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