Insurance

Life Insurance Overview

Accelerated Death Benefit Rider: This is found in most life insurance contracts. An accelerated death benefit provision in a life insurance policy states that the life insurance company will pay a portion of a policy’s death benefit before the insured’s death occurs. To receive this benefit, the insured must be diagnosed with a life-threatening illness. Upon the death of the insured, the beneficiary will receive the rest of the death benefits.

The insurance company may charge a small service fee for the expedited payment. Contact your insurance company or agent for more information about this benefit before selling a policy through a viatical settlement company.

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beneficiary: the person entitled to the benefits of a life insurance policy upon the death of the insured.

free trial period: unconditional reimbursement for a period of at least 14 days once the life insurance contract has been delivered. the free review period for a life insurance policy issued before 1/1/2009 was 10 days. variable life policies do not have a trial period.

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grace period: entitles the insured to a period of not less than 30 days to make the payment of the premium.

Incontestable Clause: Allows the insurer the right to contest a death claim on a life insurance policy during the first 2 years of the policy.

iinsurable interest: an insurable interest exists for life insurance purposes when (at the time the policy is entered into) the policyholder has a reasonable expectation that it will benefit of the continuation of the life and health of the person covered by the policy. the benefit is required to be one of love and affection due to the relationship the policyholder has with the insured or a pecuniary benefit such that the policyholder benefits financially from the continued life and health of the insured. Business entities have an insurable interest in business owners and key employees. The parties to a contract for the purchase or sale of a business entity have an insurable interest in the lives of all other parties to the contract solely for the purposes of the contract. The trust and the trustees have an insurable interest in the trust grantor under the life insurance policies owned by the trust when the beneficiaries of the trust meet specified criteria.

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Advocate: Policy proceeds are sent to a court and the court determines the correct distribution.

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Non-Forfeiture Provision: A no-forfeiture provision is a state-mandated requirement that life insurance policies return excess cash values ​​(if any) to the policyholder. policy if the policy lapses or is terminated by the policyholder. the options for no expiration are:

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