Indvidual Life Insurance

Divident Options

-Cash Payment(Annual check) -Reduced Premium Payment(reduce next years premium) -Accumulation at Interest(divident kept in account where in accumulates interest and can be withdrawn at any time) -Paid-Up Additions(Used to purchase single premium policy in addition to face amount of permanent policy) -One Year Term(Purchase additional one year term policy that increases overall death benefit

Settlement Options

-Cash Payment(lump sum cash payment) -----Automatic optoin -Life Income(installment payments that recipient can't outlive -Interest Only(insurance company retains policy proceeds and pays interest to beneficiary at regular interval) -Fix Period Installments(specified period of years chosend and equal installments paid to reciipients) -Fixed Amount Installments(pays fixed specified installment amount until proceeds exhausted

Settlement Options-LIFE INCOME

-Single Life(provides single beneficiary income) -Joint and Survivior(Guarantee for 2+ recipients) -Life Refund(Guarantees total annuty fund paid out to recipient) -Life with Period Certain(Payments guaranteed for lifetime of recipients as well as guaranteed period of time payout)

Free look period

10 day period after policy delivery where it can be returned for full premium refund

Irrevocable Designation of Beneficiary

Beneficary can't be changed without written consent of the beneficiary

Reduced Paid-Up Insurance

Cash Value used as single premium to buy permanent policy with lower face amount

Extended Term

Cash Value used to convert policy to term insurance for same face amount that lasts as long as cash value can purchase -AUTOMATIC NONFORFEITURE OPTION

Per Capita Beneficiary

Evenly distributes betweeen living named beneficiaries

Cash SUrrender Value

Get current cash value of policy in cash -Taxed as ordinary income

Nonforfeiture Options

Guarantees built into policy that are triggered by policy surrender or lapse

Primary Beneficiary

Has first claim to benefits

Contingent Beneficiary

Has second claim in primary beneficiary can't collect

Common Disaster Clause

If insured and Primary beneficiary died in common disaster proceeds go to contingent beneficiary or insureds estate -protects contingent beneficiary

Uniform simultaneous death law

If insured and primary beneficiary die in same accident proceeds are distributed as if primary beneficiary died first

Settlement Options

Insureds and beneficiaries choose how they recieve insurance proceeds

Misstatement of Age and Sex

Insurer can adjust policy at any time due to misstatement of age or sex

Incontestability clause

Insurer can't deny claim due to statements in application after 2 years

Settlement Options

Methods used to pay death benefit to beneficiary when insured dies or turn 100

Entire Contract Provision

Policy and copy of application and any riders is entire contract

Policy Loan

Policyowner can borrow amount equal to available cash value -Insurer can defer loan requests for 6 months -Loan Value =Cash Value - (Unpaid loans + Interest)

Assignment

Policyowner has right to transfer ownershi of policy

Automoaatic Premium loan provision

Prevents unintentional lapse in policy that borrows against benefits value

dividend

Return of excess premiums(Insurance company Surplus) -Not taxable to policyowner

Exclusions

Risks a policy won't cover -Aviation _Hazardous Occupations/hobbies -War/Military service -Illegal Act -Suicide

Absolute Assignment

Transfer entire ownership to other person

Collateral Assignment

Transfer of partial rights to other person

Consideration

Value each party provides the other

Reinstatement

allows lapsed policy to begin again -max 3 years

Per stirpes Beneficiary

distributes benefits to beneficiary who died to his heirs

Surrender Charge

fee charged to insured when policy surrendered for cash value

No named beneficiary

goes to Insureds estate

Insuring Clause

insurer promise to pay death benefits when insured dies

conversoin Priviledge

policyowner can choose to have new policy issued before old one expires

Grace Period

time after premium due date that it can be paid without policy lapsing