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42 Cards in this Set
- Front
- Back
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Insuring Clause Provision
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sets forth the basic agrement between the insurer and the insured. States the promise to pay and details about payment and coverage.
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third-party ownership
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when the owner and the insurd are not the same person
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assignment provision
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"specifies the policyowner's right to transfer rights of ownership without the insurer's permission, although they do need to advise the insurer in writing"
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absolute assignment
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involves transferring all rights of ownership to another person or entity. Permanent and total transfer of rights. New owner doesn’t need insurable interest.
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collateral assignment
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involves transfer of partial rights to another person. Usually done in order to secure a loan or some other transaction. Partial and temporary untill debt is repaid.
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contigent beneficiary
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secondary benificary: recieves bennefits only if primary benificiary is dead.
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common disaster clause
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"provided under the Uniform Simulatneous Death Law: if both insured and benificiary die at the same time without clear view of who died first, it will be assumed the beneficiary died first and money goes to the contigent beneficiary."
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level premium
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in most life insurance policies. Means the premiums remain the same throughout the duration of the contract.
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flexible premium
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available in policies like universal life insurance: allow the policy owner to pay more or less than the planned premium.
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Maximum time for reinstatement of a life policy
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3 years
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incontestability clause
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"prevents the insurer from denying a claim due to statements in an application after the policy is 2 years old even in material matters. Does not apply in event of non-payment on premiums or statements related to age, sex, or identity"
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mistatementof age and gender
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provision that allows the insurer to adjust the policy at any time due to mistatments involving age or gender.
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policy loan
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"policyowner is entitled to borrow up to the available ammount of cash value, does not have to be repaid, loans are not subject to income tax."
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The insurer must provide the policy owner with ____ days notice that the policy is going to lapse
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30 days written
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automatic premium loan provision
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"commonly added to contracts, prevents unintentional lapse of policy due to non-payment. Loan from the death benefit with interest."
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Aviation clause exclusion
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will cover passengers but not pilots.
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Hazardous occupations or hobbies clause exclusion
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may exclude death due to hazaradous occupations. The underwriter has the option to insure these risks but charge a higher premium
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War or Military Service Clause Exclusion: status clause
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excludes all death while on active duty
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War or Military Service Clause Exclusion: results clause
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excludes death by act of war
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Length of time before someone can commit suicide after buying a life insurance policy. (to get entire bennefit not just return of premium)
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2 years
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waiver of premium rider
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waives the premium if the insured becomes totally disabled.
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waiting period from time of disability untill premium is normally waved
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6 months
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payor benefit rider
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"primarily used with juvenile policies; functions like a waiver of premium rider; if payor becomes disabled for at least 6 months or dies, the insurer will waive the premiums"
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accidental death rider
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death must occur 90 days after accident and insurer pays double or tripple idemnity
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term rider
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rider attached to allow a little more insurance without having to purchace another policy. Usually attached to whole life policy to ad protection at reduced cost
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spouse term rider
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allows spouse to be covered for a limited period of time for a specified ammount
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chidren's term rider
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allows for all chidren in family to be covered for limited time at specified ammount
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substitute insured or change of insured rider
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"allows for change of insureds, subject to insurability. Commonly used with key person insurance."
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cost of living rider
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"this rider will increase or decrease the face value by a cost of living factor, which is calculated every year"
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accelerated death benefits or living riders
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allow for early payment of portion of death benefit if insured has an extreme illness… usually 50% but can be up to 100% or a specific dollar ammount.
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If you are terminally ill you are expected to die within..
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2 years
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Nonforefieture values
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guarantee required by state law to be included into the policy
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if you don’t want coverage anymore you can change it in for cash value but you have to pay a….
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surrender charge
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"return of excess premiums, not taxable, insurance companies cannot guarantee them"
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dividends
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time limit for which dividend distribution (participation) mus occur.
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no later then 3 years
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Dividend payment options
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"cash, reduce premiums, accumulate interest(interest is taxable), paid-up additions, paid-up option, one-year term, acceleration of endowment"
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life income settlement option
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installment payments to the benneficiary. Ammount Is based on the recipients life expectancy and ammount of principal. No gurantee the recipient will receive all benefits before they die.
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life income with period certain settlement option
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best of both worlds. Not only are payments guaranteed for life of recipient but there is also a specified time period that will pay after death.
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Life income joint and survivor settlement option
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gurantees income for two or more recipients for as long as they live. If one dies the surviving recipient will receive reduced payment.
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Interst only settlement option
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compay keeps policy proceeds and pays interest to benneficiary at regular intervals. Usually considered a temporary option untill some point when proceeds are paid as a lump sum. Can be used if the policyowner wants someone besides the primary benneficiary to recieve the principal at some later point.
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fixed-period settlment option (also called period certain)
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a period of years is selected for equal installments to be paid the longer the period selected the smaller each installment will be. Excess interest will not extend the period of time. Does not guarantee lifelong payments but does guarantee total payment of principal
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fixed amount settlement option
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"pays a fixed, specified ammount in installments untill the proceeds run out. Guarantees total principal to be paid but not lifeline payments."
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