Chapter 4 - Life Assurance Flashcards
What is the name of the sum assured payable after the diagnosis of an incurable disease that is expected to restrict the life expectancy for 12 months
Terminal illness benefit
What are the major loadings to cover the expenses of the life office?
Salaries of employees, commission paid to the sellers of the policies, costs of office, buildings, used, computer, administration, and regulatory costs, medical fees during underwriting 
Who was not be able to be a beneficiary under a life policy executed by Robin and subject to the married woman’s property act
Robbins, parents, Robbins daughter aged 14, Robins son aged 21, Robin’s wife
Robbins parents
How long after the disappearance of someone with no direct evidence of death, could the spouse of the person applied to the courts for a declaration of presumed death in order to claim on a policy?
7 years
What would happen to a life policy if the customer change the gender by gender reassignment surgery
It will remain in force with no amendments required
What is the main disadvantage of an absolute trust?
They cannot be adapted to changing needs
Why would a relevant life policy be of benefit to someone who has substantial existing pension arrangements?
The benefit payable from a relevant life policy will not count towards there lifetime pension allowance
Why might a family income benefit policy be cheaper than a level term insurance for the same initial sum assured
Because of the sum assured under a family income benefit decreases like a decreasing term insurance
What would usually be the best type of protection, contract and basis of cover to protect a joint repayment mortgage?
Decreasing Life insurance on a joint life, first death basis
What are the four different ways that a policy can be written
Own life, life of another, joint life first death, joint life second death/joint life last survivor
What would be the main risk in using death in service benefits as life assurance to repay a mortgage on death
Leaving employment, voluntarily or otherwise could cause the cover to automatically cease
What are the types of nondisclosure?
Reasonable-where the customer has acted honestly unreasonably, but I still failed to disclose all facts in which case claim to be paid in full
Careless-where the customer failed to take the reasonable care, and should’ve realised that the information was incorrect, in these cases, proportional amounts will be paid
Deliberate or reckless-where on the balance of probabilities the customer new or must’ve known that information was both incorrect and relevant to the insurer in such cases are you sure I can void the policy
What’s the difference between joint tenancy and tenancy in common?
The difference mainly lies in what happens after the death of one of the people involved. Joint tenancy as well upon death. Their interest passes automatically to the survivor.
tenancy in common allows the interest to then be passed to the deceased beneficiaries, instead of the other person involved in the joint ownership
If there was a claim on a mortgage to policy, who were the life office pay cash, the mortgagee or the mortgaor
The mortgagee as in the one who took out the policy
Why might the cause of death be relevant in a death claim?
Certain activities could be excluded from the cover, or if the death has occurred, even taken part of the short period, then they may require further evidence They may also want to see if it happened abroad or in the UK and suicide can often have a bearing on the validity of the claims.
What is a convertible term assurance?
Turn the shower and sort of an option to be converted to in Delmont or whole of life policy without evidence of health at any time before expiry
Why are premiums derived from a mortality table loaded
to cover the expenses of the life office in marketing, selling and administering the policy
How can the owner of an existing life policy put it in trust?
By assigning it to trustees using a deed of assignment
If terminal illness cover is part of a team insurance, when will it not normally apply?
The last 12 or 18 months of the contract
What proof of title will be required for death claim on an unassigned own life policy, and to whom will the money be payable
The appropriate grant of administration and the money would be payable to the legal personal representations of the will
The cost of the life cover provided by the whole of life unit link policy is typically met by
A variable level of a unit cancellation throughout the life of the policy
The natural premiums of a life assurance policy rise each year, due to what
The lives assured grow older
What is terminal illness benefit?
Turn on Ellis benefit is known as a rider for additional benefit to a whole of life policy
This does vary from critical illness as it is not available as its own policy, so be wary in questions and properly read to make sure that this is a question about terminal illness or critical illness.
Turn on illness is not paid. In addition to the death benefit, it is just an earlier payment of the song assured
If a client has taken out a unit linked whole of life insurance policy on a standard cover basis, what situation would require the premiums to be increased?
If the underlying fund did not meet a predetermined rate of return each year
What is normally added to be loaded premium to arrive at the final premium payable for life assurance policy
The policy charge is normally added to a loaded premium to arrive at the final premium payable. The policy charge is a handling fee 
What form of assignment is not covered under the assurance act 1867
Assignment by operation of law
What will make the claim value vary on a with profits life insurance policy
The precise date of death
Most life offices will pay death claims without a grant, where the sum assured, and the value of the estate is small, if the proceeds are being Paid to who
A surviving spouse
How is the cover provided under a whole of life policy affected if premiums cease at a preset age
It is not affected the cover continues until death
What to policies make up a whole of life, low-cost insurance policy?
This combines a with profit investment base with a decreasing term insurance.
How can I consumer compare costs on different whole of life policies?
They use reduction in yield, this shows the annual reduction in any possible investment element due to plan charges. So a lower reduction in yield would assume a lower fee. Regardless of reduction in yield, standard cover will always have a greater chance of providing some investment element than say the likes of a maximum cover policy
How long in relation to the duration of the cover will premiums be payable for
Premiums will often be payable first period slightly shorter than the duration of the cover not longer
Can you get escalating payments on a family income benefit policy?
Yes, to keep in line with inflation
Define the pure or net premium calculated for life insurance policies by actuaries from mortality tables
The pure on net premium calculated for life insurance policies by actuaries from mortality tables. Is the premium required just to meet the claims of those who died during the year.
If a life insurance policy is assigned to someone, how soon should the person notify the life office of the assignment?
As soon as possible
How are premiums usually calculated by a life office and how would a difference effect this?
Premiums are usually calculated on a yearly basis and assume that the whole premium is available to the life office for investment at the start of the policy year. A premium will include a frequency loading to compensate the life office for not having access to a full payment upfront, if it is to be paid by monthly instalments.
Who is the mortgagee and who is the mortgagor
The mortgagee is the lender and the mortgagor is the client
What does a continuation option mean in regards to a life insurance policy divided by employer for a pension scheme
This means that the person can take out a new policy if you leave the company based on his age at the time
What is guaranteed insurability on in life insurance policy?
It allows the policyholder to increase the sum assured on stated events within a specific time period without the need for further underwriting
Why are split trusts useful for life insurance policies, which include critical illness
It’s because the person who is assured we will be able to receive the benefits if diagnosed with critical illness
What distinguishes the difference between a mortgage and an absolute assignment
Alright, known as the equity of redemption
When a life insurance policies made paid up, what does this mean in relation to the Sum assured?
It is reduced
What method is the fastest for collecting underwriting evidence and the results in less nondisclosure?
Tele underwriting 
