Which provision allows an insurer to borrow from the cash value of a policy in order to pay premiums due and prevent a lapse in coverage? [Solved] (2022)

Which provision allows an insurer to borrow from the cash value of a policy in order to pay premiums due and prevent a lapse in coverage?

An automatic premium loan (APL) is an insurance policy provision that allows the insurer to deduct the amount of an outstanding premium from the value of the policy when the premium is due.... read more ›

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Which provision allows an insurer to borrow from the cash value?

The Automatic Premium Loan Provision enables the insurer to borrow automatically from the policy's cash value, at the end of the grace period, to cover a premium payment to prevent the policy from lapsing.... read more ›

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What is it called when you borrow money from your life insurance policy?

Key Takeaways

Policy loans are borrowed against the death benefit, and the insurance company uses the policy as collateral for the loan. Life insurance companies add interest to the balance, which accrues whether the loan is paid monthly or not. Only permanent life insurance builds cash value.... continue reading ›

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Which provision requires proof of insurability after a policy has lapsed?

Which of these provisions require proof of insurability after a policy has lapsed? Most insurers require evidence of insurability be provided upon reinstatement of a lapsed policy.... continue reading ›

(Video) Life Insurance Exam Master Class #4
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What is the automatic premium loan provision?

An automatic premium loan is often associated with a life insurance policy that has a cash value. It is a specific clause, or rider, within the policy that allows the insurance issuer to withdraw premium payments from the accrued value of the policy when the policyholder is unable to or neglects to continue paying.... continue reading ›

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What is the wash loan provision in a policy?

Having a crediting rate equal to the loan rate is called a wash loan, which can result in more attractive performance. It is common for loan rate provisions to be specified based upon policy year, with wash loans frequently becoming available after a policy has been in force for a specified amount of time.... read more ›

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What is a policy loan provision?

Under the policy loan provision, a permanent life insurance policy may be borrowed against, using the policy's cash value as collateral. The cash value can also be pledged as security to obtain loans from other sources.... view details ›

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Can you borrow more than the cash value of a life insurance policy?

How much you can borrow from a life insurance policy varies by insurer, but the maximum policy loan amount is typically at least 90% of the cash value, with no minimum amount. When you take out a policy loan, you're not removing money from the cash value of your account.... see more ›

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When can you borrow from whole life?

The amount of cash value you can take out of your whole life insurance policy depends on the rules of the insurance company that holds your policy. Usually, if there is accumulated cash value in your policy, you can borrow from it, make withdrawals, or surrender your policy and remove your cash.... view details ›

Which provision allows an insurer to borrow from the cash value of a policy in order to pay premiums due and prevent a lapse in coverage? [Solved] (2022)

What happens when you take cash value from life insurance?

You might be allowed to withdraw money from a life insurance policy with cash value on a tax-free basis. However, if the sum you take out surpasses the amount of money you've built up as the cash value under your policy, you'll be required to pay income taxes on that money.... read more ›

What is a payment a premium provision for life insurance?

In the event the policyholder dies with the debt partially or fully unpaid, the insurance company deducts the amount borrowed, plus any accumulated interest, from the amount payable. Premium -- The payment, or one of the regular periodic payments, that a policyholder makes to own an insurance policy.... continue reading ›

What is the reinstatement provision in life insurance?

A reinstatement clause is an insurance policy clause that states when coverage terms are reset after the insured individual or business files a claim due to previous loss or damage. Reinstatement clauses don't usually reset a policy's terms, but they do allow the policy to restart coverage for future claims.... see more ›

Which one of the following provisions in a permanent life insurance policy may lapse for non payment of premium?

A non-forfeiture option. (or clause) is a provision included in certain life insurance policies stipulating that the policyholder will not forfeit the value of the policy if the policy lapses after a defined period due to missed premium payments.... see details ›

What limits the amount that a policyowner may borrow from a whole life insurance policy?

What limits the amount that a policyowner may borrow from a whole life insurance policy? Cash value - The amount available to the policyowner for a loan is the policy's cash value. If there are any outstanding loans, that amount will be reduced by the amount of the unpaid loans and interest.... continue reading ›

Which provision prevents an insurer from changing the terms?

The incontestability clause in life insurance policies is one of the strongest protections for a policyholder or beneficiary.... continue reading ›

What privilege does the insurer have in order to balance this?

Exam Prep
QuestionAnswer
In insurance policies, contract ambiguities are automatically ruled in the favor of the insured. What privilege does the insurer have in order to balance this?The right to determine the wording of a policy
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What happens when a policy is surrendered for its cash value?

What happens when a policy is surrendered for cash value? When a policy is surrendered, you'll lose coverage and no longer be responsible for paying insurance premiums. If your policy has cash value, you'll get this money after surrender fees have been taken into account.... see more ›

When can you borrow from whole life?

The amount of cash value you can take out of your whole life insurance policy depends on the rules of the insurance company that holds your policy. Usually, if there is accumulated cash value in your policy, you can borrow from it, make withdrawals, or surrender your policy and remove your cash.... read more ›

Which of the following life insurance policies allows a policyowner to take out a loan from the policy's cash value?

Automatic Premium Loan (APL) Provision: A permanent life insurance policy non-forfeiture provision that allows an insurer to automatically pay an overdue premium for a policyowner by making a loan against the policy's cash value as long as the cash value equals or exceeds the amount of the premium due.... read more ›

When calculating the amount a policyowner may borrow from a variable life policy what must be?

When calculating the amount a policyowner may borrow from a variable life policy, what must be subtracted from the policy's cash value? The cause of loss insured against. Be fined a sum of $1,000. One-sided: only one party makes an enforceable promise.... continue reading ›

It’s simple to borrow against the cash value of a permanent life insurance policy as there are no loan requirements or qualifications aside from the amount of cash value you have available. Learn about the pros and cons of life insurance policy loans.

There aren't any loan requirements or qualifications (other than the amount of cash value) and the funds can be used for any purpose and paid back whenever you decide, plus a life insurance policy loan has relatively low-interest rates.. Each time you pay premiums for a cash value life insurance policy, such as whole or universal life insurance , part of the premium is put towards the cash value.. How much you can borrow from a life insurance policy varies by insurer, but the maximum policy loan amount is typically at least 90% of the cash value, with no minimum amount.. To illustrate, we collected loan interest rates for variable universal life insurance policies from three of the largest insurers:. In addition, you don't have to pay the annual interest, so long as the total outstanding loan (original loan plus accumulated interest) doesn't exceed the policy's cash value.

Coinsurance – A form of medical cost sharing in a health insurance plan that requires an insured person to pay a stated percentage of medical expenses after the deductible amount,…

The Change of Beneficiary Provision (a Mandatory Uniform Provision) establishes the insured’s right to change the beneficiary, unless it is designated as irrevocable.. These policies can contain optional provisions, including change of occupation, illegal occupation, misstatement of age or sex, and relation of earnings to insurance.. An incontestability clause in most life insurance policies prevents the provider from voiding coverage due to a misstatement by the insured after a specific amount of time has passed.. Abandonment and salvage can be added as a clause in an insurance contract, giving the insurer the option to rightfully claim an insured property that has been destroyed and subsequently abandoned by its owners.. The insurance grace period can vary depending on the insurer and policy type.. A cancellation provision clause is a provision in an insurance policy that permits an insurer to cancel a policy at any time before its expiration date.. Which provision allows the policyholder a period of time, while coverage is in force, to examine a health insurance policy and determine whether or not to keep it?. An insurance policy with a conversion privilege allows the insured to switch to another policy without submitting to a physical examination.. Which provision concerns the insured’s duty to provide the insurer with reasonable notice in the event of a loss?. A cancellation provision clause is a provision in an insurance policy that permits an insurer to cancel a policy at any time before its expiration date.. Illegal Occupation/Act (an Optional Uniform Provision) allows the insurer the right to deny liability if the insured is injured while performing an illegal occupation or committing an illegal act.. The insuring clause explains the promise the insurer has made to the named insured to pay a death benefit to a designated beneficiary.. An incontestability clause in most life insurance policies prevents the provider from voiding coverage due to a misstatement by the insured after a specific amount of time has passed.

Automatic Premium Loan (APL) Provision: A permanent life insurance policy non-forfeiture provision that allows an insurer to automatically pay an overdue premium

For example, a credit life insurance policy might be called "credit card payment protection insurance," "mortgage protection insurance" or "auto loan protection insurance.". Juvenile life insurance is permanent life insurance that insures the life of a child (generally under age 18).. Universal life insurance policies offer flexible premiums that may allow you to adjust how much you'll pay each year by accessing some of the policy's cash value (though you will need to pay the minimum premium amount or the policy will lapse).. ... An additional life insurance rider allows the policyowner to purchase additional participating paid-up insurance for an additional premium (called paid-up additions) that increases the death benefit and accelerates the cash value growth , of an insurance policy.. Asked by: Ara Blanda | Last update: February 11, 2022Score: 4.2/5. (27 votes) Automatic Premium Loan (APL) Provision: A permanent life insurance policy non-forfeiture provision that allows an insurer to automatically pay an overdue premium for a policyowner by making a loan against the policy's cash value as long as the cash value equals or exceeds the amount of the premium due.. Both the universal life policy and whole life policy allow withdrawals or loans against the cash value of the policy.

Which provision states that the insurance company must pay claims immediately? Time of Payment of Claims (a Mandatory Uniform Provision) stipulates that claims

The Payment of Claims provision in a Health Insurance policy states to whom claims will be paid.. A premium refund is a special provision in the policy which allows a beneficiary to collect the face amount of a policy plus all the premiums that have been paid.. All individual accident and health insurance policies must contain a proof of loss provision stating that the insured must furnish a completed claim form to the insurer within 90 days of the date of loss.. Which provision states that the insurance company must pay claims immediately?. Time of Payment of Claims (a Mandatory Uniform Provision) stipulates that claims are to be paid immediately upon written proof of loss.. In an accident and health insurance policy, the time of payment of claims provision provides for immediate payment of the claim after the insurer receives written proof of the loss .. Payment of Claims.. Payment of Claims is considered a mandatory provision and directs where the claim benefits will go.. What provision in a life insurance policy states that the application is considered part of the contract?. Time of Payment of Claims (a Mandatory Uniform Provision) stipulates that claims are to be paid immediately upon written proof of loss.. Time of Payment of Claims *The Time Payment of Claims provision requires that claims will be paid immediately upon receipt of proofs of loss except for periodic payments, which are to be paid as specified in the policy.. Most states make it mandatory that insurance companies contain a grace period clause in the policies they sell, allowing a specified period of time in which to pay the overdue premium.. The provisions that cover the responsibilities of the policyholder include requirements that they notify the insurer of a claim within 20 days of a loss , provide proof of the extent of that loss, and update beneficiary information when changes take place.

Convertible insurance lets the policy owner convert a term policy that only covers the insured individual for a predetermined number of years into a policy

Automatic Premium Loan (APL) Provision: A permanent life insurance policy non-forfeiture provision that allows an insurer to automatically pay an overdue premium for a policyowner by making a loan against the policy's cash value as long as the cash value equals or exceeds the amount of the premium due.. Choosing the nonforfeiture extended term option allows the policy owner to use the cash value to purchase a term insurance policy with a death benefit equal to that of the original whole-life policy.. As financial needs and objectives change , the policyowner can make adjustments to the premium and/or face amount.. One of the changes a policyowner can make in an adjustable life insurance policy is the amount of premium paid .. The free look period is a required period of time, typically 10 days or more, in which a new life insurance policy owner can terminate the policy without penalties, such as surrender charges.. Universal life insurance policies offer flexible premiums that may allow you to adjust how much you'll pay each year by accessing some of the policy's cash value (though you will need to pay the minimum premium amount or the policy will lapse).. Adjustable life insurance is a hybrid of term life and whole life insurance that allows policyholders the option to adjust policy features, including the period of protection, face amount, premiums, and length of the premium payment period.

Pursuant to a confirmation issued with the policy, Furnival has agreed that the insurer may terminate or refuse to renew the policy for five reasons, which are generally permitted reasons for cancellation or non-renewal under state insurance laws and regulations: a material misrepresentation by the insured; a material breach by the insured; a material breach by the insured of the insurance conditions; a material change in the insured`s business activities; or a significant loss or reduction in reinsurance by the insurer. In the policy at issue, the insurer further agreed in the approval that it would terminate the policy or not renew it solely for the reasons mentioned. In the context of health insurance, benefits, with the exception of death benefits that have not otherwise been awarded, are paid to Correct! Wrong! The conditionally extensible provision is very similar to the optionally extensible provision. The main difference is that conditionally renewable policies can be cancelled for certain conditions contained in the policy, but renewable policies do not specify a condition or reason for termination. For example, if the insured paid a premium for three months and chose to cancel the policy at the end of the second month, the insurance company is required to calculate the premium applicable in the last month and reimburse it to the insured. Wrong! L would first pay the $500 deductible; Of the remaining $2,000, the insurer pays 80% ($1,600) and the insured pays 20% ($400). D An insurer may change the wording of optional insurance provisions that would be detrimental to the policyholder, but must first obtain government approval before Amendment A comes into force Once a type of provision is drafted, it cannot be amended. Wrong! If an insured incorrectly indicates his or her age when applying for the policy, the optional false indication of the age determination modifies the benefit to be paid to the benefit that would have been purchased at the insured`s actual age. On the 15th.

Pursuant to a confirmation issued with the policy, Furnival has agreed that the insurer may terminate or refuse to renew the policy for five reasons, which are generally permitted reasons for cancellation or non-renewal under state insurance laws and regulations: a material misrepresentation by the insured; a material breach by the insured; a material breach by the insured of the insurance conditions; a material change in the insured`s business activities; or a significant loss or reduction in reinsurance by the insurer.. The District Court dismissed Furnival`s application for summary judgment, noting that Furnival had “inadvertently admitted” that there was an exception to the general requirement that an extension must include the same terms of the original directive, “unless otherwise stated.” Since the insurer had informed the insured that it intended to amend the policy in accordance with state law, the District Court concluded that the insurer had fulfilled the conditions of the insurance contract under the “exception, unless otherwise specified”.. Furnival appealed, arguing that a contract renewal provision was illusory if it required the offer of a new contract only with reasonable notice, and that such an interpretation would allow an insurer to offer an unnecessary policy.. The conditionally renewable provision that allows an insurance company to cancel or not renew a policy benefits the insurer and not the policyholder.. Insurers may offer several different renewal options for the policies they subscribe to.. The insurer may increase the insurance premium for the policy if it decides to renew the policyholder for another period.. However, as long as the insured meets the conditions for renewal and practices the required premium in a timely manner, the insurer guarantees not to cancel the policy.

A life insurance lapse is when your policy lapses and you lose your insurance coverage due to nonpayment of premiums.

When you take out a life insurance policy , you pay a premium to keep the policy active.. If you stop paying those premiums your policy will lapse, meaning you lose your life insurance coverage and your beneficiaries won’t get any life insurance money when you die.. With any type of life insurance, your insurer is required to inform you when your policy is in danger of lapsing, and then again when it has officially lapsed.. Most cash value life insurance policies, such as whole life insurance , include a feature called an automatic premium loan.. You usually have the option to reinstate your life insurance policy after a lapse within two years of a policy lapse.. If your life insurance policy lapses, then you no longer have coverage and your beneficiaries won’t get a payout from the life insurance company when you die.. If you stop paying your life insurance premiums and your policy lapses, you are not refunded any of the money you paid in premiums.. You can generally reinstate your life insurance policy within two years of it lapsing, but the period varies for each life insurance company.

Flashcards related to Chapter 4: Policy Provisions, Options and Riders (Exam 2) within Life Insurance Policy category.

If an insured's age on a life insurance policy has been misstated, what is the insurer's liability if the insured dies?A) No death benefit is owed because of the misstatement of ageB) The full original death benefit listed on the policyC) A prorated de. A whole life insurance policy accumulates cash value that becomesA) the policy loan value which the insured may borrow againstB) the death benefitC) the source of funding for administration feesD) a source of funding a term rider to the policy. In a life insurance policy, the entire contract consists ofA) policy and conditional receiptB) policy and all sales materialC) policy and any verbal agreementsD) policy and attached application. In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUSTA) remit all past-due premiums within the grace periodB) provide evidence of insurability to the insurerC) resubmit a new life insurance applicationD) pro. What is the purpose for having an accelerated death benefit on a life insurance policy?A) It allows for a spouse to be added as a rider to a life insurance policyB) It allows for policy loans to be advanced to the insured in the event of unemploymentC). When an accidental death benefit is added to a whole life policy, how does this affect the policy's cash value?A) Increases the policy's cash valueB) Decreases the policy's cash valueC) Policy's cash value is not affectedD) Policy loans will no longer. Under a life insurance policy, what does the insuring clause state?A) The agent's obligation to provide the proper amount of coverageB) The insurer's obligation to return all premiums upon an approved death claimC) The insurer's obligation to pay a dea. The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paidA) minus indebtedness and with interestB) during the. When does a life insurance policy's waiver of premium take effect?A) Insured becomes unemployedB) Insured becomes totally disabledC) Insured has had policy in force for a specified number of yearsD) Insured has become terminally ill

Flashcards related to Health Insurance Policy Provisions Ch. 6 within Marketing-Insurance category.

What type of rider would be added to an Accident and Health policy if the policy owner wants to ensure the policy will continue if he/she ever becomes totally disabled?. The clause in an Accident and Health policy which defines the benefit amounts the insured will pay is called the. Premiums normally increase at time of renewal. What type of rider would be added to an Accident and Health policy if the policy owner wants to ensure the policy will continue if he/she ever becomes totally disabled?. The clause in an Accident and Health policy which defines the benefit amounts the insured will pay is called the. Premiums normally increase at time of renewal

The conditionally renewable provision in an insurance policy allows an insurance company to cancel immediately, not renew at the renewal date, or increase premiums on a policyholder under certain conditions.…

The conditionally renewable provision in an insurance policy allows an insurance company to cancel immediately, not renew at the renewal date, or increase premiums on a policyholder under certain conditions.. Uniform policy provisions refer to a set of clauses, some mandatory and some optional, that insurance companies include in written insurance policies.. Each state has a uniform individual accident and sickness policy provisions law which dictates precisely the provisions that must appear in an insurance policy.. Policy Conditions — the section of an insurance policy that identifies general requirements of an insured and the insurer on matters such as loss reporting and settlement, property valuation, other insurance, subrogation rights, and cancellation and nonrenewal.. Life insurance policy provisions describe or explain various features, benefits, and conditions of your life insurance policy.. Provisions in your life insurance policy also stipulate the rights and obligations of both the insurer (insurance company) and the insured (you).. Uniform policy provisions refer to a set of clauses, some mandatory and some optional, that insurance companies include in written insurance policies.. Each state has a uniform individual accident and sickness policy provisions law which dictates precisely the provisions that must appear in an insurance policy.. There are many categories of health policies, including global health policy, public health policy, mental health policy, health care services policy, insurance policy, personal healthcare policy, pharmaceutical policy, and policies related to public health such as vaccination policy, tobacco control policy or …. The group life insurance policy shall contain a provision setting forth the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of the coverage of the person.. An insurance policy is a legal contract between the insurance company (the insurer) and the person(s), business, or entity being insured (the insured).. Double accident benefit under a life insurance policy refers to the double payment of the sum assured under the policy, should the insured die due to an accident during the tenure of the policy.

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The maximum premium an insurer can charge for their health insurance based on geography. Health insurance premiums can be reimbursed to the employee. Insurance with Other Insurers. The insurer will pay the original benefit stated in the policy. The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age

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