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Questions and Answers
What does the Disability Waiver of Premium Rider do?
What does the Disability Waiver of Premium Rider do?
What is the main function of the Disability Income Rider?
What is the main function of the Disability Income Rider?
To provide a monthly income benefit in addition to the Waiver of Premium.
Who benefits from the Payor Benefit Rider?
Who benefits from the Payor Benefit Rider?
The owner of a Juvenile Insurance Policy.
The Guaranteed Insurability Rider allows the insured to purchase additional insurance without evidence of insurability.
The Guaranteed Insurability Rider allows the insured to purchase additional insurance without evidence of insurability.
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Under what conditions does the Multiple Indemnity Rider pay out?
Under what conditions does the Multiple Indemnity Rider pay out?
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What does the Accidental Death and Dismemberment Rider provide?
What does the Accidental Death and Dismemberment Rider provide?
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A Term Rider can only be added to a Term Insurance policy.
A Term Rider can only be added to a Term Insurance policy.
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What is the Family Policy designed to provide?
What is the Family Policy designed to provide?
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What does a Family Income Policy combine?
What does a Family Income Policy combine?
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What is the purpose of the Joint Life policy?
What is the purpose of the Joint Life policy?
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What triggers a payment from a Survivorship Life policy?
What triggers a payment from a Survivorship Life policy?
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The Entire Contract Provision means that agents can make changes to the life insurance contract.
The Entire Contract Provision means that agents can make changes to the life insurance contract.
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How long is the Free Look Period for an insured?
How long is the Free Look Period for an insured?
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Which of the following rights does Ownership Provisions grant?
Which of the following rights does Ownership Provisions grant?
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What defines a Revocable Beneficiary?
What defines a Revocable Beneficiary?
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What happens under the Suicide Clause during the contestable period?
What happens under the Suicide Clause during the contestable period?
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What is the definition of Non Forfeiture Options?
What is the definition of Non Forfeiture Options?
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What is meant by the term 'Dividends' in life insurance?
What is meant by the term 'Dividends' in life insurance?
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Dividends are guaranteed payments for all policyholders.
Dividends are guaranteed payments for all policyholders.
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What does the policyholder receive under the Reinstatement process?
What does the policyholder receive under the Reinstatement process?
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The Grace Period is typically ____ days.
The Grace Period is typically ____ days.
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What does the term 'Settlement Options' refer to?
What does the term 'Settlement Options' refer to?
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Study Notes
Disability Riders
- Disability Waiver of Premium Rider: Waives future premium payments if the insured is totally and permanently disabled for at least six months before age 60, with payment for the first 6 months required.
- Disability Income Rider: Provides a monthly income benefit alongside the Waiver of Premium for an additional cost.
Payor and Insurability Riders
- Payor Benefit Rider: Waives future premiums on Juvenile Insurance Policies if the adult premium payer becomes disabled or dies.
- Guaranteed Insurability Rider: Allows the insured to purchase additional insurance without evidence of insurability, limited to intervals specified in the policy.
Indemnity Riders
- Multiple Indemnity Rider: Pays multiple of the face amount (double or triple) if death is accidental, occurs within 90 days, and the insured is under age 70.
- Accidental Death and Dismemberment Rider: Pays a separate benefit for accidental death or dismemberment, with a schedule for bodily losses.
Family and Joint Policies
- Term Rider: Alters benefits in an existing Term Insurance policy or adds Term Insurance to a Whole Life policy.
- Family Policy: Insures several family members with Whole Life on the breadwinner and Term Riders for the spouse and children, offering automatic increases in coverage at certain ages.
- Joint Life (First to Die): Insures two lives under one policy, with benefits paid out upon the first death, allowing the survivor to purchase a new policy without evidence of insurability.
- Survivorship (Second to Die): Pays upon the last insured's death, primarily used for covering estate taxes.
Contractual Provisions
- Entire Contract Provision: Only the life insurance policy and attached application govern the agreement; agents cannot modify terms.
- Free Look Period: Insured has ten days to review and return the policy for a full refund if dissatisfied.
- Ownership Provisions: Include rights to assign the policy, change beneficiaries, receive cash value, and select premium payment options.
Beneficiary Designations
- Primary Beneficiary: First in line to receive policy proceeds.
- Contingent Beneficiary: Next in line if the primary beneficiary is deceased.
- Tertiary Beneficiary: Receives proceeds if both primary and contingent beneficiaries die first.
- Revocable Beneficiary: Can be changed by the insured at any time.
- Irrevocable Beneficiary: Changes require the beneficiary's permission, limiting the insured's rights regarding the policy.
Distribution Methods
- Per Capita: Benefits distributed equally among living beneficiaries.
- Per Stirpes: Benefits distributed by bloodline to descendants.
- Estates: If no beneficiaries are alive, proceeds go to the insured's estate, potentially subject to taxes.
Special Clauses and Options
- Uniform Simultaneous Death Act: Allows benefits to go to contingent beneficiaries when the insured and primary beneficiary die together.
- Common Disaster Clause: Assumes the beneficiary dies first in simultaneous deaths.
- Spendthrift Clause: Pays beneficiaries through set installments, protecting proceeds from creditors.
- Grace Period: 30 days of coverage granted if premiums are unpaid; claims paid with a deduction for unpaid premiums.
Loans and Withdrawals
- Automatic Premium Loans: Uses the policy's cash value to cover unpaid premiums but may lapse if cash value is exhausted.
- Policy Loans: Insured can borrow against the cash value after maintaining the policy for a sufficient time.
- Withdrawals and Surrender: Rights to extract cash values, potentially affecting face value and policy terms.
Non-Forfeiture and Dividend Options
- Non-Forfeiture Options: Options available upon policy lapse, including cash value extraction, reduced paid-up insurance, or extended term insurance.
- Dividends: Refunds of premiums from participating companies, not taxable unless exceeding paid premiums; options for utilization include premium reduction and cash payments.
Contestability and Assignment
- Incontestability: Policy cannot be contested after two years based on statements made in the application.
- Assignment: Transfer of ownership rights; absolute and collateral assignments vary in scope.
Clauses and Taxation
- Suicide Clause: Limits company liability to return of premiums if suicide occurs within the contestable period.
- Misstatement of Age: Allows for adjust benefits based on corrected age discrepancies.
- Settlement Options: Various methods for benefit disbursement, like lump sum or fixed installments.
- Policy Exclusions: Common exclusions include suicide (within two years), war, and aviation-related deaths.
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Description
Explore important terms and provisions related to insurance policy riders with these flashcards. This quiz covers definitions, like the Disability Waiver of Premium Rider, and its specific conditions. Perfect for students and professionals looking to deepen their understanding of insurance concepts.
