Life Insurance Exam-Illinois / Actual Exam
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Terms in this set (161)
A large group of people Pooling of Risks
contribute money to a
fund out of which their
losses can be paid
is the person or org that Policyowner
applies for the policy and
pays the premium
Actuarial Tables
Are statistical tables that are
used when calculating
premium rates and mortality
loss reserves
,financial risks of premature Life Insurance Policies transfer:
death on a defined amount
the face amount of life Loss of income
insurance is determined as a
multiple of income
contract which is issued by a Life annuity
life insurance company
protects an individual against
the financial risk of outliving
a normal life expectancy
according to the mortality
actuarial tables and running
out of money in old age
guarantees monthly income Life annuity
benefits to the annuitant for
the rest of his/her life no
matter how long he/she
lives
a person must be in a Insurable interest
position where he/she will
lose money should loss
occur only at the time the
policy is issued
the policy owner; he/she will Who must have insurable interest?
lose money should hte
insured die prematurely
contributions can be tax qualified plans
deducted
contributions cannot be non qualified plans
deducted
, tax on the interest and/or tax deferred plans
earnings is postponed as it
compounds and
accumulates until it is
withdrawn
no tax on benefits tax free
total contributions made to cost basis
the plan
cannot be deducted Tax: premiums paid on individual life insurance policies...
(nonqualified)
is usually not taxed (tax free) Tax: the benefits paid to the beneficiary at the insured's
death...
pays a dividend Participating policy
are usually not taxed (tax Tax: dividends paid to the policyowner on participating
free) policies...
The IRS has written rules that Modified Endowment Contract
define when a life insurance
policy does not have a real,
valid life insurance purpose
and is in substance an
investment or savings plan
modified endowment If a cash value life insurance policy does not have a valid life
contract insurance purpose, the IRS classifies it as a
Underwriter
is an insurance company
employee who reviews
applications and additional
information and decides
whether the applicant is
acceptable and what the
correct premium rate should
be
Questions with Certified Solutions / Newest
Practice questions for this set
Learn
Studied 7 terms
Nice work, you're crushing it
Continue studying in Learn
Terms in this set (161)
A large group of people Pooling of Risks
contribute money to a
fund out of which their
losses can be paid
is the person or org that Policyowner
applies for the policy and
pays the premium
Actuarial Tables
Are statistical tables that are
used when calculating
premium rates and mortality
loss reserves
,financial risks of premature Life Insurance Policies transfer:
death on a defined amount
the face amount of life Loss of income
insurance is determined as a
multiple of income
contract which is issued by a Life annuity
life insurance company
protects an individual against
the financial risk of outliving
a normal life expectancy
according to the mortality
actuarial tables and running
out of money in old age
guarantees monthly income Life annuity
benefits to the annuitant for
the rest of his/her life no
matter how long he/she
lives
a person must be in a Insurable interest
position where he/she will
lose money should loss
occur only at the time the
policy is issued
the policy owner; he/she will Who must have insurable interest?
lose money should hte
insured die prematurely
contributions can be tax qualified plans
deducted
contributions cannot be non qualified plans
deducted
, tax on the interest and/or tax deferred plans
earnings is postponed as it
compounds and
accumulates until it is
withdrawn
no tax on benefits tax free
total contributions made to cost basis
the plan
cannot be deducted Tax: premiums paid on individual life insurance policies...
(nonqualified)
is usually not taxed (tax free) Tax: the benefits paid to the beneficiary at the insured's
death...
pays a dividend Participating policy
are usually not taxed (tax Tax: dividends paid to the policyowner on participating
free) policies...
The IRS has written rules that Modified Endowment Contract
define when a life insurance
policy does not have a real,
valid life insurance purpose
and is in substance an
investment or savings plan
modified endowment If a cash value life insurance policy does not have a valid life
contract insurance purpose, the IRS classifies it as a
Underwriter
is an insurance company
employee who reviews
applications and additional
information and decides
whether the applicant is
acceptable and what the
correct premium rate should
be
