Traditional Whole Life Products
Ordinary straight life
Limited-Pay
Single-Premium Life
Adjustable Life
Straight Life
basic policy that charges a level annual premium for the lifetime of the insured and provides a level, guaranteed benefit
Limited-Pay
(10 pay, 20, paid up, 65): the policyowner makes premium payments for the first several years the policy is in force. Once premiums have been paid for a certain number of years, the policy has been paid in full
Single-Premium Life
life insurance where you pay the premium once, immediate cash value
Adjustable Life
depending on the insured need's the policy owner has the options to increase or decrease the premium, change the premium-paying period, increase or decrease the face amount of coverage, or change the period of protection; option of converting from term to
Interest-Sensitive Life Products
Universal Life
Variable Whole Life
Variable Universal Life
Interest-Sensitive Whole Life
Universal Life
A combination flexible premium, adjustable life insurance policy. The premium payer may select the amount of premium he or she can pay and the policy benefits are those which the premium will purchase. Or, the premium payer may change the amount of insura
Variable Whole Life
because this type of po,l.icy involves investment accounts, an individual must hold a securities license in addition to a life insurance license in order to sell variable life; the sale of a variable life policy must be preceded or accompanied by a prospe
Variable Universal Life
A combination of the features of variable life insurance and universal life insurance under the same contract. Benefits are variable based on the value of equity investments, and premiums and benefits are adjustable at the option of the policyholder.
Interest-Sensitive Whole Life
Whole life insurance with a level premium, guaranteed death benefit, guaranteed minimum cash value, and accumulations in cash value that fluctuate with market rates of interest.
Term Life
Level, Decreasing, and Increasing Term
Special Features
Renewable
Convertible
Level, Decreasing, and Increasing Term
level- the premium and death benefit remain level during the term of coverage
Decreasing- the premium remains level during the term of coverage, but the death benefit decreases with time
Special Features
Renewable
Convertible
Annuities
Single, Level, and Flexible Premium
Immediate and Deferred
Fixed and Variable
Equity Index
Single, Level, and Flexible Premium
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Immediate and Deferred
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Fixed and Variable
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Equity Index
A stock market index is a method of measuring a section of the stock market. Many indices are cited by news or financial services firms and are used to benchmark the performance of portfolios such as mutual funds.
Combination Plans and Variations
Joint Life
Survivorship Life
Joint Life
single policy is designed to insure two or more lives; can be term insurance or permanent insurance; premium would be less than for the same type and amt of coverage on the same individuals
Survivorship Life
Two or more insureds. Pays upon death of the last
Policy Riders
Waiver of Premium and Waiver of Premium with Disability Income
Guaranteed Insurability
Payor Benefit Accidental Death and/or Accidental Death and Dismemberment
Term Riders
Other Insureds (e.g., spouse, children, nonfamily)
Cost of Living
Waiver of Premium and Waiver of Premium with Disability Income
A clause in an insurance policy that waives the policyholder's obligation to pay any further premiums should he or she become seriously ill or disabled. A waiver of premium allows people to benefit from an insurance policy, even when they cannot work.
Guaranteed Insurability
An option in life and health insurance contracts that permits the insured to buy additional prescribed amounts of insurance at prescribed future time intervals without evidence of insurability.
Payor Benefit
primarily used with juvenile policies;payor becomes disabled for at least 6 mths dies, the insurer will waive the premiums untile minor reaches a certain age
Accidental Death and/or Accidental Death and Dismemberment
If the insured dies because of an accident, the insurance company will pay the beneficiary an additional death benefit.
In order for the beneficiary to receive this additional benefit, the insured must die within 90 days of the accident
this rider typical
Term Rider
that is added to a whole life policy at the time of purchase or that may be added in the future.
Other Insureds (e.g., spouse, children, nonfamily)
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Cost of Living
average cost of basic necessities of life (as food and shelter and clothing)
Policy Provisions and Options
Entire Contract
Insuring Clause
Entire Contract
provision simply stipulates that the policy and a copy of the application, along with any riders or amendments
Insuring Clause
identifies the insuere and insured and states the conditions under which benefits are to be paid. insurers promise to pay benefits for specific kinds of losses
Consideration
a clause that states that the policyowner promises to pay all premiums due under the policy and that all representations made on the application are true
Owner's Rights
clause that states that the policyownder possesses all contractual rights in the policy while the insured is still living. This includes the right to name a beneficiary, borrow against the cash value or select a dividend option
Beneficiary Designations
Primary and Contingent
Revocable and Irrevocable
Changes
Common Disaster
Minor Beneficiaries
Primary and Contingent
primary- first beneficiary in line to receive the death benefit
contingent- the 2nd beneficiary in line to receive the death benefit
if none alive and insured dies, goes to their estate
Revocable and Irrevocable
change and cant change
Changes
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Common Disaster
A provision in a Life contract that provides that the Primary Beneficiary
must outlive the insured by a specified period of time in order to receive the proceeds. If not, then the
Contingent Beneficiary receives the proceeds. The provision is designed to
Minor Beneficiaries
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Premium Payment
Modes
Automatic Premium Loan
Level or Flexible
Modes
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Automatic Premium Loan
A provision in cash-value life insurance policies that allows any premium not paid by the end of the grace period to be paid automatically with a policy loan if sufficient cash value or dividends have accumulated.
Level or Flexible
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Reinstatement
stipulates under what conditions the insured may reinstate coverage after a lapse. sickness is not covered for 10 days after reinstatement to cover adverse selection
Policy Loans, Withdrawals, Partial Surrenders
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Nonforfeiture Options
Alternative ways the cash value may be used if the policy is surrendered. Has to be whole-life or have some sort of cash/ savings element.
Dividends and Dividend Options
dividends paid to policy holders of Mutual Insurance Companies, and are taxable (when in excess of premiums)
Incontestability
clause stating that once a policy is in effect for two years, company cannot deny payment of a claim or cancel due to fraud
Assignments
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Suicide
after 2 years, pays death benefit, before does not
Misstatement of Age and Gender
if results in overpayment insurer refunds the overpaid premium. If is results in an underpayment, the insurer pays reduced death benefit. This provision is not subject to the incontestibility provision.
Settlement Options
alternative ways a beneficiary can choose to receive the policy benefits upon the death of insured. include: 1. Lumpsum settlement, 2. interest-only settlement, 3. installment-payments settlement, and 4 life-annuity settlement.
Policy Exclusions
to exclude death caused by anoninsurable risk: 1) suicide (2 yrs), 2) war, 3) aviation (regular duties), 4) being private pilot
Completing the Application
Required Signatures
Changes in the Application
Consequences of Incomplete Applications
Warranties and Representations
Collecting the Initial Premium and Issuing the Receipt
Replacement
Disclosures at Point of Sale (i.e., HIPAA, HIV consent)
Required Signatures
the party against whom enforcement of the contract is sought must have signed the contract. the signature may be the person's full legal name, last name, first name, nickname, initials, or other symbol or mark.
Changes in the Application
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Consequences of Incomplete Applications
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Warranties and Representations
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Collecting the Initial Premium and Issuing the Receipt
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Replacement
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Disclosures at Point of Sale (i.e., HIPAA, HIV consent)
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Underwriting
Insurable Interest
Medical Information and Consumer Reports
Fair Credit Reporting Act
Risk Classification
Insurable Interest
an interest in a person or thing that will support the issuance of an insurance policy
Medical Information and Consumer Reports
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Fair Credit Reporting Act
federal law giving consumers the right to view and correct their credit information
Risk Classification
an assessment of the level and kind of risk an individual presents to correctional staff and other inmates
Delivering the Policy
When Coverage Begins Explaining the Policy and its Provisions, Riders, Exclusions, and Ratings to the Client
Do Not Call List
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Third-Party Ownership
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Group Life Insurance
Conversion Privilege
Contributory vs. Noncontributory
Retirement Plans
Tax-Qualified Plans
Nonqualified Plans
Tax-Qualified Plans
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Nonqualified Plans
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Business Insurance
A policy whose principal purpose is to provide reimbursement to an employer for the time lost by a key employee who is disabled.
Social Security Benefits and Taxes
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Tax Treatment of Insurance Premiums, Proceeds, Dividends
Individual Life
Group Life
Modified Endowment Contracts (MECs)
Individual Life
includes many types of temporary and permanent insurance protection plans written on individuals with premiums paid monthly quarterly semiannually or annually
Group Life
life insurance provided for members for a group
Modified Endowment Contracts
Occurs when your cash value grows too fast. When it happens you lose all the tax benefits of a life insurance policy.
Accelerated Death Benefits
living riders allow the early payment of some portion of the death benefit if the insured is diagnosed as having a specified catastrophic illness, is terminally ill, or permanently confined to a long-term care facility. The maximum benefit is usually spec
Endowments
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Twisting (replacement to the detriment of the insured)
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Powers and Duties of the Commissioner
Broad Powers
Examination of Records
Notice and Hearing
Forms and Rate Review
Definitions
Domestic and Foreign
Stock and Mutual
Certificate of Authority
Fraternals
Licensing and Appointments
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Educational Requirements
Prelicensing
Continuing Education
Long-Term Care (LTC)
Types of Licenses
Producer
Temporary
Nonresident
Termination of License
Expiration
Revocation or Suspension
Appointment
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Termination of Appointment
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Maintenance and Duration of License
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Trade Practices
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Prohibited Practices
Unfair Claims Settlement Methods and Practices
Rebating
Misrepresentation
Defamation
Discrimination
Penalties
Misappropriation or Conversion of Funds
Forgery
Suitability
Compensation of Licensees
Commissions
Fees for Service
Commissions
the act of granting certain powers or the authority to carry out a particular task or duty
Fees for Service
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Advertising
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Agent Conduct and Insurance Marketing Standards
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Required Disclosures
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Guaranty Association
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Notice of Policyholder Rights
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Beneficiaries
Protection from Creditors
Policyowner Rights
Right to Cancel
Insured
Insurance Company
Insured
a person whose interests are protected by an insurance policy
Insurance Company
a financial institution that sells insurance
Policy Provisions
Grace Period
Grace Period
a time period during which no finance charges will be added to your account
Back Dating
The practice of making a policy effective at an earlier date than the present.
Credit Insurance (Life and A&H)
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Group Life
Continuation of Coverage
Conversion of Coverage
Continuation of Coverage
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Conversion of Coverage
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