Life, Health and Accident Insurance Exam and Notes
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Life, Health and Accident Insurance Exm and Notes
Institution
Life, Health And Accident Insurance Exm And Notes
Life, Health and Accident Insurance Exam and Notes
Key Topics in Life Insurance
1. Insurance Application Process - The agent does not set final rates. - If a question is missed, schedule another appointment. - The underwriter or beneficiary does not need to sign the application.
2. Insurabili...
Life, Health and Accident Insurance Exam and Notes
Key Topics in Life Insurance
1. Insurance Application Process
- The agent does not set final rates.
- If a question is missed, schedule another appointment.
- The underwriter or beneficiary does not need to sign the application.
2. Insurability and Coverage
- The definition of insurance as risk transfer.
- Coverage dates based on conditional receipts.
- Requirements for signatures on applications.
3. Types of Insurance
- Differences between term and whole life insurance, including cash value characteristics.
- Features and benefits of adjustable life policies, including what can be changed by the policy owner.
4. Underwriting and Risk Assessment
- The purpose of underwriting in risk selection and classification.
- Definition and distinction between consumer and investigative consumer reports.
5. Life Insurance Provisions and Riders
- Importance of provisions like free look, grace period, and incontestability.
- Understanding various riders such as waiver of premium, living needs rider, and guaranteed
insurability.
6. Group Life Insurance
- Conversion rights and requirements for group life insurance participation.
- Group contracts ownership and competitive options for small groups.
,7. Non-Forfeiture Options and Dividends
- Understanding non-forfeiture options like extended term and cash surrender.
- How dividends work and their tax implications.
8. Legal Concepts
- Third-party ownership and implications for insurance contracts.
- The principle of insurable interest.
9. Retirement and Other Benefits
- Differences in IRA funding sources.
- Social Security benefits and exclusions.
### Exam Tips
- Familiarize yourself with key definitions and important clauses in insurance policies.
- Understand the differences between various types of insurance products and their features.
- Pay attention to the specific provisions of contracts and conditions related to premiums and benefits.
- Review the principles of underwriting and risk classification, as well as the legal concepts involved in
insurance contracts.
Who are the parties to the group contract? ✔️Owner (sponsor) & Insurer (company)
What does the Insured receive in a group contract? ✔️a certificate
What are the consequences of withdrawing money from a traditional IRA prior to age 59 1/2? ✔️10%
penalty on the taxable portion
How long does an employee have to exercise the conversion option? ✔️31 days after terminating from
the group, still covered by original group policy during this period
,Noncontributory Plan ✔️employer pays all of the premium, requires 100% of eligible employees be
included
Contributory Plan ✔️premium is shared between the employer and employees, requires 75% of eligible
employees be included
Can you use a life insurance policy to fund an IRA ✔️NO
IRA Rollovers ✔️tax-free distribution of cash from one retirement plan to another, generally must be
completed within 60 days from the time the money is taken out of the first plan
Self-Employed Plans (HR-10 of Keogh Plans) ✔️allow for self-employed persons to fund their
retirement programs with pre-tax dollars just like corporate
401(k) Plans ✔️employees take a reduction in their current salaries by deferring amounts into a
retirement plan. Participants can choose either receive taxable cash compensation or have the money
contributed into the 401(k) referred to as cash or deferred arrangement plans (CODA)
403(B) Tax-Sheltered Annuities (TSAs) ✔️a qualified plan available to employees of certain nonprofit
organizations under Section 501(c)(3) of the Internal Revenue Code, and to employees of public school
systems
Key Person Insurance ✔️insurance purchased on a key person that if the business loss would suffer
financial loss
The Business in Key Person Insurance is? ✔️The applicant, the policyowner, the premium payer and the
beneficiary
the employee is the insured
What does the business have to do with the policy if the key person quits? ✔️They have to do nothing.
What taxation rules apply to Individual Life Insurance? ✔️Premiums- not tax deductible
, Death benefit- tax free if taken as a lump-sum distribution to a named beneficiary
Death benefit paid in installments (other than lump-sum)- principal is tax free; interest is taxable
In Group term insurance what $ amount of premiums are attributable to the employee not taxable?
✔️$50,000
What is the 7-pay Test? ✔️the cumulative premiums paid during the first 7 years of the policy must not
exceed the total amount of net level premiums that would be required to pay the policy up using
guaranteed mortality costs and interest
What taxation rules apply to Modified Endowment Contracts (MECs) cash value ✔️tax-deferred
accumulations
Any distribution are taxable, including withdrawls and policy loans
Distributions are taxed on LIFO basis "interest first" rule
Distributions before are 59 1/2 are subject to a 10% penalty and changes to FIFO
What is Social Security (Old Age Survivors Disability Insurance) OASDI ✔️designed to provide protection
for eligible workers and their dependents against financial loss due to old age, disability, or death
What does the term fully insured mean? ✔️refers to someone who's has earned 40 quarters of
coverage (the equivalent of 10 years of work), therefore entitled to receive Social Security retirement,
Medicare, and survivor benefits
The Director of Insurance for the state of Missouri is? ✔️appointed by the Governor
How often can an insurance company be examined by the insurance department of Missouri? ✔️As
often as deemed necessary
Which of the following is incorporated in another state? ✔️a foreign company
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