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Name 3 instancs in which insurable interest exists.
An applicant insuring his or her own life.
An applicant insuring the life of a family member (relative or spouse)
An applicant insuring the life of a business partner, key employee, or someone who has a financial obligation to them.
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Give an example of a situation where life insurance would help.
Survivor Protection
Estate Creation
Cash Accumulation
Liquidity
Viatical Settlements
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What needs to be considered when planning for survivor protection?
Current assests and liabilities
Determining what survivors' needs may be
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If a person wants to accumulate money for specific needs, is life insurance a good option? Explain
Kinda, whole life policy offers cash value
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In a Viatical Settlement what does the viator recieve when the policy is sold?
Receive a percentage of the policy's face value
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What is the main difference between Viatical Settlements and Accelerated Death Benefits?
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Human Live Value is based upon the loss of what?
Based on problable future earnings of the insured using...
Wages
Inflation
# of years to retirement
Time value of money.
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What is the needs approach based upon?
Based on the predicted needs of a family after the premature death of the insured.
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What is the main difference between capital liquidation and capital retention?
Capital Liquidation involves selling assets
Retention is the retaining of assets
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What is the purpose of a buy-sell agreement?
Determines what will be done with a business in the event that an owner dies or becomes disabled.
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Describe a Stock Redemption buy-sell agreement.
Under corporate ownership if the business owns the policies, pays the premiums, and is the beneficiary.
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What is the purpose of key person insurance?
Lessens the risk of financial loss bucause of the premature death of a key employee that has specialized knowledge, skills, or business contacts.
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Give an example of when a key person policy would be beneficial.
A model could insure their legs
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How is a life insurance policy given as an executive bonus taxed?
The premium is taxed as income
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How does a participating life insurance policy given as an executive bonus taxed?AzqQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQ X21111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111
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How does a participaing life insurance policy differ from a non-participating policy?
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What are the 3 factors theat determine the premium for a particular policy?
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How does the premium mode affect the total premium paid for the year?
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If a person in an insurance commercial is a paid actor, what must the advertisement include?
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What are illustrations in life insurance policies?
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What basic information is required to be part of illustrations?
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What is prohibited when using an illustration in the sale of a life insurance policy?
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Describe the differences between Part 1 & Part 2 of the application?
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What is the purpose of the agent's report?
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Who is required to sign the application?
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When does an insurance policy go into force if there is premium whith the application? If there is no premium with the application?
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At what point does coverage begin when an agent issues a Conditional Receipt?
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When is a policy considered delivered?
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What is the purpose of having the insured sign a statement of good health?
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How can an insurance company use the information it obtains from the Medical Information Bureau?
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When do insures usualy require an HIV test?
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How does a substandard risk policy differ from a standard risk?
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Which risk classification typically qualifies for lower premiums?
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