Life Insurance Premiums, Proceeds, and Beneficiaries Flashcards
This is the original policy owner in a viatical settlement.
Viator
This is the new third-party owner in a viatical settlement.
Viatical (Viatee)
This settlement involves a person with a terminal illness selling his existing life insurance policy to a third party for a percentage of the death benefit.
Viatical Settlement
This act states that if the insured and the primary beneficiary die in a common accident at approximately the same time, with no clear evidence as to who died first, the law will assume that the primary died first. Therefore, the death benefit proceeds are paid to the contingent beneficiaries.
Uniform Simultaneous Death Act
This includes the premium that has been paid by a policy owner for insurance coverage which has not yet been provided.
Unearned Premium
This is the department within an insurance company that’s responsible for reviewing applications, approving or declining applications, and assigning risk classifications.
Underwriting Department
This is the third beneficiary in line to receive death benefit proceeds. They will only receive the death benefit if both the primary and contingent beneficiaries die before the insured.
Tertiary Beneficiary
This is a cost comparison calculation formula which is used to determine the average cost-per-thousand for a policy that’s surrendered for its cash value. It aids in cost comparisons if the policy owner plans to surrender the policy for its cash value in 10 or 20 years.
Surrender Cost Index
This clause prevents creditors from obtaining any portion of policy proceeds upon an insured’s death. Additionally, the clause can be selected by the policy owner to prevent a beneficiary from recklessly spending benefits by requiring the benefits to be paid in fixed amounts or installments over a certain period.
Spendthrift Clause
This is a policy funding option in which the policy owner pays a single premium that provides protection for life as a paid-up policy.
Single Premium Funding
These are optional modes of settlement that are provided by most life insurance policies. Options include lump-sum cash, interest only, fixed-period, fixed-amount, and life income.
Settlement Options
This is a beneficiary that the policy owner may change at any time without notifying or getting permission from the beneficiary.
Revocable Beneficiary
This is the money an insurer sets aside (as required by the state’s insurance laws) to pay future claims.
Reserves
This is the amount actually paid as a death, surrender, or maturity benefit. In the case of a death benefit, it includes the face value, plus any earned dividends, less any outstanding loans and interest. In the case of a surrender benefit, the amount includes any cash value, minus surrender charges, outstanding loans, and interest. In the case of maturity, the benefit amount includes the cash value, less any outstanding loans and interest.
Policy Proceeds
This is the first beneficiary in line to receive benefit proceeds upon the death of an insured.
Primary Beneficiary
This is the frequency in which a policy owner elects to pay premiums.
Premium Mode
This form evenly distributes benefits among an insured’s beneficiaries according to the family line, branch, or root (i.e., children and grandchildren).
Per Stirpes (By the Bloodline)