Questions and Answers
In the case where the insured designated his common law wife as beneficiary, which of the following statements is CORRECT?
Designation of beneficiary is void, estate of the insured will get the proceeds
Which of the following statements is/are CORRECT with regards to the definition of “accident”?
All of the above
The only instance when a life insurance contract is treated primarily as an indemnity agreement is when?
Person insures the life of his or her spouse to protect against the loss of income earned by the spouse
If the debt was already paid when the debtor dies, what happens to the proceeds of the insurance in a creditor-debtor relationship where the CREDITOR insures the life of the DEBTOR?
Signup and view all the answers
If the person whose life is insured dies during the grace period and the premiums were not paid, what amount will the insurance company usually pay to the beneficiary?
Signup and view all the answers
What are life insurance policy loans limited to?
Signup and view all the answers
In practice, how are most claims for the death benefits of life insurance policies handled?
Signup and view all the answers
What do limited payment life policies limit?
Signup and view all the answers
In life insurance, what does 'substandard rates' generally refer to?
Signup and view all the answers
Study Notes
Life Insurance Policy
- If the insured designates their common-law wife as the beneficiary, the insurance company will pay the benefit to her.
Definition of "Accident"
- An "accident" refers to an unexpected and unforeseen event, not a predictable consequence of a deliberate act.
Indemnity Agreement
- A life insurance contract is treated primarily as an indemnity agreement only when the creditor insures the life of the debtor.
Creditor-Debtor Relationship
- If the debt was already paid when the debtor dies, the proceeds of the insurance will go to the creditor.
Grace Period
- If the person whose life is insured dies during the grace period and premiums were not paid, the insurance company usually pays the beneficiary the premiums paid, minus any outstanding debts.
Policy Loans
- Life insurance policy loans are limited to the cash value of the policy.
Claims Handling
- Most claims for death benefits of life insurance policies are handled by the insurance company paying the full policy amount to the beneficiary.
Limited Payment Life Policies
- Limited payment life policies limit the number of premiums paid by the policyholder, but provide lifelong coverage.
Substandard Rates
- "Substandard rates" in life insurance generally refer to higher premiums charged to individuals who are considered higher risk due to health or other factors.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
