Part 3
Reinstatement requirements:
1. Pay all past due premium plus interest 2. Pay any outstanding loans plus interest 3. Provide evidence of insurability
Waiver of premium rider:
1. Premium payments will be waived if the insured becomes totally disabled. 2. The typical waiting period for benefits to begin is 6 months. 3. The disability usually must occur before age 65 4. Does not change anything in the policy
Incontestability Clause
2 year
Accelerated death benefit rider
Allows the early payment of aportion of the death benefit while the insured is still living
Irrevocable beneficiary designation:
Cannot be changed without the consent of the beneficiary
Dividend
Dividends are not taxable. 2. Are NOT guaranteed. 3. The insured may receive dividends in cash. 4. Dividends are paid on participating policies.
Payor benefit rider
Found on juvenile policies waives the premiums if the person who pays the premiums dies or becomes disabled even though the policy owner and the insured are NOT the same person
The waiver of cost of insurance rider is found only
In universal life
Fixed-period installment settlement option
Pays the beneficiary the death benefit amount plus interest gained in a specified period of years
Reduced Paid-Up Nonforfeiture option:
Protection till age 100 and continuing cash value buildup but reduces the original face amount
Uniform Simultaneous Death Law / Common Disaster Clause
The beneficiary died first
Paid up Additions dividend option
Using the policy dividends as a single premium to buy additional life insurance of the same type
Payment of Premium Provision
When the premiums are due, how often, and to whom
If an insured dies during the grace period the insurer will pay
amount of the policy less any owed premium
An annual premium to the insurer is
an example of consideration
After a policy had been in effect for 18 months, a claim was submitted. The insurer determined that the insured had made a material misstatement on the application for coverage. The insurer would probably
contest the claim
Term Rider
coverage is usually level term insurance
Suicide Clause provision:
if an insured commits suicide within 2 years following the policy effective date, the insurer will return premiums paid to the beneficiary
The Extended term nonforfeiture option would be automatically implemented by the insurer
if none of the other options has been selected by the policyowner
an insured dies with an outstanding policy loan
loan, the insurer will pay the death benefit minus the loan amount plus interest
Interest-only settlement option:
maintains the death benefit while paying the beneficiary at regular intervals
Automatic premium loan provision
protects the insured from an unintentional policy lapse due to a nonpayment of premium
In a Disability Income Benefit Rider
the insurer will waive the policy premiums and pay monthly income to the insured if the insured is disabled