When must a producer provide disclosure?
When must a producer provide disclosure about information practices to an applicant? A producer must give a disclosure notice about information practices to an applicant prior to or at the time of signing the application.
What is the term used for an applicant written request to ensure for the company to issue a contract based on the information provided?
what is the term used for an applicant’s written request to an insurer for the company to issue a contract, based on the information provided? application.
When Linda suffered a broken hip she notified her agent in writing within 12 days of the loss?
As long as Linda notified the agent within 12 days of the loss after she suffered a broken hip, it does not matter how long it takes the agent to notify the insurance company, because as long as Linda notified the agent, the claim is treated as though the insurer has been notified since in such agreement, the …
What is the advantage of reinstating a policy instead of applying for a new one?
What is the advantage of reinstating a life insurance policy as opposed to applying for a new one? Policy premium in a reinstated policy will be set according to the insured’s original age.
What provision states that claims must be paid immediately upon written proof of loss?
Time of Payment of Claims *The Time Payment of Claims provision requires that claims will be paid immediately upon receipt of proofs of loss except for periodic payments, which are to be paid as specified in the policy. An insured pays her Major Medical Insurance premium annually on March 1.
How long do you have to provide proof of loss?
Most insurance policies require that the policyholder provide a signed Proof of Loss within 60 days of the insurance company’s request.
What is the maximum amount of time the insured has to file legal action against the insurer after written proof of loss is provided?
60 days
Which of the following can legally bind coverage?
Your insurance coverage can be bound one of two ways: coverage can be bound through the insurance company issuing the policy or by the verbal or written commitment (called a “binder”) of an authorized representative of the company, such as an agent.
What is the difference between bind and issue policy?
The binder serves only as a temporary or interim policy until a formal policy is issued. Once the formal policy is issued, the binder merges into the policy and is extinguished. Nevertheless, a binder is a fully enforceable contract of insurance.
Which of the following is the best reason to purchase life insurance rather than annuities?
Based on those very simplistic explanations, the best reason for purchasing life insurance rather than annuities would be to provide for your loved ones if you do not have much saved up.
Which of the following best defines a hazard?
A hazard is any source of potential damage, harm or adverse health effects on something or someone. Basically, a hazard is the potential for harm or an adverse effect (for example, to people as health effects, to organizations as property or equipment losses, or to the environment).
What is the name of the insured who enters into a viatical settlement?
What is the name of the insured who enters into a viatical settlement? Viator. Viator means the owner of a life insurance policy who enters into or seeks to enter into a viatical settlement contract.
What is the main purpose of seven pay test?
The seven-pay test determines whether the total amount of premiums paid into a life insurance policy, within the first seven years, is more than what was required to have the policy considered paid up in seven years.
What is not allowed in a 1035 exchange?
No, an ownership change is not allowed during a 1035 Exchange. There may be both income tax and gift tax consequences depending on the circumstances. If the policy owner wants the new policy to be owned by someone else, an option is to change the ownership prior to the exchange.
What is a 1035 exchange?
1035 Exchanges The Internal Revenue Service allows you to exchange an insurance policy that you own for a new life insurance policy insuring the same person without paying tax on the investment gains earned on the original contract. You cannot, however, exchange an annuity contract for a life insurance policy.
What happens if a life insurance policy fails the 7 pay test?
A ”modified endowment” policy is a life insurance policy that has failed a “7-pay test.” The result is that all loans and cash withdrawals are taxed using the last-in first-out, or LIFO, accounting method. Once the test is failed, modified endowment treatment applies for the remaining life of the contract.
What is 7 pay MEC limit?
seven years
What is the earliest culture life insurance can be traced back to?
Around 600 BC, the Greeks and Romans formed the first types of life and health insurance with their benevolent societies. These societies provided care for families of deceased citizens. Such societies continued for centuries in many different areas of the world and included funerary rituals.
Which statement concerning adjustable life insurance is accurate?
Which statement concerning adjustable life insurance is accurate? The face amount and premiums can be changed simultaneously by the policyowner- Adjustable life insurance combines features of both term and whole life coverage.
What statement most accurately compares term and permanent life insurance?
The statement most accurately compares term and permanent life insurance (B.) Term life insurance last only for a finite amount of time and is less expensive than permanent life insurance.
What kind of life insurance policy covers two or more?
Joint Life Insurance Joint Life Insurance provides coverage for two or more persons with the death benefit payable at the first death. Premiums are significantly higher than for policies that insure one person, since the probability of having to pay a death claim is higher.
What happens when a policyowner borrows against the cash value of his life insurance policy?
A policyowner is permitted to take out a policy loan on a whole life policy at what point? What happens when a policyowner borrows against the cash value of his life insurance policy? The policy proceeds would be reduced by the outstanding loan balance. Which of these is NOT a common life insurance nonforfeiture option …
Do you get money back if you cancel whole life insurance?
The cash value feature of a whole life insurance policy increases over the span of the policy. That means that you will receive money back if you cancel because of the growth rate of the policy. There are a few ways that you can take advantage of the cash value feature of a whole life insurance policy.
Should I cash in my whole life policy?
Whole life insurance policies are the best option for some people, especially those who will always have dependents due to disabilities and the like. But if you’re paying for an expensive policy you don’t really need, cashing out may be the best option, even if you have to pay fees and taxes.
Can I cash out my whole life insurance policy?
Generally, you can withdraw a limited amount of cash from your whole life insurance policy. In fact, a cash-value withdrawal up to your policy basis, which is the amount of premiums you’ve paid into the policy, is typically non-taxable. A cash withdrawal shouldn’t be taken lightly.
What is the downside of whole life insurance?
The biggest drawback to whole life insurance is that the premiums can be more expensive than term life insurance. So for a young investor with limited free cash to buy insurance and invest for the future, this is why I only recommend term life insurance.
How long does it take for whole life insurance to build cash value?
10 years
What is the cash value of a 25000 life insurance policy?
Upon the death of the policyholder, the insurance company pays the full death benefit of $25,000. Money collected into the cash value is now the property of the insurer. Because the cash value is $5,000, the real liability cost to the insurance company is $20,000 ($25,000 – $5,000).