Finance 101
What are the three ways that money grow?
What is Fixed, Variable, and Indexed?
Name the 2 kinds of life insurance.
What are permanent and term life insurance?
What is the primary feature that allows the policy's cash value to grow based on the performance of a selected financial index, such as the S&P 500, while also providing a minimum guaranteed interest rate?
What is "indexed interest crediting" or simply "indexing"?
In indexed annuities, what is the guaranteed minimum interest rate called, which ensures that the annuity's value will not decrease due to market downturns?
What is the "minimum interest rate" or "floor rate"?
This tax-advantaged retirement account sponsored by the government allows you to contribute post-tax dollars and have tax-free withdrawals after the age of 59 1/2. What is it?"
What is a "Roth IRA?"
Explain the rule of 72.
What is the rule that tells us how long it takes for our money to double? (72 รท interest rate)
What can be used to calculate a life insurance need? (explain in detail)
What is D.I.M.E?
(Debt, Income, Mortgage, Education)
What is the guaranteed floor and cap rate in an IUL/LIRS?
The floor can never go below 0, there is no guaranteed cap rate.
What type of annuity provides regular payments to the annuitant for their entire lifetime, ensuring they won't outlive their income stream?
What is a "lifetime annuity" or "life annuity"?
(will also take Living Benefit Rider)
This term describes an investor's ability and willingness to endure market fluctuations and potential losses in pursuit of their financial goals.
What is "risk tolerance"?
Explain how an IRA/401k/etc is taxed.
What is tax-deferred?
(Money is taxed once it is withdrawn)
A period of time (typically 2 years) that allows the insurer to review an application for incorrect information.
What is the contestability period?
What is the name of the provision that sets a maximum limit on the amount of premium payments that can be made in a given year to maintain the tax-advantaged status of the policy?
What is the guideline annual premium (or 7-pay)?
What type of annuity offers the potential for higher returns by linking the annuity's performance to the performance of specific investments, such as stocks or bonds, while also carrying a degree of risk?
What is a "variable annuity"?
In the United States, this is the age at which individuals can start receiving full Social Security retirement benefits.
What is "full retirement age," typically around 65-67?
Explain what a mutual fund is.
What is a pooled collection of assets that invests in stocks, bonds, and other securities?
Life insurance policies often have various riders that provide additional benefits or coverage options. What is the term for a rider that allows the insured to receive a portion of the death benefit in advance if they are diagnosed with a terminal illness and have a limited life expectancy?
What is "accelerated death benefit rider" or "living benefit rider."
What is a MEC? Please explain for an additional 100 points.
What is a Modified Endowment Contract?
This is the process of an IUL becoming taxable due to overfunding.
Explain a "surrender period."
What is the length of time you will be charged a fee if you cash in your annuity?
This period is typically 5-10 years. After the surrender period has expired, you can cash in your annuity without paying a fee.
Annual study that focuses on investor behavior rather than market or fund returns
What is the "Dalbar Study"
Name the most important stock market indexes in the U.S.
What are the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite?
The percentage of term life insurance policies that pay out.
What is 2%?
Explain how you withdraw the cash value from an IUL.
You would withdraw your cost basis and use a loan to access the rest.
(100 extra points if you name the type of loan)
(200 extra points if you explain how that type of loan works)
Clients earn interest based on a percentage of the growth of the index each year. That percentage is determined by the _______ rate.
What is "participation rate" or "index participation rate"?
"Beyond the initial policy sale, what ongoing service should a life insurance professional offer to help clients adapt to changing circumstances or needs?"
What is "policy reviews and updates"?
(Will also accept "annual reviews")