Exam (elaborations)
Iowa Insurance Exam - Life Correct Answers Latest Version
- Course
- Institution
Iowa Insurance Exam - Life Correct Answers Latest Version
[Show more]
Content preview
Iowa Insurance Exam - Life CorrectAnswers Latest Version
purpose of life insurance Answer: pay a death benefit to beneficiaries when the insured dies
life insurance for personal use Answer: death benefit serves to replace the insured's future loss
income and pay expenses that occur upon death, living benefits
Group insurance vs. individual Answer: -covers many non-related people
-less expensive per person
group insurance eligibility Answer: -group cannot be formed for the express purpose of purchasing
it
-employers
-labor unions
-trade and professional association groups
individual insurance Answer: covers one individual
ordinary life insurance Answer: face amounts grater than $25,000, premiums are payable monthly,
quarterly, semi annually, annually; includes every type of life insurance and annuity product, flexible
options
industrial life insurance Answer: "burial insurance", small face amounts 1000 or 2500 to 10,000;
premiums paid frequently, no medical exam, agent meets personally with policy owner to collect
premium
,permanent life insurance Answer: provides life ins for the insured's entire life; coverage is provided
until insured dies or reaches 120 years old
True or false: Level premium of permanent life insurance - once the policy is issued premiums remain
level for the full duration of policy coverage Answer: true
Permanent life insurance accumulation element within the policy is __________ ____________ Answer:
cash value
Term life insurance Answer: coverage is temporary, time limit can be as short as one year, as long as
20+ years or until the insured reaches a specific age (ex. 65). No cash value, costs less than permanent
life, premiums increase with age
Participating vs nonparticipating life insurance Answer: par - issued by mutual ins co's, policyowner
is eligible for policy dividends declared by the insurance co; dividends are paid from insurers divisible
surplus
non par - issued by stock ins co, no policy dividends
fixed life insurance Answer: insurer guarantees fixed death benefit and min rate of return on
policy's cash value, premiums are invested in co's general account
variable life insurance Answer: premiums are invested in investment sub accounts managed by the
insurer - guarantees min death benefit (face amount of policy); cash values and death benefit raise and
fall based on sub accounts investment
Regulation of Variable products - what do the Securities Exchange commission and financial Industry
Regulatory authority do? Answer: SEC - responsible for regulating the securities that make up an
insurer's separate account
FIRA - regulates producers who sell variable life products and companies that sell investment products
, Actuary base life insurance premiums based on 3 things Answer: mortality, interest, expenses
Interest factor Answer: added to premium calculations to recognize investment earnings, used as
credit - higher rate = lower premium
Expense factor Answer: worked into premium calculation to reflect costs that insurer expects to
incur (rent, commissions, benefits)
Premium Tax Answer: levied on insurance companies when they receive premiums
Net Single premium Answer: uses factors of mortality and interest - theoretical amount (excludes
expense factor) that would be needed to fund the face amount for the duration of the policy with single
premium payment
Net level premium Answer: applying a factor to the net single premium, spreads out premium for
duration of premium paying period
Gross premium Answer: charged for the policy by adding the expense load to the net single
premium/net level premium
Level premium payment plan Answer: premium is fixed, remains over policy's term
flexible premium plan Answer: policyowner can change the premium payment amount after the
first payment within range set by insurer, includes universal life insurance and variable universal life
insurance
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Schoolflix. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $14.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
78252 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now