- 1 What does the guaranteed insurability option allows an insured to do?
- 2 What are collateral assignments normally associated with?
- 3 How is a life insurance policy dividends legally defined?
- 4 Which policy provision protect the policy owner from unintentional lapse of the contract?
- 5 Which type of rider will waive the premium?
- 6 Can a term life insurance policy be surrendered for its cash value under which policy provision?
- 7 Will banks take life insurance as collateral?
- 8 Which of the following is a life insurance policy that does not require a physical exam?
- 9 What happens when a policyowner borrows against the cash value of his insurance policy?
- 10 Should I use dividends to pay life insurance premiums?
- 11 Are dividends earned on a life insurance policy taxable?
- 12 What are the pros and cons of whole life insurance?
- 13 What does the grace period allow a life insurance?
- 14 How are life insurance premium rates calculated?
- 15 When does a life insurance policy waiver of premium take affect?
What does the guaranteed insurability option allows an insured to do?
The guaranteed insurability (GI) rider is available on certain life insurance policies and allows you to purchase additional insurance at specific dates in the future (subject to minimums and maximums) without having to go through an exam or answer health questions.
What are collateral assignments normally associated with?
A collateral assignment of life insurance is a conditional assignment appointing a lender as the primary beneficiary of a death benefit to use as collateral for a loan. If the borrower is unable to pay, the lender can cash in the life insurance policy and recover what is owed.
How is a life insurance policy dividends legally defined?
What Are Dividends? Many whole life insurance policies provide dividends representing a portion of the insurance company’s profits that are paid to policyholders. In many ways, these dividends are similar to traditional investment dividends that represent a share of a public company’s profit.
Which policy provision protect the policy owner from unintentional lapse of the contract?
The incontestability clause in life insurance policies is one of the strongest protections for a policyholder or beneficiary.
Which type of rider will waive the premium?
A waiver of premium rider is an optional insurance policy clause that waives insurance premium payments if the policyholder becomes critically ill or disabled. To purchase a waiver of premium rider you may need to meet certain requirements for age and health.
Can a term life insurance policy be surrendered for its cash value under which policy provision?
In most whole life insurance plans, the cash value is guaranteed, but it can only be surrendered when the policy is canceled. Policyholders may borrow or withdraw a portion of their cash value for current use. A policy’s cash value may be used as collateral for low-interest policy loans.
Will banks take life insurance as collateral?
Life Insurance Policies and Collateral Assignments. Did you know your life insurance policy can help you get a loan? Lenders widely accept life insurance as collateral because of the guaranteed funds, so if the worst happens, they’re still going to get repaid.
Which of the following is a life insurance policy that does not require a physical exam?
With guaranteed issue whole life insurance, you can avoid having to undergo a medical exam as part of your insurance application process. This type of coverage, available through AIG insurance companies, does not require a medical exam or a coverage waiting period.
What happens when a policyowner borrows against the cash value of his insurance policy?
A policyowner is permitted to take out a policy loan on a whole life policy at what point? What happens when a policyowner borrows against the cash value of his life insurance policy? The policy proceeds would be reduced by the outstanding loan balance. Which of these is NOT a common life insurance nonforfeiture option
Should I use dividends to pay life insurance premiums?
Just like most other life insurance policies, paying premiums at a frequency more than annually costs you some money. Using the dividend option to pay premiums comes with a requirement that the premium is paid annually. This is good news, it will eat up less of your dividend as a result of the annual payment savings.
Are dividends earned on a life insurance policy taxable?
Some life insurance policies (known as participating policies ) pay dividends to their policyholders. Dividends are generally not taxed as income to you. However, if your dividends exceed the total premium payments for the insurance policy, the excess dividends are considered taxable income.
What are the pros and cons of whole life insurance?
Whole life insurance has many potential benefits that might make it a strong part of your financial plan.
- IT WILL PAY A BENEFIT.
- IT HAS PREDICTABLE PREMIUMS.
- IT’S AN ASSET.
- IT MAY PAY DIVIDENDS.
- IT HAS TAX ADVANTAGES.
- IT’S MORE EXPENSIVE THAN TERM.
- IT’S MORE COMPLEX THAN TERM.
What does the grace period allow a life insurance?
What is the grace period on a life insurance policy? Your grace period — the amount of time you have to make a payment after the due date and bring your life insurance policy back to good standing — is usually 30 days, but it depends on your policy and insurance provider.
How are life insurance premium rates calculated?
The primary unit for figuring out a life insurance rate is the rate per thousand ( cost per $1000 of insurance ), which can vary depending on which factors influence it (age, gender, etc). For example, if the rate is $0.2 per $1,000 and an enrollee elects $15,000 in coverage, the monthly premium will be $3.
When does a life insurance policy waiver of premium take affect?
But there is usually a six-month waiting period before you can have your premiums waived. Typically, the benefits of this rider will end once the policyholder is no longer disabled. If the disability proves to be long-term, the premium payments will be covered up until a certain age, such as 65 or 70.