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Chap 12: Policy Services - Coggle Diagram
Chap 12: Policy Services
Frequency of Premiums
Premium Receipts
Official receipt
Binding Receipt
Client Reminders
Call client
Highlight that policy might lapse
Suggest more frequent basis
of payment or
premium holidays
(ILPs)
Alterations
Assignment
Transfer of rights on a policy
from one person to another
Methods
Gift
Made without
consideration
Will be vested with OA for creditors if assignment
was
less than 3 years
before bankruptcy
Operation of law
Death
Assigned to executor
Bankruptcy
Valuable consideration
Ownership transferred to bank
Policy used as collateral
for securing loans
May include clause that reverts
rights to assignor upon loan repayment
Types
Absolute
Assignor transfers all rights
and ownership
Collateral
Rights will revert to assignor
in some situations
Policy Loans
Can be done if there
is cash value
Implications
Claims and surrenders
are reduced by loan
Interest accrued on loans
Insurer will terminate policy without refunding premiums if policy loan exceeds policy cash value
Requires completion of
policy loan agreement form
Lapsation
Conditions
Premiums not paid
by grace
period and
no cash value
Policy is under APL and
no more cash value
Reasons
Poor service by
adviser or insurer
Churning activity
Twisting by competing adviser
Reinstatement
Lapsed policy can be
reinstated
within 1- 3 years
, provided
Submission of
reinstatement
application form
Satisfactory evidence of LIs
continued insurability
Paid all arrears of
premiums with interest
Subject to underwriting
Subject to incontestability
suicide and waiting period clauses
Surrendering
Required for
life policies that
Accumulate cash value
Active for at least 3 years
Documents
Discharge form
Witnessed by a
person
above 21
Declaration that policy
has
not been assigned
Cannot be done if client
becomes
bankrupt
Bankruptcy
Life insurance policies are creditor protected
if
trust nominated
or
assigned
Duplicate Policy
Requirements
Written request for issuance
of duplicate policy
Statutory declaration policy
has not been assigned
Police report if stolen
Indemnity to indemnify insurer