Exam 6: Financial Services: Insurance Companies

The cash surrender value of a life insurance policy represents the payment to the insured's beneficiaries at the time of death.

As of 2015,the Federal Reserve oversees approximately one-third of U.S.insurance company assets.

The Insurance Regulatory Information System (IRIS)is a standardized examination system used to measure the profitability of insurance companies.

As of 2015,ordinary life accounted for approximately 80% of policies in force.

Annuities are the reverse of life insurance in that they are different means of liquidating a fund.

As currently structured,state guarantee funds will continue to collect premium payments and honor life policies and annuity obligations of a failed insurance company.

In group life insurance,lower rates on policies can be offered because of cost economies as a result of mass administration of plans and reduced selling and commission costs.

An insurance policy in which fixed premium payments are invested in mutual funds of stocks,bonds,and money market instruments is called

As of 2014,sales of annuities and sales of traditional life insurance policies were approximately equal.

The policyholder can vary the premium payments on an endowment life policy.

A term life policy allows the policyholder to vary the maturity of the policy.

Unlike the life insurance industry,property-casualty insurers have more uncertainty about the timing of policy payouts.

Because of the large amounts of policy reserves that life insurance companies carry as liabilities,they are rarely surprised by unexpected fluctuations in expected future payouts.

A reasonable way to overcome some of the risk of adverse selection in the life insurance business can be accomplished by

An insurance policy that protects an individual over an entire lifetime as long as the premiums are paid is called

What is essentially understood to be insurance for property-casualty insurance companies?

A permanent guarantee fund for the insurance industry does not exist.

An insurance policy that allows both the premium amount and the maturity of the life contract to be changed by the insured is called

Loss adjustment expenses refer to the costs surrounding the loss settlement process.

Returns on an insurer's asset portfolio and new premium income flows act as a backup to unexpected policy losses.