Flashcards in contract law and legal factors affecting underwriting Deck (95)
what is the suicide clause?
permits an insuere, under certain circumstances, to deny a claim that is the results of a suicide. This is usually a specific period 1-2 years, during which suicide is not covered as a risk.
what is the change of plan provision
the option is available to change the plan or the amount of insurance and the conditions and requirements to do so.
what is the Accelerated Benefits provision?
also known as living benefits provision, this defines the citeria that must be met for a payout of the death benefit while the insured is till alive/
-a portion of the death benefit can be paid in a lump sum or in level monthly payments
what is the purpose of the Disability waiver benefit?
is to keep the policy in force, without the payment of premiums by the applicant, during a period of disability of the insurer. Premiums continue to be waived as long as the insured disability continues
what is the interpreted definition of disability according to the courts?
a disability that precents the insured from preforming the substantial material acts of their own occupations or of any other occupation for which the insured experience education or trianin might fit him.
what are examples of presumptive disabilities?
loss of sights, secerance of hands or feet, los of use of hands or feet, loss of speach and loss of hearing,
when can an insuere (both in US and CAN) contest a disability waiver benefit claim for material misrepresentation?
what is the purpose of accidental death benefit?
provides additional amount of insurane should the death of the insured occur by accident.
what are the two basic definitions of acidental death that have been used by insurers?
accidental means in which the cuase and result must be accidental, and accidental results where only the result must be accidental.
in an accidental death benefit dispute what is the responsibility of the plaintiff?
to proce the cause of death was accidental. if the insurer disputes the coverage, it may have to prove the death resulted from an activity not covered.
what is typically not included in an accidental death provision?
participation in an assault or felony
descent from an aircraft
infection or disease
drugs (unless administered)
** theres usually an age limit
what is the long term care provision do?
provides the policyowner with monthly benefits usually allocated for nursing home care. The benefit will typicaly be an accelerated pauyment of a portion of the death benefit.
What is the termninal Illness provision do?
offer a benefit to the policy ownder in the form of pre-payment of a percentage of the death benefit, should the insured be diagnosed with a terminal illness
what is the extended maturity option?
at policy maturity, policy proceeds and any policy gain are paid to the policy owner.
- help avoid the taxable event that would occur upon treciept fo the proceeds.
What does a term rider on a perm plan do?
provides additional amount of protection, typically this rider offers the benefits of term rates. the rider expires, at that time, there is typically no cash value available on that portion of the policy.
what rules are required for an admendement/ endorsement to be legally enforced?
1. they must be attached to the policy
2. they must be signed by the policyowner
what is the typically use for an amendment form?
clarify unanswered application questions or application inconsistencies, verification of plan, and providing details of a polocy rating or a denied benefit or rider
what is the purpose of the insurability statement?
serves as an upfate to verify the insurability factors such as health, finanical status, hazordous activities
most applications and policies will state that coverage will not take effect until when?
until the first full premium is paid and a polocy is deliverd while the insured is alive, and there has been no material change in health since the signing of the applciation.
define insurable interrest
the benefit or advantage from the continued life of the insured. Can be financial, dependance, or based on life/affection
who is the typical beneficiary, and does the insurable interrest have be there for an application on ones own life?
beneficiary can be anyone, and the interrest does not need to be present, (in some states yes)
who must be present when an application is being taken on someone else?
the insurable interest, personal or business, must be present.
when is spousal consent typically required?
when the named beneficiary is someone other than the insured's spouse.
what is common in estate planning, regarding the beneficiary?
to name a trust as the owner and beneficialy of the life insurance contract.
what happens in canada if there is no insurable interest at the time of approval?
the contract is voided
a person has an insurable interrest on his own life or on the life of who
1. child/ grandchild
2. his spouse, civil union, domestic partner
3. any persion upon whom he is wholly or in part dependent (Spport)
4. his employee
5. any person in which he has a percuiary (financial interrest)
who is included on a business interrest? who is not?
who is: key person, business partner, officers, stockholders, parties to buy-sell
not: all employees
what is recision and when can it be taken?
taken if misrepresentation is uncovered during the contestible period.
it is the process of making a contract void from the beginnig.
what are the acceptions to the recision clause past the contestible period?
can be cancelled after he period if it has been determined by the insuere that there was fraudulent impersonation, lack of insurabe interest, or if the policy was obtained with intent to murder