Life Insurance Policies

Survivorship Life (Second-to-die)

Insurers two or more lives for a premium that is based on a joint age. *Pays on the last death* Since death benefit is not paid until the last death, the joint life expectancy in a sense is extended, resulting in a lower premium than that which is typically charged for joint life.

Universal Life Death Benefit Option A

Level Death Benefit- Death benefit remains level while the cash value gradually increases

Decreasing Term Insurance

Level premium and a death benefit that decreases each year over the duration of the policy term. Primarily used when the amount of needed protection is time sensitive, or decreases over time.

Characteristics of Group Plans

*Purpose of the group*- Must be created for a purpose other than to obtain group insurance. *Size of the Group*- The larger the number of people in the group, the more accurate the projections of future loss experience will be. Based on the Law of Large Numbers of similar risks. *Turnover of the Group*- A group should have a steady turnover; younger, lower-risk employees enter the group, and older, higher-risk employees leave. *Financial strength of the Group*- Group insurance is costly to administer, the underwriter should consider whether or not the group has the financial resources to pay the policy premiums, and whether or not it will be able to renew the coverage. -Cost of coverage is based on the average age of the group and the ratio of men to women. To reduce adverse selection, the insurer will require a minimum number of participants in the group, depending on whether the employer or employees pay the premium.

Return of Premium (ROP)

A Life insurance that is an increasing term insurance policy that pays an additional death benefit to the beneficiary equal to the amount of the premiums paid. The return of premium is paid if the death occurs within a specified period of time or in the insured outlives the policy term.

Reinstatement

Allows a lapsed policy to be put back in force. The maximum time limit for reinstatement is usually *3 years* after the policy has lapsed. If the policyowner chooses to reinstate the policy, he/she will have to provide evidence of insurability. Required to pay all back premiums plus interest, and may be required to repay any outstanding loans and interest. The value of reinstating a lapsed policy opposed to purchasing a new policy is that the policy will be restored to its original status, and retain all the values that were established at the insured's issued age.

Guaranteed Insurability Rider

Allows the insured to purchase additional coverage at specified future dates (usually every 3 years) or events (such as marriage or birth of a child), without evidence of insurability, for an additional premium. When this option is exercised, the insured purchases the additional coverage at his or her attained age. This rider usually expires at the insured's age 40.

Nonforfeiture Options

Because permanent life insurance policies have cash values, certain guarantees are built into the policy that cannot be forfeited by the policy owner. Under the *extended-term option*, the insurer uses the policy cash value to convert to term insurance for the same face amount as the former permanent policy.

Whole Life Insurance (Permanent Insurance)

Build cash value and remain in effect for the entire life of the insured or age 100. Provide lifetime protection, and includes a savings element (or cash value). The cash value created by the accumulation of premium is scheduled to equal the face amount of the policy at age 100. -*Level Premium*- Based on the insureds age and remains the same through policy -*Death Benefit*- Is guaranteed and remains level for life -*Cash Value*- Created by age 100 and is paid out to the policy owner. (Policyowner and Insured don't have to be the same person) Have a guaranteed interest Rate -*Living Benefits*- Policyowner can borrow against the cash value while the policy is in effect, or can receive the cash value when the policy is surrendered. Cash value also known as nonforfeiture value, does not usually accumulate until the third policy year and grows tax deferred.

LP-65 (Life Paid-Up)

Coverage is completely paid for by the insured's age 65

20-Pay Life

Coverage is completely paid for in 20 years

Limited-Pay Whole Life

Designed so the premiums for coverage will be completely paid-up well before age 100. This type of policy has a shorter premium-paying period than straight life insurance, so the annual premium will be higher. Cash value builds up faster for the limited-pay policies. Suited for those who do not want to be paying premiums beyond a certain point in time.

Single Premium Whole Life

Designed to provide a level death benefit to the insured's age 100 for a one-time, lump-sum payment. The policy is completely paid-up after one premium and generates immediate cash.

Accidental Death Rider

Pays some multiple of the face amount if death is the result of an accident as defined in the policy. Death must usually occur within *90 days* of such an accident. The benefit is normally two time (*double indemnity*) the face amount. Some policies pay triple the face amount (*triple indemnity*) for accidental death.

Regulation of Variable Products (SEC, FINRA and Utah)

Dually regulated by the State and Federal Government due to the element of investment risk, declared that variable contracts are securities and are regulated by Securities and Exchange Commission (SEC), and the Financial Industry Regulatory Authority (FINRA), also known as National Association of Securities Dealers (NASD). Also regulated by the Insurance Department. Agents selling mush: -Be registered with FINRA -Have a securities license -Be licensed by the state to sell life insurance

Grace Period

Period of time after the premium due date that the policyowner has to pay the premium before the policy lapses (usually 30 or 31 days). Purpose of the grace period is to protect the policyholder against an unintentional lapse of the policy. If the insured dies during this period, the death benefit is payable; however, any unpaid premium will be deducted from the death benefit.

Group Underwriting Requirements

Group life insurance is underwritten on a group basis as opposed to an individual basis. Each participant completes a short application that clearly identifies the insured and the insured's beneficiary. If the group is large enough, there are no medical questions since the plan will be issued based upon the nature of the group and the group's past claims experience.

Level Premium Term

Provides a level death benefit and a level premium during the policy term.

Accelerated Benefit or Living Needs Rider

Provides for an early payment of part of the policy death benefit if the insured is diagnosed with a terminal illness that will result in death within 2 years, or has other qualifying conditions. The purpose is to provide the insured with the necessary funds to take care of necessary medical and nursing home expenses that incur as a result of the terminal illness.

Misstatement of Age and Gender

Provision which allows the insurer to adjust the policy at any time due to a misstatement of age or gender. If the applicant has misstated his or her age or gender on the application, in the event of a claim, the insurer is allowed to adjust the benefits to an amount that the premium at the correct age or gender would have purchased.

Riders Affecting the Death Benefit Amount

Some riders affect the amount of the death benefit paid out to the beneficiary, and either increase it through multiple indemnity or refunds of premiums, or decrease it if a portion of the death benefit was paid out to the insured while still living.

Entire Contract

Stipulates that the *policy and a copy of the application*, along with any riders or amendments, constitute the entire contract. Neither the insurer nor the insured may change policy provisions one the policy is in effect without both parties agreeing to it and the change being affixed to the contract.

Beneficiary (Designation Options) (Life Insurance)

The beneficiary does not have to have insurable interest in the insured.

Indexed Whole Life (Equity Index Whole Life)

The cash value is dependent upon the performance of the equity index, such as S&P 500 although there is a guaranteed minimum interest rate. The policy's face amount increases annually to keep pace with inflation without requiring evidence of insurability. Policies are classified depending on whether the policyowner or the insurer assumes the inflation risk. If assumed the risk, the policy premiums increase with the increase in the face amount. If the insurer assumes the risk, the premium remains level.

Level Term Insurance

The most common type of temporary protection purchased

Payment of Premiums

The policy stipulates when the premiums are due, (monthly, quarterly, semiannually, annually) and to whom. If the insured dies during a period of time for which the premium has been paid, the insurer must refund any unearned premium along with the policy proceeds. The payment of premium provision also stipulates that premiums must be paid in advance. Any individual life insurance or annuity contract must contain a provision that states that all premiums are payable in advance either at the company's home office or to the appointed producer upon delivery of the policy.

Straight Whole Life (Ordinary Life or Continuous Premium Whole Life)

The policyowner pays the premium from the time the policy is issued until the insureds death or age 100 (whichever occurs first). Straight Life will have the lowest annual premium.

Dividend Options

They are paid only on participating policies. When the policy owner purchases a policy from a participating insurer, he or she actually pays a "grossed-up" premium. The higher the premium is charged as a safety margin in the event the insurer's losses are higher than anticipated. Accumulation at Interest- The insurance company keeps the dividend in an account where it accumulates interest. One-Year Term Option- The insurance company uses the dividend to purchase additional insurance in the form of *one-year term insurance* that increases the overall policy death benefit.

Incontestability

This clause prevents an insurer from denying a claim due to statements in the application after the policy has been in force for *2 years*, even if there has been a material misstatement of facts or concealment of a material fact.

Cash Loans

Whenever a policy has cash value, it has loan value. The amount available to the policy owner for a loan equals the cash value minus any outstanding and unpaid policy loans including interest. *Loan Value = Cash Value - (unpaid loans + interest)*

Participating Whole Life

Will share in the insurance company's excess profits in the form of dividends.

Disability Income

With this rider, in the event of disability the insurer will waive the policy premiums and pay a monthly income to the insured. The amount paid is normally based on a percentage of the face amount of the policy to which it is attached.

Family Term Rider

incorporates the spouse term rider along with the children's term rider in a single rider. When added to a whole life policy, the family term rider provides level term life insurance benefits covering the spouse and all the children in the family.

Spouse/Other-insured Term

provides coverage for one or more family members other than the insured. The rider is usually level term insurance, attached to the base policy covering the insured. Also know as a family rider, if the rider covers only the spouse of the insured, it can be specified as a *spouse term rider*, and allows the spouse to be added to coverage for a limited period of time and for a specified amount.

Variable Life Insurance (sometimes referred to as variable whole life insurance)

(or annuities) are Contracts in which the cash values accumulate based upon a specific portfolio of stocks without guarantees of performance. Variable annuities keep pace with inflation, and are determined by the value of securities backing it. Variable Life insurance is a level, fixed premium, investment-based product. Fixed premiums and a guaranteed minimum death benefit, cash value is not guaranteed and fluctuates with the performance of the portfolio in which the premiums have been invested by the insurer. (Considered to be more risky based on its investment component)

Succession

*Primary Beneficiary*- has first claim to the policy proceeds following the death of the insured. The policyowner may name more than one primary beneficiary, as well as how the proceeds are to be divided. *Contingent Beneficiary*- has second claim in the event that the primary beneficiary dies before the insured. Contingent beneficiaries do not receive anything if the primary beneficiary is still living at the time of the insureds death. *Tertiary Beneficiary*- is third in line for the death benefits in the event that both the primary and contingent beneficiaries predecease the insured.

Right to Examine (Free Look)

Allows the policyowner *10 days* from the receipt to look over the policy and if dissatisfied for any reason, return it for a fully refund of premium. *The free-look period starts when the policyowner receives the policy (policy delivery), not when the insurer issues the policy. Certain life insurance transactions, such as replacement, may require a longer free-look period. The 10-day free look regulation does not apply to -Group Policies -Credit Life Insurance -Replacement policies where the required free-look is *30 days* -Any other classes of policies as determined by the commissioner

Conversion to Individual Policy

An employee has the right to convert to an individual policy without providing insurability at a standard rate, based on individuals attained age. Can convert to any form of insurance issued by the insurer (usually whole life), except for term insurance. The face amount or death benefit will be equal to the group term face amount but the premium will be higher. Employee usually has a period of *31 days* after terminating from the group in order to exercise the conversion option. During this time the employee is still covered under the group plan. If the insured dies during the conversion period, a death benefit equal o the maximum amount of individual insurance which would have been issued must be paid by the group policy, whether or not the application for an individual policy is completed. If the master contract is terminated, every individual who has been on the plan for at least 5 years will be allowed to convert to individual permanent insurance of the same coverage.

Juvenile Life (Jumping Juvenile)

Any life insurance written on the life of a minor. Jumping Juvenile- The face amount increases at a predetermined age, often 21. The face amounts jumps, but the premium remains level.

Variable Universal Life Insurance

Combines many features of the whole life and flexible premium of universal life and the investment component of variable life, making it a securities version of the universal life insurance. Following features: -Flexible premium that can be increased, decreased or skipped as long as there is enough value in the policy to fund the death benefit -Increasing and deceasing the amount of insurance -Cash withdrawals or policy loans

Trusts

Commonly established for minors, or to create a scholarship fund. Trusts can be used for estate planning purposes, and when used properly, can keep life insurance death proceeds out of the insured's taxable estate.

Adjustable Life

Developed to provide the best of both worlds, term and permanent coverage. Can assume the form of either term insurance or permanent insurance. The insured typically determines how much coverage is needed and the affordable amount of premium. Insurer will then determine the appropriate type of insurance to meet the insureds needs. As the needs change, the policyowner can make adjustments in his or her policy. Policyowner has the following options: -Increase or decrease the premium or the premium-paying period -Increase or decrease the face amount -Change the period of protection The policyowner also has the option of converting from term to whole life or vice versa. The cash value of an adjustable life policy only develops when the premiums paid are more than the cost of the policy.

Portability

Distinguishes an individual policy from a typical group policy.

Estates

If none of the beneficiary's are alive at the time of the insured's death, or if no beneficiary has been named, the insured's estate will automatically receive the proceeds of a life insurance policy. The death benefit of the policy may be included in the insureds taxable estate if this occurs.

Common Disaster Clause

If the insured and the primary beneficiary die at approximately the same time from a common accident with no clear evidence as to who died first, a problem may arise in identifying which party is eligible for the death benefit. Is provided under the Uniform Simultaneous Death Law.

Universal Life Death Benefit Option B

Increasing Death Benefit- The death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increase. Pure insurance with the insurer remains level for life, therefore the expenses for this option are much greater than those for Option A. Causing the cash value to be lower in the older years.

Suicide Exclusion

Insurance policies usually stipulate a period of time during which the death benefit will not be paid if the insured commits suicide. If the insured commits suicide within *2 years* following the policy effective date, the insurer's liability is limited to a refund of premium. If the insured commits suicide after the 2-year period, the policy will pay the death proceeds to the designated beneficiary the same as if the insured had died of natural causes.

Group Life Insurance

Issued to the sponsoring organization, and covers the lives of more than one individual member of the group. Usually written for employee-employer groups. Usually written as annually renewable term insurance. Two features that distinguish group insurance: -Evidence of insurability is usually not required (unless an applicant is enrolling for coverage outside the normal enrollment period -Participants (insureds) under the plan do not receive a policy because they do not own or control the policy. Each insured under the group plan is issued a certificate of insurance. The actual policy, or master policy/contract, is issued to the sponsor of the group, the group sponsor is the policyholder and exercises control over the policy.

Eligible Groups

May be sponsored by employers, debtor groups, labor unions, credit unions, associations, and other organizations formed for a reason other than purchasing insurance.

Modifications

Modifications or changes in the policy must be endorsed on, or attached to, the policy in writing over the signature of an executive officer of the insurer. The policyowner may request changes, only the executive officer can make the changes to the contract.

Settlement Option

Methods used to pay the death benefits to a beneficiary upon the insured's death, or to pay the endowment benefit if the insured lives to the endowment date. Upon the death of the insured, or at the point of endowment, the contract is designed to pay the proceeds in cash, called a lump sum, unless the recipient chooses a different mode of settlement. *Life Income Option*- also know as straight life, provides the recipient with an income that he or she cannot outlive. The amount of each installment paid is based on the recipient's life expectancy and the amount of principal. Single Life Option- can provide a single beneficiary income for the rest of his/her life. Upon the death of the beneficiary, the payments stop. *Life Income Joint and Survivor*- guarantees an income for two or more recipients for as long as they live. Most contracts provide that the surviving recipient will receive a reduced payment after the first recipient dies. *Life with Period Certain*- the recipient is provided with the "best of both worlds" in terms of a lifetime income and a guaranteed installment period. Payments are guaranteed for the lifetime of the recipient, but there is also a specified period that is guaranteed. *Joint Life with Term Certain*- policy pays to 2 or more persons and stops paying at the death of the first. If the first death occurs during the specified term, the payments will continue to the other person until the end of the specified term. *Straight Life Income Option*- provides the recipient with an income that he or she cannot outlive. *Life Refund Income*- comes in either a cash refund form or an installment refund form. Both options guarantee that the total annuity fund will be paid out to the annuitant or to the beneficiary. Under the *Cash refund option* if the annuitant dies before the annuity fund is depleted, a lump-sum settlement of the remainder would be made to the beneficiary, *Installment refund option*, the beneficiary would receive the remaining funds in the form of continued annuity payments. *Interest Only*- The insurance company retains the policy proceeds and pays interest on the proceeds to the recipient (beneficiary) at regular intervals (monthly, quarterly, semiannually, or annually). The insurer usually guarantees a certain rate of interest and will often pay interest in excess of the guaranteed rate. *Fixed Period Installments*- a specified period of years is selected, and equal installments are paid to the recipient. The payments will continue for the specified period even if the recipient dies before the end of the period.

Ownership (Parties to a policy and ownership)

Parties to the insurance contract are the insurer, the policyowner, the insured, and the beneficiary. The policyowner and the insured may be the same person or different persons. Only the policyowner has the ownership rights under the policy, and not the insured or the beneficiary. Among the ownership rights are naming and changing the beneficiary, receiving the policy's living benefits, selecting a benefit payment options, and assigning the policy. Policyowner has the responsibility of paying the policy premiums, and is also the person who must have an insurable interest in the insured at the time of application for the insurance. When the owner and the insured are not the same person, the insurance arrangement is referred to as the third-party ownership.

Accelerated Benefits Rider

Permits an insured to submit a claim for a living benefits from a policy under one of the following circumstances: -Diagnosed with a terminal illness -Needs long-term care -Requires permanent confinement to a nursing home -Diagnosed with a dread disease The payment of these benefits usually falls into one of the following categories: -Long-term care, which generally allows the insured to use part of the policy's face amount to pay nursing home or at home care -Dread Disease, which pays ( usually limited to 1/4 to 1/2 the death benefit) to cover the cost of heart attack, organ transplant, cancer treatment, or other catastrophic disease -Terminal illness, which pays most of the death benefit

Spendthrift Clause

Protects beneficiaries from the claims of there creditors. This applies to the benefits that are paid in a fixed-period or fixed-amount installments.

Annually Renewable Term

Purest form of term insurance. Death benefit remains level and the policy may be guaranteed to be renewable each year without proof of insurability, but the premium increases annually according to the attained age, as the probability of death increase.

Joint Life (First-to-die)

Single Policy designed to insure two or more lives. Can be in the form of permanent insurance. The premium would be less than for the same type and amount of coverage on the same individuals. More commonly found as joint whole life, which functions similarly to an individual whole life policy with two major exceptions: -Premium is based on a joint average age between the ages of the insureds -Death benefit is paid upon the first death only

Term Life Insurance (Pure Life Insurance)

Temporary protection because it only provides coverage for a specific period of time. Provide the greatest amount of coverage for the lowest premium. Provides what is known as pure death protection: -No cash value or other living benefits Three basic types of term coverage based on how the face amount (death benefit) changes: -Level, -Increasing -Decreasing The premium is level throughout the term, only the amount of the death benefit may fluctuate, depending on the type of term insurance. Offers the least expensive cost per $1,000 of death benefit purchased.

Policy Loans and Withdrawals

The *policy loan* option is found only in policies that contain cash value. The policy owner is entitled to borrow an amount equal to the available cash value. The insurer must provide *30 day written notice* to the policy owner that the policy is going to lapse. Insurance companies may defer a policy loan request for *up to 6 months*, unless the reason for the loan is to pay the policy premium. Policy loans are not subject to income taxation.

Revocable vs. Irrevocable

The policyowner, without the consent or knowledge of the beneficiary, may change a *revocable* designation at any time. An *irrevocable* designation may not be changed without the written consent of the beneficiary. Irrevocable beneficiaries have a vested interest in the policy

Exclusions

The types of risks the policy will not cover. The most common exclusions found in life insurance policies are aviation, hazardous occupation, and war and military service. *Aviation*- Most life insurances will cover an insured as a fare-paying passenger or a pilot on a regularly scheduled airline, but will exclude coverage for noncommercial pilots, or require an additional premium for the coverage. *Hazardous Occupations or Hobbies*- If the insured is engaged in a hazardous occupation or participates in hazardous hobbies (like skydiving or auto racing), death that results from the hazardous occupation or hobby may be excluded from coverage. The underwriter also has the option of charging a higher premium for insuring these risks. *War or Military Service*- The *statues clause* excludes all causes of death while the insured is on active duty in the military. The *results clause* only excludes the death benefit if the insured is killed as a result of an act of war (declared or undeclared).

Waiver of Premium

This rider waives the premium for the policy if the insured becomes totally disabled. Coverage remains until the insured is able to return to work. Most insurers impose a 6-month waiting period from the time the disability until the first premium is waived. If the insured is still disabled after the 6-month waiting period they will refund the premiums paid in those 6 months. This rider expires when the insured reaches age 65.

Classes

Two classes designations are available for use when an insured chooses to "group" the beneficiaries; *Per Capita* and *Per Stirpes* Per capita, meaning by the head, evenly distributes benefits amount the living named beneficiaries. Per Stirpes, meaning by the bloodline, distributes the benefits of a beneficiary who died before the insured to that beneficiary's heirs.

Withdrawals of Partial Surrenders

Universal life policies allow the *partial withdrawal of the policy cash value. May be a charge for each withdrawal and usually limits as to how much and how often a withdrawal may be made. During the withdrawal, the interest earned on the withdrawn cash value may be subject to taxation, depending upon the plan. The death benefit will be reduced by the amount of any partial surrender.

Credit Life

Written to insure the life of the debtor and pay off the balance of a loan in the event of the death of the debtor. Usually written as *decreasing term insurance,* may be written as an individual policy or as a group plan. When written as a group policy, the creditor is the owner of the master policy, and each debtor receives a certificate of insurance. *The creditor is the owner and the beneficiary of the policy* although the premiums are generally paid by the borrower. *Credit life insurance cannot pay out more than the balance of debt. The creditors may require the debtor to have life insurance; they cannot, however, require that the debtor buys insurance from a specific insurer.

Cost of Living Rider

addresses the inflation factor by automatically increasing the amount of insurance without evidence of insurability from the insured. The face value of the policy may be increased by a cost of living factor tied to an inflation index such as the Consumer Price Index (CPI).

Children's Term Rider

allows children of the insured to be added to coverage for a limited period of time for a specified amount. Term insurance and usually expires when the minor reaches a certain age (18 or 21) The premium does not change on the inclusion of additional children; it is based on an average number of children.

Return of Premium Rider

is implemented by using increasing term insurance. When added to a whole life policy, it provides that at death prior to a given age, not only is the original face amount payable, but an amount equal to all premiums previously paid is also payable to the beneficiary. Usually expires at a specified age such as 60.

Payor Benefit Rider

is primarily used with juvenile policies, otherwise it functions like the waiver of premium rider. If the payor becomes disabled for at least 6 months or dies, the insurer will waive the premiums until the minor reaches a certain age, such as 21. This is also used when the owner and the insured are two different individuals.

Uniform Simultaneous Death Law

It will be assumed that the primary beneficiary died first in a common disaster. The proceeds will be paid to either the contingent beneficiary or to the insureds estate, if no contingent beneficiary is designated. Most insurers specify a certain period of time, usually 14 to 30 days, in which death must occur in order for this provision to apply.

Increasing Term Insurance

Level premiums and a death benefit that increases each year over the duration of the policy term. Often used by insurance companies to fund certain riders that provide a refund of premiums or a gradual increase in total coverage. This type of policy would be ideal to handle inflation and the increasing cost of living.

Universal Life (Flexible Premium Adjustable Life)

The policyowner has the flexibility to increase the amount of premium paid into the policy and to later decrease it again. May even skip paying a premium and the policy will not lapse as long as there is sufficient cash value at the time to cover the monthly deductions for cost of insurance. If the cash value is to small, the policy will expire. Since the premium can be adjusted the insurance company will give them a choice of two types of premiums: -Minimum Premium- amount needed to keep the policy in force for the current year. Paying the minimum premium will make the policy perform as an annually renewable term product. -Target Premium- a recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime. Universal Life is also an interest-sensitive policy. Insurer guarantees a contract interest rate (usually 3 to 6%), there is also potential for the policyowner to get a current interest rate, which is not guaranteed in the contract but may be higher because of current market conditions. Two Components: -Insurance Component- Always annually renewable term insurance -Cash Account Waiver of cost of insurance- Found in Universal Life insurance in the event of disability of the insured, this rider will waive the cost of the insurance and other expenses but does not waive the cost of premiums necessary to accumulate cash values. (Allows the policy holder to move funds between the death benefit component and the savings component).

Assignment

The policyowner of a life insurance policy has the right to transfer partial or complete ownership of the policy to another person without the consent of the insurer. The owner must advise the insurer in writing of the assignment. Transfer of the life insurance policy does not change the insured or amount of coverage; it only changes who has the policy ownership rights. Two types of assignment: - Absolute Assignment- involves transferring all rights of ownership to another person or entity. Permanent and total transfer of all the policy rights. The new policyowner does not need to have insurable interest in the insured. - Collateral Assignment- involves the transfer of partial rights to another person. Usually done in order to secure a loan or some other transaction. Partial and temporary assignment to some of the policy rights. Once the debt or loan is repaid, the assigned rights are returned to the policyowner.