Quiz2 Life Insurance

Study Notes

A life insurance policy is a legal document that outlines the terms of the insurance.
The policy holder has an insurable interest in the wellbeing of the person he or she is insuring, and must provide proof of this interest before applying for the policy.
If the policy holder does not disclose critical information that would have made him or her ineligible for coverage, the insurance company can cancel the contract for up to two calendar years from the original policy issuing date.
A life insurance policy can provide coverage for a lifetime, and the payout will continue even if the principal is exhausted.
A mortgage life insurance policy is a form of life insurance that provides coverage for the insured person’s home.
Mortgage life insurance can provide coverage for the insured person’s mortgage, as well as any other personal property that is attached to the home.
Non-participating life insurance policies do not pay out any profits to the policy owner.
You pay your premiums, and your beneficiary receives a lump sum when you die.
Non-smoker rates acknowledge that non-smokers are expected to live longer than smokers.
The life insurance company's operating costs are used to calculate dividends and premium rates.
Accelerated Death Benefits are available before the death of the insured.
Accidental Death Insurance is a type of insurance that pays out only if the insured dies in an accident.
Accrued Interest is interest that has been earned and recognized but not yet paid out.
Agent is a person licensed by the state to negotiate insurance contracts.
Billing Date is the day of the month that the life insurance premium bill is due.
Beneficiary is the individual who receives proceeds from a life insurance policy at the death of the insured.
Cash Surrender Value is the cash amount you would get if you surrendered a life insurance policy.
The cost of insurance is the amount an individual must pay for his or her life insurance policy, also known as a premium.
The monthly charge for a life insurance policy fluctuates depending on the insured person’s health, age, sex and other considerations such as lifestyle and the nature of the person’s profession.
A policy can have a conversion right that allows the policyholder to change the current policy to a permanent insurance policy within a certain timeframe, without giving proof of insurability.
A disclosure statement explains the details of the policy for the benefit of the consumer.
A policyholder may receive a return as part of the distribution of a portion of an insurance company’s profits.