Life Insurance Policies Overview

Endowment and Term Life Policies

• Both endowment and term life policies offer a benefit paid if the insured is alive at the end of the coverage period
• Endowment policies have cash value, unlike term policies, and lack renewability and convertibility options

Life Insurance Application Function

• A key function of a life insurance policy application is to furnish initial information related to insurability

Transferring Life Insurance to a Son

• To transfer life insurance responsibilities to a son, an absolute assignment is required, which differs from beneficiary status changes effective upon the insured's death

Irrevocable Beneficiary Policies

• On a policy with an irrevocable beneficiary, the insured needs the beneficiary's consent to make changes

Basic Settlement Options

• Basic settlement options include fixed amount, fixed period, life income, and interest on deposit

Rescinding a Life Insurance Policy

• An insurance company can rescind a life insurance policy if it uncovers a material misstatement in the application

Licensing Insurance Agents

• Licensing agents is intended to establish ethical standards and protect the public rather than generating income for the government

Paid-Up Insurance Option

• Electing a paid-up insurance option means the insurance continues at a reduced amount with a reduced premium

Changing to a Lower Premium Policy

• Insured individuals can change to a lower premium policy if they show evidence of insurability

Universal Life Policy

• A universal life policy allows the policyholder to change premium levels and sum insured, while its cash values are tied to investment performance

Disability Waiver of Premium Rider

• Of the statements about a disability waiver, stating that the insured must die while disabled is false; disability must occur before a specified date

Information in Life Insurance Applications

• The most important data in life insurance applications relates to the applicant's insurability

Paid-Up Additions Impact

• Paid-up additions do not impact the cash value of a policy

Increasing Life Coverage

• Total life coverage of a basic policy increases most effectively with a supplemental term rider

Life Insurance Companies and Probability

• Life insurance companies use laws of probability to estimate future death rates to guide premium design

Renewable Term Insurance

• In renewable term insurance, policy owners should expect to renew coverage at a higher premium

Binding Receipts

• A binding receipt means that the insurance company offers temporary insurance until the application's approval or decline

Endowment vs Term Life Insurance

• Term and endowment policies protect for a defined time, but only endowment pays the face amount if the insured is alive at the end of the term

Total Needs Selling

• An agent who gauges a prospect's complete financial needs before suggesting a policy is doing total needs selling

Maintaining Full Insurance

• Under a permanent life insurance policy, extended-term insurance maintains complete coverage for a set time if premiums are halted

Maturity of Endowment Policy

• For an endowment at age 65 to give to a church, a life annuity option is best

Medical Evidence and Insurance

• Medical evidence for insurance hinges on the applicant's age and the insurance amount requested

Conserving Life Insurance

• Conserving a life insurance policy depends on many factors, but not pressure selling

Insurability Information Sources

• Government tax records are not typically tapped by insurers to gauge an applicant's insurability

Disclosing Facts for Life Insurance

• If an applicant for life insurance misrepresents material facts, the contract is only voidable if the insurer takes action within two years

Settlement Option Provisions

• Settlement options may pay the proceeds in fixed amounts until exhausted, but cannot be altered by request

Non-Forfeiture Values

• Non-forfeiture values guarantee any guaranteed policy benefits remain with the policy owner, even if premiums are discontinued

Continuous Premium Whole Life Policy

• A continuous-premium whole life policy gives policy owners more insurance for the same annual premium outlay

Interpleader Actions

• Interpleader actions can be filed with a Court of Law to decide conflicting claims on the same insurance proceeds

Cash Value of Life Policy

• The cash value of a yearly renewable term policy doesn't increase very fast because of its short duration

Legitimate Insurable Interest

• An individual does not have a legitimate insurable interest on his mistress

Coverage Through Riders

• Life insurance can be supplemented through riders, adding coverage for accidental or different types of risks for an added cost

Insurance Premiums

• Cash is not the only payment option for premiums during a grace period, other options are allowed

Non-Forfeiture Option Selections

• A non-forfeiture option is selected when premium payments stop or if a policyowner can no longer pay them

Consequences of Unpaid Interest

• If interest on a policy loan goes unpaid by the policy anniversary, the insurance company can increase the existing loan by the owed interest

Incontestability Clause Defined

• The incontestability clause makes it so insurance companies can't deny claims after a set time, usually 2 years, from policy issuance

Beneficiary Policies

• For a Ps. 20,000 policy with primary/secondary revocable beneficiaries, the insured can add a third beneficary any time

Incorrect Age Statement

• An insurer will pay the corrected misstated age in the event of their death

Renewing Renewable Term Life Insurance

• The premiums shall increase upon renewal of a renewable term life insurance

Importance of Underwriting

• Underwriting is important in determining the degree of risk that each applicant can pose to the company

Policy Reinstatement

• Insurability must be furnished to reinstate a life insurance policy

Grace Period

• The grace period protects the policy from lapsing if a policyowner fails to pay his premiums on the due date

Life Insurance Benefits

• Life insurance have benefits that are explicitly intended to cover for mortgage, funeral expenses, and family income

Provisions of Endowment Policy

• An endowment policy provides protection for a specified period and the face amount once the insured is alive upon maturity of the policy

Life Insurance Contribution

• Life insurance contributes directly to the welfare and progress of the country by accumulating capital

A Yearly Tradional Insurance Policy

• Premium shall increase every time the policy is renewed

Borrowing on a Policy

• Dividends are not affected when the policyowner borrows on a policy.

Automatic Premium Loan Clause

• The Automatic Premium Loan Clause is not part of the Standard Policy Provision

Interim Term is Note Considered a Basic Policy

• An interim term is not a basic insurance policy

Agents Role

• The agent should determine if the husband has adequate insurance coverage