entire contract provision
the entire contract provision found at the beginning of the policy states that the policy documents the application which is attached to the policy and any attached writers constitute the entire contract
insuring clause
A general statement that identifies the basic agreement between the insurance company and the insured, usually located on the first page of the policy.
Owner's rights provisions
- can change the beneficiary
- can borrow cash value
- can receive dividends
- select premium mode
- assignment rights
- The beneficiary has no rights in the contract
Free Look Provision
Generally 10 days after policy delivery to cancel policy w/ full refund, except 30 days for seniors or for replacement policies.
Consideration Clause
in a life insurance policy the consideration Clause states that the policyowner consideration consist of completing the application and paying the initial premium
Grace Period Provision
Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Reinstatement Provision
with reinstatement a policy is restored to its original status and its values are brought up today.
1 all back premiums must be paid
2 interest on past-due premiums may be required to be paid
3 any outstanding loans on the last policy may be required to b
policy loan provisions
Apply to whole life and the universal life policies and allow the owner to borrow an amount up to the cash value from the insurer at a rate of interest specified in the policy, and up to the account value in universal life.
if not repaid by the time of th
cash value of the policy
when a life insurance policy obtains a policy loan the collateral for the loan is what?
amount of Interest due will be added to loan balance
what happens if a policy owner does not make a scheduled interest payment on a policy loan?
the policy is no longer in force
what happens in the event policy loan plus interest exceeds a life insurance policy cash value?
Incontestable Clause
the insurer cannot contest the policy after it has been in force two years during the insured's lifetime
absolute assignment
the transfer is complete and irrevocable the assignee receives full control over the policy and full rights to its benefits
collateral assignment
is one in which the policy is assigned to a creditor as security, or collateral, for a debt. If the insured dies the Creditor is entitled to the reimbursement after the benefits proceeds for the amount owed
accelerated benefit provision
a provision in life insurance that allows for the early payment of some portion of the policy face amount should the insured suffer from a terminal illness or injury
suicide provision
2 year period where if the insured commits suicide before then they will not receive the benefits they will just get their premium payments back. After 2 years they can receive the entire proceeds.
misstatement of age or sex clause
if the insured's age or sex is misstated, the amount payable is the amount that the premiums paid would have purchased at the correct age and sex
automatic premium loan provision
- Enables the insurer to withdraw funds from the policy if any cash value has accumulated within the contract
discretionary provision
Gives discretionary authority to the insurer when determining the eligibility of an insured for benefits under the policy; designed to protect the insurance company
after 3 years
when are Insurance required to make casserole devalues available for ordinary life insurance policies?
Rear end load
some policies require a penalty to be paid if a policy is surrendered in its early years Lee's surrender are deducted from the cash value when the policy is discontinued( a partial surrender can allow the policy owner to withdraw the policy cash value int
presence of dividends
what is the major difference between participating and non-participating?
guaranteed insurability option Rider
Allows a policyowner to purchase additional life insurance coverage at specified dates without providing evidence of insurability.
cost for new covers purchase under this writer are calculated bases on Ensure attained age
this writer also allows the polic
waiver of premium Rider
should the owner be disabled and cant earn an income, after 6 months, all premiums will be paid by the insurer during the disability period; After 6 months, the premiums will be repaid
settlement options
1 increasing proceeds can be provided through accumulation of Interest
2 rapper depletion of proceeds can be avoided
3 proceeds can be administered by the insurance company
Term Riders
which of these life insurance Riders allows the applicant to have excess coverage
it is taxed as ordinary income
which of the following statements about accumulated interest earned on dividends from an insurance policy is true?
inability of the insured to perform more than two activities of daily living
a long-term care Rider in a life insurance policy pays a daily benefit in the event of which of the following?
variable life
which of these types of life insurance allows the policyowner to have level premiums and also choose from a selection of investment options
must have a terminal illness to qualify
Which of the following statements is CORRECT about accelerated death benefits?
p is the insured on a participating life policy. Which statement is true if PS premiums are waived due to a disability?
P will have to pay income tax on the amount of Premium waived
accidental death and dismemberment
the option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called
adjusted death benefit to the reduce the amount
L takes out a life insurance policy and dies 10 years later. During the claims process the insurer discovers that L had understated her age on the application under the Miss statement of age provision the insurer will
variable life
which of these types of life insurance allows the policyowner to have level premiums and also choose from a selection of investment options
policy loan provision
a provision in a life insurance policy that pays the policy owner an amount that does not surpass the guaranteed cash value is called?
waiver of premium
a life insurance policy which ensure that the premium will be paid if the insured becomes disabled has what kind of Rider attached
cash value provision
a policy loan is made possible by which of these life insurance policy features
automatic policy loan
s has a whole life policy with a premium payment due. Which provision would keep the policy in Force if s does not make the required payments and the policy has adequate cash value which premium payments can be made?
insuring agreement
the agreement in a life insurance contract that states a specific sum of money will be paid to the designated person upon and insurance death is called
return of Premium Rider
S Buys a $10,000 whole life policy in 2003 and pays an annual premium of $100. S dies five years later in 2008 and the insurer pays the beneficiary 10500. What kind of writer did s includes on the policy?
automatically add the amount of Interest due to the loan balance
what action will an insurer take if an interest payment on a policy loan is not made on time?
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nonforfeiture options
cash value, reduced paid-up insurance, extended term insurance
child
whose life is covered on a life insurance policy that continues a payor benefit clause?
what is suicide provision designed to do?
Safeguard the insurer from the applicants who is contempt in suicide
em had an annual life insurance premium payment due January 1st. She died January 10th without making the premium payment what action will the
pay face amount minus the past due premium
when the insured dies or the policy maturity date whichever happens first
when is the face amount of a whole life policy paid?
paid up additional insurance
a young married teacher has two children and owns a whole life policy. If the teacher wants an increasing death benefit to protect against inflation the teacher should select which of the following dividend options?
term Rider
which of these life insurance Riders allows the applicant to have excess coverage?
20000 death benefits
cave pays on a $20,000 20-year endowment policy for 10 years and dies from an automobile accident how much will the insurance company pay the beneficiaries?
payers benefit Rider
which life insurance Rider typically appears on a juvenile life insurance policy?
deducted when the policy is discontinued
how are surrender charges deducted in a life policy with a rear end loaded provision
what does the ownership clause in a life insurance policy state
who the policy owner is and what rights the policy owner is entitled to
p is blinded in an industrial accident which of these provisions of his life insurance policy will pay a set of benefit amount
accidental death and dismemberment clause