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next years premium) -Accumulation at Interest(divident kept in account where in accumulates interest and can be withdrawn at any time) -Paid-Up Additions(Used to purchase single premium policy in addition to face amount of permanent policy) -One Year Term(Purchase additional one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
