Primerica Chapter 4
Children's Term Rider
Allows children of the insured to be added to coverage for a limited period of time for a specified amount.
Misstatement of Age and Gender
this allows the insurer to adjust the policy at any time due to a misstatement of age or gender is included in the policy
standard policy provisions
1. ownership 2. assignment 3. payment of premium 4. right to examine 5. grace period 6. reinstatement 7. inconstestability 8. misstatement of age or gender 9. payment of claims 10. exclusions
Cost of Living
addresses the inflation factor by automatically increasing the amount of the insurance without evidence of insurability
Right to Examine
allows the policyowner 10 days from receipt to look over the policy and if dissatisfied for any reason return it for a full refund of premium
Disability Income Benefit
in the event of disability the insurer will waive the policy premiums and pay a monthly income to the insured
Family Term Rider
incorporates the spouse term rider along with the children's term rider in a single rider
Extended Term
insurer uses the policy cash value to convert to term insurance for the same face amount as the former permanent policy
Collateral Assignment
involves a transfer of partial rights to another person
Guaranteed Insurability Rider
Allows insured to purchase additional amounts of disability income insurance at future dates
NAIC
National Association of Insurance Commissioners
Grace period
Period of time after the premium due date that the policyowner has to pay before the policy lapses
Entire Contract
Stipulates that the policy and a copy of the application, along with any rider or amendments, constitute the entire contract
Payment of premiums
Stipulates when premium payments are due, how and to whom they must be paid
Common Disaster Clause
When insured and primary die at the same time, it is assumed that the primary died first
contingent beneficiary
a beneficiary who has second claim to the policy proceeds after the death of the insured (usually after death of the primary beneficiary)
Primary Beneficiary
a beneficiary who has the first claim to the policy proceeds after the death of insured.
Payment of Claims
death benefits are paid to the beneficiary, if no beneficiary the proceeds are paid to the estate
Automatic Premium Loan
not required, but commonly added to contracts with a cash value at no additional charge. this is a special type of loan that prevents the unintentional lapse of a policy due to non payment of the premium
Long Term Care
often purchased as a separate policy, can also be marketed as a rider to life insurance policy
Incontestability Clause
prevents an insurer from denying a claim due to statements in the application after the policy has been in force for 2 years
Payor Benefit
primarily used with juvenile policies, functions like the waiver of premium rider
Assignment
transfer of rights of policy ownership
Exclusions
types of risks the policy will not cover
Absolute Assignment
involves transferring all rights of ownership to another person or entity
Reduced Paid-Up Insurance
policy cash value is used by the insurer as a single premium to purchase a completely paid-up permanent policy that has a reduced face amount
Spendthrift Clause
protects beneficiaries from the claims of their creditors
Return of Premium
implemented by using increasing term insurance
Waver of Premium
waives the premium for the policy if the insured becomes totally disabled
accidental death rider
pays some multiple of the face amount if death is the result of an accident as defined in the policy
Accelerated Benefits
provides 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
Other Insured Rider
provides coverage for one or more family members other than the insured
Principal Amount
the face value of the policy; the original amount invested before the earnings