STATE FARM ESTIMATICS EXAM ACTUAL EXAM 150
QUESTIONS AND CORRECT ANSWERS (100% VERIFIED
ANSWERS) |AGRADE
Absolute Assignment - ANSWER: Policy assignment when assignee receives full
control over the policy and full rights to its benefits.
Accelerated benefits rider - ANSWER: Life insurance rider that allow for early
payment of some portion of policy's face amount, should the insured suffer from
terminal illness/injury.
adhesion - ANSWER: Contract must be accepted by the insured exactly as it is written
by the insurer. Terms of contract cannot be negotiated. Contract is offered on a take
it or leave it basis.
admitted insurer - ANSWER: An insurance company that has been approved to
operate within a given jurisdiction.
accidental death benefit rider - ANSWER: Life insurance policy rider providing for
payment of an additional benefit when death occurs by accidental means.
adjustable life - ANSWER: Policy allows the policymaker to adjust the policy's face
amount, premium, and type of protection without having to complete a new
application or any additional underwriting.
agents (producer) report - ANSWER: Section of an insurance application where the
agent, details personal observations about the applicant.
annually renewable term (ART) - ANSWER: A form of renewable term insurance that
provides coverage for one year and allows policyowner to renew coverage each year,
without evidence of insurability.
apparent authority - ANSWER: The insured believes the agent has authority to act
based on actions, words or deeds of the agent. Even though the agent may not have
been granted such authority by the insurer, they will be held liable for the actions of
the agent.
automatic premium loan provision - ANSWER: Authorizes the insurer to
automatically pay any premium in default at the end of the grace period. The
premium owed plus interest charged is deducted from the policy's cash value.
beneficiary - ANSWER: Person to whom the proceeds of a life or accident policy are
payable when the insured dies.
,annuitant - ANSWER: One to whom an annuity is payable, or a person upon the
continuance of whose life further payment depends.
attained age - ANSWER: With reference to an insured, the current insurance age.
aviation exclusion - ANSWER: The insurer will not pay a claim if the insured dies as a
result of flying an aircraft or acting as a member of a flight crew. In most cases, the
insurer will offer the applicant the opportunity to purchase a rider offsetting the
exclusion.
buyers guide - ANSWER: A generic publication that explains life insurance in a way
that an average consumer can understand. It does not contain specific product or
policy information
Buy-sell agreement - ANSWER: Agreement that a deceased businessowner's interest
will be sold and purchased at a predetermined price or at a price according to a
predetermined formula.
Churning - ANSWER: Replacing one life contract with another within the same
company without demonstrating a benefit to the client.
common disaster provision - ANSWER: This policy provision provides an alternative
beneficiary in the event that the insured and the original beneficiary die as the result
of a common accident.
Consideration - ANSWER: Element of a legal contract consisting of premium payment
and statements made by the prospective insured in the application.
Cash Value - ANSWER: The equity amount or savings accumulation in a permanent
life policy.
Collateral assignment - ANSWER: Assignment of a policy to a creditor as a security
for a debt. At the insured death, the creditor is entitled to be reimbursed out of
policy proceeds for the amount owed and any excess will go to the beneficiary.
Conditional receipt - ANSWER: Given to the policyowners when they pay a premium
at time of application. in this case, the applicant is covered the later of the date of
the application or proof of insurability, even though the policy may not have been
issued.
Consideration, legal purpose, offer, acceptance. and competent parties. - ANSWER:
The five parts of a legal contract.
Contingent beneficiary - ANSWER: Persons named to receive proceeds in case the
original beneficiary is not alive.
, cost-of-living (col) rider - ANSWER: A rider available with some policies that provides
for an automatic increase in benefits ( typically tied to the consumer price index.)
offsetting the effects of inflation. This will result in an automatic increase in
premium.
defined benefit plan - ANSWER: A pension plan under which benefits are determined
by a percentage of the recipients salary.
discrimination - ANSWER: In insurance, the act of treating certain groups of people
unfairly in the sale and pricing of policies. This does not apply to age, sex,
occupation, and medical history.
conversion privilege (convertibility) - ANSWER: Allows the policyowner, before an
original insurance policy expires, to elect to have a new permanent policy issued that
will continue the insurance coverage without evidence of insurability.
credit life insurance - ANSWER: Decreasing term insurance covering the unpaid
balance of a mortgage or installment loan. If the borrower dies, benefits pay balance
due. May be individual or group policy.
defined contribution plan - ANSWER: A tax-qualified retirement plan in which annual
contributions are determined by a percentage of the employee's salary.
dividend - ANSWER: Policyowners share in the divisible surplus of a company issuing
participating policies, paid as a return of premium.
dividend options - ANSWER: The different ways in which the insured under a
participating, life insurance policy may elect to receive surplus earnings: in cash, as a
reduction of premium, as additional paid-up insurance, left on deposit at interest, or
as additional term insurance.
estate - ANSWER: Most commonly, the quantity of wealth or property at an
individual's death.
extended term insurance - ANSWER: Nonforfeiture option providing for the cash
surrender value of a policy to be used as a net single premium at the insured's
attained age to purchase term insurance for the net death benefit.
fiduciary - ANSWER: Person in a position of special trust and confidence.
endow - ANSWER: When the cash value in a permanent policy is equal to the death
benefit, the policy matures (or is paid out). This is assumed to happen at age 100.
exclusion ratio - ANSWER: A percentage used to determine the amount of annual
annuity income exempt from federal income tax.
QUESTIONS AND CORRECT ANSWERS (100% VERIFIED
ANSWERS) |AGRADE
Absolute Assignment - ANSWER: Policy assignment when assignee receives full
control over the policy and full rights to its benefits.
Accelerated benefits rider - ANSWER: Life insurance rider that allow for early
payment of some portion of policy's face amount, should the insured suffer from
terminal illness/injury.
adhesion - ANSWER: Contract must be accepted by the insured exactly as it is written
by the insurer. Terms of contract cannot be negotiated. Contract is offered on a take
it or leave it basis.
admitted insurer - ANSWER: An insurance company that has been approved to
operate within a given jurisdiction.
accidental death benefit rider - ANSWER: Life insurance policy rider providing for
payment of an additional benefit when death occurs by accidental means.
adjustable life - ANSWER: Policy allows the policymaker to adjust the policy's face
amount, premium, and type of protection without having to complete a new
application or any additional underwriting.
agents (producer) report - ANSWER: Section of an insurance application where the
agent, details personal observations about the applicant.
annually renewable term (ART) - ANSWER: A form of renewable term insurance that
provides coverage for one year and allows policyowner to renew coverage each year,
without evidence of insurability.
apparent authority - ANSWER: The insured believes the agent has authority to act
based on actions, words or deeds of the agent. Even though the agent may not have
been granted such authority by the insurer, they will be held liable for the actions of
the agent.
automatic premium loan provision - ANSWER: Authorizes the insurer to
automatically pay any premium in default at the end of the grace period. The
premium owed plus interest charged is deducted from the policy's cash value.
beneficiary - ANSWER: Person to whom the proceeds of a life or accident policy are
payable when the insured dies.
,annuitant - ANSWER: One to whom an annuity is payable, or a person upon the
continuance of whose life further payment depends.
attained age - ANSWER: With reference to an insured, the current insurance age.
aviation exclusion - ANSWER: The insurer will not pay a claim if the insured dies as a
result of flying an aircraft or acting as a member of a flight crew. In most cases, the
insurer will offer the applicant the opportunity to purchase a rider offsetting the
exclusion.
buyers guide - ANSWER: A generic publication that explains life insurance in a way
that an average consumer can understand. It does not contain specific product or
policy information
Buy-sell agreement - ANSWER: Agreement that a deceased businessowner's interest
will be sold and purchased at a predetermined price or at a price according to a
predetermined formula.
Churning - ANSWER: Replacing one life contract with another within the same
company without demonstrating a benefit to the client.
common disaster provision - ANSWER: This policy provision provides an alternative
beneficiary in the event that the insured and the original beneficiary die as the result
of a common accident.
Consideration - ANSWER: Element of a legal contract consisting of premium payment
and statements made by the prospective insured in the application.
Cash Value - ANSWER: The equity amount or savings accumulation in a permanent
life policy.
Collateral assignment - ANSWER: Assignment of a policy to a creditor as a security
for a debt. At the insured death, the creditor is entitled to be reimbursed out of
policy proceeds for the amount owed and any excess will go to the beneficiary.
Conditional receipt - ANSWER: Given to the policyowners when they pay a premium
at time of application. in this case, the applicant is covered the later of the date of
the application or proof of insurability, even though the policy may not have been
issued.
Consideration, legal purpose, offer, acceptance. and competent parties. - ANSWER:
The five parts of a legal contract.
Contingent beneficiary - ANSWER: Persons named to receive proceeds in case the
original beneficiary is not alive.
, cost-of-living (col) rider - ANSWER: A rider available with some policies that provides
for an automatic increase in benefits ( typically tied to the consumer price index.)
offsetting the effects of inflation. This will result in an automatic increase in
premium.
defined benefit plan - ANSWER: A pension plan under which benefits are determined
by a percentage of the recipients salary.
discrimination - ANSWER: In insurance, the act of treating certain groups of people
unfairly in the sale and pricing of policies. This does not apply to age, sex,
occupation, and medical history.
conversion privilege (convertibility) - ANSWER: Allows the policyowner, before an
original insurance policy expires, to elect to have a new permanent policy issued that
will continue the insurance coverage without evidence of insurability.
credit life insurance - ANSWER: Decreasing term insurance covering the unpaid
balance of a mortgage or installment loan. If the borrower dies, benefits pay balance
due. May be individual or group policy.
defined contribution plan - ANSWER: A tax-qualified retirement plan in which annual
contributions are determined by a percentage of the employee's salary.
dividend - ANSWER: Policyowners share in the divisible surplus of a company issuing
participating policies, paid as a return of premium.
dividend options - ANSWER: The different ways in which the insured under a
participating, life insurance policy may elect to receive surplus earnings: in cash, as a
reduction of premium, as additional paid-up insurance, left on deposit at interest, or
as additional term insurance.
estate - ANSWER: Most commonly, the quantity of wealth or property at an
individual's death.
extended term insurance - ANSWER: Nonforfeiture option providing for the cash
surrender value of a policy to be used as a net single premium at the insured's
attained age to purchase term insurance for the net death benefit.
fiduciary - ANSWER: Person in a position of special trust and confidence.
endow - ANSWER: When the cash value in a permanent policy is equal to the death
benefit, the policy matures (or is paid out). This is assumed to happen at age 100.
exclusion ratio - ANSWER: A percentage used to determine the amount of annual
annuity income exempt from federal income tax.
