The commissioner may begin conservation proceedings against companies who cannot meet solvency regulations.

An insurer may be liquidated if conservation proves to be futile.

An insurer suffering from an impairment of their minimum required paid-in capital is labeled solvent.

Insurers may not advertise their membership in the Guarantee Association.

An employee insures their employer in the fear of losing their job

A spouse insures the other spouse

A parent buys insurance on their adult child

A local hospital insures its chief of surgery

The insuring clause states the insurer’s promise to pay a death benefit if premiums are paid, and proof of death is received.

Death during the grace period results in a full death benefit being paid.

Suicide during the policy’s first two years results in policy rescission.

The automatic premium loan can keep a policy in force when payments are missed and there is sufficient cash value to pay the premium.

Physical

Morale

Legal

Moral

Reinstatement requires payment of past due premium plus interest.

Reinstatement usually requires an application with underwriting questions, but may not require any physical exams.

A reinstated policy’s premium is based upon the insured’s original age.

The reinstated policy is incontestable if the first time it was in force it already passed the two year mark.

insured

beneficiary

policyowner

annuitant

Both are tax deductible to the investor

Both allow the investor to invest for themselves and their non-income earning spouse

Both have penalties for early withdrawal

Both grow tax deferred

An annuity

An endowment policy

Social Security

Term Insurance

The illustration will note that both guaranteed and non-guaranteed elements will remain unchanged for the years illustrated.

To be understandable, policy illustrations must follow certain formats so the insured can make informed buying decisions.

Illustrations must note that they are only an illustration.

Guaranteed elements must be emphasized in bold print.

Agents need to complete 4 hours of ethics continuing education every license renewal as a part of their regular CE hours.

Independent agents can be appointed by multiple insurers.

Exclusive agents work for themselves.

If an agent submits business to an insurer that the agent is not appointed with, the insurer can submit a notice of appointment within 14 days to validate the relationship.

Mass marketing techniques usually involve selling insurance without the use of an agent.

An agent or broker must exercise care when using apparent authority during the sales process.

Insurance agents are not authorized to sell life insurance.

Brokers represent insurers in negotiating coverage with various insureds.

Group insurance has a non-deductible premium while individual insurance has a tax deductible premium to the payor.

Group insurance is automatic and requires less medical information than the individual coverage.

Group life tends to have a lower premium per person than individual life.

Both provide a tax free death benefit.

A client buys cash value insurance to fund their children’s college education.

A client buys insurance to provide future income to a surviving spouse.

A client buys insurance to pay off their mortgage should they pass away prematurely.

A client buys insurance to fund a buy-sell agreement.

Settlement options like fixed period are good ways to provide an income to a beneficiary who cannot handle large sums of money.

Life income payments are income tax free.

Life income with 10 years certain provides at least 120 months of payments.

Fixed amount is the default option when no option is selected.

Interest only option

Accumulate with interest option

Life income option

Cash option