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Questions and Answers
What is the key function of an Impairment Rider?
What is the key function of an Impairment Rider?
- It increases the coverage amount automatically.
- It removes coverage for a specified pre-existing condition. (correct)
- It allows for coverage adjustments based on health status.
- It guarantees coverage regardless of health changes.
How does the premium for additional coverage work under the Guaranteed Insurability Rider?
How does the premium for additional coverage work under the Guaranteed Insurability Rider?
- It is determined by the market rate at the time of purchase.
- It is calculated based on the insured's attained age at exercise. (correct)
- It is based on the insured's initial age at policy purchase.
- It remains constant regardless of age.
Which of the following statements is true about the Impairment Rider?
Which of the following statements is true about the Impairment Rider?
- It can be either temporary or permanent in nature. (correct)
- It permanently excludes all health conditions from coverage.
- It allows for coverage of any health condition.
- It includes all pre-existing conditions without exception.
What is a significant benefit of the Guaranteed Insurability Rider?
What is a significant benefit of the Guaranteed Insurability Rider?
Which of the following best describes a pre-existing condition as it relates to the Impairment Rider?
Which of the following best describes a pre-existing condition as it relates to the Impairment Rider?
What is the primary purpose of the grace period in a policy?
What is the primary purpose of the grace period in a policy?
Which statement accurately describes policy reinstatement?
Which statement accurately describes policy reinstatement?
What is the difference between a revocable and an irrevocable beneficiary?
What is the difference between a revocable and an irrevocable beneficiary?
When must a claimant submit proof of loss?
When must a claimant submit proof of loss?
How long does an insured typically have to provide notice of a claim after a loss?
How long does an insured typically have to provide notice of a claim after a loss?
What right does the insurer have regarding the physical examination of the insured?
What right does the insurer have regarding the physical examination of the insured?
What is the purpose of the 'Free Look' provision in an insurance policy?
What is the purpose of the 'Free Look' provision in an insurance policy?
In the context of insurance policies, what does the 'Deductible' refer to?
In the context of insurance policies, what does the 'Deductible' refer to?
What does the 'Waiver of Premium' provision entail?
What does the 'Waiver of Premium' provision entail?
What does 'Coinsurance' signify in an insurance policy?
What does 'Coinsurance' signify in an insurance policy?
Which clause specifies that coverage does not apply to prior conditions?
Which clause specifies that coverage does not apply to prior conditions?
What is meant by 'Recurrent Disability' in an insurance policy?
What is meant by 'Recurrent Disability' in an insurance policy?
What does an Impairment Rider specifically eliminate coverage for?
What does an Impairment Rider specifically eliminate coverage for?
Which of the following describes a Guaranteed Insurability Rider?
Which of the following describes a Guaranteed Insurability Rider?
Which right allows the insurer to cancel a policy at any time?
Which right allows the insurer to cancel a policy at any time?
What is a characteristic of a Noncancellable policy?
What is a characteristic of a Noncancellable policy?
Under which renewal condition can the insurer raise premiums on a class basis?
Under which renewal condition can the insurer raise premiums on a class basis?
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Study Notes
Policy Provisions
- Entire contract includes the policy, riders, amendments, and application copy.
- Grace period allows a specified time post-premium due date to prevent policy lapse.
- Reinstatement permits policy restoration with proof of insurability within a set timeframe.
- Change of beneficiary:
- Revocable can be modified anytime by the policyowner.
- Irrevocable requires beneficiary consent for any changes.
- Notice of claim mandates insured to inform insurer within 20 days post-loss or as soon as possible.
- Claim form provision requires the insurer to provide claim forms within a designated period.
- Proof of loss must be submitted by claimant within 90 days of the loss.
- Time of payment of claims outlines immediate claim settlement upon written proof of loss.
- Payment of claims specifies the recipient of claims payouts.
- Physical examination and autopsy clause allows insurers to examine the insured while a claim is pending.
Mandatory Provisions
- Insuring clause establishes the fundamental agreement between the insurer and policyowner.
- Free Look allows policy return for a refund within a defined timeframe.
- Consideration involves exchange of value between contracting parties.
- Probationary period must elapse before specific coverage initiates.
- Elimination period defines the waiting days post-illness or accident onset for benefit eligibility in disability income policies.
- Waiver of premium ensures premium payments are suspended during total, permanent disability.
- Pre-existing conditions clause excludes coverage for conditions prior to the policy.
- Recurrent disability sets a time frame required between two illnesses for new benefits.
- Deductible refers to the amount the insured must pay prior to the insurer covering benefits.
- Coinsurance involves expense sharing, expressed as a percentage after the insured pays the deductible.
- Copayments outline cost-sharing in a fixed dollar amount.
Riders
- Impairment Rider removes coverage for designated pre-existing conditions (e.g., back injuries) and may be temporary or permanent.
- Guaranteed Insurability Rider allows additional coverage purchase without evidence of insurability, with premiums based on the insured's age at the time of option exercise.
Rights of Renewability
- Noncancellable means the insurer cannot cancel or increase premiums beyond what is stated in the policy.
- Cancellable permits the insurer to cancel the policy anytime or at the end of the policy period with written notice and refund of unearned premium.
- Guaranteed renewable allows insurer to raise premiums (only on a class basis) on policy anniversary, while giving the insured the right to renew for the contract's life.
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