Study five Flashcards
What must a contract include?
1) application (including initial premium payment)
2) policy
3) any amendment attached the the policy when it is issued
4) any amendment agreed upon in writing after the policy has been issued
- the application is the primary source of info that the insurer uses to assess the acceptability of risk and to determine appropriate premium
Define rider.
- or endorsement, is an attachment to an insurance policy that either enhances or limits the benefits payable under that policy
What information must be provided if the applicant is not the same person as the proposed life insured?
1) name, address, telephone number
2) relationship to proposed life insured
3) date and place of birth, gender, marital status, SIN
- helps confirm the applicant has an insurable interest in the life insured
What general info is required from applicant to be insured?
1) name, address, telephone number
2) date and place of birth, gender, marital status, SIN
3) name and address of employer, occupation description
4) smoker or nonsmoker
5) total annual income and personal net worth
6) details of existing, inforce life and health policies
7) whether current application is to replace another policy
8) prior declination or cancellation of life/health insurance
9) details of any other concurrent application for life or disability insurance
10) participation in hazardous activities
11) applied for or received any pension, disability, or compensation benefits
12) details of travel or residence outside of north america (not including holidays)
13) details of any drivers license suspension, criminal charges or convictions
What questions on the application relate to the coverage for which the applicant is applying for?
1) type of coverage requested
2) amount of coverage requested
3) any additional options or riders requested
4) name and address of beneficiary, and whether they are to be named as revocable or irrevocable
5) name of any contingent beneficiary
Define revocable beneficiary.
- is one that the policyholder may remove from the policy at any time without beneficiary’s permission.
Define irrevocable beneficiary.
- retains an interest in the policy for life
- policyholder may not remove beneficiary from policy without written permission
- policyholder may not surrender, assign it as collateral, borrow against, or withdraw funds from policy without permission from beneficiary
Define contingent beneficiary.
- is a successor to the policy if the named beneficiary is not alive at the time of a claim.
What are the elements common to all life insurance applications?
1) part 1 - general info
2) part 2 - health info
3) producer’s/agent’s reports
4) temporary insurance agreement
5) declaration
6) receipt for payment/ preauthorized cheque form
7) medical information bureau disclosure
Describe what happens with assignment with a collateral assignee.
- life insurance benefit amount can be assigned to a third party as collateral
- this assignee is to be included as one of the beneficiaries of the policy after assignment
- the death benefit would be paid jointly to assignee and beneficiary
What is absolute assignment?
- when the interest on a life insurance policy transfers all rights under contract to the assignee
- the assignee then has the right to name a new beneficiary
What does the non-medical questionaire include?
1) name, address of doctor, details of last visit
2) height, weight, details of weight change
3) use of tobacco, nicotine, marijuana, drugs
- use of alcohol, participation in rehab
4) prior diagnosis or treatment for
- abnormal BP, heart disease
- cancer
- diabetes, hepatitis
- respiratory disorder
- gastrointestinal disorder
- disorder of the bones, muscles, joints, eyes, skin
- epilepsy, seizures, nervous disorder
- anxiety, depression
- disease of kidney, bladder, reproductive system
- AIDS, HIV
5) any other medical treatment, tests, symptoms in the past 5 years
6) family history of heart disease, kidney disease, diabetes, cancer, stroke, mental illness, hereditary disease
What is a TIA?
- temporary insurance agreement
- binders for life insurance
What does an agent need to do in order for a TIA to be valid?
1) have received completed application
2) have received a valid cheque for the first premium
3) be reasonably confident that the proposed life insured will be acceptable to the underwriters at the standard premium rate
What are the requirements for temporary coverage?
1) an age restriction
- specifying that the proposed life insured must be under a certain age ( 61-65)
2) certain disease restrictions
- specifying that the PLI must not have been diagnosed or treated for cancer, stroke, heart disease, disorder of immune system, positive HIV, chronic kidney, liver, or lung disease
3) time limitation for disability
- providing that the proposed life insured cannot have been disabled for longer than a specified number of days during last 6-12 months
4) limitation to disqualify the proposed life insured
- if an insurer has declined, modified, or surcharged a previous life insurance policy
5) time limitation for hospital admission or tests
- to disqualify a PLI who has been admitted to hospital, undergone tests, or had surgery recommended
during previous 90 days
6) a limit restricting the amounf of coverage provided by TIA
- to the lesser of the limit imposed by TIA’s by the insurer or the limit of coverage applied for
- commonly $500,000
