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Chap 12-6
Section 6
15
Finance
Undergraduate 4
10/27/2011

Additional Finance Flashcards

 


 

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Term
most beneficiary designations are
Definition
revocable
Term
means that the policyowner reserves the right to change the beneficiary designation w/out the beneficiary's concent
Definition
revocable benefit
Term
has only the expectation of benefits, and the policyowner can change the beneficiary whenever desired
Definition
revocable beneficiary
Term
one that cannot be changed w/out the beneficiary's consent
Definition
irrevocable beneficiary
Term
means that the beneficiary is specifically named and identified
Definition
specific beneficiary
Term
a specific person is not named but is a member of a group designated as beneficiary, such as "children of the insured"
Definition
class beneficiary
Term
is appropriate whenever the insured wishes to divide the policy proceeds equally among members of a particular group
Definition
class designation
Term
most insurers restrict the use of class designation b/c of the problem of
Definition
identifying members of the class
Term
is permitted but will not be permitted when the class members cannot be identified, or the relationship to the insured is remote
Definition
designation of children as a class
Term
a provision that allows policyowners to exchange their present policies for different contracts
Definition
change-of-plans provision
Term
the purpose of the change-of-plans provision is to provide flexibility to the
Definition
policy owner
Term
the policy owner may pay the different in the policy reserve under the new policy and the policy reserve under the original policy if the change is to a
Definition
higher-premium policy
Term
to change to a higher-premium policy, evidence of insurability is not required b/c the pure insurance protection (net amt of risk) is
Definition
reduced
Term
in this case of this change, the insurer refunds the difference in cash values under the two policies to the policy owner
Definition
change to a lower-premium policy
Term
evidence is required in a change to a lower-premium policy b/c the pure insurance protection (net amt of risk) is
Definition
increased
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