Life Policy Provisions, Riders, and Options Flashcards
The ___________ provision specifies the policy owners right to assign (transfer ownership of the policy). Must advise the insurer ________________.
Assignment; in writing
Permanent and total transfer of all policy rights. ____________ have to have Insurable interest in the insured.
Absolute assignment; does not
Transfer of partial and temporary rights of ownership. Usually done to secure a loan. Once debt is paid the rights are returned.
Collateral assignment
Policy + copy of application + any riders or amendments
Entire contract
Free look period starts when?
When the policy owner receives the policy; NOT when issued
Periods of time after the due date thay the policy owner has to pay before the policy lapses
Grace period
Provision that allows a lapsed policy to be put back in force
Reinstatement
The max time limit for reinstatement after a policy has lapsed.
Usually 3 years
If a policy holder elects to reinstate a lapsed policy they will have to provide what.
Evidence of insurability
T\F: a policy that has been surrendered cannot be reinstated.
True
Incontestability clause prevents an insurer from denying claims due to statements in the application after the policy has been in force for how long?
2 years
T/F: Misstatement if age on an application will result in an adjustment of premiums or benefits.
True
Aviation, hazardous occupation, and war/military service are the most common ___________.
Exclusions
The ______ clause excludes all causes of death while the insured is on active duty in the military.
Status
The ______clause only excludes the death benefit of the insured is killed as a result of an act of war.
Results
If the insured commits suicide within ____________ following the policy effective date the insurers liability is limited to a refund of premium.
2 years
Benefits designated to a minor will either be paid out the the minors _________ or paid to the _____\ of the minor.
Guardian, trustee
Meaning by the head, evenly benefits among the living named beneficiaries.
Per capita
Meaning by the bloodline, distributed the benefits of a beneficiary who died before the insured to that beneficiary’s heirs.
Per stirpes
The beneficiary designation that provides for levels of priority or choice.
Succession
Has first claim to the policy proceeds following the death of the insured. May be more than one.
Primary beneficiary
Has second claim to insurance proceeds in the event the primary beneficiary dies before the insured. Does not receive anything if primary is still alive at time of death.
Contingent beneficiary
Stipulates thay if the insured and primary beneficiary die in same accident and there is no sufficient evident to show who died first, policy proceeds are to be distributed as if the primary died first.
Uniform simultaneous death law
If the insured and primary beneficiary die in a common disaster (even if a number of days apart) it is presumed the the primary beneficiary died first. (Usually 14 to 30 days)
Common disaster clause
Common disaster clause protects whom?
The contingent beneficiary
Am insurer must provide ________ written notice to the policy owner that the policy is going to lapse.
30 days
Insurance companies may defer a policy loan request for up to ____________ unless the reason for the loan is to pay the policy premium
6 months
Policy loans are or are not subject to income taxation?
Are not
T/F: Policy loans are ONLY available in policies that have cash value.
True
A special type of loan that prevents the unintentional lapse of a policy due to no payment of premium.
Automatic premium loan
While the insurer may defer requests for other loan for a period of up to 6 months, loan requests for payment of due premiums must be honored __________.
Immediately
________ life policies allow partial withdrawal (surrender) of the policy cash value. Not the same as a policy loan.
Universal
Written modifications attached to a policy that provide benefits not found in the original policy.
Riders
Accelerated or living benefits riders provide for partial payment of the death benefit prior to _________________
Insureds death
Waives the premium for the policy if the insured becomes totally disabled.
Waiver of premium
With waiver of premium most insurers impose a _______________ waiting period from the time of disability until the first premium is waived. Usually expires when insured reaches age __.
6 month: 65
Premiums paid during the waiting period with a waiver of premium rider are ___________ if the insured is stilll disabled at the end of the waiting period.
Refunded
I’m the event of disability the insurer waived the policy premiums and pays a monthly income to the insured.
Disability income benefit
If the payor becomes disabled for at least 6
Months or dies the insurer resides the premiums until the minor reaches a certain age such as 21. (Also used when insured and payor are two different people)
Payor benefit
Provides coverage for one or more family members other than the insured.
Other insured rider.
Allows spouse to be added to coverage for a limited time and for a specified amount. Usually expires at age 65
Spouse term rider
Allows child to be added to coverage for a limited time and amount.
Children’s term rider
Children’s term rider : ____ premium for ___ children
One; all
children’s term rider usually expires when? And minor usually has option to ________ without providing insurability.
18 or 21; convert
Incorporates the spouse term rider along with the children’s term rider into 1.
Family term rider
Pays some multiple of the face amount of death is cause by accident
Accidental death rider
The benefit pays out two times the face amount
Double indemnity
