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life producer

Z
zayvyanc 74 terms Apr 28, 2026
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Terms 74

1
Maryland Insurance Administration (MIA)
The state agency that approves continuing education (CE) courses for insurance producers in Maryland.
2
Rebating
Returning a portion of commission to a client to induce a sale; a prohibited practice in Maryland.
3
Twisting
Inducing replacement of an insurance policy through misrepresentation to the insured's detriment.
4
Defamation in insurance
Making false or malicious statements about another insurer or producer.
5
Insurance
A means to transfer risk from one party to another through a contract.
6
Law of large numbers
As the number of similar exposure units increases, the predictability of losses improves.
7
Insurable interest
A financial interest in the subject matter of insurance that must exist only at policy inception for life insurance.
8
Term life insurance
Provides temporary protection for a specified period, with coverage ending if the insured survives the term.
9
Renewable term policy
Can be renewed without evidence of insurability but at the insured's attained age.
10
Decreasing term insurance
Most commonly used to cover a declining mortgage balance as the loan is paid down.
11
Term rider
Allows term life insurance to be added to a whole life base policy.
12
Universal life insurance
Flexible premium insurance with adjustable death benefit and current interest rates.
13
Variable life policies
Require a securities license to sell due to investment component risks.
14
Survivorship life (second-to-die)
Pays the death benefit at the death of the second insured party.
15
Grace period
Typically 30 or 31 days during which a policy remains in force even if premium is not paid.
16
Misstatement of age provision
Requires the insurer to adjust the benefit to what the premium would have purchased at the correct age.
17
Nonforfeiture options
Include paid-up insurance, extended term, and cash surrender value; excludes accidental death benefit.
18
Assignment provision
Allows the policy owner to transfer ownership rights to another party.
19
Contingent beneficiary
Receives policy proceeds if the primary beneficiary predeceases the insured.
20
Waiver of premium rider
Generally waives premiums upon total disability after an awaiting period.
21
Entire contract clause
States the contract constitutes the policy and application with any attached riders or endorsements.
22
Incontestability clause
Prevents the insurer from voiding the policy after 2 years.
23
Life insurance premium factors
Three elements that primarily determine premiums are mortality, interest, and expenses.
24
Backdating policy
Generally allowed to lower the insured's issue age to reduce premium costs.
25
Master contract
Issued to the employer as the policyholder in a group life insurance plan.
26
Certificate of insurance
Document received by employees as proof of group life coverage.
27
Group life conversion
Terminated employee's right to convert group life to individual coverage without evidence of insurability within a limited time.
28
Noncontributory group plan
Premiums are paid by the employer only.
29
Annuity accumulation period
Phase during which the owner pays premiums into the contract.
30
Single premium immediate annuity (SPIA)
Begins income payments within 12 months of purchase.
31
Single premium deferred annuity
Deferred annuity purchased with one lump sum payment.
32
Annuity annuitization phase
Generally provides periodic income payments at specified intervals.
33
Life only (straight life) annuity
Pays as long as the annuitant lives and ceases at death.
34
Market Value Adjusted (MVA) annuities
Must disclose that the adjustment may be either upward or downward.
35
Deferred annuity
Can be used to hold IRA contributions.
36
Annuity suitability
Focuses primarily on the owner's financial objectives, time horizon, and liquidity needs.
37
Collateral assignment
Often used to provide security for a loan against a life policy.
38
Policy loan at death
The insurer will reduce the death benefit by the loan plus interest.
39
Policy loans and surrender value
Reduce the amount receivable upon surrender.
40
Policy lapse
Occurs when policy loans plus interest exceed the cash value.
41
Lump-sum life insurance benefits
Generally excludable from gross income when paid to a named beneficiary.
42
Interest-only settlement
Interest is taxable as ordinary income.
43
Participating whole life dividends
Generally treated as return of excess premium, not taxable to extent of basis.
44
Life policy surrender tax
May result in taxable income to the extent cash value exceeds total premiums paid.
45
Early IRA distribution
Before age 59½ is subject to ordinary income tax and 10% penalty unless exception applies.
46
Direct trustee-to-trustee IRA transfer
Results in no distribution to the participant and no withholding.
47
Key person life insurance
Owned by the business to provide funds to replace lost revenue and recruit/train replacement.
48
Buy-sell agreement funded with life insurance
Intended to finance the purchase of a deceased owner's interest in the business.
49
Split-dollar life insurance
Typically involves allocation of premium and/or benefits between two parties.
50
Direct response marketing
Relies on mass media and mail without using producers to solicit customers.
51
Unfair claims settlement practice
Failing to provide reasonable explanation for claim denial.
52
Accidental death exclusion
Not typically excluded in life insurance policies.
53
Life insurance buyer's guide
Includes help on all topics except how to sue an insurer in civil action.
54
Legal elements of insurance contract
Include offer, acceptance, consideration, and legal purpose.
55
Binder in life insurance
Generally provides temporary coverage until the policy is issued.
56
Utmost good faith
Both parties' duty to disclose material facts honestly.
57
Contract of adhesion
Ambiguities are construed in favor of the party that did not draft the contract.
58
Commingling
Mixing premiums in a separate trust account with personal funds; prohibited practice.
59
Coercion by producer
Threatening to cancel a business relationship unless a policy is purchased.
60
Order to cease and desist
Typically used to stop an unfair practice.
61
Producer license revocation due process
Requires notice and the right to a hearing before license is revoked.
62
Interest-only settlement option
Pays only interest on proceeds, leaving principal with the insurer.
63
Fixed period settlement
Payments are made for a specified number of years.
64
Lump sum beneficiary payment
Income tax result is not taxable as income.
65
Insurer balance sheet reserves
Primary liability for future obligations on an insurer's balance sheet.
66
Mutual insurance company
Owned by policyholders.
67
Captive vs. independent agents
Captive agents represent one insurer; independent agents represent multiple insurers.
68
Replacement of life insurance
May involve surrender charges and new contestability periods.
69
Needs approach
Primarily used to determine the proper amount of life insurance needed.
70
Human life value approach
Estimates insurance needs by capitalizing the insured's expected future earnings.
71
Valid contract elements
Include offer, acceptance, consideration, and legal purpose; excludes illustration.
72
Counteroffer with substandard rating
Policy issued with counteroffer is considered a new offer by insurer requiring acceptance.
73
Revocable beneficiary designation
Allows changing the beneficiary at any time.
74
Unnamed beneficiary proceeds
Paid to the insured's estate if no beneficiary is named or surviving.