PSI Life Insurance Study Guide Flashcards

A set of vocabulary flashcards based on the PSI Life Insurance study guide covering policy clauses, beneficiaries, assignments, nonforfeiture options, riders, and policy types.

Insuring Clause

The insurance company's promise to pay the death benefit and the location of the insurer's consideration.

Consideration Clause

The policyowner's consideration, consisting of premiums and a truthful application.

Entire Contract Clause

The combination of the policy, the application, and any attached riders.

Representations

Statements made on the application which are not considered warranties.

Ownership Clause

Grants the owner the right to change the beneficiary, assign, surrender, borrow, or transfer the policy.

Revocable Beneficiary

A beneficiary that the owner may change at any time.

Irrevocable Beneficiary

A beneficiary whose permission is required before the owner can make changes.

Collateral Assignment

A temporary transfer of the policy to be used as collateral for a loan.

Absolute Assignment

A permanent transfer of ownership of the insurance policy.

Nonforfeiture Options

Options available to the policyowner if they stop paying premiums.

Cash Surrender

A nonforfeiture option where the policy ends and the owner receives the cash value.

Reduced Paid-Up

A nonforfeiture option that provide a smaller permanent policy.

Extended Term

The automatic nonforfeiture option that provides the same face amount for a limited period of time.

Policy Loans

Loans available only for cash value policies, where the death benefit is reduced by any unpaid loan amount.

Accumulation at Interest

A dividend option where the interest earned is considered taxable.

Waiver of Premium

A rider that waives premiums if the insured becomes disabled.

Guaranteed Insurability

A rider allowing the owner to buy more insurance without evidence of insurability.

Cost of Living

A rider that increases the death benefit to keep up with inflation.

Multiple Indemnity

A rider providing a larger accidental death benefit.

Accelerated Death Benefit

A rider triggered by terminal illness or qualifying confinement.

Term Rider

Temporary insurance for family members such as a spouse or children.

Exclusions

Specific risks that are not covered by the insurance policy.

Reinstatement

The process of restoring a policy within $3$ years using the original issue age, requiring back premiums, interest, and evidence of insurability.

Settlement Options

Methods for paying out policy proceeds, including Lump Sum, Interest Only, Fixed Amount, Fixed Period, Life Income, and Life Income with Period Certain.

Term Policy

Temporary insurance that carries no cash value.

Whole Life Policy

Permanent insurance that includes a cash value component.

Universal Life Policy

A flexible life insurance policy.

Variable Life Policy

A policy where the owner assumes the investment risk.