Provisions, Riders, Options Flashcards
Acronym for Exclusions
WASH
What are the exclusions?
War
Aviation
Suicide
Hazardous Hobbies
Another way to say Hazardous Hobbies
Avocation
By the head
Per Capita
By the bloodline
Per stirpes
Disability Riders acronym
Waiver of premium
Waiver of cost of insurance
Payor benefit
Disability income
Waiver of premium
If policyowner becomes disabled for more than 6 months, the premium is waived.
Waiver of cost of insurance
Only used with universal life. Waives the cost of insurance (mortality charge)
Payor benefit
Juvenile policy
Disability income
Pays your monthly income and waiver of premium if you are disabled. Ex) Aflac
Additional insured riders
Children
Other
Friends
Spouse
Children Rider
Term rider that converts to whole life at age 21 without proving insurability.
Pay the same amount no matter how many kids.
“Jumping juvenile”
Other rider
Non-family
Used for key persons/business
Family Rider
Equal amount per person
Increasing Riders that change the death benefit
“ICRAG”
Increasing
Cost of living
Return of premium
Accidental death
Guaranteed insurability
Accidental death rider qualifications
Must happen within 90 days of accident
Cannot be at fault
Non-Forfeiture options
Non-forfeiture
Reduced paid up
Extended
Cash surrendar
Reduced paid up
Lasts the longest (age 100)
Extended term
Has the greatest amount of coverage (D.B, proceeds, face amount)
Cash surrender
Ends immediately
Dividend Options
Do - dividend options
C - cash “dividend check”
R - reduction of premium
A - accumulation at interest
P - paid up options/insurance
P - paid up additions
O - one year term
Reduction of premium
Lowers next year’s premium by the dividend amount
Accumulation at interest
Like a savings account (taxable)
Paid up options/insurance
Paying the life insurance up early with dividends
Paid up additions
Buy more of the same kind of life insurance with the dividend.
One year term
Buy an additional one year of term insurance
Settlement options
C - cash
L - life income
I - interest only
F - fixed period
F - fixed amount
Cash settlement
Payment (lump sum)
Not taxable to the beneficiary
Automatic choice
Life income also known as
Annuity
Life income
Use the death benefit to buy annuity
Life income types
Single/straight/pure life
Refund life
Life with period certain
Joint and survivor
Single/straight/life
Only of the life of the beneficiary
Refund life
For the life of beneficiary or refunded to another beneficiary.
Life with period certain
For the life of a beneficiary or paid out over time to another beneficiary.
Joint and survivor
Pays two beneficiaries for their life, upon 1st death, the second now gets 2/3.
Interest only
Beneficiary #1 gets interest only
Beneficiary #2 gets the death benefit (at 21)
*temporary option
Fixed period installments aka annuity certain
Depletes funds over a fixed period
Pays a 2nd beneficiary if the 1st dies
Fixed amount installments
Pays fixed amount until proceeds are exhausted.
Pays a 2nd beneficiary if the 1st dies.
