Webce Life and Health Insurance ACTUAL MIDTERM EXAM
WITH COMPLETE QUESTIONS AND CORRECT DETAILED
ANSWERS\VERIFIED 100% ALREADY GRADED A+
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)
WITH COMPLETE QUESTIONS AND CORRECT DETAILED
ANSWERS\VERIFIED 100% ALREADY GRADED A+
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)
