life insurance pt 2

Defined as a cause of loss

• - How insurance companies minimize exposure to loss
• - assumes risk form another insurance company

Unincorporated association whose members proved coverage for one another

is an insurance agent who represents only one insurance company

Regulates an insurer's claim settlement practices.

treaty - each party automatically accept

• - if an insurance company does not enforce a contract provision 
• - giving up a known right on a voluntary basis

When the agency contract is unclear concerning the authority given

adding children's ride to a life insurance policy

*Premiums are averaged over the term of policy

provides a death benefit that gradually decreases over the span of the policy. 

* Commonly used for paying off an outstanding mortgage balance in the event of the insureds death

Only available to the policyowner when the policy has been surrendered

Has premiums that are lower than normal during early years of policy

guaranteed a death benefit, plus premium and investment flexibility (payments)

• - premiums are flexible
• - death benefit can increase
• - the cash value interest rate must equal or exceed a guaranteed minimum value

Covers two or more persons and pays the face amount upon the death of the first insured

Insures the life of a minor

because of the transfer of investment risk from the insurer to the policy owner - variable products are considered securities contracts and insurance contracts

When the death benefit is increased

Premiums are averaged over the term of the policy

has level face amounts and level premiums - written to cover a need for a specified period of time at lowest premium

ex: if D needs life insurance that provides coverage for the remainders of her working years, and wants to pay as little as possible D would need level term

provides an annually decreasing face amount over time with the level premiums. 

a life policy that has a death benefit that adjusts periodically and written for a specific time. usually written for mortgage or other debt that decreases over time until paid off.

provides an increasing face amount over time based on specific amounts or a percentage of the original face amount.

Is a provision that allows policy owners to convert their term insurance into permanent policies without showing proof of insurability.

• Provides death benefits for the entire life of the insured. It also provides living benefits in the form of cash values. 
•  - all whole life are same type benefits except for how its paid