Life insurance policies, provisions, options and riders Flashcards
Who only has the right to make modifications or changes to an insurance policy?
The executive officer of the insurance company
How long is the free-look? What does it mean?
Free-look is 10 days. It is the time in which the client can review/cancel the policy.
When does the free-look start?
Once the policy has been delivered
Define modes
It is the frequency in which the premium is paid
Which mode does not incur a service fee from the insurance company?
Annual premium
Define grace period. How long is the grace period?
It is the time in which payment of premium has lapse however the policy will be enforced for that duration (31 days)
What happens if the insured dies during the grace period?
the premium will be deducted from the death benefit amount
What is the term in which a lapsed policy can be placed back in force?
Reinstatement
What is the maximum length of time that a policy can be reinstated?
3 years
Define incontestability
It is when an insurer cannot deny payment of claim after 2 years d/t misstatement or concealment of facts
what is the exception in a incontestability period?
misstatement of age
What is the provision in which the insurer denies certain types of risks?
Exclusion provision
When is the death benefit paid by the insurer if the insured commits suicide?
> 2 yrs
Name the two types of war clauses
Results and status war clause
Define the two types of war clauses
status clause will not pay death benefit is insured is active duty. Results clause will not pay if insured is killed by act of war
Name beneficiary designation options (5)
individual, classes (per capita, per stirpes), estate, trust, minor
Which succession of benefits is often the estate?
Tertiary beneficiary
Which succession of benefits is referred as the contingent beneficiary?
secondary beneficiary
Define third party ownership
It is when the insured and policy owner are not the same person
Define common disaster clause
Clause that protects the secondary (contingent) beneficiary in case the insured and primary beneficiary dies at the same time
Define provisions
Provisions in a life insurance policy are the clauses that outline the policy’s conditions, coverage, and exclusions. They also specify how the policy can be modified or terminated
