State Farm exam 2023 with complete solutions

Absolute Assignment Policy assignment when assignee receives full control over the policy and full rights to its benefits. Accelerated benefits rider Life insurance rider that allow for early payment of some portion of policy's face amount, should the insured suffer from terminal illness/injury. adhesion Contract must be accepted by the insured exactly as it is written by the insurer. Terms of contract cannot be negotiated. Contract is offered on a take it or leave it basis. admitted insurer An insurance company that has been approved to operate within a given jurisdiction. accidental death benefit rider Life insurance policy rider providing for payment of an additional benefit when death occurs by accidental means. adjustable life Policy allows the policymaker to adjust the policy's face amount, premium, and type of protection without having to complete a new application or any additional underwriting. agents (producer) report Section of an insurance application where the agent, details personal observations about the applicant. annually renewable term (ART) A form of renewable term insurance that provides coverage for one year and allows policyowner to renew coverage each year, without evidence of insurability. apparent authority The insured believes the agent has authority to act based on actions, words or deeds of the agent. Even though the agent may not have been granted such authority by the insurer, they will be held liable for the actions of the agent. automatic premium loan provision Authorizes the insurer to automatically pay any premium in default at the end of the grace period. The premium owed plus interest charged is deducted from the policy's cash value. beneficiary Person to whom the proceeds of a life or accident policy are payable when the insured dies. annuitant One to whom an annuity is payable, or a person upon the continuance of whose life further payment depends. attained age With reference to an insured, the current insurance age. aviation exclusion The insurer will not pay a claim if the insured dies as a result of flying an aircraft or acting as a member of a flight crew. In most cases, the insurer will offer the applicant the opportunity to purchase a rider offsetting the exclusion. buyers guide A generic publication that explains life insurance in a way that an average consumer can understand. It does not contain specific product or policy information Buy-sell agreement Agreement that a deceased businessowner's interest will be sold and purchased at a predetermined price or at a price according to a predetermined formula. Churning Replacing one life contract with another within the same company without demonstrating a benefit to the client. common disaster provision This policy provision provides an alternative beneficiary in the event that the insured and the original beneficiary die as the result of a common accident. Consideration Element of a legal contract consisting of premium payment and statements made by the prospective insured in the application. Cash Value The equity amount or savings accumulation in a permanent life policy. Collateral assignment Assignment of a policy to a creditor as a security for a debt. At the insured death, the creditor is entitled to be reimbursed out of policy proceeds for the amount owed and any excess will go to the beneficiary.