The sale of a policy to a VSP may affect a person's eligibility for ____ assistance
the sale of a policy to a VSP may affect a person's eligibility for public assistance
what is a stranger originated life insurance STOLI policy?
A policy that is purchased by a third party with no insurable interest in the insured
true or false: waiver means a voluntary abandonment of an existing right
true
what settlement option uses all or a portion of the death benefits to provide an income for life
the life income option
a family term rider is added to a policy issued to the family ______
a family term rider is added to a policy issued to the family breadwinner
What is the surrender for cash benefit?
a forfeiture option whereby the owner surrenders the policy for its cash value
what is the tax treatment upon policy surrender?
Upon policy surrender comma the cash value that exceeds total premiums paid would be considered taxable
which option is more flexible - fixed period or fixed amount
fixed amount
True or false: double to triple indemnity may be used to describe the AD&D death benefit
true
requiring an additional premium, riders added a life insurance policy must be purchased ___________
requiring an additional premium, riders at added to a life insurance policy must be purchased at the time of the application
what are the advantages of selling a contract to a VSP
a larger living benefit and being free from federal taxes
What is the name of the individual who sells her policy to a VSP?
A viator
identify the acronym: AD
accidental death and dismemberment
what is the result of a life settlement
a policy owner sells his existing life insurance to a third party
describe the paid up permanent insurance option
this option provides for a smaller permanent life insurance policy requiring no further premiums.
True or false: interest earned on dividends left with the insurer to accumulate is not taxable.
false
upon disability, a life insurer may waive the premium obligation after ____ months of disability
upon disability, a life insurer may waive the premium obligation after six months of disability
name the three nonforfeiture benefits
surrender for cash, extended level term, and reduced pay up permanent insurance
what non forfeiture option continues to provide an identical amount of insurance protection for a limited time
the extended level term option
dividends paid on a life insurance policies are received _____ and are never _____.
Dividends paid on life insurance policies are received tax free and are never guaranteed.
What rider increases the death benefits to offset an increase in the CPI?
The cost of living adjustment Rider (COLA)
What name is synonymous for the waiver of premium rider in a UL policy?
The cost of insurance rider
insurance policy dividends are received _____, while interest earned on dividends is ______.
Insurance policy dividends are received tax free, while interest earned on dividends is taxable
Who negotiates a VSP purchase?
A viatical settlement broker
what rider uses an increasing term policy rider to pay an additional DB equal to the base policy's existing cash value?
the return of cash value rider
if the premium payer dies, premiums on a child's policy may be waived until the child reaches ___.
If the premium pay your dies, premiums on a child's policy may be waived until the child reaches 21.
What type of assignment is used when selling a policy to a VSP?
Absolute assignment
in a universal life insurance policy what is the waiver of premium provision called?
The waiver of cost provision
what does the guaranteed insurability rider allow
it allows additional coverage to be purchased without the insured having to prove they are insurable
dividends are considered a return of overpayment premium, and are not taxable when returned to the policyowners.
Dividends are considered a return of overpayment premium, and are not taxable when returned to the policyowners.
Which settlement option indicates the beneficiary is most concerned with Receiving a specific monthly dollar amount?
fixed amount
what is probably the simplest and most common settlement option used?
Cash or lump sum payment
which settlement option allows interest to be paid on all the retained death benefits
the interest only option
what type of insurance is used to provide dependent coverage using a family term rider?
Level term insurance
someone who has a very short life expectancy can expect a larger or smaller purchase price when selling a VSP?
Larger
what is another name for the accelerated benefits rider?
the living needs rider
what dividend option provides the greatest additional amounts of death benefit protection for a limited time?
The one year term option
the payor rider is added to a _____ for an additional _______.
the payor rider is added to a child's policy for an additional premium.
For the principle benefit to be paid under an AD&D policy, death must occur within __ days following the accident.
For the principle benefit to be paid under an AD&D policy, death must occur within 90 days following the accident.
If disabled, the waiver of premiums still allows for ________growth.
If disabled, the waiver of premiums still allows for cash value growth.
Policies sold to a VSP are said to have gone through __________.
Policies sold to a VSP are said to have gone through viatication
What dividend option is used to gradually increase the overall death benefits as a possible inflation offset.
the paid up permanent additions option
what non forfeiture option continues to provide permanent insurance protection in a smaller face amount?
The paid up permanent insurance option
if a person is disabled, life insurance premiums are waived once the insured is totally disabled for ___ months.
if a person is disabled, life insurance premiums are waived once the insured is totally disabled for six months.
True or false: if an insurer is to retain the death benefit, an interest rate will be paid on these assets.
True
benefits received from an accelerated benefit are not taxable if the insured is ________.
Benefits received from an accelerated benefit are not taxable if the insured is terminally ill.
Are death benefits taxable when received by the beneficiary?
No. Death benefits are not taxable.
True or false: a portion of the benefit provided by either fixed amount or fixed period will be taxable interest.
True
settlement options may be selected by _______, but altered by a _____ upon the death of the ______.
Settlement options may be selected by policy owners, but altered by a beneficiary upon the death of the insured.
An accelerated benefit may provide for _____ if the insured is confined to a nursing home.
An accelerated benefit may provide for long-term care if the insured is confined to a nursing home.
If _______, the proceeds received from a VSP sale are received tax free.
If terminally ill, the proceeds received from a VSP sale are received tax free.
What is the limitation to an accidental death rider?
It only pays for accidental death
what are the cash value options available to policy owners upon policy surrender?
Nonforfeiture options
what rider is added to a policy and will provide a term insurance death benefits on the spouse or children
a dependent rider
what non forfeiture option continues to provide an identical death benefits upon policy surrender?
The extended level term option
accelerated benefits often require the insured to be _________, with the life expectancy of __ to __months.
Accelerated benefits often require the insured to be terminally ill, with the life expectancy of 12 to 24 months
True or false: a time limit exists to purchase additional life protection without required evidence of insurability.
True. The guaranteed insurability rider usually limits this to age 40 or 50
the AD&D rider is generally _______ because it only protects against accidental losses
the AD&D rider is generally inexpensive because it only protects against accidental losses.
In a life settlement, which party remains the same after the actual transfer of ownership occurs?
The insured party remains the same.
Benefits received through the accelerated benefits rider will _____ the future death benefit.
Benefits received through the accelerated benefits rider will reduce the future death benefit.
What dividend option provides an additional benefit for a limited period of time?
The one year term option
if someone has any paid up permanent additions, what is payable upon debt?
The paid up permanent additions , In addition to the death benefit on the original policy
what additional rider increases the life insurance death benefits by an amount equal to the total policy premiums paid?
The return of rider premium
dividends are paid to policyholders of a ______ company.
Dividends are paid to policyholders of a mutual company.
What is another name for the death benefit on an accidental death and dismemberment policy?
The principle sum or amount
is the waiver of premium rider optional or mandatory
optional. The waiver of premium rider must be added at the time of application by paying an additional premium.
Once the VSP buys a contract, it is responsible for future ______________.
Once the VSP buys a contract, it is responsible for future premium payments.
Which settlement option indicates the beneficiary is most concerned with receiving income for specific period of time?
Fixed period
Identify the acronym: VSP
viatical settlement provider
premium rates for additional insurance purchased under the GI rider are based on an insurer's ______ or _______ age.
Premium rates for additional insurance purchased under the GI rider are based on an insured's attained or actual age
When does the settlement option become available to the beneficiary?
upon the death of the insured
What is the name of the company that purchases existing life insurance policies from an existing policy owner
viatical settlement provider
name the six dividend options.
Cash, reduce premiums, accumulate at interest, paid up permanent additions, paid up option, and one year term
when a policy is sold to a VSP, who becomes the new policy owner?
The VSP is the new policy owner and beneficiary.