WEBCE Life And Health (281 Questions) Complete With 100% Correct Verified Answers Newly Updated 2024
WEBCE Life And Health (281 Questions)
Complete
... [Show More] With 100% Correct Verified
Answers Newly Updated 2024
Representations and Warranties
Representations are statements the applicant makes on an application that are
deemed to be true to the applicant's best knowledge. Warranties are statements the
insurer makes in the contract.
Underwriting vs. Actuarial Departments
Two related insurance company functions. Through the process of _________,
applications are assessed for insurability and to assign premium rates. The
________ department analyzes data to help estimate future losses and to produce
rate tables.
Managerial System vs. General Agency System
Two variations of the career agency system in which producers represent a single
company. One is headed by a company employee called a general manager (GM),
the other by an independent contractor called a general agent (GA).
Fraternal Insurance Company
A non-profit form of insurance provider sponsored by an organization of people
who share a common ethnic, religious, or vocational affiliation.
Peril and Hazard
Two related general insurance terms:
Peril is the immediate cause of a loss (and the event that is insured against).
Hazard is any condition that increases the risk of incurring a loss.
Contract of adhesion
A type of contract in which one party (the offeror) drafts the terms that must be
accepted as-is by the offeree. Insurance policies are this type.
Mutual Insurance Company
A form of insurance company that is owned by policyowners. May distribute
policy dividends (non-taxable) through participating policies.
Independent Agency System
An insurance distribution system in which the manager and producers are fully
independent and not affiliated with any single insurer.
Buyer's Guide and Policy Summary
Two related disclosure documents that are required by most states to be presented
to life and health insurance applicants at some point during the buying process.
Risk
A basic insurance term referring to the possibility of incurring a loss.
Law of Large Numbers
A mathematical principle that is the basis for predicting the odds of a loss
occurring in a certain population in any given year.
Social Security (OASDI)
A federal insurance program that provides disability, death, and retirement benefits
to covered workers and their qualifying beneficiaries.
Agents vs. Brokers
Two basic types of insurance producer: an ______ represents a single insurer and a
_____ sells policies from multiple insurers.
Reinsurance
The process through which insurance companies spread large risks among other
insurers.
Domestic, Foreign, and Alien Insurers
Insurers can be categorized by their state of domicile. There are three categories,
known as _____, _____, and _____.
Stock Insurance Company
A form of insurance company that is owned by stockholders who may or may not
also be policyowners. May distribute stock dividends (taxable).
Admitted Insurer
An insurer that has a certificate of authority in a given state is said to be
an___________ insurer in that state.
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)
Decreasing Term Life Insurance
This form of term life features a death benefit that diminishes over time and
premium that remains level for the term of the policy.
Fully Insured Status (Social Security)
To be considered fully insured, a worker must have 40 quarters of coverage. A
fully insured worker is eligible for disability, retirement, and death benefits.
Cross-Purchase Buy-Sell Agreement
A type of buy-sell agreement in which each owner purchases a life insurance
policy on each of the other owners.
ERISA
The Employee Retirement Income Security Act of 1974 (ERISA) protects the
rights of employees covered under an employer-sponsored plan by stipulating
minimum participation, vesting, and funding requirements.
Irrevocable Beneficiary
This beneficiary designation cannot be changed by the policyowner without that
beneficiary's permission [Show Less]