Xander fills out a life insurance application to purchase a $75,000 policy. The policy is accepted by the insurer and delivered to him on March 3. He pays the first month’s premium upon receipt of the policy. Unfortunately, on March 9, Xander loses his job and decides that he no longer wants the policy. What will be the consequence of this cancellation?
Brian gives his lawyer Dave $200,000 that will be used as a down payment to purchase a condo. Brian received these funds from his mother’s life insurance death benefit. The money is deposited into Dave’s trust account. Unbeknownst to Brian, Dave is going through financialhardship. If Dave files for bankruptcy while Brian's funds are still in his trust account, can the bankruptcy trustee seize the funds?
Following the death of her sister Sarah last year, Yesha, the liquidator of Sarah's estate, had been in contact with Sarah’s insurance agent Monique on several occasions to claim the death benefit on Sarah’s life insurance policy.
Yesterday, Yesha noticed that Sarah also had a disability insurance policy with a return of premium option which stated that a portion of the premiums can be reimbursed upon her death. Yesha contacted Monique again and asked her for more details about the disability policy and return of premium option but Monique replied that she could not help her as her firm had destroyed Sarah's files shortly after paying out the death benefit.
Did Sarah’s firm act appropriately?
Frankie is a newly licensed insurance of persons agent who meets with Walter, her father's friend since college. Walter is in his late forties, and he mentions that he would like to purchase a life insurance policy and start planning for his retirement. Frankie has never sold a segregated fund before. Not wanting to disclose her inexperience, she clumsily fills out the application form to invest in segregated funds. Which responsibility did Frankie breach?
Dora meets with the following clients, each of whom fills out a disability insurance application:
• Scott, a ski instructor who skydives every weekend in the summer,
• Lamar, a librarian who drives to work daily and spends his free time collecting stamps and watching nature shows,
• Timothy, an administrative assistant who walks 30 minutes each way to and from work, and
• Yashar, an accountant who participates in 5 online chess competitions a week and studies chess in his spare time.
All else being equal, which of Dora’s clients will qualify for the most favorable insurance premium?
Harper owns a disability insurance policy that will pay her a monthly benefit if she becomes unable to work. At the time she applied for the policy, Harper was a new graduate with an annual income of $60,000, and she qualified for a monthly benefit of $3,000. Instead of taking the maximum benefit, she focused on paying off her student loans and keeping her insurance premiums low. She elected to purchase a monthly benefit of $2,500 and add the future purchase option (FPO) rider for up to $500 a month of additional coverage. Now she is further along in her career, Harper earns $100,000 a year, and she meets with her insurance agent Trish to increase her coverage. Harper would like her new monthly benefit to be $5,000.
Which of the following statements about Harper’s coverage is TRUE?
Paul is a self-employed props person in the film industry. A year ago, he purchased disability insurance with an accidental death and dismemberment (AD&D) rider. During a film shoot, the wood floor of the film set catches fire due to his negligence and he loses sight in one eye. Hisdoctor prescribes complete rest for five months. How will the insurer compensate Paul under the circumstances?
Mauro works full-time for a small company that offers no benefits. He earns $40,000 a year. He has an individual disability insurance policy that would provide him with $2,000 a month, for a maximum of two years, after a waiting period of four months. This policy includes a partial and residual disability rider. Injured in an accident, Mauro is completely unable to work for nine months. After that, Mauro’s doctor advises him to start working two days a week for the next three months, after which Mauro should be able to resume working full-time. What monthly benefit will Mauro receive during the period he works part-time?
Eloise has critical illness coverage through her group insurance plan at work. She is 54 years old, in excellent health, and is planning to retire soon. She meets with Sonia, her insurance agent, to plan her retirement and to make sure she will still be covered in the event of critical illness. To make sure she is not a burden on her family, Eloise would also like to receive monthly benefits in the event she is placed in an assisted living facility. What should Sonia tell her?
Dominic suffers a heart attack on October 1 and dies a little over a month later, on November 7. At the time of his death, he owned a $150,000 critical illness (CI) insurance policy, purchased 10 years earlier. Dominic never failed to pay the $100 monthly premium. When he died, the insurer had not yet issued the benefit payment.
How will the CI benefit be treated?
