Chapter 14

Question 1

Define a straight life annuity annuitized payout option ?

Answer 1

Payments continue for the lifetime of the annuitant and cease at the annuitants death

Question 2

Define a joint and survivor life annuity payout option

Answer 2

payments are made to two or more annuitants; continue for the lifetime of the last surviving annuitant and cease at the death of the last surviving annuitant

Question 3

define a life annuity with period certain payout options

Answer 3

payments continue for the lifetime of the annuitant or for a certain period specified int he contract (which ever is loner) - there is usually a contingent payee for a remaining balance if applicable.

Question 4

Define a life with refund annuity payout option

Answer 4

payments continue for the lifetime of the annuitant. If they die before the payee recieves payments that total at least the purchase price of the anniuty contract, the insurer refunds to the payee the difference between the purchase price and the amount paid out

Question 5

Define a structured settlement

Answer 5

a settlement of a civil dispute or lawsuit in which a party agrees to make periodic payemnts to a specified payee for a specified period of time.

Question 6

Standard claim procedures for require most insurers to perform which 5 tasks?

Answer 6

1. determine whether the policy is in force
2. Verify the identity of the insured
3. verify that a loss has occured
4. varify that the loss is covered by the policy
5. verify the identity of the beneficiary.

Question 7

Name some examples of practices that are typically deemed to be unfair claim practices

Answer 7

1. intentionally misrepresenting important facts about insurance coverage
2. failing to provide request claim forms within a stated time (15 days)
3. failing to respond prompty to communications about unpaid claims
4. faling to develop proper g/l for the timely investigations of claims
5. failing to render prompt decision about the payment or denial of a claim after an investigation is complete

Question 8

What is typically accepted as proof of claim?

Answer 8

most require a death certificate

APS-

Question 9

There are time limitations for paying valid claims. What are they for

• canada
• hong kong
• philippines
• united states

Answer 9

• 30 daays
• ASAP
• 60 days
• 30 days

Question 10

What is the simultaneous death act

Answer 10

if the insured and beneficiary die at the same time or under circumstances that make it impossible to determine which of them died first, the insured is deemed to have surviced the beneficiary, and policy proceeds are payable as though the insured outlive the beneficiary unless the policy provides otherwise.

Question 11

What is a survivorship clause?

Answer 11

it requires the beneficiary to survive the insured by a stated period of time, usually 30-60 days, to be entitled to receive the policy proceeds.

Question 12

When computing the amount payable of a claim, what may increase the amount of death benefit payable?

Answer 12

1. accidental death benefits
2. accumulated policy dividends
3. unpaid policy dividends
4. paid-up additional insurance benefits
5. unearned premium paid in advance

Question 13

When computing the aount payable of a claim, what may decrease the amount of death benefit payable?

Answer 13

1. unpaid policy loans
2. accrued policy loan interest
3. premiums due and unpaid at the time of the insures death

Question 14

most policies contain exclusions. What are these?

Answer 14

provisions that specify certain situations under which the insurer will not pay the policy’s face amount.

Question 15

state the war exclusion provision

Answer 15

an insurer will not pay the full policy proceeds if an insured’s death is caused by war-related activities.

Question 16

State the aviation exclusion provision.

Answer 16

states than an insurer will not pay the policy face amount if the insured’s death is caused by certain aviation related- activities.

Question 17

State the suicide exclusion provision.

Answer 17

The insurer will not pay the policy face amount if the insured dies as a results of suicide within a stated period of time after the date that the policy was issued. usually 2 years. But they will return the premiums

Question 18

Most states require a claimant to prove which 4 facts, when an insured’s disapperance cannot be attibuted to an identifiable cause?

Answer 18

1. the insured has been missing continuoously for a specified period of time (5-7 yrs)
2. insured’s absence is unexplained
3. a reasonable search for the insured has taken place
4. no one has had communicaiton with the insured since his disappearance.

Question 19

What is a rebuttable presumption?

Answer 19

a presumption that can be disproven but that stands until adequate evidence is presented to the contrary.

Question 20

define an accidental death benefit

Answer 20

A supplemental life insurance policy benefit that requires the insurer to pay a specified amount of money in addition to the policy’s basic death benefit if an insured dies as a results of an accident.

Question 21

What is the definition of an accidental death

Answer 21

death resulting directly and independently of all other causes, from accidental bodily injury.

Question 22

What is a time limitation clause?

Answer 22

a clause that specifies that the insured’s death must occur within a certain period of time- usually 90 days- from the date of an accident for accidental death benefits to be payable.

Question 23

how do insurers typically handle claim litigations./

Answer 23

this can be very expensive so insurers try to avoid this by reaching a compromise with the potential plaintifs,

Question 24

what is a compromise settlement?

Answer 24

An agreement between two or more parties to settle a dispute regarding the terms and/or performance of a contract.

Question 25

What starts a litigation?

Answer 25

it begins when an insurer denies a claim for a life insurance proceeds.

Question 26

what is a choice of laws provision?

Answer 26

When parties mutually agree on to which jurisdiction laws will govern their contract.

Question 27

what happens when a policy does not include a choice of laws provision in their contract?

Answer 27

Typically the law is followed under the jurisdiction in which the last contract act was made.

Question 28

What are the last acts necessary to complete the formation of a life insurance contract?

Answer 28

1. payment of the initial premium

2. delivery of the policy to the policy owner.

Question 29

what is meant by the benefit of the bargain?

Answer 29

the amount that would put the plaintiff in the financial position he would have been in had the contract been performed.