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ohio life insurance Exam Prep Questions And Answers ()
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ohio life insurance Exam Prep Questions And Answers (202472025)key person insurance - ✔✔life insurance policy a business owner purchases on a key employee
Human life value (in determining amount of personal life insurance) - ✔✔Enough insurance to
cover the loss of the income assuming the insured died.
Needs Approach ((in determining amount of personal life insurance) - ✔✔Needs considered
include outstanding indebtedness, mortgages, educational needs of various family members,
federal and state inheritance taxes, and other special needs of the surviving spouse
5 Reasons for a person to purchase insurance - ✔✔survivor protection-
Estate creation- premium payment create face amount
Cash Accumulation- Cash Value policy matures
Liquidity- allows the policy to be used as collateral
Estate conservation- used to pay taxes due to gov.
Cross Purchase - ✔✔Form of buy/sell agreement where each owner enters into agreement with
other owners
Entity Purchase - ✔✔Form of buy/ sell agreement where owners enter legal agreement with Trusts,
that collects death benefits and pays the deceased owners heirs.
Viatical Settlement - ✔✔An agreement to sell or assign a life insurance policy to an unrelated
person even if they have no conceivable insurable interest
Viator - ✔✔the owner of a life insurance policy who has unconditional right to rescind the contract
for at least 15 calendar days after receipt.
Whole life - ✔✔Permanent. Covers the insured until he dies or until the policies matures at age
120. Never has to be renewed, and the policy will pay the face amount. (level premium)
, Term Life Insurance - ✔✔temporary. Purchased for a specific need (to cover a bank loan or
mortgage. No cash value, renewable at higher premium
Endowment - ✔✔Matures at a predetermined age selected by the client. Has a cash value that
accumulates faster than whole life. Premium is high
Industrial (home service) Life insurance - ✔✔Premium paid weekly with 28 day grace period. Had
cash values and face amounts
Gross Premium - ✔✔The cost of Death+ Expenses- Interest
Net Single Premium - ✔✔The cost of Death- Interest
Premium Payment Mode - ✔✔The method and frequency with which a premium is paid to the
insurer
Surrender Cost Index - ✔✔(Interest- Adjusted Net Cost Method) Compares cash value surrendered
emphasizing when the client CASHED IN the policy
Life Insurance Net Payment Cost Index - ✔✔(Comparative Interest Rate Method)
Focuses on when the client DIES
Index Numbers - ✔✔policies with small index numbers is a better buy than a larger index number
backdating policies - ✔✔if the policy is backdated one month from today the agent must obtain 2
months premiums from the applicant
Twisting - ✔✔Convincing a client to replace coverage to the clients detriment is called twisting
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