoys all the tax advantages of whole life insurance A life insurance contract where all withdrawals The terms of the policy typically outline these conditions, which may include paying premiums on time and maintaining the insured property in good condition. An insurance applicant with a below-average likelihood of loss is typically considered to be a. B) Consideration However, corporations also can raise money by selling bonds or issuing additional shares of stock. Conditional, Under a contract of adhesion, What is created after policy proceeds are obtained in a lump sum and then immediately invested? B) Unequal consideration d. a deductible stated in the policy's provision. Only the insured can change the provisions express, ______ is NOT an element of a valid contract. Whole life policy that pays out its cash value over a 20 year period Whole life policy with premiums paid up after 20 years Term life policy that returns cash value after 20 years Term life policy with premiums paid up after 20 years, Which type of multiple protection policy pays on the death of the last person? A) estoppel Reduction of premium dividend option Extended term option Paid-up option Cash dividend option, Net death benefit will be reduced if the loan is not repaid, Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. (C) Both parties exchange goods of equal value. which of the following best describes a conditional insurance contract Authority given in writing to an agent in the agency agreement Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties Authority given to handle claims and process payments Authority given to an agent to act outside the scope of the agency agreement, The authority granted to a licensed producer is provided via the producer's apparent authority written contract Law of Agency Principal Capacity, Insurable interest does NOT occur in which of the following relationships? Under the McCarran-Ferguson Act, what is the minimum penalty for this? In the case of an insurance contract, the contracting parties are the claimant and the insurer. The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? b) a contract is an agreement enforceable at law. All of the following are examples of pure risk EXCEPT. Eventually, they retire and dissolve the business. express authority For a trip to the hospital, Evan Appleton paid $1,656 in hospital charges, a$750 insurance deductible, and a $457 co-payment. Which of the following BEST describes a conditional insurance contract? Answer Explanation: A contract that requires certain conditions or acts by the insured individual. Net death benefit will be reduced if the loan is not repaid No interest will be charged on loan balance Term life policies are the only type of insurance that allows policy loans A loan can be taken out for up to the face amount of the policy, Ownership of a life insurance policy may be temporarily transferred with a(n) collateral assignment absolute assignment transferable assignment beneficiary assignment, provide evidence of insurability to the insurer, In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST remit all past-due premiums within the grace period provide evidence of insurability to the insurer resubmit a new life insurance application provide a valid reason for the lapse, Which of the following is considered to be an alternative to a life settlement? A provision that allows a policyowner to withdraw a policys cash value interest free is a(n), The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT, All of these are valid options for an Adjustable Life Policy EXCEPT, The policys premium can be increased or decreased, An insurers claim settlement practices are regulated by the. D) legal reserve, In an insurance contract, the element that shows each party is giving something of value is called __________. be in writing guarantee Policy Application Riders Certificate of Authority, A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n) guaranteed term rider guaranteed insurability rider accelerated benefit rider cost of living rider, The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid minus indebtedness and with interest during the last 12 months minus indebtedness and without interest during the last 6 months, A life insurance policyowner does NOT have the right to change a beneficiary select a beneficiary take out a policy loan revoke an absolute assignment, A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT fare-paying passenger pilot of personal airplane suicide war, The insurer's obligation to pay a death benefit upon an approved death claim, Under a life insurance policy, what does the insuring clause state? The insured does not meet established underwriting requirements, The type of multiple protection coverage that pays on the death of the last person is called a(n). If she dies 15 years after the policy's inception date, how much will her beneficiary receive? $0 $5,000 $10,000 $15,000, Determine financial strength of an insurance company, What is the primary purpose of a rating service company such as A.M Best? Which of the following statements about aleatory contracts is NOT true? What Benefit Does The Payor Clause On A Juvenile Life Policy Provide? B) premium only C) the terms must be accepted or rejected in full A) voidable The period of coverage The face amount The premium payments The cash value, at a predetermined date or age, regardless of the insured's health, A Renewable Term Life insurance policy can be renewed at a predetermined date or age, regardless of the insured's health only if the insured provides evidence of insurability anytime at the policyowner's request typically with no change in premium, Pre-death distributions will become taxable, Under a Modified Endowment Contract, what are the likely tax consequences? C) Materiality of concealment D) A contract where only one party makes any kind of enforceable contract, Answer:A) A contract that requires certain conditions or acts by the insured individual. Which of the following does a producer NOT have a fiduciary responsibility to? If the insured dies at any time during the 5 years, his beneficiary will receive the policy's face value. The policies continue in force with no change. Only the insured pays the premium A policy containing exclusions or limits that are not clearly disclosed to the policyholder, or a premium that is significantly higher than the risk covered, could be considered unfair or one-sided. If xxx actually turns out to be 131313, what do you think of the claim? D) the authority to add provisions to a contract, C) the authority to represent the insurer, Which of the following contracts is defined as "one that restores an injured party to the condition that was present before the loss"? Which of the following best describe the term definition claim forms Premiums paid plus interest earned is returned to the beneficiary. Post thoughts, events, experiences, and milestones, as you travel along the path that is uniquely yours. Sharon is the policyowner of a $500,000 life insurance policy. b. benefits paid under workers compensation. Sister and brother Consideration Which of the following is NOT considered rebating? c) a contract must be in writing. Which Of The Following Statements About Personal Selling Is Correct? 30 seconds. Both partners are still married at the time of Bob's death. The death benefit would be $250,000 $750,000 $375,000 $500,000, What does the word "level" in Level Term describe? Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed on Ken? Of the following dividend options, which of these is taxable? Express Apparent Implied Conditional, The type of multiple protection coverage that pays on the death of the last person is called a(n) joint life policy survivorship life policy annuity joint policy dual life policy, A nonforfeiture option can be used to increase the death benefit, All of these are valid options for an Adjustable Life Policy EXCEPT The policy's premium can be increased or decreased The policy's death benefit can be increased or decreased A nonforfeiture option can be used to increase the death benefit The policy's protection period can be modified, A life insurance contract which accumulates cash values higher than the IRS will allow, A Modified Endowment Contract (MEC) is best described as A life insurance contract which accumulates cash values higher than the IRS will allow An annuity contract which was converted from a life insurance contract A modified life contract which enjoys all the tax advantages of whole life insurance A life insurance contract where all withdrawals prior to age 65 are subject to a 10% penalty, An interest-sensitive life insurance policyowner may be able to withdraw the policy's cash value interest free. A symbol is a mark, sign or word that indicates, signifies, or is understood as representing an idea, object, or relationship, best describes a symbol. C) Legal purpose Preferred risk policies with reduced premiums are issued by insurance companies because the insured has, Better than average mortality or morbidity experience. Provide funds to help fund retirement Provide funds to help pay taxes Provide funds for funeral expenses Provide tax deductions for premium payments, lower than the typical whole life policy during the first few years and then higher than typical for the remainder, The premium for a Modified whole life policy is higher than the typical whole life policy during the first few years and then lower than typical for the remainder lower than the typical whole life policy during the first few years and then higher than typical for the remainder normally graded over a period of 20 years level for the first 5 years then decreases for the remainder of the policy, The type of policy which pays on the death of the last person is called joint life survivorship life dual life shared life, A life insurance policy that is subject to a contract interest rate is referred to as adjustable life group life term life universal life, a policy that is paid up after only one payment, A single premium cash value policy can be described as a policy that is paid up after only one payment a policy that only requires an annual payment a policy that is guaranteed issue a policy that covers two or more lives, A limited payment whole life policy provides protection for 20 years lifetime protection protection for more than one person discounted premiums, A policyowner may change two policy features on what type of life insurance? A marathon is 42.2 kilometers. Which Of The Following Best Describes A Conditional Insurance Contract Incontestable period Probation period Reinstatement period Grace period, The benefit can be offered as a rider at a specific extra cost or may be at no cost, Which of these is NOT a characteristic of the Accelerated Death Benefit option? According to the Affordable Care Act (ACA), insurers can no longer deny health coverage due to pre-existing conditions unless that plan is a (n) Grandfathered plan Accident plan Individual plan Group plan Grandfathered plan discreet apparent implied express, Bob and Tom start a business. Which of the following BEST describes a conditional insurance contract? Provide death benefits Provide money for retirement Provide living benefits Provide money for college, The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT charities political organizations insurance sales calls surveys, protect consumers with guidelines regarding credit reporting and distribution, The Fair Credit and Reporting Act's main purpose is to assist in the underwriting of insurance policies protect insurers from an applicant's misrepresentation protect consumers with guidelines regarding credit reporting and distribution assist an insurer in determining an applicant's creditworthiness, What kind of life insurance policy issued by a mutual insurer provides a return of divisible surplus? Are you looking for the correct answer to the question Which of the following BEST describes a conditional insurance contract?? A) One party is restored to the same financial position the party was in before the loss occurred B) The unequal exchange of value or consideration for both parties C) One party (the insurance company) prepares the contract with no negotiation between the applicant and insurer D) Only one party (the insurer) makes any kind of enforceable promise