Life Insurance Policy Ownership and Terms

These flashcards cover key concepts regarding life insurance policy ownership, assignment types, and policy details.

Who owns and pays the premium for a life insurance policy for their child until the child reaches age 18?

The parent is the policy owner and pays the premium.

What happens to the ownership of the life insurance policy when the child turns 18?

The parent can make an absolute assignment of ownership to the child.

What rights does the child have once they become the policy owner at age 18?

The child pays the premium, names the beneficiary, has access to cash value, and can surrender or assign the policy.

What is collateral assignment in the context of a life insurance policy?

It allows the policy owner to temporarily assign ownership to a third party as collateral for a loan.

What happens to the ownership of the life insurance policy after the loan is paid off?

Policy ownership reverts to the original policy owner.

What is the insuring clause or insuring agreement in a life insurance policy?

It provides important information about the policy, including the parties to the contract, premium amounts, coverage length, and death benefit.

What are the two parties involved in an insurance policy?

The insurer and the policy owner (or the insured).

What is the company's promise outlined in the insuring agreement?

To pay the benefit to the beneficiary upon receipt of proof of the insured's death, subject to policy terms.