TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION AND INDIVIDUAL LIFE INSURANCE.................... 2 CHAPTER 2: REGULATION OF THE INSURANCE INDUSTRY ................................ 5 CHAPTER 3: INTRODUCTION TO RISK AND INSURANCE .................................... 9 CHAPTER 4: MEETING NEEDS FOR LIFE INSURANCE..........................................15 CHAPTER 5: THE INSURANCE POLICY.....................................................................19 CHARTER 6: PRICING LIFE INSURANCE. ..................................................................22 CHAPTER 7: TERM LIFE INSURANCE........................................................................26 CHAPTER : PERMANENT LIFE INSURANCE AND ENDO!MENT INSURANCE3" ............................................................................................................................................ CHAPTER 9: SUPPLEMENTARY #ENEFITS ...............................................................37 CHAPTER 1": LIFE INSURANCE POLICY PROVISIONS.......................................... 43 CHAPTER 11: LIFE INSURANCE #ENEFICIARY POLICIES.................................... 49 CHAPTER 12: ADDITIONAL O!NERSHIP RIGHTS.................................................. 5" CHAPTER 13: PAYING LIFE INSURANCE POLICY PROCEEDS. ............................ 5 CHAPTER 14: PRINCIPLES OF GROUP INSURANCE POLICY................................ 62 CHAPTER 15: GROUP LIFE INSURANCE. ..................................................................67 CHAPTER 16: ANNUITIES AND INDIVIDUAL RETIREMENT SAVINGS PLANS 71 CHAPTER 17: GROUP RETIREMENT AND SAVINGS PLAN. ..................................1 CHAPTER 1: MEDICAL E$PENSE COVERAGE....................................................... 6 CHAPTER 19: DISA#ILITY INCOME COVERAGE. ................................................... 9" CHAPTER 2":TRADITIONAL GROUP HEALTH INSURANCE PLANS................... 94 CHAPTER 21: TRADITIONAL INDIVIDUAL HEALTH INSURANCE POLICIES. 1"" CHAPTER 22: MANAGED CARE PLANS ................................................................... 1"5 CHAPTER 23: REGULATION OF HEALTH INSURANCE........................................ 1"9
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 1 - 113
CHAPTER 1: INTRODUCTION AND INDIVIDUAL LIFE INSURANCE Insurance companies are orani!e" as ei#$er • S#oc% Insurance companies C-8)0' 0, ,-( 0 &, -/ ,0%+-*+%,. S- (-8)0' &, -;'+ ,0%+-*+%,. T+,+ ,0%+-*+%, + &<&+',. N-. - (-8)0'&+,: 16"4 I'(-8+ %-8 P%+8&/8: 226 &**&-' D-**0% 08-/' - L&+ I',/%0'(+ &' -%(+: 9. %&**&-' •
&u#ua' Insurance companies T&, )+ - (-8)0' &, -;'+ &, )-*&( -;'+%,. P-*&( -;'+%, %+(+&<+ &<&+', -/ - -)+%0&' )%-&,. N-. - (-8)0'&+,: 91 I'(-8+ %-8 P%+8&/8: 127 &**&-' D-**0% 08-/' - L&+ I',/%0'(+ &' -%(+: 6 %&**&-'
•
Fra#erna' Bene(i# companies P%-<&+ 0 ,-(&+ - &, 8+8+%, ;- ,0%+ 0 (-88-' +'&( %+*&&-/, +(. 0(%-/'. N-. - (-8)0'&+,: 135 I'(-8+ %-8 P%+8&/8: 4.1 &**&-' D-**0% 08-/' - L&+ I',/%0'(+ &' -%(+: 23 &**&-' → M+8+%, 8/, ,+*+( + -&(+%, - + F%0+%'0* ,-(&+ → O)+%0+ /'+% 0 *-+ ,,+8 = ;+%+ -'* *-+ 8+8+%, 0' +&% 08&*&+,> (0' -;' %0+%'0* ,-(&+>, &',/%0'(+.
&u#ua'i!a#ion:
I &, 0%+% - %0&,+ 8-'+ +&' 8//0* &',/%0'(+ (-8)0'&+,. S- 8-, (-8)0'&+, ,0% 0, ,-( (-8)0' 0' +' (-'<+% - 8//0* (-8)0'&+, ;+' + 0<+ +'-/ /',. T&, )%-(+,, - (-'<+%&' %-8 ,0%+ &',/%0'(+ (-8)0' - M//0* I',/%0'(+ C-8)0' &, (0**+ 8//0*&?0&-'. ! M//0*&?0&-'@ Demu#ua'i!a#ion: S+* +)*0'0-%. ! D+8//0*&?0&-'@ Home o((ice: H+0B/0%+% - I',/%0'(+ C-8)0'. H-8+ -&(+
R+. O
R+. O
F&+* O
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
R+. O
F&+* O
F&+* O
P0+ 2 - 113
F&+* -&(+ &, 0*,- '-;' 0, #%0'( -&(+ -% 0+'( -&(+.
Insurance companies are ( inancia' in#erme"iaries) A &'0'(&0* &'+%8+&0% &, 0' -%0'&?0&-' ;&( /,+, ,/%)*/, 08-/' - ,0<+%, -% &',/%0'(+ (-8)0' & &, )%+8&/8 0' &'<+,, 0 &' -+% ,+(-%,. In"i*i"ua' an" +roup Insurance: I'&<&/0* I',/%0'(+ (-<+%, &'&<&/0*, ;+%+ 0, G%-/) I',/%0'(+ (-<+%, 0 %-/) - )+-)*+. Li(e Insurance:
A )-*&( &',/%0'(+ (-8)0' )%-<&+, ,-8+ +'+&, & &',/%+ )+%,-' &+,. T+ 0%+ ;+%+ - 3 )+,. →
Term Insurance: P0, +'+& & &',/%+ &+, ;&&' + (-<+%+ &8+ )+%&-. N- (0, <0*/+
→
Permanen# Insurance: P%-<&+, (-<+%0+ %-/-/ &',/%+>, *&+&8+. C0, <0*/+ 0<0&*0*+
→
En"o,men# Insurance: I, ,&8&*0% - T+%8 ,&'(+ )0, +'+& & &',/%+ &+, ;&*+ (-<+%+ -% &** 0 ,0+ 0+. H0, (0, <0*/+ 0<0&*0*+.
Annui#-: A''/& &, 0 ,+%&+, - )+%&-&( )08+',. I &',/%+>, &+ +' &',+0 - )0&' 0 */8) ,-8+ +'+& - + '-8&'++, & (0' + ,)0(+ -/ &' +B/0* &',0**8+',.
A' A''/& (0' 0*,- + 0 (-'%0( /'+% ;&( 0' &',/%0'(+ (-8)0' )%-8&,+, - 80+ 0 ,+%&+, - )+%&-&( )08+', - 0 '08+ &'&<&/0* &' +(0'+ -% 0 )%+8&/8 -% ,+%&+, - )%+8&/8,. Hea'#$ Insurance: P%-+(&-' -;0%, ,&('+,, 0((&+' 0' &,0&*&. T-pes o( co*erae: • M+&(0* +)+',+ (-<+%0+: o H-,)&0* +)+',+ o S/%+% +)+',+ o P,&(&0' +)+',+ Speci(ie" e.pense co*erae:
L-' T+%8 (0%+: *&+ -% -* )+-)*+ ;- '++ (-',0' (0%+ 0' %+08+' D+'0* (-<+%0+ P%+,(%&)&-' D%/ V&,&-' (0%+ D%+0 &,+0,+ (-<+%0+ •
• • • •
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 3 - 113
•
C%&&(0* &**'+,, (-<+%0+
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 4 - 113
CHAPTER /: RE+ULATION OF THE INSURANCE INDUSTR0
E<+% /,&'+,, 8/, (-8)* ;& ,+<+%0* ++%0* ,0+ 0' )%-<&'(&0* *0;, ,- 0 & -)+%0+, &' 0 0&% 80''+%. I',/%0'(+ R+/*0&-' %+B/&%+, 0 + I',/%0'(+ (-8)0'&+, %+80&': 1. So'*en#: T+ 0%+ 0*+ - 8++ +&% +, 0' - )0 )-*&( +'+&, ;+' + (-8+ /+ 2. Con"uc# usiness (air'- an" e#$ica''USA Reu'a#ions
A((-%&' - + &cCarran2Feruson Ac# 3Pu'ic La, 145 %+/*0&-', 0%+ 80+ S0+ G-<+%'8+' /'&* + %+/*0&-' 80+ &, 0+B/0+. I '- C-'%+,, &'+%+%+,. • •
C-',&/&-'0* 0/-%& %+80&', ;& F++%0* -<+%'8+' S0+ G-<+%'8+' -;', )%&80% 0/-%&.
S#a#e reu'a#ions
S0+ I',/%0'(+ 08&'&,%0&-' &, -<+%'+ S#a#e Insur ance Depar# men# 3SID5 /'+% 0' Insurance Commissioner -% S#a#e Superin#en"en# o( Insurance) SID +',/%+, 0 + (-8)0'&+, ;&&' + ,0+ (-8)* ;& 0** ,0+ &',/%0'(+ *0;, 0' %+/*0&-',. M-, ,0+ %+/*0&-', 0%+ ,&8&* 0% &' '0/%+ ,&'(+ + 0%+ 0,+ -' 0 8-+* Na#iona' Associa#ion Insurance Commissioners 3NAIC5 . NAIC &, 0 '-'-<+%'8+'0* -%0'&?0&-' (-',&,, - 0** ,0+ I',/%0'(+ C-88&,,&-'+%,. T+ NAIC +<+*-) mo"e' i''6 0 ,08)*+ *0; 0 ,0+ &',/%0'(+ %+/*0-%, 0%+ +'(-/%0+ - /,+ 0, 0 0,&, - ,0+ *0;,. T- ,0% /,&'+,, &' 0 ,0+ 0' &',/%0'(+ (-8)0' %+B/&%+, ;- (+%&&(0+,: Cer#i(ica#e o( incorpora#ion or corpora#e c$ap#er: &,,/+ ,0+ %+B/&%+ -% 0' • (-%)-%0&-' - ,0% &, /,&'+,, &' 0 ,0+ Cer#i(ica#e o( au#$ori#- or 'icense: I,,/+ SID -'* -% &',/%0'(+ (-8)0'&+, • So'*enc- Reu'a#ion
A, )+% &, %+/*0&-' + SID &8)-,+, 0 8&'&8/8 *&8& -' + 08-/' - 0,,+, *&0&*&&+, 0' -' -;'+%,> +B/&. Asse#s 7 Liai'i#ies 8 O,ners9 Eui#Asse#s: C0, 0' I'<+,8+' Liai'i#ies: D+, 0' //%+ -*&0&-', P-*&( %+,+%<+, ,0%+, + *0%+ )-%&-' - *&0&*&&+, -% 0' &',/%0'(+ (-8)0' O,ners9 Eui#-: C0)&0* S/%)*/, Capi#a' &, + 8-'+ &'<+,+ &' + (-8)0' &, -;'+%, ?+%- &' (0,+ - 0 8//0* &',/%+%
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 5 - 113
T+ ,0+, -<+%,++ + Annual Statement ;&( +0( &',/%+% )%+)0%+, +0( (0*+'0% +0% 0' &*+, ;& SID. T&, &, + 0((-/'&' %+)-% - 0 (-8)0'. T+ NAIC 0, +<+*-)+ + -%80 - &, ,0+8+' 0 &, 0((+)+ 0** ,0+. A*,- + ,0+ %+/*0-%, (-'/( 0' -',&+ +08&'0&-' - 80'/0** (+( + &',/%+%>, /,&'+,, %+(-%, /,/0** -' +<+% 3 - 5 %,. I' (0,+ 0' &',/%+% +(-8+, &'0'( &0** /',-/' + S#a#e Insurance Commissioner 0, + 0/-%& - 0+ (+%0&' 0(&-',: I' (0,+ - "omes#ic insurer &'(-%)-%0+ + ,0+: I (0' %+0&*&0+ -% *&B/&0+ +)+'&' -' + (-'&&-' - + (-8)0'. I' (0,+ - 0 (orein insurer &'(-%)-%0+ /'+% + *0;, - 0'-+% ,0+: R+<-+ -% ,/,)+' + &',/%+%>, *&(+',+ - -)+%0+ &' + ,0+. Li(e an" Hea'#$ +uaran#- Associa#ion: A' -%0'&?0&-' 0 -)+%0+, /'+% + ,/)+%<&,&-' - + SIC - )%-+( )-*&( -;'+%, +'+&(&0%&+, 0' ,)+(&&+ -+%, 00&', *-,,+, 0 80 -((/% &' (0,+ - &',-*<+'(. T&, 0,,-(&0&-' )%-<&+, /', - /0%0'++ )08+' -% (+%0&' )-*&(&+, /) - ,0+ *&8&,. Reu'a#ion o( &ar%e# Con"uc# &ar%e# Con"uc# La,s: T&, *0; %+/*0+, -; &',/%0'(+ (-8)0'&+, (-'/( +&% /,&'+,, ;&&' + ,0+. A, )+% &, *0; + )+%-%8 )+%&-&( 80%+ (-'/( +08&'0&-', - + &',/%+%,. &ar%e#in o( Insurance pro"uc#s: I' -%+% - -0&' 0' 0+'>, *&(+',+ 0 )%-,)+(&<+ 0+' 8/, • #+ ,)-',-%+ -% *&(+',&' 0 *&(+',+ &',/%0'(+ (-8)0' • C-8)*++ 0))%-<+ +/(0&-'0* (-/%,+ ;-% -% )0,, 0 ;%&+' +08&'0&-' • P%-<&+ 0 %+)/0*+ (0%0(+% (+%&&(0+ T+ 0+'>, *&(+',+ 8/, + )&(0** %+'+;+ +0( +0%. A ,0+ 80 %+<-+ 0 *&(+',+ & +,+ +'0+, &' (+%0&' /'+&(0* )%0(&(+, 0' <&-*0+, + ,0+>, &',/%0'(+ *0;,. Po'ic- Forms: I &, 0 ,0'0%&?+ (-'%0( -%8, 0 ,-;, + +%8, (-'&&-', +'+&, 0' -;'+%,&) %&, - 0 )0%&(/*0% &',/%0'(+ )%-/(. A' &',/%0'(+ (-8)0' 8/, &*+ +,+ -%8, 0' %+(+&<+ + SID9s 0))%-<0* +-%+ *0/'(&' 0 '+; )%-/(. SID 80 0, + (-8)0' - %+<&,& + -%8 -% %+/(&' 0%-', ,- 0 & (-/* + (*+0%+% - + +'+%0* )/*&(. Fe"era' Reu'a#ions •
•
•
•
T&, 0))*&+, - + ,0*+ - &'<+,8+' )+ &',/%0'(+ )%-/(. #/,&'+,,+, 0 ,+** ,+(/%&&+, 8/, (-8)* ;& Securi#ies an" E.c$ane Commission SEC. E: V0%&0*+ *&+ &',/%0'(+ V0%&0*+ 0''/&&+, #+-%+ ,+**& ' +,+ )%-/(, + ,0*+, 0+' 8/, + %+&,+%+ ;& + Na#iona' Associa#ion o( Securi#ies Dea'ers$ip NASD. E8)*-++ +'+& )*0', 8/, (-8)* ;& + +%8, - Emp'o-ee Re#iremen# Income Securi#- Ac# ERISA.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 6 - 113
CANADA Reu'a#ions
U'*&+ 0 US &',/%0'(+ (-8)0' 0 C0'0&0' (-8)0' 80 + &'(-%)-%0+ /'+% + 0/-%& - +&+% + F+ -<+%'8+' -% -'+ - + )%-<&'(&0* -<+%'8+',. Fe"era' Reu'a#ions
T+ Insurance Companies Act &, + )%&80% F++%0* *0; 0 -<+%', ,)+(&&+ &',/%0'(+ (-8)0'&+, -)+%0&' &' C0'00. C-8)0'&+, 0 8/, (-8)* ;& &, 0( 0%+:
insurers F++%0** &'(-%)-%0+ &',/%+%, foreign &',/%+%, &'(-%)-%0+ &' (-/'%&+, -+% 0' C0'00 0' ,)+(&&+ )%-<&'(&0** &'(-%)-%0+ &',/%+%,. O((ice o( #$e superin#en"en#s o( (inancia' ins#i#u#ions 3OSFI5: A ++%0* 0+'( 0 &, %+,)-',&*+ -% -<+%,++&' 0** &'0'(&0* &',& /&-', &' C0'00 &'(*/&' 0** *&+ 0' +0* &',/%0'(+ (-8)0'&+,. T&, &',&/ + %/', /'+% + &%+(&-' - Superin#en"en#s o( (inancia' ins#i#u#ions 3SFI5.
E<+% &',/%0'(+ (-8)0' 8/, &*+ 0' Annual Return ;& + OSFI. T&, &<+, + &'0'(&0* ,0+8+' - + (-8)0'. OSFI 0*,- +08&'+ &'0'(&0* (-'&&-', - 0 (-8)0' -' 0 )+%&-&( 0,&, /,/0** -' +<+% 3 +0% / & 80 + 0'&8+ SFI 80 0+ (-'%-* -% +(*0%+ 0 (-8)0' 0, &',-*<+' -% -0&' 0 (-/% -%+% - *&B/&0+ (-8)0' & &', & &'0'(&0** /',-/'. Cana"ian Li(e an" Hea'#$ Insurance Associa#ion 3CLHIA5: A' &'/,% 0,,-(&0&-' - *&+ 0' +0* &',/%0'(+ C-8)0' -)+%0&' &' C0'00. Cana"ian Li(e an" Hea'#$ Insurance Compensa#ion Corpora#ion 3CompCorp5: I &, 0 ++%0** &'(-%)-%0+ '-')%-& (-8)0' +,0*&,+ CLHIA - )%-+( C0'0&0' (-',/8+%, 00&', *-,, - +'+&, &' + +<+' - 0 *&+ 0' H+0* I',/%0'(+ C-8)0' +(-8+, &',-*<+'. CompCorp (-**+(, 8-'+ %-8 0** &, 8+8+% (-8)0'&+, - /' +,+ /0%0'++ )08+',.
Pro*incia' Reu'a#ions
I' 8-, %+,)+(, *0;, - %+/*0+ &',/%0'(+ (-8)0'&+, -)+%0&' &' &+%+' )%-<&'(+, 0%+ ,&8&*0% &' 0** )%-<&'(+, +(+) %-8 L0;, - /++(. T&, &, +(0/,+ + /++( *0; &, 0,+ -' 0 C&<&* L0; ,,+8 / -+% /%&,&(&-',> *0;, 0%+ 0,+ -' 0 (-88-' *0; ,,+8. O((ice o( #$e Superin#en"en# o( Insurance: A' 08&'&,%0&<+ 0+'( +,0*&,+ &' +0( )%-<&'(+ - +'-%(+ + )%-<&'(+>, &',/%0'(+ *0;, 0' %+/*0&-',. I -)+%0+, /'+% + &%+(&-' - 0' &'&<&/0* '-;' 0, + Superin#en"en# o( Insurance. T+ <0%&-/, )%-<&'(&0* S/)+%&'+'+', - I',/%0'(+ 0<+ <-*/'0%&* -%8+ 0 (-**+(&<+ - Counci' o( Insurance Reu'a#ors '-;' 0, + Cana"ian . T+-)/%)-,+ - CCIR &, &,(/,, &',/%0'(+ &,,/+, 0' - %+(-88+' /'&-%8 &',/%0'(+3CCIR5 *+&,*0&-' + )%-<&'(+,.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 7 - 113
T+ CCIR 0, 0-)+ Superin#en"en#s9 +ui"e'ines 0 ,+%&+, - %+(-88+'0&-', 0 (-'(+%', 0 <0%&+ - 80+%,. T+,+ /&+*&'+, ;+%+ +<+*-)+ &' (--)+%0&-' ;& + &',/%0'(+ &'/,% ;-%&' %-/ &, &'/,% 0,,-(&0&-' + CLHIA. So'*enc- Reu'a#ion
T+,+ *0;, %+B/&%+ + O((ice o( #$e Superin#en"en# o( Insurance - ,/)+%<&,+ (-8)0'&+, 0 ;+%+ &'(-%)-%0+ + )%-<&'(+ 0' - +08&'+ -,+ (-8)0'&+, )+%&-&(0**. A*,- + &',/%0'(+ (-8)0' ,-/* -0&' 0 *&(+',+ %-8 + -&(+ - ,0% /,&'+,, &' 0 )0%&(/*0% )%-<&'(+. M-, - + *&(+',&' %+B/&%+8+', ,++ - +',/%+ 0 &',/%0'(+ (-8)0'&+, 0%+ &'0'(&0** 0*+ - )%-<&+ + +'+&, + )%-8&,+ - )0 ;+' + &,,/+ &',/%0'(+ )-*&(&+,. Reu'a#ion o( &ar%e# Con"uc#
U'*&+ %+B/&%+8+', &' + US -;+<+% + )%-<&'(+, - '- %+B/&%+ 0 0** )-*&( -%8, + &*+ +-%+ +&' &,,/+ / + &',/%+%, 0%+ %+B/&%+ - &*+ )-*&( -%8, &' -'* ;- ,&/0&-',: 1 A, 0 (-'&&-' - -0&'&' 0 *&(+',+ - (-' /( 0' &',/%0'(+ /,&'+,, ;&&' + )%-<&'(+ 2 #+-%+ 80%+&' 0 <0%&0*+ *&+ &',/%0'(+ (-'%0( &' + )%-<&'(+ T+ )%-<&'(+, 0*,- %+/*0+ 80' - + 80%+&' 0(&<&&+, - + (-8)0'&+, -: 1 P%-&& %-8 /'0&% %0+ )%0(&(+, 0*,+ -% 8&,*+0&' 0<+%&,+8+' 2 A+' ,-/* + + *&(+',+ -%8 + ,0+ +-%+ 80%+&' &' 0 ,0+. T+ *&(+',&' %+B/&%+8+', 0%+ ,&8&*0% - %+B/&%+8+', &' + U'&+ S0+,.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ - 113
CHAPTER ;: INTRODUCTION TO RIS< AND INSURANCE
C-'(+) - R&,: R&, +&,, ;+' +%+ &, /'(+%0&' 0-/ + //%+. T)+, - R&,: #- &'&<&/0* 0' /,&'+,,+, +)+%&+'(+ 2 &', - %&,. 0 S)+(/*0&<+ %&,. P/%+ %&,. !0 &, specu'a#i*e ris%@ T&, &'<-*<+, 3 )-,,&*+ -/(-8+,: *-,, 0&' -% '-(0'+. E08)*+: Y-/% )/%(0,+ ,0%+, - ,-(. T&, &, 0 ,)+(/*0&<+ %&, -/ 0%+ 0&'. I + <0*/+ - + ,-( %0&,+, -/ 0&'. I + <0*/+ - + ,-( 0**, -/ *-,+. I + <0*/+ - + ,-( %+80&', + ,08+ +%+ &, '- (0'+. !0 &, pure ris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
0 A<-&&' %&,: F-% +08)*+: O'+ (0' 0<-& + %&, - )+%,-'0* &'/% 0 80 %+,/* %-8 0' 0&% (%0, 0<-&&' %0<+* 0&%)*0'+.
C-'%-**&' %&,: !+ (0' % - (-'%-* %&, 0&' ,+), - )%+<+' -% %+/(+ *-,,+,.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 9 - 113
F-% +08)*+: A ,-) -;'+% 8& (-'%-* + %&, - ,/+%&' &'0'(&0* *-,, /+ - &, ,-) /%'&' -;' &',0**&' &%+ +&'/&,+%, 0' 0''&' ,8-&' &',&+ + ,-). T&, ;0 + %+/(+, + *&+*&-- - 0 &%+ %+0&' &' &, ,-) 0' 0*,- *+,,+', + ++' - 080+ &' (0,+ - 0 &%+.
( A((+)&' %&,: !+' 0' &'&<&/0* -% 0 /,&'+,, 0,,/8+, 0** + &'0'(&0* %+,)-',&&*& -% 0 %&,. Se'(2insurance
T&, &, 0 %&, 80'0+8+' +('&B/+ ;&( 0 )+%,-' -% /,&'+,, 0((+), + &'0'(&0* %+,)-',&&*& -% &'0'(&0* *-,,+, 0,,-(&0+ ;& 0 )0%&(/*0% %&,.
T%0',+%%&' %&,: !+' + &'0'(&0* %+,)-',&&*& -% 0' 0,,-(&0+ %&, &, %0',+%%+ %-8 -'+ )0% 0'-+% +'+%0** &' +(0'+ - 0 ++ & &, (0**+ %0',+%%&' - %&,. A 8-, (-88-' +08)*+ &, )/%(0,&' 0' &',/%0'(+ (-<+%0+. Po'icA ;%&+' -(/8+' 0 (-'0&', + +%8, - + 0%++8+' +;++' + &',/%0'(+ (-8)0' 0' + -;'+% - + )-*&(. T&, &, 0 *+0** +'-%(+0*+ (-'%0(. Po'ic- ene(i#s or po'ic- procee"s
T+ 08-/' - 8-'+ 0 + &',/%0'(+ (-8)0' 0%++, - )0 = ;+' 0 ,)+(&&( *-,, (-<+%+ 0 )-*&( -((/%,. Premium
T+ ++ 0 + &',/%0'(+ (-8)0' 0+, %-8 + -;'+% - + )-*&( &' +(0'+ - 0,,/8&' + &'0'(&0* %+,)-',&&*& -% *-,,+, &'(/%%+ & + ,)+(&&( %&, (-<+%+ + )-*&( -((/%,. !0 0%+ + %++ )+, - )/%+ %&,, 0 0%+ +'+%0** (-<+%+ &',/%0'(+ (-8)0'&+,@ Proper#- "amae ris%: %&, - +(-'-8&( *-,, - -/% 0/-8-&*+ -8+ -% -+% )+%,-'0* +*-'&', /+ - 0((&+' + &%+ -% '0/%0* &,0,+%. Proper#- insurance (-<+%, 0 )%-)+% 080+ %&,. Liai'i#- ris%: %&, - +(-'-8&( *-,, %+,/*&' %-8 -/ +&' %+,)-',&*+ -% 0%8&' -+%, -% +&% )%-)+%. Liai'i#- insurance (-<+%, 0 *&0&*& %&,.
Proper#- an" Casua'#- insurance or Proper#- an" Liai'i#- insurance
C-<+%, 0 )%-)+% %&, 0, ;+** 0, 0 *&0&*& %&,. T+ &',/%0'(+ (-8)0' -+%&' ,/( &',/%0'(+ &, (0**+ 0 P%-)+% 0' C0,/0* &',/%+% -% 0 P%-)+% 0' L&0&*& &',/%+%. Persona' ris%:
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 1" - 113
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nsura'e ris%s: 1 T+ *-,, 8/, -((/% (0'(+. U'+)+(+ +<+' '- &'+'&-'0** (0/,+ + )+%,-' (-<+%+ 2 T+ *-,, 8/, + +&'&+. I' +%8, - &8+ 0' 08-/' 3 T+ *-,, 8/, + ,&'&&(0'. I' &'0'(&0* +%8, 4 T+ *-,, %0+ 8/, + )%+&(0*+. T+ )%-0*+ %0+ - + *-,, 8/, + )%+&(0*+ 5 T+ *-,, 8/, '- + (00,%-)&( - + &',/%+%. A ,&'*+ -% +; -((/%%+'(+ - + *-,, 8/, '- (0/,+ -% (-'%&/+ - (00,%-)&( &'0'(&0* 080+ - + &',/%+% C*0,,&&(0&-' - )-*&(&+,: D+)+'&' -' + ;0 &' ;&( 0 )-*&( ,0+, + 08-/' - + )-*&( +'+& +<+% &',/%0'(+ )-*&( (0' + (*0,,&&+ 0, +&' +&+% - + -**-;&': Con#rac# o( in"emni#-: 08-/' - + )-*&( +'+& )00*+ -% 0 (-<+%+ *-,, &, +B/0* - + 08-/' - + (-<+%+ &'0'(&0* *-,, ++%8&'+ 0 + &8+ - + *-,, -% 0 80&8/8 08-/' ,0+ &' + (-'%0( ;&(+<+% &, *+,,.
E08)*+: M0' )+, - +0* &',/%0'(+ )-*&(&+,. Va'ue" Con#rac#: ,)+(&&+, + 08-/' - +'+& 0 ;&** + )00*+ ;+' 0 (-<+%+ *-,, -((/%, %+0%*+,, - + 0(/0* 08-/' - + *-,, 0 ;0, &'(/%%+. E08)*+: M-, *&+ &',/%0'(+ )-*&(&+,.
S-8+ -+% &8)-%0' +%8,: Face amoun#: T+ 08-/' - + +'+& 0 &, *&,+ &' + )-*&(. C'aim: T+ %+B/+, -% )08+' /'+% + +%8, - + )-*&(. La, o( 'are numers: I ,0+, 0 )&(0** + 8-%+ &8+, ;+ -,+%<+ 0 )0%&(/*0% +<+' + 8-%+ *&+* &, & 0 -/% -,+%<+ %+,/*, ;&** 0))%-&80+ + J%/+ )%-0&*& 0 + +<+' ;&** -((/%. &or#a'i#- #a'es: C0%, 0 &'&(0+ - 0 %+0 +%++ - 0((/%0( + '/8+% - )+-)*+ &' 0
&<+' %-/) - 1""""" -% 8-%+ ;- 0%+ *&+* - &+ 0 +0( 0+. &ori"i#- #a'es: C0%, 0 &'&(0+ - 0 %+0 +%++ - 0((/%0( + &'(&+'(+ - ,&('+,, 0' 0((&+', 0+ -((/%%&' 08-' 0 &<+' %-/) - )+-)*+.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 11 - 113
Reinsurance: &, + &',/%0'(+ 0 -'+ &',/%0'(+ (-8)0' '-;' 0, + ce"in compan-2,+**, - 0'-+% &',/%0'(+ (-8)0''-;' 0, + reinsurer. Re#en#ion 'imi#: T+ 80&8/8 08-/' - &',/%0'(+ 0 + &',/%+% &, ;&**&' - (0%% 0 &, -;' %&, -' 0' -'+ *&+ ;&-/ %0',+%%&' ,-8+ - + %&, - 0 %+&',/%+%. Re#rocession: !+' 0 %+&',/%+% (++, %&,, - 0'-+% %+&',/%+% +' 0 %0',0(&-' &, (0**+ 0 %+%-(+,,&-'. T+ %+&',/%+% - ;&( + %&, 0, ++' (++ &, (0**+ 0 %+%-(+,,&-'0&%+.
P+-)*+ ;- 0%+ &'<-*<+ &' + (%+0&-' 0' -)+%0&-' - 0' &',/%0'(+ )-*&( App'ican#: T+ )+%,-' -% /,&'+,, 0 0))*&+, -% 0' &',/%0'(+ )-*&(. Po'ic- o,ner: T+ )+%,-' -% /,&'+,, 0 -;', + &',/%0'(+ )-*&(. Insure": T+ )+%,-' ;-,+ *&+ -% +0* &, &',/%+ /'+% + )-*&(. T$ir"2par#- po'ic-: !+' -'+ )+%,-' )/%(0,+, &',/%0'(+ -' + *&+ - 0'-+% )+%,-'. Bene(iciar-: T+ )+%,-' -% )0% + )-*&( -;'+% '08+ - %+(+&<+ + )-*&( +'+&.
A,,+,,&' + D+%++ - R&, Un"er,ri#in: T&, &, + )%-(+,, - &+'&&' 0' (*0,,&&' + +%++ - %&, %+)%+,+'+ 0 )%-)-,+ &',/%+. T+%+ 0%+ 2 )%&80% ,0+, &' &, )%-(+,,:
1 I+'&&' + %&,, 0 0 )%-)-,+ &',/%+ )%+,+',. 2 C*0,,&&' + +%++ - %&, 0 0 )%-)-,+ &',/%+ %+)%+,+',. Un"er,ri#er: T+ +8)*-++ - + &',/%0'(+ (-8)0' ;- &, %+,)-',&*+ -% /'+%;%&&'.
I+'&&' %&,, I',/%+%, (0''- )%+&( ;+' 0 ,)+(&&( &'&<&/0* ;&** &+ +(-8+ &'/%+ -% ,/+% %-8 &**'+,,. #/ +%+ 0%+ 0 '/8+% - 0(-%, 0 (0' &'(%+0,+ -% +(%+0,+ + *&+*&-- 0 0' &'&<&/0* ;&** ,/+% 0 *-,,. T+ 8-, &8)-%0' - +,+ 0(-%, 0%+ + -**-;&': P$-sica' $a!ar": P,&(0* (0%0(+%&,&( 0 80 &'(%+0,+ + *&+*&-- - 0 *-,,. E08)*+: A )+%,-' ;& 0 &,-% - +0% 00(, )-,,+,,+, 0 ),&(0* 0?0% 0 ;&** &'(%+0,+ + *&+*&-- 0 + )+%,-' ;&** &+ ,--'+% 0' 0 )+%,-' - + ,08+ 0+ %-/) 0' ,+ ;&-/ ,/( 0 ),&(0* 0?0%. &ora' $a!ar": T+ *&+*&-- 0 0 )+%,-' 80 0( &,-'+,* &' + &',/%0'(+ %0',0(&-'. E08)*+: A' &'&<&/0* ;& 0 (-'&%8+ %+(-% - &**+0* +0<&-% &, 8-%+ *&+* - +%0/ 0' &',/%+% 0' &, 0 )+%,-' ;& '- ,/( %+(-%,.
C*0,,&&' %&,, T+ )/%)-,+ - (*0,,&&' 0 )%-)-,+ &',/%+ &'- 0' 0))%-)%&0+ %&, (0+-% &, - +'0*+ + &',/%+% - ++%8&'+ + +B/&0*+ )%+8&/8 %0+ - (0%+ -% + %+B/+,+ (-<+%0+.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 12 - 113
Un"er,ri#in ui"e'ines: R/*+, - %&, ,+*+(&-' 0 0%+ 0))*&+ /'+%;%&+%, - (*0,,& )%-)-,+, &',/%+,. T+ &',/%+% +,0*&,+, +,+ /&+*&'+,. G+'+%0** + %&, (0+-%&+, 0 0%+ &+'&&+ 0** /'+%;%&&' /&+*&'+, 0%+: 0 S#an"ar" ris%s: P%-)-,+ &',/%+, 0 0<+ + *&+*&-- - *-,, 0 &, '- ,&'&&(0'* %+0+%0'0<+%0+. P%+8&/8 %0+, 0 + 0%+ (0%+ 0%+ s#an"ar" premium ra#es. Sus#an"ar" ris%s: P%-)-,+ &',/%+ 0 0<+ ,&'&&(0'* %+0+% =0' 0<+%0+ *&+*&-- - *-,, / 0%+ ,&** -/' &',/%0*+. T&, (0+-% &, (0**+ specia' c'ass ris%s. P%+8&/8 %0+, 0 + 0%+ (0%+ 0%+ &+% 0' 0%+ (0**+ + sus#an"ar" premium ra#e -% specia' c'ass ra#e.
( Dec'ine" ris%: P%-)-,+ &',/%+, 0 0%+ (-',&+%+ - )%+,+' 0 %&, 0 &, -- %+0 -% + &',/%+% - (-<+%.
Pre(erre" ris%s = Super Pre(erre" ris%s : P%-)-,+ &',/%+, 0 )%+,+' 0 ,&'&&(0'* *+,,0'0<+%0+ *&+*&-- - *-,,. T+ 0%+ +'+%0** (0%+ 0 *-;+% 0' ,0'0% )%+8&/8 %0+. I',/%0*+ I'+%+, R+B/&%+8+' L0;, &' 0** ,0+, 0' )%-<&'(+, %+B/&%+ 0 ;+' 0' &',/%0'(+ )-*&( &, &,,/+ + )-*&( -;'+% 8/, 0<+ 0' &',/%0*+ &'+%+, &' + %&, 0 &, &',/%+ + )-*&( -;'+% 8/, + *&+* - ,/+% 0 +'/&'+ *-,, -% +%&8+' ,-/* + +<+' &',/%+ 00&', -((/%,. I',/%0*+ &'+%+, %+B/&%+8+' &' +0* &',/%0'(+ F-% +0* &',/%0'(+ 0' insura'e in#eres# +&,, & + 0))*&(0' (0' +8-',%0+ 0 +'/&'+ %&, - +(-'-8&( *-,, ,-/* + )%-)-,+ &',/%+ %+B/&%+ 8+&(0* (0%+ -% +(-8+ &,0*+. I',/%0*+ &'+%+, %+B/&%+8+' &' *&+ &',/%0'(+ A' insura'e in#eres# +&,, ;+' + )-*&( -;'+% &, *&+* - +'+& & + &',/%+ (-'&'/+, *&<+ 0' &, *&+* - ,/+% ,-8+ *-,, -% +%&8+' & + &',/%+ &+,. T+ &/%+ +*-; ,-;, + 08&* %++ - 0 (+%0&' &',/%+. T+ (&%(*+, &' + -* -/*&'+ +)&( + %+*0&-',&), 0 (%+0+ 0' &',/%0*+ &'+%+, &' + *&+ - + &',/%+.
G%0'0+ %
G%0'8-+%
M-+%
F0+% U'(*+
A/'
C-/,&'
S&,+%&' *0;
#%-+ %
Insure"
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3 N&+(+
N+)+ ;
S&,+ %
S)-/,+
P0+ 13 - 113
C&*
G%0'(&*
C&*>, ,)-/,+
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 14 - 113
CHAPTER >: &EETIN+ NEEDS FOR LIFE INSURANCE Poin#s #o rememer:
1 I',/%0'(+ A+' S0*+, A+' 0%+ 0' 0/-%&?+ )+%,-' 0' &',/%0'(+ C-. - %+)%+,+' + C-. &' &, +0*&', ;& 0))*&(0', -% &',/%0'(+. 2 I',/%0'(+ 8++, 0 I'&<&/0* P+%,-'0* '++, I. F/', - (-<+% &'0* +)+',+, II. D+)+'+',> ,/))-% III. E/(0&-' (-,, IV. R+&%+8+' &'(-8+ V. O+%, #/,&'+,, '++, /) A)I) Fun"s #o co*er (ina' e.penses
E,0+: A** &', - <0*/+ (0**+ J Asse#s. A,,+, &'(*/+ cas$6 an% ? in*es#men# A=Cs6 rea' es#a#e6 an" o,ners$ip in#eres#s in usiness) E,0+ P*0',: A )*0' - ,+*+ -'+>, E,0+ 0, )+% -'+>, ;&,+,. T+ E,0+ P*0' (-',&+%, + 08-/' - 0,,+, 0' +, 0 -'+ &, *&+* - 0<+ ;+' -'+ &+, 0' -; +, -'+ (0' )%+,+%<+ -,+ 0,,+, ,- 0 0 (0' + )0,,+ - -'+>, +&%,. No#e: S+*&' 0' +,0+ 8+0', &+'&&' (-**+(&' + +(+0,+>, )%-)+% &*&' 0' %+B/&%+ 0 -%8, (-**+(&' 0** +, -;+ - + +(+0,+ 0' )0&' 0** -/,0'&' +, -;+ + +(+0,+. /) A)II) Depen"en#s9 suppor#
T- )%-<&+ /', - ,/))-% + 08&* 8+8+%, & + &'0'(&0** ,/))-%&' 8+8+% &+, /'&* + -0&' '+; 8+-, - ,/))-% -% /'&* + 0/, - 0 *-;+% &'(-8+. I' 0&&-' LIP L&+ I',/%0'(+ P-*&( (0' + /,+ - ,/))*+8+' + 08&*>, +)+',+ ;&( &, 0%++ 0, ;+**. /) A)III) E"uca#ion cos#s
T- &',/%+ + +/(0&-' - + (&*%+' +<+' 0+% + +0 - + )0%+',. /) A)IV) Re#iremen# income
T- )%-<&+ ,/))-% - &'&<&/0*, ;& %+&%+8+' &'(-8+. P+%80'+' LIP>, 0((/8/*0+ ,0<&', ;&** '- + %+/(+ & + I',/%0'(+ C-8)0'>, &'<+,8+', *-,+ 8-'+ %0+% /0%0'++, 0 + )-*&( -;'+% ;&** +0%' 0 *+0, 0 ,)+(&&+ &'+%+, %0+ -' &, /',. M-%+-<+% LIP>, )%-<&+ &'(-8+ 0 0<0'0+,. O'(+ + )-*&( -;'+% 0(/0** %+(+&<+, + )-*&( <0*/+, = (0'(+*&' + )-*&( 0' %+(+&<&' &, (0, ,/%%+'+% <0*/+ = + 80 -;+ &'(-8+ 0+, & + %+(+&<+, 8-%+ 8-'+ 0' + 0, )0& -% &
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 15 - 113
/) a)V) O#$er Persona' nee"s (or LI T- -'0+ + )%-(++, - + LIP - 0 (0%&0*+ -%0'&?0&-' ,/( 0, 0 C/%( -% 0' E/(0&-'0* I',&/&-'. I' &, (0,+ + )%+8&/8, 0%+ +/(&*+ -% ++%0* &'(-8+ 0 )/%)-,+,.
/) B) Business nee"s
A Key Person &, 0 )+%,-' +8)*-++ ;-,+ (-'&'/+ )0%& (&)0&-' &' + /,&'+,, &, '+(+,,0% - + ,/((+,, - + /,&'+,, 0' ;-,+ +0 ;-/* (0/,+ 0 ,&'&&(0' &'0'(&0* *-,,. A Business Continuation Insurance Plan &, 0' &',/%0'(+ )*0' +,&'+ - +'0*+ 0K+ /,&'+,, P+%,-'-;'+% &+,. -% -;'+%, - (-'&'/+ /,&'+,, -)+%0&-' & + -;'+% -% + A Closely Held Business &, 0 ,-*+ )%-)%&+-%,&) )0%'+%,&) (-%)-%0&-' 0 0%+ -;'+ -'* 0 +; &'&<&/0*,. T&, 8& '++ - +,0*&, 0 BCIP.
Liquidation &, + )%-(+,, - ,+**&' - -% (0, 0 /,&'+,,> 0,,+, - + +(+0,+ ,/( 0, &, /&*&' &'<+'-% +( 0' /,&' 0 (0, - )0 + /,&'+,,>, +,. A' /', %+80&'&' 0%+ +' &,%&/+ 08-' + -;'+%, - + /,&'+,,. Buy-Sell Agreement &, 0' 0%++8+' &' ;&( 1 -'+ )0% 0%++, - )/%(0,+ + &'0'(&0* &'+%+, 0 + 2' )0% -*, &' + /,&'+,, -**-;&' + 2 ' )0%>, +0 0' 2 + 2 ' )0% 0%++, - &%+( &, +,0+ - ,+** &, &'+%+, &' + /,&'+,, - + )/%(0,&' )0%. T+ BSA, <0% 0,+ /)-' + -%8 - + /,&'+,, -%0'&?0&-' 0, -**-;,:
#/S+** A%++8+', P0%'+%,&) #SA
S-*+ P%-)%&+-%,&) #SA
C*-,+* H+* C-%)-%0&-' #SA
15 So'e Proprie#ors$ip BSA: H+%+ + 1, )0% &, + -;'+% 0' + 2' )0% &, 0' +8)*-++ 0<&' + 0&*& + %&<+ - 0+ -<+% + /,&'+,, 0+% + -;'+%>, +0. T+ 1, )0% ;&** &+'& + 2' )0%. T+ 2 ' )0% -;+<+% 80 '- 0<+ ,/&(&+' 0,,+, - /' + )/%(0,+ - + /,&'+,,. I' 0 (0,+ &'&<&/0* LIP &, + (-88-' ;0 - /' -% &8. ,
'
/5 Par#ners$ip )0%'+%,. BSA: H+%+ + 1 )0% &, -'+ )0%'+% + 2 )0% &, + -+%
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 16 - 113
;5 T+ )/%(0,+ - + +(+0,+ )0%'+% (0' + 0((-8)*&,+ -'+ - + ;- 8+-, = I C%-,, P/%(0,+ M+- -% II E'& M+-. 3I5
I' Cross Purc $ase &e#$o "6 +0( )0%'+% 0%++, - )/%(0,+ 0 )%-)-%&-'0+ ,0%+ - + +(+0,+ )0%'+%>, &'+%+, &' + )0%'+%,&). E0( )0%'+% /', + #SA )/%(0,&' 0' &',/%0'(+ )-*&( -' + *&+ - +0( - + -+% )0%'+%,. T/, +0( )0%'+% -;', )0, + )%+8&/8 -' 0' &, + '08+ +'+&(&0% - 0 )-*&( -' + *&+ - +0( - + -+% )0%'+%,. !+' 0 )0%'+% &+, -+% )0%'+%, %+(+&<+ + )%-(++, - 0 LIP 0' (0' /,+ -,+ )%-(++, - )/%(0,+ + )%-)-%&-'0+ - + +(+0,+ )0%'+%>, -;'+%,&) &'+%+, &' + )0%'+%,&).
3II5
I' En#i#- &e #$o"6 + )0%'+%,&) %0+% 0' + &'&<&/0* )0%'+%, 0%++, - )/%(0,+ + ,0%+ - + +(+0,+ )0%'+% 0' &,%&/+ 0 )%-)-%&-'0+ ,0%+ - 0 -;'+%,&) &'+%+, - + ,/%<&<&' )0%'+%,. T+ )0%'+%,&) )/%(0,+, 0' LIP -' + *&+ - +0( - + )0%'+%, )0, + )%+8&/8, 0' &, + '08+ +'+&(&0% - +0( )-*&(. !+' 0 )0%'+% &+, + )0%'+%,&) /,+, + LIP )%-(++, - )/%(0,+ + +(+0,+ )0%'+%>, ,0%+ &' + /,&'+,, %-8 + +(+0,+>, +,0+.
>5 C'ose'- He'" Corpora#ion BSA: I &, ,&8&*0% - + Par#ners$ip BSA) H+%+ 0*,- + (0' 0<+ +&% #SA +&+% &' C%-,, P/%(0,+ M+- -% &' E'& M+-. I' + E'& M+- + C-%)-%0&-' /, + )-*&(&+, -' +0( - + -;'+%,> *&<+,.
A + )+%,-' (-/* + 0' -;'+% 0 )0%'+% 0' +8)*-++ - + /,&'+,,. I' Key Person Life Insurance + (-%)-%0&-' -;', )0, + )%+8&/8, -' 0' &, + +'+&(&0% - + I',/%0'(+ P*0'. Li(e Insurance as an Emp'o-ee Bene(i#:
H+%+ E8)*-+%, )0 -% 0** -% )0% - + +8)*-++ +'+&, 0, )0% - + -0* )0(0+ /'+% ;&( + C-. (-8)+',0+ &, +8)*-++,. E8)*-+%, 80 +<+' -+% &'&<&/0* +'+& )*0', - (+%0&' +8)*-++, 0*-' ;& + -'+ 0 0** -+% +8)*-++, %+(+&<+. T+%+ 0%+ ;- )+, - &'&<&/0* *&+ &',/%0'(+ +'+& )*0', = I S)*&D-**0% LIP 0' II D++%%+ C-8)+',0&-' P*0'. I Split-Dollar LIP &, 0' 0%++8+' /'+% ;&( 0 /,&'+,, )%-<&+, &'&<&/0* LIP, -% (+%0&' ,+*+(+ +8)*-++, ;- ,0%+ &' )0&' + (-, - + )-*&(&+,. T+ +8)*-+% 0%++, - )0 + )-%&-' - +0( 0''/0* )%+8&/8 0 &, +B/0* - + 08-/' ;&( + )-*&(>, (0, <0*/+ ;&** &'(%+0,+ 0 +0%. T+ +8)*-++ 0%++, - )0 + %+80&'+% - + )%+8&/8. I + +8)*-++ &+, ;&*+ + )-*&( &, &' -%(+ &' 8-, ,/( (0,+, + +8)*-+% ;&** %+(+&<+ 0' 08-/' +B/0* - ;0 & )0& -% + )-*&( + +'+&(&0% '08+ + +8)*-++ ;&** %+(+&<+ + %+80&'+% - + )-*&( )%-(++,. I + +8)*-++ %+&%+, -% *+0<+, + &%8 + +8)*-++ ;&** + +
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 17 - 113
-;'+% - + )-*&( / 8/, %+&8/%,+ + +8)*-+% -% + )%+8&/8, & )0& -' + +8)*-++>, +0*. II Deferred Compensation Plans &, 0 )*0' +,0*&,+ 0' +8)*-+% - )%-<&+ &'(-8+ +'+&, - 0' +8)*-++ 0 0 *0+% 0+ ,/( 0, + +8)*-++>, %+&%+8+' & + +8)*-++ -+, '- <-*/'0%&* +%8&'0+ + +8)*-8+' +-%+ 0 0+. F-% &, + +8)*-++ '++, - ++% 0 )0% - &,+% (/%%+' (-8)+',0&-' /'&* ,-8+ //%+ 0+. T+ +8)*-+% /,+, &, ++%%+ (-8)+',0&-' - )/%(0,+ 0' &',/%0'(+ )-*&( -' + +8)*-++>, *&+. T/, + +8)*-+% -;', )0, + )%+8&/8 -% 0' &, + '08+ +'+&(&0% - 0 )-*&(. N-+ 0 + )-*&( &, '- 0 )0% - + D++%%+ C-8)+',0&-' A%++8+' +;++' + +8)*-+% + +8)*-++ %0+% &, + /'&' &',%/8+' -% + 0%++8+'.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 1 - 113
CHAPTER 4: THE INSURANCE POLIC0
Con#rac#: A (-'%0( &, 0 *+0** +'-%(+0*+ 0%++8+' +;++' 2 -% 8-%+ )0%&+,. T+ )0%&+, 0%+ -/' - (0%% -/ + )%-8&,+, + 80+ ;+' +'+%&' &'- + (-'%0( 0' <&-*0&-' ;-/* + +%8+ 0, %+0( - (-'%0( 0' (0' + *+0** (0**+'+. T-pes o( Con#rac#s: 15 Forma' an" In(orma' con#rac#s) FOR&AL
INFOR&A3L@ I5
T+ )+ - (-'%0( &' ;&( + %+B/&%+8+', (-'(+%'&' + -%8 - 0%++8+' 0%+ 8+ E..: L+0,+ ++ 0%++8+' ;&( 0' -;'+% 0' +'0' 0<+ - +'+% +-%+ + +'0' (0' -((/) + -/,+.
T+ )+ - (-'%0( &' ;&( + %+B/&%+8+' (-'(+%'&' + ,/,0'(+ - 0%++8+' 0%+ 8+.
S-/* + &' ;%&+' -%8 0' + D-(/8+' ,-/* 0<+ ,-8+ -%8 S+0* - + *+0** +'-%(+0*+
C0' + !%&+' -% O%0*. I' C0'00 -;+<+% )%-<&'(&0* *0;, %+B/&%+ I',/%0'(+ (-'%0(, + &' ;%&&'.
E..: L&+ 0' +0* &',/%0'(+ (-'%0(,.
A<0'0+, - ;%&+' (-'%0(, &' (0,+ - *&+ 0' +0* &',/%0'(+ (-'%0(,:
0 T+ ;%&+' (-'%0( )/, - %+, 0' ,-% - (-'/,&-' -<+% + +%8, - 0%++8+'. !&-/ & *+0* )%-*+8, 8& 0%&,+. T+ ;%&+' (-'%0( )%-<&+, 0 )+%80'+' %+(-% - 0%++8+'.
2 Uni'a#era' ? Bi'a#era' con#rac#s) UNILATERAL 3I5@ BILATERAL 3I5@ O'* -'+ )0% 80+, + *+0** +'-%(+0*+ #- )0%&+, 80+ *+0** +'-%(+0*+ )%-8&,+,. P%-8&,+, ,- 0 - 0%+ (-'%0(/0** -/'. E..: A *&+ &',/%0'(+ )-*&( &, 0 U'&*0+%0* (-'%0( &' + ,+',+ 0 P-*&( -*+% (0' &,(-'&'/+ 0, 0' ;+' + ;&,+, -;+<+% + I',/% +% &, *+0** -/' - )%-<&+ )%-<&+ (-<+%0+ &' %+/%' -% S0+ )%+8&/8 0, *-' 0, + P%+8&/8 &, )0&.
;5 Commu#a#i*e an" A'ea#or- con#rac#s) CO&&UTATIVE T+ )0%&+, ,)+(& <0*/ +, &' 0<0'(+ 0
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
ALEATOR0 3I5 @ O'+ )0% )%-< &+, ,-8+&' - <0*/+ -
P0+ 19 - 113
+ ;-/* +(0'+ 8-%+-<+ % &+8, 0' ,+%<&(+, 0%+ +(0'+ +;++' )0%&+, 0%+ - %+*0&<+* +B/0* <0*/+,.
0'-+% &' +(0'+ -% 0 (-'&&-'0* )%-8&,+. O'* & + +<+' -((/%, )%-8&,+ 8/, + )+%-%8+. S+%<&(+, (0' + - /'+B/0* <0*/+,.
E..: C-',%/(&-' - -/,+ ;+%+ -;'+% E..: L&+ &',/%0'(+ )-*&( &' ;&( + )0, + (-'%0(-% 0 )%-8&,+ ,/8 ;+' + &',/%+% )0, + &',/%+ (+%0&' ,/8 -'* & -/,+ &, (-8)*++. + &',/%+ &+,.
>5 Barainin an" A"$esion con#rac#s) BAR+AININ+ #- )0%&+, 0, +B/0*, ,+ +%8, 0' (-'&&-', - + 0%++8+'.
ADHESION3I@ 5 O'+ )0% )%+)0%+, & 0' + -+% 0((+), -% %++(, 0, 0 ;-*+.
T+ I &'&(0+, 0 &',/%0'(+ (-'%0( 0** /'+% &, (0+-%. Con#rac#s can a'so e c'assi(ie" on #$e asis o( #$eir 'ea' s#a#us) Va'i" con#rac#: O'+ 0 &, +'-%(+0*+ 0 *0;. Voi": O'+ 0 ;0, '+<+% +'-%(+0*+ 0 *0;. Voi"a'e: A (-'%0( ;&( &, -+%;&,+ +'-%(+0*+ 80 0<+ %-/', - %++( -% • 0<-& &. • •
Forma#ion o( *a'i" Li(e=Hea'#$ insurance con#rac# in*o'*es > enera' reuiremen#s) •
T$e par#ies #o #$e con#rac# mus# mani(es# #$eir mu#ua' assen# #o #erms o( con#rac#.
I' (0,+ - *&++0* &',/%0'(+ )-*&(&+, + )0%&+, %+0( &, 8//0* 0,,+' %-/ 0 )%-(+,, - JO+% 0' JA((+)0'(+ &' ;&( -'+ )0% 80+, 0' -+% 0' 0'-+% 0((+), &. •
T$e par#ies #o #$e con#rac# mus# $a*e con#rac#ua' capaci#-)
T+ &',/%0'(+ (-8)0' 8/, 0<+ + *+0* (0)0(& - &,,/+ )-*&(. T+ ,-/* + *&(+',+ -% 0/-%&?+ )%-)+% %+/*0-% 0/-%& - - /,&'+,,. A, 0% 0, + &'&<&/0* &, (-'(+%'+ +,+ ,-/*'> + 0 8&'-% -% *0( 8+'0* (0)0(&. A minor &, 0 )+%,-' ;- 0, '- 00&'+ + 0+ - 80-%& 1 &' C0'00 0' &' 8-, ,0+, &' + US. I 0 8&'-% 0+, 0' &',/%0'(+ )-*&( +' + +'+&(&0% 8/, + 0 8+8+% - + 8&'-%>, &88+&0+ 08&*. I' (0,+ 0' &',/%+% &,,/+, 0 )-*&( - 0 8&'-% +' + (-8)0' 0, - )%-<&+ + )%-8&,+ &',/%0'(+ )%-+(&-'. T+ 8&'-% -;+<+% 0<-& + )-*&( 0' + (-8)0' ;-/* 0<+ - %+/%' + )0& )%+8&/8,. T+ (-'%0( )+%,-' &, <-&. T+ (-'%0( +'+%+ +'+%+ &'&'- 00 8+'0** 8+'0** &'(-8)++' &8)0&%+ %/ 0&(, %/'+% -% &',0'+ &, +'+%0** voidable by the 8+'0** &8)0&%+ )+%,-'. •
T$e par#ies #o #$e con#rac# mus# e.c$ane 'ea''- a"eua#e consi"era#ion)
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 2" - 113
T+ 0))*&(0&-' 0' + &%, )%+8&/8 0%+ /,/0** (-',&+%+ -% 0 *&+ &',/%0'(+ (-'%0(. U'&* + &%, )%+8&/8 &, )0& 0 <0*& (-'%0( &, '- +'+%+ &'-. •
T$e con#rac# mus# e (or a 'a,(u' purpose) N- (-'%0( (0' + 80+ -% 0 )/%)-,+ ;&( &, /'*0;/*. S/( 0 (-'%0( &, 0 <-& (-'%0(. E..: A (-'%0( 0 %+B/&%+, -'+ )+%,-' - &** ;-/* '+<+% + *+0** +'-%(+0*+. T+ )%&80% )/%)-,+ - 0** &',/%0'(+ &, - )%-+( 00&', &'0'(&0* *-,, '- - )%-<&+ 8+0', - )-,,&*+ &'0'(&0* 0&'. I + &',/%0*+ &'+%+, &, '- 8+ 0 <0*& (-'%0( &, '- -%8+. H-;+<+% & + &',/%0*+ &'+%+, &, 8+ 0 + &8+ + (-'%0( ;0, 80+ 0 (-'&'/&' &',/%0*+ &'+%+, &, '- %+B/&%+.
T+,+ %+B/&%+8+', 8/, + 8+ ;+' *&++0* &',/%0'(+ )-*&(&+, 0%+ -%8+. Insurance po'ic- as a proper#Proper#-: A /'*+ - %&, 0 )+%,-' 0, ;& %+,)+( - ,-8+&'. I &, - ;- )+,. Rea' Proper#-: &, *0' 0' ;0+<+% &, %-;&' -' -% 0&+ - + *0'. Persona' Proper#-: A** )%-)+% -+% 0' + %+0* )%-)+%. I &'(*/+, 0'&*+ --, ,/( 0, (*-&' /%'&/%+ 0' 0/-8-&*+, 0, ;+** 0, &'0'&*+ )%-)+% ,/( 0, (-'%0(/0* %&,. T+ &',/%0'(+ )-*&(&+, 0%+ Intangible personal property, 0, & %+)%+,+', &'0'&*+ *+0* %&, 0 0<+ <0*/+ 0' 0 (0' + +'-%(+ + (-/%,. O,ners$ip o( Proper#-: &, + ,/8 - 0** + *+0* %&, 0 +&, &' 0 )%-)+%. T+ *+0* %&, 0' -;'+% 0, &' )%-)+% &'(*/+ + %& - /,+ 0' +'- + )%-)+% 0' + %& &,)-,+ - + )%-)+%.
R&, - )-*&( -;'+%: 1 R& - '08+ + +'+&(&0%. 2 R& - &,)-,+ + )-*&(.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 21 - 113
CHARTER : PRICIN+ LIFE INSURANCE)
I' -%+% -% 0' &',/%+% - 0<+ +'-/ 8-'+ 0<0&*0*+ - )0 )-*&( +'+&, ;+' + +(-8+ /+ + &',/%+% ++%8&'+, + )%+8&/8 + (-8)0' 8/, (0%+ -% + ,)+(&&( &',/%0'(+ (-<+%0+. I' &, (0)+% ;+ ,0** &,(/,, + 8+-, +<-*<+ -<+% + +0%, -% ++%8&'&' *&+ &',/%0'(+ )%+8&/8, &e#$o"s o( Fun"in Li(e Insurance) &u#ua' Bene(i# &e#$o ": 2 H+%+ + 8-'+ &, (-**+(+ 0+% + +0 - + )+%,-' ;- ;0, &',/%+. T&, 8+- ;0, 0*,- '-;' 0, post death assessment 8+-. E0( 8+8+% - 0 8//0* +'+& ,-(&+ 0%++ - )0 0' +B/0* 08-/' - 8-'+ ;+' 0' -+% 8+8+% &+. T&, 8+-
0 %++ %+; 80&' -*+% %0;0(, 1 - C-**+(&-' - 8-'+. 2 R+(%/&8+' - '+; 8+8+%,. 3 A, + 8+8+%, + '/8+% +0, &'(%+0,+ &' +0( +0%. Assessmen# &e#$o": 2 U'+% &, 8+- + &',/%0'(+ (-8)0' +,&80+ +&% (-, -% (+%0&' )+%&- - &8+ /,/0** -% -'+ +0%. T+ -%0'&?0&-' +' &<&+ &, 08-/' 08-' + )0%&(&)0',. T&, 8+- 0*,- 0(+ + ,08+ %0;0(, 0, + 0-<+ 8+-. Lea' Reser*e S-s#em: 2 T&, &, + 8-+%' )%&(&' ,,+8 0' &, 0,+ -' )%-)+% (0*(/*0&-' 0' (-**+(&-' - )%+8&/8, -% + +0 +'+& - + &',/%+. T+ )%+8&/8 &, &%+(* %+*0+ - + 08-/' - %&, (-<+%+. T&, ,,+8 &, 0,+ -' *0;, %+B/&%&' 0 &',/%0'(+ (-8)0' ,-/* 80&'0&' Policy Reseres! Premium Ra#e Ca'cu'a#ions)
I',/%0'(+ C-8)0' +8)*-, ,)+(&0*&, '-;' 0, ac#uaries6 ;- 0%+ %+,)-',&*+ -% (0*(/*0&' + )%+8&/8 %0+, + (-8)0' ;&** (0%+ -% &, )%-/(,. P%+8&/8 %0+, 8/, + adequate -% + (-8)0' - 0<+ +'-/ 8-'+ - )0 )-*&( +'+&,. P%+8&/8 %0+, 8/, + equita"le ,0 +0( )-*&( -;'+% &, (0%+ )%+8&/8, 0 %+*+( + +%++ - + %&, (-<+%+. T+ -**-;&' 0(-%, -<+%' + )%+8&/8 (0*(/*0&-',: Ra#e o( mor#a'i#-) In*es#men# earnins) E.penses) • • •
Ra#e o( &or#a'i#-)
F-**-;&' 0%+ + + )-&',: 1. #*-( - )-*&(&+,. 2. M-%0*& T0*+,. 0 E)+(+ 8-%0*&. M-%0*& +)+%&+'(+.
&or#a'i#- Ta'es6 +%+-%+ 0%+ (0%, 0 ,-; + +0 %0+, 0' &',/%+% 80 %+0,- '0* 0'&(&)0+ 08-' 0 )0%&(/*0% %-/) - &',/%+ *&<+, 0 (+%0&' 0+,0 &, -; 80' )+-)*+ &' +0( 0+ %-/) 80 + +)+(+ - &+ &' 0 )0%&(/*0% +0%. A*-/ + %0+, 0 0(/0** -((/% 80 */(/0+ %-8 %-/) - %-/) + */(/0&-', ;&** +' - -,+ -'+ 0'-+% +&' &+% &'
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 22 - 113
-'+ %-/) 0' *-;+% &' + -+%. I' +'+%0* + &+% + 8-%0*& %0+ + &+% + )%+8&/8 ;&** + (0%+. I &, + 0, - + under#riter - +<0*/0+ + %&, - 0 %-/) 0' - & + )%+8&/8 -% + %-/). T+ %&, &, +'+%0** (0+-%&?+ 0, = S0'0% R&, S/,0'0% R&, D+(*&'+ R&,. F-**-;&' 0%+ + &8)-%0' )-&', 0-/ + M-%0*& T0*+,: F-% - + ,++, 8-%0*& %0+, ,0% & 0 &% 0' +(%+0,+, %080&(0** 0 0+ 1. F-% - ,++, + 8-%0*& %0+, ,+0&* +(%+0,+, /'&* 0-/ 0' 0+ - 1". F-% 80*+, + 8-%0*& %0+, &'(%+0,+, ,0%)* /%&' ++'0+ +0%, +(%+0,+, &' + 8& 2", 0' +' %&,+, 00&' &' + +0%* 3", A 0' &<+' 0+ + 8-%0*& %0+ -% + ;-8+' &, *-;+% 0' + (-%%+,)-'&' 8-%0*& %0+ - 80*+,. •
• •
•
In*es#men# Earnins)
P%+8&/8 -**0%, 0%+ + )%&80% ,-/%(+ - /', /,+ - )0 *&+ &',/%0'(+ (*0&8,. #+(0/,+ 8-, )-*&(&+, 0%+ &' -%(+ -% ,-8+ &8+ +-%+ + +(-8+ )00*+ &',/%0'(+ (-8)0'&+, 0<+ )%+8&/8 -**0%, - &'<+,. T+ +0%'&', %-8 +,+ &'<+,8+', )%-<&+ + (-8)0' - (0%+ +;+% )%+8&/8,. A' &'<+,8+' +0%'&' (0' + +)%+,,+ 0, ra#e o( re#urn. E.penses)
A )-*&(&+, net premium &, + 08-/' 0 + &',/%+% ,-/* )0 &' -%+% - )%-<&+ + +'+&,. T+ '+ )%+8&/8 +)+', -' 3 0(-%,: M-%0*& %0+. I'<+,8+' E0%'&',. L0),+ %0+. T+ %0+ 0 ;&( + )-*&(&+, 0%+ %-))+ /+ - '-')08+' - )%+8&/8,. T- &, '+ )%+8&/8 + I',/%0'(+ C-8)0' 0, +&% -)+%0&' (-,, '-;' 0, 'oa"in) T&, -0* 08-/' &, '-;' 0, gross premium! • • •
T$e Le*e' Premium Pricin S-s#em)
T+ 'e*e' premium s-s#em 0**-;, + )/%(0,+% - )0 + ,08+ 08-/' - )%+8&/8 08-/' +0( +0% + )-*&( &, &' -%(+. I &, /,+ - )%&(+ ;-*+ *&+ &',/%0'(+ +%8 &',/%0'(+ 0 )%-<&+, (-<+%0+ -% 0' -'+ +0% 0' +'-;8+' &',/%0'(+. I' &, ,,+8 &+% )%+8&/8 %0+, 0%+ (0%+ 0' ;0 %+B/&%+ /%&' + +0%* +0%, - + )-*&(. T+ +%0 8-'+ (0%+ &, &'<+,+ 0' + %+/%' &, /,+ - 8++ %+0+% %&,, /%&' + *0+% ,0+ - + )-*&(.
Po'icies ,i#$ Nonuran#ee" Re#urns)
I' -/% &,(/,,&-' -;+<+% ;+ 0<+ 0,,/8+ 0 -'(+ +0( )%&(&' +*+8+' &, 0,,&'+ 0 <0*/+ 0' + )%+8&/8 &, ,+ -% 0 )0%&(/*0% )-*&( + )%&(&' )%-(+,, &, &'&,+. T0 &, '- 0*;0, + (0,+. F-% ,+<+%0* )+ - )-*&( + )%&(+ (0' (0'+ +<+' 0+% & 0, ++' &,,/+ T+ &%, 8+- &, )0&' policy diidends! T+ ,+(-' 8+- &, c$anging pricing elements 0, + )-*&( &, &' -%(+.
Po'ic- Di*i"en"s)
Insurance po'icies)
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3 Par#icipa#in po'icies)
P0+ 23 - 113 Non par#icipa#in po'icies)
Par#icipa#in po'icies 0%+ + -'+ ;+%+ + )-*&( -;'+%, ,0%+ + (-8)0'>, "i*isi'e surp'us. Surplus &, + 08-/' ;&( (-8)0'>, 0,,+ , +(++ (-8)0'>, *&0&*&&+,. T+ ,0%+ - + &<&,&*+ ,/%)*/, 0 + )-*&( -;'+% %+(+&<+, &, '-;' 0, policy diidend! # &,,/&' )0%&(&)0&' )-*&(&+, &',/%0'(+ (-8)0'&+, (0' %+/%' 8-'+ - + )-*&( -;'+% ;+' + (-'&&-' &, 0<-%0*+ + +,0*&, )%+8&/8 %0+, 0 ;&** + ,/&(&+' - 8++ /'0<-%0*+
(-'&&-',. A )0%&(&)0&' 0 )-*&( )%-<&,&-' &<+, + )-*&( -;'+% ,+<+%0* (-&(+, &' + ;0 )-*&( )-*&((-'0&', &<&+', (0' +&<&+' /,+. T+,+ (-&(0 +, 0%+ '-;' 0, diidend options! L0;, &' + U'&+ S0+, 0' C0'0 0 - no# %+B/&%+ &',/%0'(+ (-8)0'&+, - +(*0%+ %+/*0% )-*&( &<&+', + -'* &' 0 + '++ - &'&(0+ &, ;+' + ;&** +(*0%+ )-*&( &<&+',. Non2par#icipa#in po'icies 0%+ + -'+ ;+%+ + )-*&( -;'+%, - '- ,0%+ + &<&,&*+ ,/%)*/,. G+'+%0** + )%+8&/8 )0& -% '-')0%&(&)0&' )-*&(&+, &, *+,, 0' + )%+8&/8 )0& -% )0%&(&)0&' )-*&(&+, - + ,08+ )+.
C$anes in Pricin Fac#ors)
C+%0&' )-*&(&+, 8+'&-' 0** + (-, +*+8+', 0' +&% 8&'&8/8 0' 80&8/8 <0*/+. #0,+ -' +,+ ,/( 0 )-*&( 80 +(*0%+ 0 8&'&8/8 -% 80&8/8 %0+ - %+/%'. !+' + &',/%+% &<+, 0 & %0+ - %+/%' + (-, - + )-*&( &, %+/(+. T+ (-, 0*,- +)+', -' 8-%0*& %0+. I + +)+%&+'(+ 8-%0*& %0+ &, *+,, 0' +)+(+ 8-%0*& %0+ +' + )%&(+ - + )-*&( &, ++(&<+* %+/(+. !& %++%+'(+ - C)1 S#oc% Companies (0' &,,/+ - )0%&(&)0&' 0' '-')0%&(&)0&' )-*&(&+,. I' + )0, &u#ua' Fun" Companies &,,/+ -'* )0%&(&)0&' )-*&(&+,. T-0 M//0* C-8)0'&+, &,,/+, '-')0%&(&)0&' )-*&(&+, ;& (0'&' )%&(&' 0(-%, / &' -%+% - - ,- & +8//0*&?+, 0 )0% - & 0, 0 ,/,&&0% S-( C-8)0'. Li(e Insurance Reser*es)
Li(e Insurance Reser*es
L&0&*&&+, -% + C-8)0'.
Po'ic- Reser*es)
Con#inencReser*es)
Po'ic- Reser*es %+)%+,+', + 08-/' 0' &',/%+% +,&80+, & ;&** '++ - )-*&( +'+&,. I',/%0'(+ (-8)0'&+, 8/, 0(B/&%+ 0,,+, 0 ;&** +(++ )-*&( %+,+%<+ ,- 0 + 0<+ /', -
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 24 - 113
(*0&8,. T- (0*(/*0+ + )-*&( %+,+%<+ *&0&*& + (-8)0'&+, /,+, conser*a#i*e mor#a'i#- #a'e 0 ,-;, &+% 8-%0*& %0+ 0' -+% 0<0&*0*+ 0*+,. # /,&' (-',+%<0&<+ 8-%0*& 0*+ + (-8)0'&+, ,+ 0,&+ 0 %+0+% 08-/' - 0,,+, 00&', )-*&( %+,+%<+ 0' & ;&** + '+(+,,0% )0 + (*0&8,. A 0' 8-8+' - &8+ + &+%+'(+ +;++' + Face amoun# = + 08-/' 0 ;&** + )0& 0, 0 +0 +'+& = 0' + )-*&( %+,+%<+ &, '-;' 0, + &',/%0'(+ (-8)0'>, net amount at ris% -% + )-*&(. T+%+-%+ ;& &8+ )-*&( %+,+%<+ &'(%+0,+, 0' + '+ 08-/' - %&, +(%+0,+,. C-'&'+'( R+,+%<+,: A' &',/%0'(+ (-8)0' 8/, + 0*+ - )0 +0 (*0&8, +<+' ;+' + (-'&&-', 0%+ '- 0<-%0*+. A, -% +08)*+ /%&' 0' +)&+8&( + 8-%0*& %0+ ;&** &'(%+0,+ %0)&* 0' + )-*&( %+,+%<+ 80 '- + ,/&(&+' - )0 + +0 (*0&8,. I' -%+% - (-)+ /) ;& &, &' - ,&/0&-', 0 )0% - + *-0&' 0+ - '+ )%+8&/8 &, +) 0, 0 %+,+%<+. T&, &, '-;' 0, C-'&'+'( R+,+%<+.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 25 - 113
CHAPTER : TER& LIFE INSURANCE
T+ )+ - )-*&( ;+%+ + &',/%+ &, (-<+%+ -'* -% 0 )0%&(/*0% )+%&- - &8+. P-*&( #+'+& &, )00*+ &: 1) Insure" "ies "urin #$e speci(ie" #im e an" /) Po'ic- is in e((ec#)
T+ ,)+(&&( )+%&- - &8+ ;+' + )-*&( &, 0(&<+ &, (0**+ po'ic- #erm) A+% + )-*&( +%8 +', &',/%0'(+ )%-<&+, -)&-' - (-'&'/&' &',/%0'(+. I & &, '- (-'&'/+ +' + )-*&( (-<+%0+ +', +%+. P-*&( 0''&<+%,0%: T+ 0+ -' ;&( )-*&( +(08+ ++(&<+. T+%8 )-*&( (0' + 0' &'+)+'+' )-*&( -% 0 %&+% 0*,-. A ri"er6 0*,- '-;' 0, +'-%,+8+' &, 0' 08+'8+' - 0' +&,&' )-*&( - +&+% ++' -% (/%0&* + +'+&, )00*+ /'+% + (-'%0(. T-pes o( Term Insurance:
1. Le*e' Term Li(e Insurance: 1. D+0 +'+& %+80&', + ,08+ %-/-/ + )-*&( +%8. 2. T/, A8-/' - +0( %+'+;0*+ )%+8&/8 %+80&', ,08+.
2. Decreasin Term Li(e Insurance •
•
T+ +0 +'+& ++), -' -&' -;' ;& &8+. E08)*+: A 5"""" )-*&( &' &%, +0% +(-8+, 4"""" )-*&( &' 2 ' +0% 0' ,- -'. T+ 08-/' - %+'+;0*+ )%+8&/8 %+80&', ,08+ .
T-pes o( Decreasin Term Li(e Insurance: •
&or#ae Re"emp#ion Insurance
T&, )-*&( &, +,&'+ - )%-<&+ 0 +0 +'+& 08-/' 0 (-%%+,)-', - + +(%+0,&' 08-/' -;+ -' 0 8-%0+ *-0'. T+ 08-/' - + -/,0'&' )%&'(&)0* 0*0'(+ -' 0 8-%0+ *-0' %0/0** +(%+0,+, ;& &8+. I &, +,&'+ ,- 0 + 08-/' - +'+& )00*+ 0 0' )-&' - &8+ +B/0*, + 08-/' + -%%-;+% -;+, -' + *-0'. T+ %+'+;0* )%+8&/8 - + )-*&( &, +'+%0** *+<+* %-/-/. !+' + &',/%+ &+, + +'+& &, )0& - + +'+&(&0%. T+ &'+' &, 0 + +'+&(&0%&+, ;&** )0- + 0*0'(+ -' + *-0' /,&' + +'+& %+(+&<+. #/ + +'+&(&0% &, '- -/' *+0** - 80+ + )0-. T+%+-%+ 8-%0+ *+'+% )/, (-'&&-' - )/%(0,+ &, )-*&( 0' )/ + '08+ - + *+'+% 0, +'+&(&0%. oin# &or#ae Re"emp#ion Insurance:
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 26 - 113
S08+ 0, M-%0+ R++8)&-' I',/%0'(+ / (-<+%, 0 (-/)*+. T+ )-*&( +)&%+, & - &',/%+ *&<+ %-/-/ + )-*&( +%8. I -'+ - +8 &+, -+% +, + +'+&. Cre"i# Li(e Insurance •
T&, &, 0 ,&8&*0% )%-/( / )%-+(, 00&', *-0' -% (%+& (0% &**,. F-% &, + *+'+% &, &+ /) 0, +'+&(&0% 0' +, + )0- -% + (%+& (0% 0*0'(+ %-8 + +'+& - + &',/%0'(+ T+ *-0' (-/* + /%'&/%+ *-0' )+%,-'0* *-0' (0% *-0' +(. •
Fami'- Income Co*erae
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is po'ic- can a'so e purc$ase" as ri"er ,i#$ a ,$o'e 'i(e insurance)
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 27 - 113
;) Increasin Term Li(e Insurance us# opposi#e o( Decreasin Term Li(e Insurance) Use: T&, )-*&( &, /,+ - +'(-/'+% + %&,&' *&<&' (-, +(. S- ,/))-,+ 0 1"""" )-*&( 80 ,0% *&+ 0 0' ++) -' &'(%+0,&' 5 -' +<+% 0''&<+%,0%. T+ &',/%+ 80 (--,+ - %++?+ &, &'(%+0,+ 0 ,-8+ )-&' - &8+. T+ )%+8&/8 &'(%+0,+, ;& + &'(%+0,+ &' +'+&. T+ )-*&( 8& + 0+ *&+ 0 %&+% - 0 ;-*+ *&+ &',/%0'(+. Fea#ures o( Term Li(e Insurance Po'icies: Rene,a'e Term Li(e Insurance:
T&, &, 0 +0/%+ ;&( 0**-; , 0 &',/%+ - %+'+; + )-*& ( ;&-/ ,/8&&' proo( o( insurai'i#- (or #$e same #erm an" (ace amoun#) One -ear #erm po'icies an" ri"ers are usua''- rene,a'e) T$e- are %no,n as 0RT 3 0ear'Rene,a'e Term5 or ART3 Annua''- Rene,a'e Term5 insurance) Limi#a#ions:
1. R+'+;0* 8& + *&8&+ - + (-'&'/+ &** 0 (+%0&' 0+. 2. R+'+;0* 8& + *&8&+ - 0))+' -'* 0 (+%0&' '/8+% - &8+,. D/%&' %+'+;0* + )%+8&/8 &, %+(0*(/*0+ 0,+ -' + 00&'+ 0+ - + &',/%+. T&, (0/,+, 0' &'(%+0,+ ,&'(+ 8-%0*& %&, - 0 )+%,-' &'(%+0,+, ;& 0+. R+'+;0*+ )-*&(&+, 0%+ /,/0** (-,*&+% 0' '-'%+'+;0*+ -'+,. Con*er#i'e Term Li(e Insurance:
T&, &, 0 +0/%+ ;&( 0**-;, 0 &',/%+ - (-'<+% + )-*&( - 0 ;-*+ *&+ ;&-/ ,/8&&' proo( o( insurai'i#-) E<+' & + +0* - + &',/%+ 0, ++%&-%0+ + (0''- + +(*/+ ,&'(+ )%-- - &',/%0&*& (0''- + +80'+. N+&+% + +0* (-'&&-' + /,+ - (0*(/*0+ )%+8&/8. O'* 0(-% - + (-',&+%+ &, 00&'+ 0+. Limi#a#ions:
1. R+'+;0* 8& + *&8&+ - + (-'&'/+ &** 0 (+%0&' 0+. 2. R+'+;0* 8& + *&8&+ - 0))+' -'* /%&' 0 (+%0&' &8+ )+%&- - + +%8. C-'<+%&*+ )-*&(&+, 0%+ /,/0** (-,*&+% 0' '-'(-'<+%&*+ -'+,. S&'(+ )+%80'+' &',/%0'(+ )%-<&+, 0 (0, <0*/+ 0(-% +'(+ + )%+8&/8 0*,- &'(%+0,+, /+ 0. T+ '+; )%+8&/8 0*,- +)+', -' + ++(&<+ 0+ - (-'<+%,&-': T+ ++(&<+ 0+ (-/* + - 2 )+,:
1. A##aine" ae Con*ersion: T&, &, + 0+ - + &',/%+ ;+' + (-'<+%,&-' -- )*0(+. P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 2 - 113
2. Oriina' Ae Con*ersion: T&, &, + 0+ ;+' &',/%+ 0 + -%&&'0* +%8 )-*&( &,,/+. T+ )%+8&/8 %0+ (0*(/*0+ /,&' + 00&'+ 0+ (-'<+%,&-' &, (-,*&+% 0' + -%&&'0* 0+ (-'<+%,&-' ,&'(+ + *0+% &, 0,+ -' 0 -/'+% 0+. O%&&'0* 0+ (-'<+%,&-' &, '- 0**-;+ &' 8-, (0,+,. I 0**-;+ +' +%+ 8& + *&8&0&-' 0 00&'+ 0+ &, '- 8-%+ 0' 5 +0%,.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 29 - 113
CHAPTER : PER&ANENT LIFE INSURANCE AND ENDO&ENT INSURANCE Di((erence e#,een Term Insurance an" Permanen# Insurance:
1. T+%8 I',/%0'(+ )%-<&+, (-<+%0+ -% 0 ,)+(&&( )+%&- - &8+ ;+%+0, P+%80'+' I',/%0'(+ )%-<&+, (-<+%0+ %-/-/ + *&+&8+ - &',/%+ )%-<&+ )-*&( &, &'-%(+ &.+. 0(&<+. 2. T+%8 I',/%0'(+ -+, '- )%-<&+ (0, <0*/+ ;+%+0, )+%80'+' -+,. Permanen# Insurance a'so %no,n as ,$o'e 'i(e Insurance) Cas$ Surren"er *a'ue: T+ 08-/' )-*&( -;'+% ;&** + & + ,/%%+'+%, + )-*&( 0 0' )-&'
- &8+. Face amoun#: T)&(0** +<+% )-*&( 0, 0 (0, <0*/+ ;&( ++), -' &'(%+0,&' 0' +<+'/0** +B/0*, + 0(+ 08-/' -' + )-*&(. T&, -+, '- 0))+' /'&* + 0+ 99 -% 1"". A 0 0+ (0, <0*/+ +B/0*, 0(+ 08-/'. Po'ic- Loan: A' ;-*+ *&+ )-*&( ;&( 0, 0((%/+ 0 (0, <0*/+ (0' + /,+ - 0+ *-0' '-;' 0, )-*&( *-0' /,&' + (0, <0*/+ 0, ,+(/%&. Premium pa-men# perio": 1. Con#inuous premium po'icP%+8&/8 &, )00*+ %-/-/ + *&+ - + I',/%+ S&'(+ )%+8&/8 &, )00*+ %-/-/ + *&+ /, )%+8&/8 &, /,/0** *+,, 0' 0' -+% )-*&( )+ A*,- '-;' 0, ,%0& *&+ -% -%&'0% *&+ &',/%0'(+ )-*&( 2. Limi#e" pa-men# po'ic- (i.e" numer o( pa-men#s 0. 80 + ,)+(&&( '/8+% - %,. . 80 + &** (+%0&' 0+ A+% 0** )%+8&/8, 0<+ ++' )0& & &, (0**+ )0&/) )-*&(.
I I',/%+ &+, +-%+ + +' - ,)+(&&+ *0, )%+8&/8 +0% +' &',/%0'(+ ;&** )0 + +0 +'+& - + +'+&(&0% 0' '- )%+8&/8 &, )00*+ Sin'e premium po'ic-: ,)+(&0* (0,+ - *&8&+ )08+' )-*&(. O'* -'+ )%+8&/8 )00*+. Reser*e ui'"up spee": +o'"en ru'e: S$or#er #$e ins#a''men#s (as#er #$e ui'"up) T/, %-8 0,+% - ,*-;+% -%+%: S&'*+ P%+8&/8 P-*&(L&8&+ )08+' )-*&(C-'&'/-/, P08+' P-*&(
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 3" - 113
&o"i(ie" $o'e Li(e Insurance:
2 )+,: 1. &o"i(ie" Premiums: P%+8&/8 &, *-; &' +&''&' +0%, 0' +' & %&,+, 0+% 0 )+%&- -'+ &8+ - 00&' 0 *+<+* )%+8&/8 0' 0 (-'&'/+, -% + %+, - + *&+. T&, &, 8-&&+ )%+8&/8,. S-8+&8+, & + (0'+ - )%+8&/8 %+B/+'( &, Q1 0' &, 00&'+ 0+% 0 ,+%&+, - (0'+ +' & &, '-;' 0, G%0+ P%+8&/8 P-*&(. A<0'0+: P-*&( -;'+% (0' 0-% - / 0 )-*&( ;& &+% 0(+ 08-/' 0' + (0' )%+,+'* 0-%. 2. &o"i(ie" Co*erae: C-<+%0+ &, (0'+ ;& &'(%+0,&' 0+. A<0'0+: I I',/%+ &', &, (-<+%0+ %+B/&%+ 8& - -;' *0+% &' &,+% *&+ +' &, &, 0' &+0* (-&(+. !& &8+ &'0'(&0* -*&0&-' - )+-)*+ -+, -;' *&+ -/,+ *-0' )0& - (&*%+' '- 8-%+ +)+'+' +(. oin# $o'e Li(e Insurance:
C-<+%0+ - 0 (-/)*+. I -'+ - +8 &+, +' ,/%<&<-% (-/)*+ +, + +'+& 0' (-<+%0+ +%8&'0+,. A*,- '-;' 0, &%,-&+ *&+ &',/%0'(+. A+% + +0 - -'+ ,)-/,+ + ,/%<&<&' ,)-/,+ Las# Sur*i*or Li(e Insurance:
T+ +'+& &, )0& -'* 0+% - + &',/%+ 0, &+ 0' &, )0& - + +'+&(&0%. A*,- '-;' 0, ,+(-'-&+ *&+ &',/%0'(+. P%+8&/8, 0%+ )00*+ -'* /'&* &%, ,/%<&<-% &+, -% 80 + )00*+ /'&* - &+,. T+ )%&(+ &, *+,, 0' (-, - +&+% 1. 2 I'&<&/0* P+%80'+' &',/%0'(+ 2. 1 -&' )+%80'+' &',/%0'(+ A<0'0+: F-% (-/)*+, ;- ;0' - )%-<&+ /', - )0 +,0+ 0+, 0 80+ *+<&+ 0+% + 0+% +&% +0,. Fami'- Po'icies:
T&, &, 0 (-8&'0&-' - -'+ ;-*+ *&+ &',/%0'(+ -% + )%&80% &',/%+ 0' +%8 &',/%0'(+ -% ,)-/,+ 0' +0( (&*. T+ 08-/' -' +%8 &',/%0'(+ &, 0 %0(&-' - + ;-*+ *&+ &',/%0'(+ -' )%&80%. E08)*+ F0+% 5"""" !-*+L&+ S)-/,+ 3" 15""" T+%8 S-' 2" 1"""" T+%8 T-0* (-<+%0+ -% F08&* P-*&(: 75""" E0( (&*%+' -%' &' + 08&* &, 0/-80&(0** (-<+%+ -' )%-/(&-' - )%--. T+ (-<+%0+ ,0%, /,/0** 0+% 15 +0%, - 0+. E%0 )%+8&/8 80+ (0%+ -% 0+ (&*%+'. &on#$'- Dei# Or"inar-:
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 31 - 113
• • • • •
T&, &, 0 ;-*+ *&+ &',/%0'(+ / )%-<&+, *+,, 0(+ 08-/'. T+ )-*&( &, ,-* /'+% -8+ ,+%<&(+ &,%&/&-' ,,+8 -8+ ,+%<&(+ 0+', A+', )%-<&+ )+%,-'0*&?+ ,+%<&(+ *&+ (-**+(&-' - )%+8&/8, M-'* )%+8&/8 A,,&'+ +%%&-% - 0+' &, '-;' 0, +& 0+'( -% 0((-/'.
Pre Nee" Funera' Insurance: • • • •
C-<+%0+ - 0'*+ /'+%0* 0' /%&0* +)+',+, S-* /'+%0* -8+, ;- 0%+ +8,+*<+, 0+', S80** 0(+ 08-/' F/'+%0* -8+, 0%+ 8+'&-'+ 0, +'+&(&0%
Uni*ersa' Li(e Insurance • • • •
•
F*+&*+ )%+8&/8 F*+&*+ 0(+ 08-/', F*+&*+ D+0 #+'+& 08-/', U'/'*&' - )%&(&' 0(-%, o M-%0*& o I'+%+, o E)+',+, P-*&( -;'+%, (0' ++%8&'+ )%+8&/8 ;&( %0',*0+, &'- (-<+%0+
Unun"'e" Pricin (ac#ors: T+%+ 0%+ 3 0(-%,:
1. &or#a'i#- c$ares: P0, + - + I',/%0'(+ (-<+%0+. T&, ,&'(+ &,(-, (0%+ &, 0*&+ 8+0,/%+ - + 8-%0*& %&,(0%+ ;&()&(0** &'(%+0,+,&'(%+0,+, ;& 0+.;& T&,0+ (0%+ &, /,/0** *+,, 0' 0 ,)+(&&+ 08-/'. T+ (0%+ &, +)%+,,+ &' +%8, - (0%+ 1""" - '+ 08-/' - %&,. N+ A8-/' - %&, D+0 #+'+& C0, V0*/+ 2. In#eres#: G/0%0'++ 8&'&8/8 I'+%+, R0+ -' )-*&(>, (0, <0*/+ +0( +0% I'+%+, %0+ (0' + - 80' )+,: 1. C-/* + &+ - + 80%+ &'+%+, %0+ 2. C-/* + &+ - %0+ - -<+%'8+' &'<+,8+' --* *&+ T%+0,/% &**, 3. C-/* + 0 & ;&** )0 /0%0'++ &'+%+, -% &%, 1""" 0' &+% &'+%+, -% 08-/' 0-<+ 1""" 4. C-/* + 0 & 0 )-*&( *-0' 0, ++' 0+' +' &'+%+, ;&** + *+,, / %+0+% 0' + /0%0'++ 8&'&8/8
3. E.penses: C0%+, - 08&'&,+% )-*&( Ho, #$ese ma##ers:
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 32 - 113
C0, <0*/+ P%+8&/8 = E)+',+, M-%0*& C0%+, E&,&' C0, V0*/+1 I'+%+, S- +<&+'* P%+8&/8 E&,&' C0, V0*/+ ,-/* + +'-/ - (-<+% + 8-%0*& (0%+, 0' E)+',+,. I + +(-8+ *+,, +' I',/%+ &, &<+' 6" 0, &8+ - 80+ 0 )%+8&/8 )08+' - (-<+% +,+ +)+',+,. I + )08+' &, '- -'+ + )-*&( *0),+,. Re'a#ions$ip e#,een Dea#$ Bene(i# an" Face Amoun#: Op#ion A P'an: F 0 ( + A 8 / '
D+0 #+'+&
R&, C0, V0*/+
Y+0%,
D+0 #+'+& F0(+ A8-/' N+ A8-/' 0 %&, D+0 #+'+& = C0, V0*/+
Op#ion B P'an: F 0 ( + A
D+0 #+'+&
8 / '
R&, C0, V0*/+
Y+0%,
D+0 #+'+& F0(+ A8-/' C0, V0*/+ N+ A8-/' 0 %&, F0(+ A8-/'
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 33 - 113
F'e.i'e Face Amoun#:
A+% 1 +0% + 0(+ 08-/' (0' + &'(%+0,+ -% +(%+0,+. I &'(%+0,+ )%-- - (-'&'/+ &',/%0&*& '++, - + &<+' ,&'(+ +,+ &'(%+0,+, + '+ %&,. I +(%+0,+ +' (0%+ '++, - + 0+' 0 + )-*&( ,&** 8++, + 8&'&8/8 *&8& -% 0' &',/%0'(+ (-'%0(. F'e.i'e Premium:
T+ &'&&0* )%+8&/8 8& + &+% 0' %+'+;0* )%+8&/8, / - ,-/* + ,/&(&+' - 0'*+ + +)+',+, 0' 8-%0*& (0%+,. T+ &',/%0'(+ -%(+, - )0 0 8&'&8/8 &'&&0* )%+8&/8 08-/'. Po'ic- Loan: L-0', 8& + 0+' -' + (0, <0*/+ 0((%/+ -% + )-*&(. S-8+ ;&%0;0* (0%+, 0%+ 0*,- 0))*&+. Fe"era' Reu'a#ion on Uni*ersa' Li(e Po'icies:
F++%0* R+/*0&-' Sec#ion G/ Corri"o r (-'%-*, 0 + (0, <0*/+ - 0 )-*&( -+, '- &'(%+0,+ -- 8/( 0-<+ 0(+ 08-/'. A (+%0&' &, &+ - *&8& + +(+,,. I & -+, +' & <&-*0+, + %/*+ -% +&' 0' &',/%0'(+ )%-/( -% 0 )/%)-,+, 0' &, (-',&+%+ 0, &'<+,8+' )%-/(. T+ I',/%0'(+ )%-/(, +'- ,)+(&0* +'+&, -% 0 )/%)-,+, 0' /, &, %+,%&(&-' &, +'-%(+. I' C0'00 &, %/*+ &, ,%&(+% 0' /, U'&<+%,0* L&+ &, %0%+* ,-* &' C0'00. Cas$ Va'ue Termino'o-:
R+,+%<+ V0*/+ A((/8/*0&-' V0*/+ C0, S/%%+'+% V0*/+ A"us#a'e Li(e Insurance:
N+ C0, V0*/+
I' &, )+ &',/%+ ,)+(&&+, + 0(+ 08-/' 0' )%+8&/8 + (0' )0 0' 0 )*0' - &',/%0'(+ &, (0*+ -/ - )%-<&+ &',/%0'(+. T+ )%-/( (0' %0'+ %-8 0 +%8 &',/%0'(+ - 0 *&8&+ )08+' ;-*+ *&+ )-*&(. #0,+ -' (0'+ - + )%+8&/8 -% 0(+ 08-/' +&+% + +%8 (0' + &'(%+0,+ -% %+B/+'( - )%+8&/8 )08+' (0' + %+/(+. In"e#ermina#e Premium Li(e Insurance:
I' &, )+ 2 )%+8&/8 %0+, &, )%-<&+ I',/%0'(+ (-8)0'&+,. 1. M&'&8/8 P%+8&/8 R0+ 2. M0&8/8 P%+8&/8 R0+ T+ )-*&( ,0%, ;& + 8&'&8/8 %0+ -% (-/)*+ - +0%,. I' &, &8+ )+%&- &',/%+% +<0*/0+, + 0(/0* 8-%0*& &'+%+, 0' +)+',+ /(+ 0' (-8+, /) ;& 0 )%+8&/8 %0+ ;&( *&+, +;++' + )%+<&-/, 2 %0+,. T&, 8-&&(0&-' 0))+', %-/-/ + *&+ - + )-*&(. I +'0*+, &',/%+% - + *+&*+ &' )%+8&/8 )%&(&' ,&'(+ &, ;0 + (0' (0'+ + )%+8&/8 - (-/'+% 0** + +)+',+,.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 34 - 113
A*,- '-;' 0, '-'/0%0'++ )%+8&/8 *&+ &',/%0'(+ -% <0%&0*+ )%+8&/8 *&+ &',/%0'(+ )-*&(. In#eres# Sensi#i*e $o'e Li(e Insurance :
I' &, )+ 2 )%+8&/8 %0+, &, )%-<&+ I',/%0'(+ (-8)0'&+,. 1. M&'&8/8 P%+8&/8 R0+ 2. M0&8/8 P%+8&/8 R0+ T&, 0*,- )%-<&+, + -)&-' - &',/%+ 0 ;++% + ;0', 0<-%0*+ (0'+, &' )%&(&' 0,,/8)&-', - %+,/* &' 0 *-;+% )%+8&/8 -% & (0, <0*/+. D+0/* &, (0, <0*/+ &'(%+0,+. Cas$ Di((erences Tra"Va'ue i#iona'increase $o'e Lme#$o" i (e Uni*ersa':Li(e
Varia'e Li(e
C0, <0*/+ &'(%+0,+, C0, <0*/+ &'(%+0,+, P-*&( %+,+%<+, 0%+ )+%&-&( )%+8&/8, 0' )+%&-&( )%+8&/8, 0' 80&'0&'+ ,+)0%0+* %-8 &'+%+, 0((%/+. T+ )-*&( &'+%+, 0((%/+. T+ )-*&( +'+%0* &'<+,8+' 0((-/'. %+,+%<+, 0%+ 80&'0&'+ &' 0 %+,+%<+, 0%+ 80&'0&'+ &' 0 T+,+ 0%+ '-;' 0, +enera' In*es#men# +enera' In*es#men# separa#e accoun# in USA Accoun# ;+%+ &',/%+% Accoun# ;+%+ &',/%+% an" serea#e" accoun# in 80&'0&', /' %-8 80&'0&', /' %-8 Cana"a) T&, %+,+%<+ &, /0%0'++ &',/%0'(+ /0%0'++ &',/%0'(+ +' &'<+,+ &' ,-(, )%-/(,. )%-/(,. -', /', +(. R+/%', (0' + 0'&(&)0+ R+/%', (0' + 0'&(&)0+ R+/%', (0'> + 0'&(&)0+ D+0 #+'+& ,0*+ D+0 #+'+& ,0*+ D+0 +'+& 8& + %+/(+ ;& )--% ,-( )+%-%80'(+ C-',&+%+ 0, I',/%0'(+ C-',&+%+ 0, I',/%0'(+ C-',&+%+ 0, ,+(/%&&+, )%-/( )%-/( +'(+ '++ - -**-; 0** SEC %+/*0&-', N- A))*&(0*+ N- A))*&(0*+ P%-/( '++, - + %+&,+%+ ;& NASD N- A))*&(0*+ N- A))*&(0*+ A+', '++ - + *&(+',+ ;& NASD N- A))*&(0*+ N- A))*&(0*+ F/', (0' + (0'+ -'(+ +<+% +0%
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 35 - 113
Varia'e Uni*ersa' Li(e Insurance: • •
A*,- (0**+ U'&<+%,0* L&+ II 0' F*+&*+)%+8&/8 <0%&0*+ *&+ &',/%0'(+ C-8&'+, *+&*+ )%+8&/8 0' *+&*+ +0 +'+&, - U'&<+%,0* L&+ ;& &'<+,8+' *+&&*& 0' %&, - V0%&0*+ L&+
En"o,men# Insurance:
P%-<&+, 0 ,)+(&&+ +'+& 08-/' ;++% + &',/%+ *&<+, - + +' - + +%8 - (-<+%0+ -% &+, /%&' 0 +%8. E0( )-*&( 0, 0 80/%& 0+ ;+' + +'+&, 0%+ )00*+ T+ (0, <0*/+ %+0(+, 0(+ 08-/' <0*/+ -' 80/%& 0+ T/, (0, <0*/+ /&*/) &, 8/( 0,+%. •
• • • • • •
I &',/%+ &+, +0 +'+& &, )0& - +'+&(&0%. P%+8&/8, 0%+ *+<+*+ %-/-/ + +%8 P%+8&/8 (-/* + ,&'*+ )%+8&/8 -% *&8&+ )%+8&/8 )08+'
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 36 - 113
CHAPTER : SUPPLE&ENTAR0 BENEFITS Po'ic- Ri"ers: A '/8+% - +'+&, (0' + 0+ - <0%&-/, -%8, - *&+ &',/%0'(+ )-*&(&+,. T+,+ 0%+ )%-<&+ 0&' %&+%, - + *&+ &',/%0'(+ )-*&(. I' ,-8+ (0,+, + +'+& &, )%-<&+ %-/ ,0'0% )-*&( )%-<&,&-',.
H+%+ ;+ +,(%&+ ,-8+ - + ,/))*+8+'0% +'+&, 0 0%+ 0&%* ,0'0% &' + &'/,%. SUPPLE&ENTAL DISABILIT0 BENEFITS
G+'+%0** (*0,,&&+ 0, 0 )+ - +0* &',/%0'(+ (-<+%0+. S-8+ &,0&*& +'+&, -;+<+% (0' + 0+ - + (-<+%0+ )%-<&+ 0 *&+ &',/%0'(+ )-*&(. M0&'* +%+ 0%+ 3 )+, - &,0&*& +'+&, 0 0 *&+ &',/%0'(+ )-*&( -% )-*&( %&+% 80 )%-<&+. I) AIVER OF PRE&IU& FOR DISABILIT0 BENEFIT 3P5
U'+% &, %&+% + &',/%+% )%-8&,+, - &<+ /) = - ,ai*e = &, %& - (-**+( %+'+;0* )%+8&/8, 0 +(-8+ /+ ;&*+ + &',/%+ &, -0** &,0*+. I' (0,+ - 0 /'&<+%,0* *&+ &',/%0'(+ )-*&( + !P +'+& (0' ,)+(& 0 +: 1 I',/%+% ;&** ;0&<+ 0' 8-%0*& 0' +)+',+ (0%+, 0 +(-8+ /+ ;&*+ + &',/%+ &, -0** &,0*+. OR 2 I',/%+% ;&** ;0&<+ + 08-/' - #are# premium 0 +(-8+ /+ ;&*+ + &',/%+ &, -0** &,0*+. Tare# premium &, + 08-/' - )%+8&/8 0 & )0& -' 0 %+/*0% 0,&, ;&** 80&'0&' + )-*&( &' -%(+. To#a' "isai'i#-: U,/0** &' 0 !P %&+% -0* &,0&*& ;&** + +&'+ 0, + &',/%+>, &'0&*& )+%-%8 +,,+'&0* 0(, - +% -;' -((/)0&-' -% 0' -+% -((/)0&-' -% ;&( ,+ &, %+0,-'0* ,/&0*+ +/(0&-' %0&'&' -% +)+%&+'(+.
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
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 37 - 113
4. S-8+ %&,, 0%+ )&(0** +(*/+. S-8+ - +8 0%+: 0 I'+'&-'0** ,+*&'*&(+ &'/%&+, I'/%&+, ,/+%+ ;&*+ (-88&&' 0 (%&8+ ( P%++&,&' (-'&&-', I'/%&+, %-8 0' 0( - ;0% ;&*+ &',/%+ &, &' 8&*&0% ,+%<&(+ II) AIVER OF PRE&IU& FOR PA0OR BENEFIT
T&, &, +,&'+ -% 3 % )0% )-*&(&+, ,/( 0, u*eni'e insurance )-*&(&+,. u*eni'e insurance po'ic- &, &,,/+ -' + *&+ - 0 (&* / &, -;'+ 0' )0& -% 0' 0/* /,/0** + (&*>, )0%+' -% *+0* /0%&0'.
P (or pa-or ene(i# )%-<&+, &',/%0'(+ ;&** ;0&<+ &, %&-% - )0&' (-**+( 0+ )-*&(>, %+'+;0*+ )%+8&/8, & 0 + + )-*&( -;'+% (-8)0' = + )+%,-' %+,)-',&*+ )%+8&/8, = &+, -% +(-8+, -0** &,0*+.
T+ ;- )0% +&'&&-' - -0* &,0&*& &' (0,+ - !P -% )0-% +'+&,: D/%&' + &%, 2 +0%, - + &,0&*& + )-*&( -;'+% &, (-',&+%+ - + #o#a''- "isa'e" -'* & + &, /'0*+ - )+%-%8 + +,,+'&0* 0(, - &, -;' -((/)0&-'. A+% + 2+0% )+%&- + )-*&( -;'+% ;&** + (-',&+%+ - + #o#a''- "isa'e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
P%-<&+, 0 8-'* &'(-8+ +'+& - + )-*&( -;'+% = &',/%+ & ,+ +(-8+, -0** &,0*+. T+ +&'&&-' - 0 -0* &,0&*& &, /,/0** + ,08+ &' &, %&+% 0, &' !P +'+& %&+%. T)&(0** + 08-/' - + 8-'* &,0&*& &'(-8+ +'+& &, 0 ,0+ -**0% 08-/' = ,/( 0, 1" )+% 1""" - + *&+ (-<+%0+. DI +'+& 0*,- /,/0** &'(*/+, 0 ;0&&' )+%&- *&+ + !P %&+%,. A )-&' - '-+ P-*&(&+, &,,/+ ;& 0 &,0&*& &'(-8+ +'+& +'+%0** &'(*/+ 0 !P +'+& 0, ;+**.
ACCIDENT BENEFITS
M-, (-88-'* -+%+ 0((&+' +'+&, 0%+ ACCIDENTAL DEATH BENEFIT
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 3 - 113
A )-*&( %&+% ;&( ,)+(&&+, 0 & + &',/%+ &+, 0, 0 %+,/* - 0' 0((&+' + &',/%+% ;&** )0 + +'+&(&0% 0' 08-/' - 8-'+ &' 0&&-' - + 0,&( +0 +'+& )%-<&+ + *&+ &',/%0'(+ )-*&(. Dou'e in"emni#- ene(i# : !+' + 08-/' )0& /+ - + AD +'+& &, +B/0* - + 0(+ 08-/' - + )-*&(. S- + -0* +0 +'+& 0 + +'+&(&0% +, +(-8+, ;&(+ + 0(+ 08-/' - + )-*&(.
G+'+%0** 8-, AD +'+& %&+%, +)&%+ ;+' + &',/%+ %+0(+, + 0+ 65 -% 7". L&8&0&-', 0' +(*/,&-', &' AD +'+&,: S-8+ +(*/,&-', 0%+: 0 &'/%&+, (0/,&' ,/&(&+. S+*&'*&(+ !0%%+*0+ 0((&+',. ( A((&+', %+*0+ - 0<&0&-' 0(&<&&+, & /%&' *& &',/%+ 0(+ &' 0' -+% (0)0(&&+, -+% 0' 0 )0,,+'+%. A' 0((&+' %+,/*&' %-8 + &',/%+>, +'0&' &' 0' &**+0* 0(&<&&+,. S-8+&8+, *0;, 8& + +%+ ;&( ;&** )%+<+' + &',/%+% %-8 +(*/&' ,-8+ - +,+ (0/,+, %-8 0 AD +'+& %&+%. A *&8&0&-' (-/* +: AD +'+& %&+% 8& + 0 )00*+ -'* & + &',/%+ &+ /%&' 0 (+%0&' &8+ %-8 + 0(/0* 0((&+' -% +08)*+ ,0 3 8-',. DIS&E&BER&ENT BENEFIT Acci"en#a' "ea#$ an" "ismemermen# 3AD?D5 ri"er ,)+(&&+, 0 + &',/%+% ;&** )0 0 ,0+ +'+& 08-/' - + &',/%+ & 0' 0((&+' (0/,+, 0 *-,, - 0' ;- *&8, -% ,& &' - ++,. A8-/' - + &,8+8+%8+' +'+& &, /,/0** +B/0* -% *-;+% - + 0((&+'0* +0 +'+&.
U,/0** ADD %&+%, ,0+ 0 + &',/%0'(+ (-8)0' ;&** '- )0 - AD +'+& 0, ;+** 0, &,8+8+%8+' +'+& -% &'/%&+, ,/+%+ &' + ,08+ 0((&+'.
ACCELERATED DEATH BENEFITS
T&, ,-% - )-*&( +'+& +(08+ 0<0&*0*+ %-8 + *0+ 19">,. Acce'era#e" "ea#$ ene(i# ri"ers 0%+ 0*,- (0**+ 'i*in ene(i# ri"ers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
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 39 - 113
I',/%0'(+ (-8)0'&+, /,/0** -+% 0((+*+%0+ +0 +'+& (-<+%0+ - -'* )-*&(&+, ;& *0%+ 0(+ 08-/'. T&, &, -'+ - ++) +&% 08&'&,%0&<+ (-,, -;'. C-88-'* -+%+ )+, - 0((+*+%0+ +0 +'+& %&+%, 0%+ &,(/,,+ +%+: TER&INAL ILLNESS BENEFIT
TI +'+& &, 0 +'+& /'+% ;&( + &',/%+% )0, 0 )-%&-' - + )-*&(>, +0 +'+& + )-*&( -;'+% & + &',/%+ ,/+%, %-8 0 +%8&'0* &**'+,, 0' 0, 0 ),&(&0'(+%&&+ *&+ +)+(0'( - 12 8-', -% *+,,. U'*&+ -+% &',/%0'(+ )-*&( %&+%, &',/%0'(+ (-8)0'&+, /,/0** -'> (0%+ 0' 0&&-'0* )%+8&/8 -% TI +'+& %&+%. T+ 08-/' - TI +'+& )00*+ &, +'+%0** 0 ,0+ - + )-*&(>, 0(+ 08-/'. #/ & &, )-,,&*+ 0 + /** 0(+ 08-/' &, )0& 0, TI +'+& &' ,-8+ )+, - )-*&(&+,. DREAD DISEASE BENEFIT
T&, &, -'+ - + +0%*&+, -%8, - 0((+*+%0+ +0 +'+& -+%+ &',/%+%,. DD +'+& 0, & &, )-)/*0%* '-;' &, 0 +'+& /'+% ;&( + &',/%+% 0%++, - )0 0 )-%&-' - + )-*&(>, 0(+ 08-/' - 0 )-*&( -;'+% & + &',/%+% ,/+%, %-8 -'+ - 0 '/8+% - ,)+(&&+ &,+0,+,. P-&' - '-+ : A'-+% -%8 - %+0 &,+0,+ (-<+%0+ (0' + )/%(0,+ 0, 0 ,0'0*-'+ +0* &',/%0'(+ )-*&(. T+,+ ,)+(&&+ &,+0,+, -% 8+&(0* )%-(+/%+, -% ;&( DD +'+& &, )00*+ 0%+ '-;' 0, insura'e e*en#s. T+ /,/0** &'(*/+ L&+%+0+'&' (0'(+% AIDS E',0+ %+'0* &'+ 0&*/%+ M-(0%&0* &'0%(&-' +0% 00( S%-+ C-%-'0% )0,, ,/%+% M0 0*,- &'(*/+: V&0* -%0' %0',)*0', A*?+&8+%>, &,+0,+ LON+2TER& CARE BENEFIT
A LTC +'+& &, )00*+ 0, 0 8-'* +'+& - 0 )-*&( -;'+% & + &',/%+ %+B/&%+, (-',0' (0%+ -% 0 8+&(0* (-'&&-'. F-% +08)*+ 0' &',/%+ ;- 0, ,+<+%+ 0%%&&, -% 0<0'(+ A*?+&8+%>, &,+0,+ 80 '++ ,-8+ -%8 - (-',0' (0%+. T+ )+, - (0%+ 0 0' LTC +'+& (-<+%, 0%+ ,)+(&&+ &' + %&+%. Ac#i*i#ies o( "ai'- 'i*in 3ADL5 &'(*/+ 0(&<&&+, ,/( 0, +0&' 0&' %+,,&' -&' - + 0%--8 +&' &' 0' -/ - + -% 0 ;++*(0&% 0' 8-&*&.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 4" - 113
ADL, 0%+ /,+ - ++%8&'+ + +*&&&*& - + &',/%+ - %+(+&<+ LTC +'+&,. ADL 0,,+,,8+' (0' + -'+ + -**-;&' 8+-,: 1 R+* -' ),&(&0' (+%&&(0&-'. 2 C-'%0( ;& &%8 ;&( ,)+(&0*&?+, &' ADL 0,,+,,8+'. 3 D+<+*-) -;' ADL 0,,+,,8+' --*,. T+ 08-/' - +0( 8-'* LTC +'+& )08+' &, +'+%0** +B/0* - ,-8+ ,0+ )+%(+'0+ - + )-*&(>, +0 +'+&. T+ &',/%+% /,/0** (-'&'/+, - )0 8-'* LTC +'+&, /'&* 0 ,)+(&&+ )+%(+'0+ - + )-*&(>, 0,&( +0 +'+& 0, ++' )0& -/. M-, LTC +'+& %&+%, &8)-,+ 0 9" 0 ;0&&' )+%&- +-%+ + 0%+ )00*+. A((-%&' - ,-8+ LTC %&+%, (-<+%0+ 8/, + &' -%(+ -% 0 &<+' )+%&- - &8+ /,/0** 1 +0% -% 8-%+ +-%+ + &',/%+ ;&** B/0*& -% LTC +'+&,. BENEFITS FOR ADDITIONAL INSUREDS V0%&-/, %&+%, (0' + 0+ - *&+ &',/%0'(+ )-*&(&+, - )%-<&+ +'+&, & ,-8+-'+ -+% 0' + )-*&(>, &',/%+ &+,. T+,+ %&+%, 0+ ,+<+%0* -%8,. H+%+ ;+ &,(/,, ,-8+ - + 8-%+ (-88-' -'+, &' + &'/,%. SPOUSE AND CHILDREN9S INSURANCE RIDER
A ,)-/,+ 0' (&*%+'>, &',/%0'(+ %&+% 0+ - 0 )+%80'+' &',/%0'(+ )-*&( )%-<&+, 0 (-<+%0+ ,&8&*0% - 0 )%-<&+ 0 08&* &',/%0'(+ )-*&(;&( &, 0 ;-*+ *&+ )-*&( 0 )%-<&+, (-<+%0+ -' + &',/%+>, +'&%+ 08&*. T+ (-<+%0+ )%-<&+ &, %&+% &, )&(0** ,-* -' + 0,&, - (-<+%0+ /'&,. I' (-'%0, &' + 08&* &',/%0'(+ )-*&( + (-<+%0+ )%-<&+ &, )&(0** 0 )+%(+'0+ - + 0(+ 08-/' )%-<&+ -' + *&+ - + &',/%+. M-, &',/%0'(+ (-8)0'&+, - '- )%-<&+ 8-%+ 0' 5 - 1" (-<+%0+ /'&,. T+ )%+8&/8 -% + (&*%+'>, (-<+%0+ &, 0 ,)+(&&+ *0 08-/'. I -+, '- (0'+ ;& + '/8+% - (&*%+' &' + 08&*. T+ +%8 &',/%0'(+ (-<+%0+ -' +0( (&* +)&%+, ;+' 0 (&* 00&', 0 ,0+ 0+ /,/0** 21 -% 25. S/( %&+%, /,/0** 0<+ 0 )%-<&,&-' -% + (&* - (-'<+% &, +%8 &',/%0'(+ %&+% - 0' &'&<&/0* *&+ &',/%0'(+ )-*&( 0' + (-<+%0+ 08-/' (0' 0*,- + (0'+ - 0 (+%0&' '/8+% - &8+, -<+% + (/%%+' 08-/' &' ,/( 0 (0,+. CHILDREN9S INSURANCE RIDER
S&8&*0% - + ,)-/,+ 0' (&*%+'>, (-<+%0+ &' &, /'(&-'0*&. T+ ,)-/,+ (-<+%0+ &, '- )%+,+'. G+'+%0** 0&8+ 0 ,&'*+ )0%+',. SECOND INSURED RIDER
A*,- (0**+ 0' op#iona' insure" ri"er -% 0' a""i#iona' insure" ri"er. T&, %&+% )%-<&+, 0 +%8 &',/%0'(+ (-<+%0+ -' + *&+ - 0'-+% &'&<&/0* -+% 0' + )-*&(>, &',/%+. T&, ,+(-' &'&<&/0* &, (0**+ 0 Secon" insure". T&, &'&<&/0* (-/* + + ,)-/,+ - + )%&80% &',/%+ &, %+*0&<+ -% +<+' 0' /'%+*0+ )+%,-'.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 41 - 113
T+ 08-/' - + (-<+%0+ -' &, ,+(-' &',/%+ &, /,/0** /'%+*0+ - + (-<+%0+ 0 + 0,&( )-*&( )%-<&+,. T+ )%+8&/8 08-/' &, 0,+ -' + %&, (0%0(+%&,&(, - + ,+(-' &',/%+ 0' '- 0 - + )%&80% &',/%+.
INSURABILT0 BENEFITS
T;- )+, - &',/%0&*& +'+&, +&,.
I)
+UARANTEED INSURABILIT0 BENEFIT
GI +'+& %&+% &, 0*,- ,-8+&8+, %++%%+ - 0, 0 uaran#ee" insurai'i#- op#ion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
T&, %&+% 0**-;, + -;'+% - 0 ;-*+ *&+ &',/%0'(+ )-*&( - )/%(0,+ ,&'*+)%+8&/8 )0&/) 0&&-', - + )-*&( -' ,0+ 0+, &' + //%+ 0' /, - &'(%+0,+ + 08-/' - (-<+%0+ /'+% + 0,&( )-*&(. M0' ,/( %&+%, 0**-; + )-*&( -;'+% - )/%(0,+ )0&/) 0&&-'0* ;-*+ *&+ &',/%0'(+ -' +0( )-*&( 0''&<+%,0%. T+,+ )0&/) 0&&-', 0<+ +&% -;' (0, <0*/+,. P%+8&/8, -% + )0&/) 0&&-', 0%+ 0,+ -' + '+ ,&'*+ )%+8&/8 %0+ -% + (-<+%0+ 0 + &',/%+>, 0+ 0 + &8+ + )0&/) 0&&-', ;+%+ )/%(0,+. M-, %&+%, ,0+ 0 & + )-*&( -;'+% -+, '- ++%(&,+ + )/%(0,+ -)&-' -% 0 ,0+ '/8+% - +0%, +' + %&+% ;&** +%8&'0+. A 0 &8+ + '/8+% - )0&/) 0&&-', 0*%+0 -/ %+80&', &' -%(+ / + )-*&( -;'+% (0' '- *-'+% ++%(&,+ + -)&-' - / '+; )0&/) 0&&-',.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 42 - 113
CHAPTER 1G: LIFE INSURANCE POLIC0 PROVISIONS
A' I',/%0'(+ )-*&( &, 0 ;%&+' -(/8+' 0 +,(%&+, + 0%++8+' +;++' ;- )0%&+, + &',/%+% 0' + )-*&(-;'+%,. H+%+ ;+ ;&** '-; 0-/ 0** + )%-<&,&-', 0 0%+ )&(0** &'(*/+ &' + &'&<&/0* *&+ &',/%0'(+ )-*&(&+,. Reu'a#ions o( Po'ic- Pro*isions
I' + USA ,0+ *0;, )&(0** %+B/&%+ &'&<&/0* *&+ &',/%0'(+ )-*&(&+, - &'(*/+ ,)+(&&+ )%-<&,&-', 0 ,)+** -/ + %&, - )-*&(-;'+%, 0' + +'+&(&0%&+,. O+% -)&-', 80 + &'(*/+ 0 + &',/%+%>, -)&-',. T+ SID %+<&+;, 0** +,+ )%-<&,&-', &' + P-*&( -%8 0' +' 0))%-<+, + )-*&(&+,. I' C0'00 + (-88-' *0; )%-<&'(+, 0<+ 0** +'0(+ &',/%0'(+ *0;, )0+%'+ ;& 8&'-% <0%&0&-', -' + Uni(orm Li(e Insurance Ac#. T+ U'&-%8 L&+ I',/%0'(+ A( &, 0 8-+* *0; 0-)+ CCIR - %+/*0+ *&+ &',/%0'(+ )-*&(&+,. A*-/ + )%-<&'(+ - /++( 0, '- 0-)+ &, *0; / 0 *0; &, 0*,- <+% ,&8&*0% - &, 0(. T+,+ )%-<&'(&0* *0;, %+B/&%+ &',/%+%, - &'(*/+ (+%0&' )%-<&,&-', &' + *&+ &',/%0'(+ )-*&(&+,. T+,+ )%-<&'(&0* *0;, 0*,- &%+(* %0' (+%0&' %&, - + )-*&(-;'+%, 0' &8)-,+ (+%0&' -*&0&-', -' &',/%+%,. A*-/ C0'0&0' *0;, - '- %+B/&%+ )-*&(&+, - &'(*/+ )%-<&,&-', ,)+**&' -/ +,+ %&, 0' -*&0&-', / + &',/%+%, %-/&'+* - ,-. !+' + 0))*&(0*+ &',/%0'(+ *0;, &' + US -% &' C0'00 %+B/&%+ 0 )-*&( )%-<&,&-' + &',/%+% &, %++ - &'(*/+ 0 )%-<&,&-' 0 &, 8-%+ 0<-%0*+ - + )-*&(-;'+%, 0' + %+B/&%+. S#an"ar" Po'ic- Pro*isions
I'&<&/0* *&+ &',/%0'(+ )-*&(&+, +'+%0** (-'0&' + -**-;&' ,0'0% )%-<&,&-',: 1) /) ;) >) 4) ) )
A (ree2'oo% pro*ision An en #ire co n#rac# pr o*ision An incon#es#ai'i#- pro*ision A race perio" pro*ision A reins#a#emen# pr o*ision A miss#a#emen# o( ae or se. pro*ision A se##'emen# op#ions pro*ision
I' 0&&-' )0%&(&)0&' *&+ &',/%0'(+ )-*&(&+, &'(*/+ 0 po'ic- "i*i"en"s pro*ision 0' )+%80'+' *&+ &',/%0'(+ )-*&(&+, 0 /&* 0 (0, <0*/+ +'+%0** 8/, &'(*/+ 0 non(or(ei#ure pro*ision 0' 0 po'ic- 'oan pro*ision 1) Free2Loo% Pro *ision I &, 0*,- '-;' 0, %+++08&'0&-' )%-<&,&-' 0 &<+, + )-*&(-;'+% 0 ,0+ )+%&- - &8+ /,/0** +' 0, 0+% + )-*&( &, +*&<+%+ &' ;&( - +08&'+ + )-*&(. D/%&' &, )+%&- + )-*&(-;'+% 0, + %& - (0'(+* + )-*&( 0' %+(+&<+ 0 /** %+/' - + &'&&0* )0& )%+8&/8. T+ &',/%0'(+ (-<+%0+ &, &' ++( %-/-/ + %++*-- )+%&- -% /'&* + )-*&(-;'+% %++(, + )-*&( & ,--'+%. /) En#ire C on#rac# P ro*ision T&, )%-<&,&-' +&'+, + -(/8+', 0 (-',&/+ + (-'%0( +;++' + )0%&+,. T&, )%-<&,&-' )%+<+', -%0* ,0+8+', %-8 0+(&' + +%8, - + )-*&( 0' )%+<+',
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 43 - 113
(-'%-<+%,&+, %-8 +<+*-)&' %+0%&' + +%8, - + (-'%0(/0* 0%++8+'. G+'+%0** + (-'%0( (0' + (*0,,&&+ 0, c'ose" -% open. A c'ose" con#rac# &, 0 (-'%0( -% ;&( -'* -,+ +%8, 0' (-'&&-', 0 0%+ )%&'+ &' -% 00(+ - + (-'%0( 0%+ (-',&+%+ - + )0% - + (-'%0(. T+ +'&%+ (-'%0( (-',&,, - + )-*&( 0' 00(+ %&+%, 0' + 00(+ (-) - + 0))*&(0&-' -% &',/%0'(+. E(+) %0+%'0* &',/%+%, 0** &'&<&/0* *&+ &',/%0'(+ *&+ )-*&(&+, &,,/+ &' + USA 0' C0'00 0%+ (*-,+ (-'%0(,. A' open con#rac# &, 0 (-'%0( 0 &+'&&+, + -(/8+', 0 (-',&/+ + (-'%0( +;++' + )0%&+, / + +'/8+%0+ -(/8+', 0%+ '- 0** 00(+ - + (-'%0(. F%0+%'0* &',/%+%, &' US 0' C0'00 +'+%0** &,,/+ )-*&(&+, 0, -)+' (-'%0(, ;&( ,0+ 0 + +'&%+ (-'%0( (-',&,, - + )-*&( 0' 0' 00(+ %&+%, + %0+%'0* ,-(&+>, (0%+%(-',&/&-'*0;, + 00(+ +(*0%0&-' - &',/%0&*& & 0' ,&'+ + 0))*&(0'. T+ +'&%+ (-'%0( )%-<&,&-' /,/0** ,0+, 0 O'* ,)+(&&+ &'&<&/0*, ,/( 0, (+%0&' -&(+%, - + &',/%+% (0' (0'+ + (-'%0(. N- (0'+ &, ++(&<+ /'*+,, 80+ &' ;%&&' N- (0'+ &, ++(&<+ ;&** + 80+ /'*+,, + )-*&(-;'+% 0%++, - & &' ;%&&' •
• •
;) Incon#es#ai'i#- Pro*ision
A((-%&' + %/*+, - (-'%0( *0;, ,0+8+', 80+ + )0%&+, ;+' + +'+% &'+ (-'%0( (0' + (*0,,&&+ 0, +&+% ,arran#ies -% represen#a#ions. arran#-: A ,arran#- &, 0 ,0+8+' 80+ 0 (-'%0(&' )0% 0 ;&** &'<0*&0+ + (-'%0( & + ,0+8+' &, '- *&+%0** %/+. Represen#a#ion: A represen#a#ion &, 0 ,0+8+' 80+ 0 (-'%0(&' )0% 0 ;&** &'<0*&0+ + (-'%0( & + ,0+8+' &, '- ,/,0'&0** %/+.
S0+8+', 80+ &' 0' 0))*&(0&-' -% &',/%0'(+ 0%+ (-',&+%+ - + %+)%+,+'0&-', %0+% 0 ;0%%0'&+,. &isrepresen#a#ion: A 0*,+ -% 8&,*+0&' ,0+8+' &' 0' 0))*&(0&-' -% &',/%0'(+ &, '-;' 0, misrepresen#a#ion) &a#eria' &isrepresen#a#ion: A 8&,%+)%+,+'0&-' 0 ;-/* 0+( + &',/%0'(+ (-8)0'>, +<0*/0&-' - + )%-)-,+ &',/%+ &, (0**+ 0, ma#eria' misrepresen#a#ion) Frau"u'en# &isrepresen#a#ion: A 8&,%+)%+,+'0&-' 0 ;0, 80+ ;& + &'+' &'/(+ + -+% )0% - +'+% &'- 0 (-'%0( 0' 0 & &'/(+ + &''-(+' )0% +'+% &'- + (-'%0(.
T+ Incon#es#ai'i#- Pro*ision +,(%&+, + &8+ *&8& ;&&' ;&( + &',/%+% 0, + %& - 0<-& + (-'%0( -' + %-/' - 80+%&0* 8&,%+)%+,+'0&-' &' + 0))*&(0&-'. D/%&' +<0*/0&-' - + 0))*&(0&-' & + (-8)0' &', 0' 80+%&0* 8&,%+)%+,+'0&-' & 0, /** %& '- - &,,/+ + )-*&(. #/ & & 0, &,,/+ 0 )-*&( 0' 0 0 *0+% )-&' - &8+ & &', 0' ,/( ,0+8+', &' + 0))*&(0&-' +' + )%-<&,&-', 0%+ &+%+' &' + USA 0' C0'00.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 44 - 113
I' U'&+ S0+, + (-'+,0*+ )+%&- &, ;- +0%, %-8 + 0+ + )-*&( ;0, &,,/+. T&, 2 +0% (-'+,0*+ )+%&- &, + 80&8/8 )+%&- )+%8&+ + *0;, &' 8-, ,0+,. A )+%&- ,-%+% 0' ;- +0%, &, )+%8&+ +(0/,+ 0 ;-/* + 8-%+ 0<-%0*+ - + )-*&(-;'+%. I' C0'00 + )+%&- &, ;- +0%, %-8 ;+' + )-*&( 0+, ++( -% ;- +0%, %-8 + 0+ & 0, ++' %+&',0+ & *0+%. T+ )%-<&'(&0* &',/%0'(+ *0;, 0*,- (-'0&' 0' +(+)&-' 0 0' &',/%+% 80 (-'+, 0 )-*&( 0 0'&8+ & + 0))*&(0&-' (-'0&'+ 0 %0//*+' 8&,%+)%+,+'0&-'. >) +race Perio" Pro*ision
I',/%0'(+ &' +;&&' US 0' C0'00 %+B/&%+ +<+% &'&<&/0* *&+80 &',/%0'(+ )-*&( ,0+ + )+%&- *0;, - %0(+ ;&( 0 %+B/&%+ %+'+;0* )%+8&/8 + )0&. T+ -race perio" &, 0 ,)+(&&+ *+' - &8+ ;&&' ;&( 0 %+'+;0* )%+8&/8 0 &, /+ 80 + )0& ;&-/ )+'0*. M&'&8/8 %0(+ )+%&-: 3" -% 31 0, &' US 0' C0'00 I 0 %+'+;0* )%+8&/8 &, '- )0& + +' - + %0(+ )+%&- + )-*&( &, ,0& - + 'apse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o'ic- Lo ans an " Po' ic- ,i #$"ra,a' Pro *ision T+ Po'ic- Loan Pro*ision %0', + -;'+% - 0 *&+ &',/%0'(+ )-*&( + %& - 0+ -/ 0 *-0' -% 0' 08-/' 0 -+, '- +(++ + )-*&(>, '+ (0, <0*/+ *+,, -'+ +0%>, &'+%+, -' + *-0'.
P-*&( *-0' &+%, %-8 0 (-88+%(&0* *-0' &' ;- ;0,: T+ )-*&(-;'+% &, '- *+0** -*&0+ - %+)0 0 )-*&( *-0'. H-;+<+% + 80 %+)0 & )0%&0** -% /** 0'&8+. T+ &',/%0'(+ (-8)0' -+, '- )+%-%8 0 (%+& (+( -' 0 )-*&(-;'+% ;%+B/+,, 0 )-*&( *-0'. •
•
T+ Po'ic- ,i#$"ra,a' Pro*ision 0*,- (0**+ 0, )0%&0* ,/%%+'+% )%-<&,&-' )+%8&, + )-*&(-;'+% - %+/(+ + 08-/' &' + )-*&(>, (0, <0*/+ ;&%0;&' /) - + 08-/' - + (0, <0*/+ &' (0,. T+ &',/%+%, - '- (0%+ 0' &'+%+, -' )-*&( ;&%0;0*,. ) Reins#a#emen# Pro*ision
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 45 - 113
Reins#a#emen# &, + )%-(+,, ;&( 0 *&+ &',/%0'(+ (-8)0' )/, 0( &'- -%(+ 0 )-*&( 0 0, +&+% • ++' +%8&'0+ +(0/,+ - '-')08+' - %+'+;0* )%+8&/8, ++' (-'&'/+ /'+% + ++'+ +%8 -% %+/(+ )0&/) &',/%0'(+ • '-'-%+&/%+ -)&-'
M-, &',/%+%, - '- )+%8& %+&',0+8+' & + )-*&(-;'+% 0, ,/%%+'+%+ + )-*&( -% &, (0, ,/%%+'+% <0*/+. I' + US 0-/ -'+0* - + ,0+, %+B/&%+ &'&<&/0* *&+ &',/%0'(+ )-*&(&+, - &'(*/+ &, )%-<&,&-' 0' + *0;, %+B/&%+ )-*&(&+, 0 *+0, 0 3+0% )+%&- /%&' ;&( + )-*&(-;'+% 0, + %& - %+&',0+ 0 )-*&( 0 0, *0),+. I 80 + *-'+% 0*,+)+'&' -' + &',/%+%. L0;, &' C0'0&0' )%-<&'(+, 0' +%%&-%&+, 0*,- %+B/&%+ &'&<&/0* *&+ &',/%0'(+ )-*&(&+, &'(*/+ %+&',0+8+' )%-<&,&-'. C0'0&0' *0;, ,)+(& + 8&'&8/8 %+&',0+8+' )+%&- 0, 2 0+0%,. A )-*&(-;'+% 8/, /*&** (+%0&' (-'&&-', - %+&',0+: T+ )-*&(-;'+% 8/, (-8)*++ 0 %+&',0+8+' 0))*&(0&-' ;&&' + &8+ %08+ ,0+ &' + %+&',0+8+' )%-<&,&-'. T+ )-*&(-;'+% 8/, )%+,+' ,0&,0(-% +<&+'(+ - + &',/%+>, (-'&'/+ &',/%0&*&. T+ )-*&(-;'+% 8/, )0 0 ,)+(&&+ 08-/' - 8-'+. T+ )-*&(-;'+% 80 + %+B/&%+ - +&+% )0 0' -/,0'&' )-*&( *-0' -% 0<+ + )-*&( *-0' %+&',0+ ;& + )-*&(. •
•
• •
A*,- &' 8-, US ,0+, 0' )%-<&'(+, &' C0'00 0 '+; (-'+,0*+ )+%&- +&', -' + 0+ -' ;&( + )-*&( &, %+&',0+. D/%&' &, '+; (-'+,0*+ )+%&- + (-8)0' 80 0<-& 0 %+&',0+ )-*&( -'* -' + 0,&, - 80+%&0* 8&,%+)%+,+'0&-', 80+ &' + 0))*&(0&-' -% %+&',0+8+'. Re"a#in: U'+% &, )%0(&(+ + &',/%0'(+ (-8)0' (0'+, + )-*&( 0+ - + 0+
-' ;&( %+&',0+. A, 0 %+,/* +0+ )%+8&/8 %0++(0%+ ++ %+0+ )-*&( ;&**++)-*&( 0,+&,-' + &',/%+>, 00&'+ 0' ;&** (0%+-%-% -%&&'0* )-*&(. ) &iss#a#emen# o( Ae or Se. Pro*ision T&, )%-<&,&-' +,(%&+, + 0(&-' + &',/%+% ;&** 0+ - 0/, + 08-/' - + )-*&( +'+& &' + +<+' 0 + 0+ -% ,+ - + &',/%+ &, &'(-%%+(* ,0+. I + &',/%+% &', ,/( +%%-% after t$e deat$& +' & 0/, + 0(+ 08-/' - + )-*&( - + 08-/' + )%+8&/8 0(/0** )0& ;-/* 0<+ )/%(0,+ & + &',/%+>, 0+ -% ,+ 0 ++' ,0+ (-%%+(*. I + 8&,,0+8+' &,(-<+%+ "efore t$e deat$& +' + &',/%+% 80 %0' + )-*&(-;'+% + -)&-' - )0 -% %+(+&<+ 0, 0 %+/' 0' )%+8&/8 08-/' &+%+'(+ (0/,+ + 8&,,0+8+' &',+0 - 0<&' + &',/%+% 0/, + )-*&(>, 0(+ 08-/'. ) Se##'emen# Op#ions Pro*ision I &, 0*,- (0**+ 0, payout option provision. S/( )%-<&,&-' %0' 0 )-*&(-;'+% + %& +(&+ -; + )-*&( +'+&, ;&** + )0&. ) Po'ic- Di *i"en"s Pro *ision T&, )%-<&,&-' &<+, + )-*&(-;'+%, + %& - (--,+ %-8 08-' ,+<+%0* &<&+' )0-/ -)&-',. L0;, &' 8-, /%&,&(&-', &' + US 0' C0'00 %+B/&%+
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 46 - 113
)0%&(&)0&' )-*&(&+, - +,(%&+ + &<&+' -)&-', 0 0%+ 0<0&*0*+ - + )-*&(-;'+%,. 1G) Non(or(ei#ure Bene(i#s T+,+ +'+&, 0%+ 0<0&*0*+ - + -;'+% - 0 *&+ &',/%0'(+ )-*&( 0 /&*, 0 (0, <0*/+. S0+ &',/%0'(+ *0;, %+B/&%+ &',/%0'(+ (-8)0'&+, - &'(*/+ '-'-%+&/%+ +'+&, &' 0** &'&<&/0* *&+ &',/%0'(+ )-*&(&+, 0 /&* 0 (0, <0*/+. A*-/ )%-<&'(&0* *0;, - '- %+B/&%+ &',/%0'(+ (-8)0'&+, - &'(*/+ +,+ &' + )-*&(&+, / (-8)0'&+, /,/0** - &. Cas$ Surren"er *a'ue non(or(ei#ure op#ion: T&, ,0+, 0 0 )-*&(-;'+% ;&,(-'&'/+, )%+8&/8 )08+', (0' +*+( - ,/%%+'+% + )-*&( 0' %+(+&<+ + )-*&(>, (0, ,/%%+'+% <0*/+. F-**-;&' + ,/%%+'+% - 0 )-*&( 0** (-<+%0+ /'+% + )-*&(
+%8&'0+,. T+ ne# cas$ *a'ue &, + 0(/0* 08-/' 0 0 )-*&(-;'+% +, 0+% 0/,8+', - )0& /) 0&&-', &<&+' 0((/8/*0&-', 0<0'(+ )%+8&/8 )08+', 0' )-*&( *-0', -/,0'&'. L0;, %-/-/ + US 0' C0'00 0**-;, 0' &',/%+% - %+,+%<+ + %& - ++% )08+' - 0' )-*&(>, (0, ,/%%+'+% <0*/+ -% 0 )+%&- - /) - ,& 8-', 0+% + -;'+% - + )-*&( %+B/+,, )08+'. Con#inue" Insurance Co*erae Non(or(ei#ure Op#ions Re"uce" Pai"2Up Insurance: U'+% &, -)&-' + )-*&(>, '+ (0, <0*/+ &, /,+ 0, 0 '+ ,&'*+ )%+8&/8 - )/%(0,+ )0&/) *&+ &',/%0'(+ - + ,08+ )*0' 0, + -%&&'0* )-*&(. T+ )%+8&/8 (0%+ &, 0,+ -' + 00&'+ 0+ - + &',/%+. T+ 0(+ 08-/' ;&** + ,80**+% 0' + 0(+ <0*/+ - + -%&&'0* )-*&(. T+ (-<+%0+ &,,/+ /'+% &, -)&-' (-'&'/+, - 0<+ *&+ /&*&' (0, <0*/+ %& - ,/%%+'+% + )-*&( 0' %+(+&<&' &<&+',. #/ 0' ,/))*+8+'0* +'+&, 0 ;+%+ 0<0&*0*+ -' + -%&&'0* )-*&( ,/( 0, 0((&+'0* +0 +'+&, 0%+ /,/0** '- 0<0&*0*+ ;& + %+/(+ )0&/) &',/%0'(+. E.#en"e" Term Insurance : U'+% &, -)&-' + &',/%0'(+ (-8)0' /,+, + )-*&(>, '+ (0, <0*/+ - )/%(0,+ +%8 &',/%0'(+ -% + /** (-<+%0+ 08-/' )%-<&+ /'+% + -%&&'0* )-*&( -% 0, *-' 0 +%8 0, + '+ (0, <0*/+ (0' )%-<&+. T+ +%8*+' +)+', /)-' + 08-/' - + (-<+%0+ 08-/' - '+ (0, <0*/+ ,+ - + &',/%+ 0' &, 00&'+ 0+. Au#oma#ic Non(or(ei#ure Bene(i#s: T&, +'+& +(-8+, ++(&<+ 0/-80&(0** ;+' 0 %+'+;0* )%+8&/8 &, '- )0& + +' - + %0(+ )+%&- 0' + &',/%+ 0, '- +*+(+ 0'-+% '-'-%+&/%+ -)&-'. T+ 8-, )&(0* 0/-80&( '-'-%+&/%+ +'+& &, + ++'+ +%8 &',/%0'(+ +'+&.
H-;+<+% + *0;, &' 0 +; /%&, &(&-', %+B/&%+ 0 )-*&(&+, &'(*/+ 0' Au#oma#ic Premium Loan 3APL5 pro*ision 0' ,)+(& 0 + 0/-80&( '-'-%+&/%+ -)&-' &, + 0/-80&( )%+8&/8 *-0'. T&, )%-<&,&-' ,0+, 0 + &',/%+% ;&** 0/-80&(0** )0 0' -<+%/+ )%+8&/8 -% + )-*&(-;'+% 80&' 0 *-0' 00&', + (0, <0*/+ 0, *-' 0, + (0, <0*/+ +B/0*, -% +(++, + 08-/' - + )%+8&/8 /+. U'&<+%,0* *&+ &',/%0'(+ )-*&(&+, /,/0** - '- &'(*/+ &, )%-<&,&-'. Li(e Insurance Po'ic- E.c'usions
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 47 - 113
A*-/ *0;, )+%8& / +'+%0** (-8)0'& +, -+, '- &'(*/+ +,+ +(*/,&-',: ,ar e.c'usions c'ause a*ia#ion e.c'usion pro*ision +(+) -% 8&*&0% -% +)+%&8+'0* 0&%(%0 -% )%&<0+* -;'+ 0&%(%0>, )&*-, (%+; 8+8+%,. #/ Suici"e e.c'usion pro*ision &, ,&** &'(*/+ &' &'&<&/0* *&+ &',/%0'(+ )-*&(&+,. T+ )%-<&,&-' &' ,-8+ )-*&(&+, ,0+, 0 + &',/%+% ;&** )0 + *0%+% - + )-*&(>, (0, <0*/+ -% + )%+8&/8, )0& -% + )-*&( &' (0,+ & &', 0 + &',/%+ 0, (-88&+ ,/&(&+ ;&&' + ;- +0% )+%&- 0+% + &,,/+ - + )-*&(.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 4 - 113
CHAPTER 11: LIFE INSURANCE BENEFICIAR0 POLICIES C'ass Desina#ion: A +'+&(&0% +,&'0&-' 0 &+'&&+, 0 (+%0&' %-/) - )+%,-', %0+% 0' '08&' +0( )+%,-' &, (0**+ 0 (*0,, +,&'0&-'. Primar- Bene(iciar-: P0% +,&'0+ - %+(+&<+ + )-*&( )%-(++, -**-;&' + +0 - + &',/%+.
P%-(++ 80 + &<&+ 08-' + +'+&(&0% & &'&(0+ &',/%+ +*,+ & +, &,%&/+ +<+'*. I' -%+% - %+(+&<+ )-*&( )%-(++ +'+&(&0% 8/, ,/%<&<+ + &',/%+. Con#inen# Bene(iciar-: A*,- '-;' 0, ,+(-'0% -% ,/((+,,-% +'+&(&0%. A (-'&'+' +'+&(&0% %+(+&<+, + )-*&( )%-(++, & 0** )%&80% +'+&(&0%&+, 0<+ )%++(+0,+ + &',/%+. No sur*i*in Bene(iciar-:
I + &',/%+ &, +0 0' 0** '08+ +'+&(&0%&+, 0%+ 0*,- +0 +' + )%-(++, 0%+ )0& - )-*&( -;'+%. I )-*&( -;'+% &, +0 +' + )%-(++, -+, - )-*&( -;'+%>, +,0+. Pre(erence Bene(iciar- C'ause: I + )-*&( -;'+% -+, '- '08+ 0 +'+&(&0% +' &',/%+ ++), 0 *&, - ,0+ -%+% - )%++%+'(+ 0' )%-(++ ;&** + )0& 0((-%&' - 0 -%+%.
I '- *&, &, 0*,- 0<0&*0*+ +' + )%-(++ ;&** + )0& - + &',/%+>, +,0+. Faci'i#- o( Pa-men#: G%-/) L&+ 8-'* +& -%&'0% +( (-'0&' 0 0(&*& - )08+' (*0/,+ ;&( )+%8&, + &',/%0'(+ (-8)0' - )0 0 *&*+ )0% - + )%-(++ - ,-8+-'+ ;- 0, &'(/%%+ /'+%0* +)+',+, -' +0* - + &',/%+. Re*oca'e Bene(iciar-: A +'+&(&0% &, (0**+ %+<-(0*+ & + )-*&( -;'+% 0, + /'%+,%&(+ %& - (0'+ + +'+&(&0% ;&*+ 0*&<+. Ri$# o( re*oca#ion: P-*&( -;'+%>, %& - (0'+ +'+&(&0%. Irre*oca'e Bene(iciar-: #+'+&(&0% ;+%+ -/ (0''- (0'+ -/% +'+&(&0% ;&-/ + (-',+' - + +'+&(&0%.
P-*&( -;'+% *--,+ +&% %& - %+<-(0&-' -'+ - + 2 8+-,: 1. P-*&( -;'+% <-*/'++%, - &<+ /) &, %&, 2. L+0* *&8&0&-',
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 49 - 113
An irre*oca'e ene(iciar- $as *es#e" in#eres# in #$e procee"s o( #$e 'i(e insurance po'ice*en "urin #$e 'i(e#ime o( #$e insure") A *es#e" in#eres# is a proper#- ri$# #$a# $as #a%en e((ec# an" canno# e a'#ere" or c$ane" ,i#$ou# #$e consen# o( #$e person ,$o o,ns #$e ri$#)
R&, - 0' +'+&(&0% &'(*/&' %+<-(0*+ -'+, 0%+ +%8&'0+ ;& + +0 - + +'+&(&0% 0' + )-*&( -;'+% (0' +' '-8&'0+ 0 '+; +'+&(&0%. USA: Communi#- Proper#- Sa'es
A (-88/'& )%-)+% ,0+ &, -'+ &' ;&( *0; +0( ,)-/,+ &, +'&*+ - +B/0* ,0%+ +0%'+ + -+% 0' )%-)+% 0(B/&%+ /%&' + 80%%&0+. T+ ,0+, 0%+: ARIONA NE! ME$ICO !ISCONSIN IDAHO LOUISIANA NEVADA TE$ASCALIFORNIA AND !ASHINGTON. I',/%0'(+ )-*&( &, 0*,- 0 )%-)+% &' +,+ ,0+,. T/, +<+' & + -+% ,)-/,+ &, '08+ 0, %+<-(0*+ +'+&(&0% & 8& + %+B/&%+ - 0+ (-',+' - + %+<-(0*+ +'+&(&0% ,)-/,+ (0'+ + +'+&(&0% & + (0'+ /%, + &'+%+, - + -+% ,)-/,+. A*+%'0&<+* +'+&(&0% (0' + (0'+ -% -'* 0* + )%-(++,. Cana"a: Common La, uris"ic#ion 1/3app'ica'e #o po'icies e(ore 1/ on'-5 Pre(erre" Bene(iciar- La,:
A )%++%%+ +'+&(&0% (*0,,&&(0&-' ;0, 80&'0&'+ -% 0 )-*&( 0' )-*&( -;'+% (0' (0'+ + +'+&(&0% -'* ;&&' &, (*0,, ;&-/ (-',+' -% (0' (0'+ - ,-8+-'+ -/,&+ + %-/) ;& (-',+' - + %-/). A** -;'+%,&) %&, 0%+ %+<-+ 0, ,--' 0, + )%++%%+ +'+&(&0% &+. Bene(iciar- (or Va'ue:
T&, %-/) &, 0*,- &%%+<-(0*+ +'+&(&0%. T&, (-/* + )+-)*+ *&+ ;- *+' 8-'+ 0' )-*&( -;'+% '08+, +8 +'+&(&0%. T+,+ )+-)*+ 0*,- 0<+ <+,+ &'+%+, / +&% %&, 0%+ '- %+<-+ 0, ,--' 0, + <0*/+ +'+&(&0% &+, 0' &, %&, 0%+ )0,,+ - +'+&(&0%>, +,0+. T+,+ *0;, ;+%+ &,(-'&'/+ 0+% + U'&<+%,0* L&+ I',/%0'(+ A( - 1962 Bene(iciar- C$ane proce"ure:
1. Recor"in me#$o": M+- - &'-%8&' + &',/%0'(+ (-8)0' &' ;%&&' 0-/ + '+; +'+&(&0% )-*&( -;'+%. 2. En"orsemen# &e#$o": P-*&(&+, 0<+ 0 -(/8+' 00(+ - + &',/%0'(+ (-'0( 0' 0 -(/8+' (-'0&'+ + +'+&(&0% '08+.
CHAPTER 1/: ADDITIONAL ONERSHIP RI+HTS
A)0% %-8 + %& - '08+ + +'+&(&0% + )-*&( -;'+% 0, 0 '- - -+% <0*/0*+ %&,. T+,+ %&, ;& %+,)+( 1. Premium Pa-men#s. /) Po'ic- Di*i"en"s
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 5" - 113
;) Se##'emen# Op #ions)
A8-' +,+ ,-8+ %&, <0% +)+'&' -' + )+ - + )-*&(. PRE&IU& PA0&ENTS :
T+ )-*&( -;'+% 0, + %& - (--,+ Premium Pa-men# &o"e %+B/+'( Premium Pa-men# &e#$o" 1)A)
PRE&IU& P A0&ENT & ODE
T&, &, + %+B/+'( 0 ;&( %+'+;0* )%+8&/8, 0%+ )00*+ 0' - + &',/%+% mo "e o( pa,+*+(, -men#)0'-'+ + )-*&( -;'+% 8/, 0%++ - 0T+ T+ %+B/+'( (0' + annua'=semiannua'=uar#er'-=mon#$'-) 0))*&(0' - +,+ 8-+, 0 + &8+ - 0))*&(0&-' / -*, + %& - (0'+ & 0+% + )-*&( &, &' -%(+. H-;+<+% + )-*&( -;'+% (0''- ,+*+( 0 8-+ 0 %+,/*, &' 0 )%+8&/8 *+,, 0' + %+B/&%+ 8&'&8/8. F-% +08)*+ & + 8&'&8/8 )%+8&/8 -% 8-'* 8-+ &, 2" + )-*&( -;'+% 0, - )0 0. O+%;&,+ + ;-/* + %+B/&%+ - (--,+ 0 *+,, %+B/+' 8-+ - )08+' ,/( 0, B/0%+%* -% ,+8& 0''/0**. 1)B)
PRE&IU& PA0&ENT ÐOD
T+ )-*&( -;'+% (0' )0 + )%+8&/8 0 I' )+%,-' - + H-8+ O&(+ 0' 0/-%&?+ #%0'( O&(+
# 80&*: T+ PO;'+% %+(+&<+, 0 premium no#ice %- + I',. C-. +-%+ +0( )%+8&/8 /+ 0+. I' 8-, (0,+, + PO;'+% %+/%', 0 )-%&-' - + '-&(+ 0*-' ;& + )%+8&/8 )08+'. T+ PO;'+% 80 )0 + )%+8&/8 &' (0, MO (+(. ( # 0/-80&( )08+' +('&B/+,: T+ 8-, (-88-' 0/-80&( )08+' +('&B/+, &'(*/+
Preau#$ori!e" C$ec% 3PAC5: T+ PO;'+% 0/-%&?+, + I',. C-. - +'+%0+ (+(, 00&', + PO;'+%>, (+(&',0<&', AC. T+ I',. C-. ,+', +,+ (+(, +%+ &%+(* -% )08+'. T+ PO;'+% 0*,- 0/-%&?+, + #0'+ S0<&', I',&/&-' - -'-% +,+ (+(, +/( + /', &%+(* %-8 + PO;'+%>, AC. T+ PO;'+% /,/0** %+(+&<+, 0 '-&&(0&-' - +0( ,/( %0',0(&-' -' &,+% 0' ,0+8+'.
E'ec#ronic Fun"s Trans(er 3EFT5: T+ PO;'+% 0/-%&?+, &,+% 0' - )0 + )%+8&/8, 0/-80&(0** -' )%+8&/8 /+ 0+,. T+ )%+8&/8 &, ,&8)* %0',+%%+ %-8 + 0' - + &',/%+% ;- 0' )0)+% (+(. T+ PO;'+% %+(+&<+, 0 '-&&(0&-'
-'* - +0( ,/( %0',0(&-' -' &,+% 0' ,0+8+'.
Pa-ro'' De"uc#ion:
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 51 - 113
I' &, )0%&(/*0% (0,+ + (--)+%0&-' - + PO;'+%>, +8)*-+% &, '+++. T+ +8)*-+% +/(, &',/%0'(+ )%+8&/8 &%+(* %-8 + +8)*-++>, )0(+(.
A"*an#aes o( Au#oma#ic Premium Pa-men# &e#$o"s:
1. 2. 3.
4.
R+/(+ &',/%+%>, 08&'&,%0&<+ +)+',+, -% )-*&(&+, ;& 8-'*B/0%+%* )%+8&/8 )08+', 8-+. R+/(+ + &',0'(+, &' ;&( + PO;'+%, -%+ - )0 %+'+;0* )%+8&/8,. A, 0 (-',+B/+'(+ 8-, &',/%+%, %+ /(+ + +%0 (0%+, 0 ;- /* -+%;&,+ + 0+ -% ,+8&0''/0*B/0%+%*8-'* )%+8&/8 )08+' 8-+. S-8+ &', /%+%, -+% B/0%+%*8-'* )%+8&/8 )08+' 8-+, -'* - % -,+ PO;'+%, ;- 0<+ ,+*+(+ 0' 0/-80&( )08+' +('&B/+.
No#e: T+ ,0*+, 0+', 0%+ 0/-%&?+ - 0((+) -'* + &'&&0* )%+8&/8. S- %/ +8 + )-*&( -;'+% (0''- )0 &,+% %+'+;0* )%+8&/8. E.cep#ion: H-8+ ,+%<&(+ 0+', 0%+ 0/-%&?+ - 0((+) %+'+;0* )%+8&/8.
POLIC0 DIVIDEND OPTIONS: Po'ic- Di*i"en": T&, &, + &',/%+%>, &<&,&*+ ,/%)*/, 0 &, ,0%+ 08-' + PO;'+%, 0<&' + )0%&(&)0&' )-*&(&+,. +enera' Terms ? Con"i#ions: 1 T+ )-*&( 8/, + 0 )0% &(&)0&' -'+.
2 T+ )-*&( &, ,/))-,+ + &' -%(+ -% 0 *-' )+%&- - &8+. 3 T+ &<&+' &, )00*+ -' + )-*&(>, 0''&<+%,0% 0+. 4 T+ )-*&( 8/, 8+ &' -%(+ -% 0 (+%0&' +'+%0** 2 +0%, 80 <0% %-8 -'+ &',/%+% - 0'-+% )+%&- - &8+ +-%+ + )-*&( &, +*&&*+ -% + &<&+'. 5 T+ 08-/' )00*+ 0, )-*&( &<&+' &, ++%8&'+ 0''/0** + Boar" o( Direc#ors - + I',/%0'(+ C-. !0 -+, + &<&+' 08-/' %+*+(@ 1 T+ &',/%+%>, 0(/0* 8-%0*& &'+%+, 0' +)+',+, /%&' 0 +0%. 2 T+ )*0' - &',/%0'(+. 3 T+ )-*&(>, )%+8&/8 08-/'. 4 T+ *+' - &8+ + )-*&( 0, ++' &' -%( +. G+'+%0** + &<&+' 08-/' &'(%+0,+ ,/,0'&0** ;& + 0+ - + )-*&( !0 &, 8+0' D&<&+' O)&-',@ D&<&+' -)&-', %++% - 0 '/8+% - &+%+' ;0, &' ;&( + PO;'+%, - )0%&(&)0&' )-*&( T+%+ 0%+ &<+LIP, ,/(%+(+&<+ -)&-',. T+ &<&+',. PO;'+% (0' ,+*+( 0' - +,+ &<+ -)&-', 0 + &8+ - 0))*&(0&-' 0 (0' + (0'+ 0' &8+. C+%0&' %+,%&(&-', 0%+ 0))*&+ -% A""i#iona' Term Insurance Op#ion)
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 52 - 113
T+ F&<+ O)&-', 0%+: 1 Cas$ Di*i"en" Op#ion: T+ &',/%+% ,+', + PO;'+% 0 (+( &' + 08-/' - + )-*&( &<&+' 0 ;0, +(*0%+. F-% ,-8+ )-*&(&+, & + (+( &, '- (0,+ ;&&' 0 ,0+ )+%&- +' + &',/%+% ;&** 0))* + 08-/' - + &<&+' /'+% 0'-+% -)&-'.
2 Premium Re"uc#ion Di*i" en" Op#ion: T+ &',/%+% 0))*&+, + )-*&( &<&+', -;0%, + )08+' - + %+'+;0* )%+8&/8,. T+ &',/%+% '-&&+, + PO;'+% - + 08-/' - + )-*&( &<&+' 0' &**, -% + &+ %+'(+ & 0' +;++' + )%+8&/8 08-/' + 08-/' - + )-*&( &<&+'.
3 Accumu'a#ion a# In#eres# Di*i"en" Op#ion: T+ &<&+', 0%+ *+ -' +)-,& ;& + &',/%+% - 0((/8/*0+ 0 &'+%+,. A**-;, + PO;'+% - ;&%0; 0 )0%0** - +,+ &<&+', + 0((/8/*0+ &'+%+, 0 0' &8+ /%&' + *&+ - + )-*&(. I + PO;'+% ,/%%+'+%, + )-*&( + &, +*&&*+ - + + 0((/8/*0+ <0*/+ - + )-*&( &<&+', 0*-' ;& + ,/%%+'+% <0*/+ - + )-*&(. I' (0,+ + &',/%+ &+, & -+, - + '08+ +'+&(&0%.
4 Pai"2up A""i#iona' Insuran ce Di*i"en" Op#ion: T+ &',/%+% /,+, 0' +(*0%+ PD&<&+' 0, 0 '+ ,&'*+ )%+8&/8 - )/%(0,+ P0&/) A&&-'0* I',/%0'(+ -' + &',/%+>, *&+ 0' &, &, &,,/+ -' + ,08+ )*0' 0, + 0,&( )-*&( 0' &' ;0+<+% 0(+ 08-/' + &<&+' (0' )%-<&+ 0 + &',/%+>, 00&'+ 0+.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 53 - 113
A"*an#aes o( #$is op#ion: A T+ )%+8&/8 (0%+ -+, '- &'(*/+ + 08-/' - (-<+% +)+',+,. S- + (-, &, *+,,+% 0' 0 '+; LIP. # D-+, '- %+B/&%+ +,0*&,&' + &',/%0*+ &'+%+,. C I + 0,&( )-*&( &, -'+ 0 /&*, (0, <0*/+ +' + )0&/) 0&&-', )/%(0,+ ;& )-*&( &<&+', ;&** 0*,- /&* (0, <0*/+ 0' + PO;'+% 0, + %& - ,/%%+'+% -,+ 0&&-', -% +&% (0, <0*/+ 0 0' &8+ ;&*+ + )-*&( &, &' -%(+. D T-/ + 0(+ 08-/' - )0&/) 0&&-', )/%(0,+ +0( +0% &, %+*0&<+* ,80** -<+% + *&+ - + )-*&( + -0* 0&&-'0* &',/%0'(+ 0<0&*0*+ (0' + ,/,0'&0*.
5 A""i#iona' Term Insurance Di*i"en" Op#ion: T+ &',/%+% /,+, +0( )-*&( &<&+' '+ &, ,&' *+ )%+8&/8 )/%(0,+ &',/%+>, 0, *&+.0T&, -+' (0**+ + (ift$ )ption!-'++0% 'erm Insur ance -' + Res#ric#ions app'ie" #o #$e Fi(#$ Op#ion: A T+ 80 08-/' - 1+0% +%8 &',/%0'(+. T0 (-/* + )/%(0,+ +0( +0% &, -+' *&8&+ - + 08-/' - + )-*&(>, (0, <0*/+. # D-+, %+B/&%+ +,0*&,&' + &',/%0*+ &'+%+, &' (0,+ + PO; '+% ;&,+, - (0'+ %-8 0'-+% &<&+' -)&-' - &, -'+. No#e: I + 0''/0* )-*&( &<&+' &, *0%+% 0' + )%+8&/8 %+B. -% + 1+0% +%8 &',. + &',/%+% ;&** 0))* + %+80&'&' /'+% 0' - + -+% -)&-',.
SETTLE&ENT OPTIONS:
T&, (-8+, &'- + )&(/%+ & LIP ;+' &>, + &8+ -% + &',/%+% - )0 + )%-(++, + +'+&(&0%&+, 0+% + &',/%+ &+,. N-%80** &',/%+% )0, 0 */8) ,/8 &%+(* - + +'+&(&0% &' + -%8 - 0 (+(. A)0% %-8 */8),/8 ,+*+8+', - )-*&( )%-(++, I',. C-,. )%-<&+ ,+<+%0* 0*+%'0&<+ 8+-, - %+(+&<&' + )%-(++, - 0 LIP. T+,+ 0*+%'0&<+ 8+-, 0%+ (0**+ Settlement )ptions! $a# is Se##'emen# Areemen#J !+' + PO;'+% ,+*+(, 0' -)&-'0* 8-+ ,+*+8+' 8-+ 0 0' &8+ ;&*+ + )-*&( &, &' -%(+ 0 (-'%0(/0* 0%++8+' (0**+ Se##'emen# Areemen# &, -'+. T&, 0%++8+' -<+%', + %&, + -*&0&-', - + )0%&+, 0+% + &',/%+>, +0.
T+ PO;'+% 0, + %& - ,+*+( 0' ,/( -)&-' ,& - ,-8+ -+% -)&-' 0' ,+*+( 0' - + settlement modes. T;- )+, - Settlement *ode 0%+ 0<0&*0*+. A Irre*oca'e: T+ +'+&(&0% &, '- 0**-;+ ,& - 0' -+% ,+*+8+' -)&-' -'(+ + )%-(++, +(-8+ )00*+. # Re*oca'e: I '- &%%+<-(0*+. De(au'# is re*oca'e & + ,+*+8+' 8-+ &, '- ,)+(&&+ 0 + &8+ - 0))*&(0&-'.
!0 &, S/))*+8+'0% C-'%0(@ T&, &, 0 ,+*+8+' 0%++8+' +;++' + I',. C-. + +'+&(&0% ;+' + *0+% ,+*+(, 0 ,+*+8+' 8-+ 0, + &',/%+ & '-.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 54 - 113
!- &, 0 P0++@ T+ )+%,-')0% ;- &, ,/))-,+ - %+(+&<+ + )%-(++, 0, )+% + +%8, - 0 ,+*+8+' 0%++8+' &, %++%%+ - 0, + Payee! !- &, 0 C-'&'+' P0++@ A Con#inen# pa-ee = Successor pa-ee &, -'+ ;- ;&** %+(+&<+ 0' )%-(++, ,&** )00*+ 0 + &8+ - + )0++>, +0. $a# are #$e common se##'emen# op#ionsJ F-/% -)&-', 0%+ '-%80** 0<0&*0*+. 1 I'+%+, O)&-' 2 F&+P+%&- O)&-'
3 O)&-' 4 F&+A8-/' L&+ I'(-8+ O)&-'
In#eres# Op#ion: U'+% &, + &',/%+% &'<+,, + )-*&( )%-(++, 0' )+%&-&(0** )0, + &'+%+, -' -,+ )%-(++, - + )0++. I /0%0'++, 0 *+0, 0 ,)+(&&+ 8&'&8/8 &'+%+, %0+.
Fi.e"2Perio" Op#ion: U'+% &, + &',/%+% 0%++, - )0 + )-*&( )%-(++, &' &',0**8+', - +B/0* 08-/', - + )0++ -% 0 ,)+(&&+ )+%&- - &8+. E0( )08+' ;&** (-',&, )0%* - + )-*&( )%-(++, )0%* - + &'+%+, +0%'+ -' + )%-(++,. H+%+ 0*,- 0 *+0, 0 ,)+(&&+ 8&'&8/8 &'+%+, %0+ &, /0%0'++.
Fi.e"2Amoun# Op#ion: U'+% &, + &',/%+% )0, +B/0* &',0**8+', - 0 ,0+ 08-/' /'&* + )-*&( )%-(++, &'+%+, +0%'+ 0%+ +0/,+. H+%+ 0*,- 0 *+0, 0 ,)+(&&+ 8&'&8/8 &'+%+, %0+ &, /0%0'++.
Li(e Income Op#ion: U'+% &, + &',/%+% 0%++, - )0 + )-*&( )%-(++, &' )+%&-&( &',0**8+', -<+% + )0++>, *&+&8+. H+%+ 0,&(0** + I',. C-. 0%++, - /,+ + )-*&( )%-(++, 0, + '+ ,&'*+ )%+8&/8 - )/%(0,+ 0 'i(e annui#- -% + +'+&(&0%.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 55 - 113
$a# is a Li(e Annui#-J Li(e annui#- &, 0' 0''/& 0 )%-<&+, )+%&-&( +'+&, -% 0 *+0, + *&+&8+ - 0 '08+ &'&<&/0*. T+ +'+&(&0% - 0 L&+ I'(-8+ O)&-' (0' (--,+ -'+ 08-' - + ,+<+%0* )+, - 0''/&&+, 0' 0,+ /)-' + )+ - + 0''/& +%+ 0%+ + -**-;&' )+, - L&+ I'(-8+ O)&-': Straig$t Life Income )ption + T+ )-*&( )%-(++, 0%+ /,+ - )/%(0,+ 0 straight life annuity. I /0%0'++, 0 + )+%&-&( +'+&, ;&** + 80+ %-/-/ + *&+&8+ - + 0''/&0'. Life Income #it$ Period Certain )ption -- T+ )-*&( )%-(++, 0%+ /,+
- )/%(0,+ 0 life income annuity with period certain. I /0%0'++, 0 + )+%&-&( +'+&, ;&** + 80+ %-/-/ + *&+&8+ - + 0''/&0' 0, ;+** 0, /0%0'++, 0 + )08+', ;&** + 80+ -% 0 *+0, 0 (+%0&' )+%&- +<+' 0+% + 0''/&0' &+, +-%+ + +' - 0 )+%&-. Refund Life Income )ption -- T+ )-*&( )%-(++, 0%+ /,+ - )/%(0,+ 0
life income with refund annuit y. I )%-<&+, + )+%&-&( +'+&, ;&** + 80+ %-/-/ + *&+&8+ - + 0''/&0' 0, ;+** 0, /0%0'++, 0 0 *+0, + )/%(0,+ )%&(+ - + 0''/& ;&** + )0& &' +'+&,. ,oint Suriors$ip Life Income )ption -- T+ )-*&( )%-(++, 0%+
/,+ - )/% (0,+ 0 joint & survivor annuity. I )%-<&+, 0 ,+%&+, - )08+', - ;- -% 8-%+ &'&<&/0*, -,+ )08+', ;&** (-'&'/+ /'&* - -% 0** + &'&<&/0*, &+.
TRANSFER OF POLIC0 ONERSHIP:
I + -;'+% - 0 *&+ &',/%0'(+ )-*&( 0, + (-'%0(/0* (0)0(& +' ,+ 0, + %& - %0',+% -;'+%,&) - ,-8+ -% 0** - +% %&, &' + )-*&(. F-**-;&' 0%+ + ;- ;0, - %0',+%%&' -;'+%,&): 'ransfer of o#ners$ip "y Assignment. - A' assinmen# &, 0' 0%++8+' /'+% • ;&( -'+ )0% %0',+%, ,-8+ -% 0** - &, %&, &' 0 )0%&(/*0% )%-)+% 0'-+% )0%. T+ )%-)+% -;'+% ;- %0',+%, + %& &, '-;' 0, assinorK + )0% - ;-8 + %&, 0%+ %0',+%%+ &, '-;' 0, assinee) T+ %+,%&(&-', - 0,,&'8+' 0%+: 1 T+ 0,,&'-% ,-/* 0<+ + (-'%0(/0* (0)0(&. 2 I' (0,+ - 0' &%%+<-(0*+ +'+&(&0% -% -% 0 +'+&(&0% - + )%++%%+ (*0,, &' C0'00 + 0,,&'8+' (0' -'* + -'+ ;& + (-',+' - + +'+&(&0%. #+(0/,+ + %& - 0,,&' 0' )%-)+% &, %0'+ *0; &',/%+%, 0%+ '- %+B/&%+ - &<+ + )-*&( -;'+% '-&(+ - &, %&, - 0,,&' 0 *&+ &',/%0'(+ )-*&(. M-, *&+ &',/%0'(+ )-*&(&+, -;+<+% - '- &'(*/+ 0,,&'8+' )%-<&,&-',. T+ assinmen# pro*ision +,(%&+, + %-*+, - + &',/%+% 0' + )-*&(-;'+% %-*+, /%&' 0' 0,,&'8+'. T+ &',/%0'(+ (-8)0' &, '- -*&+ 0( &' 0((-%0'(+ - + )%-<&,&-' /'*+,, & %+(+&<+, 0 ;%&+' -(/8+'. I +'+%0** )%-<&+ + 0,,&'++. A, + &',/%0'(+ (-8)0' &, '- *&0*+ -% + <0*&& - 0' 0,,&'8+' & (-',&+%, 0' 0,,&'8+' - + <0*& ;+'+<+% & %+(+&<+, 0 ;%&+' -(/8+'. H-;+<+% + &',/%+% 8& (+( + <0*&& ;+%+ & 0, + )%+'-;*++ 0-/ + (-'%0(/0* &'0&*& - + )-*&(-;'+%. T-pes o( assinmen#: 2 1. Aso'u#e assinmen# &, + -'+ ;+%+ (-8)*++ %0',+% - %&, -((/%,. T/, + 0,,&'-% '- *-'+% 0, 0' %& 0' + 0,,&'++ +(-8+, + )-*&( -;'+%. T+ %0',+% (0' + 0, 0 & ;+%+ +%+ &, '- +(0'+ -
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 56 - 113
8-'+ -% 0, 0 ,0*+ - + )-*&( ;+%+ 0' +B/&<0*+' 08-/' - 8-'+ &, +(0'+. 2. Co''a#era' assinmen# - 0 *&+ &',/%0'(+ )-*&( &, 0 +8)-%0% 0,,&'8+' - + 8-'+0% <0*/+ - 0 *&+ &',/%0'(+ )-*&( 0, (-**0+%0* ,+(/%& = -% 0 *-0'. T&, )+ - 0,,&'8+' &+%, %-8 + )%+<&-/, -'+ 0, a5 + (-**0+%0* 0,,&'++>, %&, 0%+ *&8&+ - -,+ -;'+%,&) %&, 0 &%+(* (-'(+%' + 8-'+0% <0*/+ - + )-*&( 0, -% +08)*+ + %&, - ,+*+( + +'+&(&0% -% + )-*&( &<&+' -)&-' %+80&', ;& + 0,,&'-% / + 0,,&'-% (0' '- 0+ 0' )-*&( *-0' -% ,/%%+'+% + )-*&( 0, +,+ +(&,&-' 0%+ %+*0+ - + 8-'+0% <0*/+ - + )-*&(. 5 + (-**0+%0* 0,,&'++ 0, 0 <+,+ %& - 0 )-*&(>, 8-'+0% <0*/+, / + %&, 0%+ *&8&+ +(0/,+ - &, + 0,,&'-% 0, %& -<+% + 08-/' &'++'+,,. T/, ;+' + )-*&( )%-(++, ;&** + )0& + -'* + - 08-/' 0 + 0,,&'-% -;+, ;&** + )0& - + 0,,&'++. c5 + (-**0+%0* 0,,&'++>, %& - + )-*&( <0*/+, 0%+ +8)-%0%. I + 0,,&'-% )0, 0( + 0,,&'-% +' + 0,,&'8+' +%8&'0+,. O'(+ + *-0' &, %+)0& + 0,,& '-% ,+(/%+, 0 %+*+0,+ %-8 + 0,,& '++ 0' -%;0%, & - + &',/%0'(+ (-8)0' - (0'(+* + 0,,&'8+'. Pro'ems resu'#in (rom assinmen#: 2 T+ 8-, (-88-' )%-*+8 0%&,+, ;+' + 0,,&'8+' &, '- '-&&+ - + &',/%0'(+ (-8)0' %-/ 0 ;%&+' -(/8+'. I + &',/%+% ;0, '- '-&&+ - + 0,,&'8+' +-%+ & )0& + )-*&( +'+&, +' & 0, '- *&0&*& - )0 + )%-(++, 00&' - + 0,,&'++. •
'ransfer of )#ners$ip "y /ndorsement. - M0' *&+ &',/%0'(+ (-8)0'&+, &' U'&+ S0+, ,)+(& en"orsemen# me#$o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
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 57 - 113
CHAPTER 1;: PA0IN+ LIFE INSURANCE POLIC0 PROCEEDS) I' &, (0)+% ;+ ,0** &,(/, + %-/& '+ )%-(+,, -**-;+ + L&+ I',/%0'(+ C-8)0'&+, - )%-(+,, + *&+ &',/%0'(+ (*0&8,. T+ (*0&8 +08&'0&-' )%-(+,, +&', ;+' + (*0&80' - )-*&( )%-(++, '-&&+, + &',/%0'(+ (-8)0' 0 + &',/%+ 0, &+. T)&(0** + )+%,-' ;- (*0&8, -% + )-*&( )%-(++ &, + primary "eneficiary!
U)-' +&' '-&&+ - + &',/%+ +0 + &',/%0'(+ (-8)0' )&(0** )%-<&+, + (*0&80' ;& 0 c'aim (orm -' ;&( + (*0&80' )%-<&+, + &',/%+% + &'-%80&-' + &',/%+% '++, - +&' )%-(+,,&' + (*0&8. I' U'&+ S0+, & &, 80'0-% - )%-<&+ (*0&8 -%8 ;&&' 15 0, %-8 + 0 - %+B/&,&&-' / &' C0'00 +%+ &, '- ,/( 0% 0' 0, %/*+. Proo( o( Loss)
A*-' ;& + (*0&8 -%8 + (*0&80' 8/, 0*,- )%-<&+ + )%-- -% + +0 - + &',/%+. I' U'&+ S0+, +'+%0** + -&(&0* "ea#$ cer#i(ica#e &, )%-/(+ / &' C0'00 8-, &',/%0'(+ (-8)0' ;&** 0((+) -&(&0* +0 (+%&&(0+ 0' A##en"in P$-sician S#a#emen# 3APS56 a coroner9s cer#i(ica#e o( "ea#$) C'aim E.amina#ion Process)
T+ &',/%0'(+ (-8)0' +8)*-++ ;- &, %+,)-',&*+ -% (0%%&' -/ + (*0&8 +08&'0&-' )%-(+,, &, +'+%0** '-;' 0, c'aim e.aminer) T+ -**-;&' &', 0%+ ++%8&'+: S#a#us o( Po'ic -: 2 T+ (*0&8 +08&'+% 8/, (+( ;++% + )-*&( ;0, &' -%(+ ;+' + &',/%+ &+. I"en#i(ica#ion o( #$e insure": 2 T+ (*0&8 +08&'+% +08&'+, + &+'& )%-- )%+,+' &' + C*0&8 %-8 0' + P%-- - *-,, -%8 ;& + &'-%80&-' )%-<&+ &' + (-8)0'>, )-*&( %+(-%,. A (*0&8 &, (-',&+%+ 0, fraudulent claim ;+' + (*0&80 ' &'+'&-'0** 0+8), - (-**+( )-*&( )%-(++, )%-<&&' 0*,+ &'-%80& -'. A (*0&8 &, (-',&+%+ 0, 0 mista%en claim ;+' + (*0&80' 80+, 0' -'+, 8&,0+ ;&*+ 80&' 0 (*0&8. Veri(ica#ion o( Po'ic- Co*erae: 2 T+ +08&'+% 8/, %+<&+; + +%8, - &',/%0'(+ - ++%8&'+ ;0 )+ - (-<+%0+ & )%-<&+,. P-*&(&+, 0 (-'0&' +(*/,&-' (%&+%&0 )%-<&+ 0 & + &',/%+% &+, & + &',/%+% &+, /+ - +(*/+ (0/,+, +' + &',/%+% &, '- *&0*+ - )0 + )%-(++,. I"en#i(-in #$e Proper Pa-ee: 2 O'(+ + <0*&0&-' - + (*0&8 0, ++' -'+ + +08&'+% '-; '++, - &+'& + %&/* -;'+% - + +'+&,. T+ +08&'+% +'+%0** -**-;, + -**-;&' *-; (0%. T+%+ 0%+ 3 ,&/0&-', 0 %+B/&%+ /%+% &'<+,&0&-' + (*0&8 +08&'+% (-88-' &,0,+%, ,-%+%8 ,/%<&<-%,&) 0' (-'*&(&' (*0&80',. S-8+&8+, - + &',/%+ 0' + )%&80% +'+&(&0% &+ /+ - 0 common "isas#er. I' &, (0,+ + +'+%0* *0; - U'&+, S0+, 0' C0'00 ,0+, 0 I + &',/%+ 0' + +'+&(&0% &+ 0 + ,08+ &8+ -% /'+% (&%(/8,0'(+, 0 80+ &8)-,,&*+ - ++%8&'+ ;&( - +8 &+ &%, +' )-*&( )%-(++, 0%+ )00*+ 0, & + &',/%+ ,/%<&<+ + +'+&(&0%. I + +'+&(&0% ,/%<&<+ + &',/%+ / &+ +-%+ + &',/%+% )0& + )%-(++, +' & +(-8+, )00*+ - +'+&(&0%>, +,0+. T+ )-*&(-;'+% -;+<+% 80 )%++% 0 + )%-(++, + )0 - ,-8+-'+ -+% 0' + +'+&(&0%>, +&%, & + +'+&(&0% ,/%<&<+, + &',/%+. S-8+ &',/%0'(+ (-8)0' &'(*/+, common disaster clause or time clause 0((-%&' &, + +'+&(&0% 8/, ,/%<&<+ + &',/%+ )-*&( 0 ,)+(&&+ 0,;&** ,/( 3" -%0,6"& 0,. I +-+'+&(&0% -+, '- ,/%<&<+ 0 )+%&- +' + )%-(++, +0,&<+' 0 + +'+&(&0% +(+0,+ + &',/%+.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 5 - 113
P%-(++, P00*+ )-*&( -;'+% & *&<&'
A))%-<+ P0 C*0&8,.
NO NO P%&80% #+'+&(&0% @
YES
NO
L&<& '@ YES P0 + P%&80%
C-'&'+' #+'+&(&0% @ YES NO L&<& '@ YES
O+% C-'&'+ ' #+'+&(&0 %@
P0 + C-'&'+'
I' 8-, (0,+, + )%&80% +' +&(&0% 80+, + (*0&8. I' US &' (0,+ - con('ic#in c'aims + &',/%0'(+ (-8)0' (0' 0+ + +*) - 0' in#erp'ea"er. I'+%)*+0+% &, 0 )%-(+/%+ /'+% ;&( 0' &',/%0'(+ (-8)0' 0 (0''- ++%8&'+ + )%-)+% (*0&80' 80 - - + (-/% &' -%+% - ,++ 0<&(+ -% +(&,&-'. T+ (-/% 80 -* + )-*&( )%-(++, 0' ;-/* %+*+0,+ + &',/%+% %-8 0' /%+% *&0&*&. T+ (-/% ;-/* +' /+ + %&/* -;'+%. I' C0'00 -% (-88-' *0; ,,+8 + &',/%+% )0, - + (-/% 0' +' + (-/% /+, + )%-)+% %+(&)&+'. T&, &, '-;' 0, pa-men# in#o cour#) I' /++( 0' &',/%0'(+ (-8)0' 80 - + M&'&,+% - &'0'(+. T+ M&'&,+% -*, + )%-(++, /'&* + (-/% ,+*+, + %&/* %+(&)&+'. De#erminin #$e Amoun# o( #$e Dea#$ Bene(i#: 2 T- (0*(/*0+ + )-*&( )%-(++, + +08&'+% ;&** 0 (+%0&' &', 0' ;-/* +/( -+% &',. T+ +08&'+% &%, 0, + -**-;&' &+8,: T+ 08-/' - 0' asic "ea#$ ene(i#s )00*+ I' 8-, (0,+, &, &, +B/0* • - + 0(+ 08-/'. I + )-*&( ;0, &' -%(+ /'+% + %+/(+ )0&/) &',/%0'(+ '-'-%+&/%+ -)&-' +' + 0,&( +0 +'+& 80 + %+/(+ 0*,- & + &',/%+ ,+ ;0, 8&,,0+. T+ acci"en#a' ene(i#s )00*+. • T+ accumu'a#e" po'ic- "i*i"en"s &'(*/&' &'+%+,,. • T+ 0(+ 08-/' - 0' pai"2up a""i#ions) • T+ 08-/' - 0' unearne" premiums pai" in a"*ance. • A+% 0&' +,+ + +08&'+% +/(, + -**-;&' &', - ++%8&'+ + &'0* )%-(++, )00*+. T+ 08-/' - 0' ou#s#an"in po'ic- 'oans) • T+ 08-/' - 0' premium "ue an" unpai") T&, &+8 0))+0%, & + • &',/%+ &+ /%&' + )-*&( %0(+ )+%&- +-%+ + )%+8&/8 0, ++' )0&.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 59 - 113
Pa-men# o( Po'ic- Procee"s)
T+ &',/%0'(+ (-8)0' %+B/&%+, + %+(&)&+' - *&+ &',/%0'(+ )-*&( )%-(++, - ,&' 0 ;%&+' -(/8+' '-;' 0, re'ease) # ,&'&' &, -(/8+' + (*0&80' ,0+, 0 + 0, %+(+&<+ /** )08+' - &, (*0&8 - + )%-(++, - 0 *&+ &',/%0'(+ )-*&( 0' 0 + %+*+0,+, + (-8)0' %-8 0** ,-% - (*0&8,. I' -%+% -% ,/( 0 %+*+0,+ -%8 - + <0*& 0' &'&' -' + (*0&80' + 8/, 0<+ + *+0* (0)0(& %+B/&%+ - )%-<&+ + %+*+0,+. C*0&80', ;- 0%+ 8&'-%, -% -+, '- 0<+ ,-/' 8+'0* (0)0(& - '- 0<+ + (0)0(& - )%-<&+ 0 %+*+0,+. O'+ ;0 &' ;&( + &',/%0'(+ (-8)0' (0' -0&' 0 <0*& %+*+0,+ ;+' + +'+&(&0% -+, '- 0<+ + *+0* (0)0(& &, )0&' + )%-(++, - 0 court-appointed guardian. T+ +)+',+, -% 0))-&'&' 0 /0%&0' + (-/% 0%+ -%'+ + (*0&80'. I' ,-8+ ,&/0&-', ;+%+ )-*&( )%-(++, 0%+ )00*+ - 0 8&'-% 0' &',/%0'(+ (-8)0' 80 -* + )%-(++, 0 0' &'+%+, - 0 //%+ 0+. T&, +'+%0** 0 ;+' + 8&'-%(-8)0'. %+0(+, 80-%& -% + (-/% 0))-&', 0 /0%&0' ;(0'&,&<+ 0 <0*& + %+*+0,+ + &',/%0'(+
Specia' C'aim Si#ua#ions)
T+%+ 0%+ )-*&(&+, 0 80 (-'0&' +(*/,&-' (%&+%&0. T+ (*0&8 +08&'+% 80 )0, 0+'&-' - +0 (*0&8, ;+%+ + )-*&( &, (-'+,0*+ + )-*&( )%-<&+, 0((&+'0* +'+&, + &',/%+ &,0))+0%+ -% + +'+&(&0% &, %+,)-',&*+ -% &',/%+ +0. Po'ic- Con#es#: 2 I 0' )-*&( (-'0&', 8&,&'+%)%+0&-' +' + &',/%+% 0, + %& - 0<-& + (-'%0( /%&' + )-*&(>, contest period 0#$ic$ is usually 1 years from t$e date #$en t$e policy "ecomes effectie2 . I',/%+%, &' C0'00 0<+ + %& - (0'(+*&' + (-'%0( 0 8-8+' - &8+ 0,+ -' %0/ (-'%0(,. I + (*0&8 +08&'+% 0, +'-/ %-/' )%-<+ + (0%+ - 80+%&0* 8&,&'+%)%+0&-' +' + &',/%0'(+ (-8)0' 80 (0'(+* + (-'%0( 0' 80 %+/' + )%+8&/8, )0& -% + )-*&(. T)&(0** + (*0&8 +)0%8+' (-',/*, + *+0* +)0%8+' - + (-8)0' +-%+ (-'+,&' 0 )-*&( -' + %-/' - material misinterpretation! Acci"en#a' Dea#$ Bene(i# C'aim: 2 !+' 0 (*0&8 -% 0((&+'0* +0 +'+& (-8+, - 0' &',/%+% + (*0&8 +08&'+% ;&** ++%8&'+ ;++% + (*0&8 0**, /'+% )-*&(>, +&'&&-' - Jacci"en#a'. I' -%+% - <0*&0+ + +08&'+% 80 0, -% + -**-;&': 1. P%-- - *-,,. /. APS. ;. A/-), %+)-%. T+ +08&'+% 80 +80' + 0-< + -(/8+', &' (0,+ ;+%+: a /'/,/0* (&%(/8,0'(+, ,/%%-/', + +0 - + &',/%+ 5 + )-*&( )%-<&+, 0((&+'0* +'+& c5 + &',/%+ &+, ;&&' + (-'+, )+%&- - + )-*&(. Disappearance o( #$e Insure": 2 !+' 0 (*0&8 0))+0%, 00&', + &,0))+0%0'(+ - + &',/%+ + (*0&80' -+, '- 0<+ +'-/ )%-- - ,/))-% &, (*0&8. I' &, ,&/0&-' + &',/%0'(+ (-8)0' (0''- )0 + )%-(++,. T+ (*0&80' 0, + %& - - - + (-/% - +(*0%+ + &',/%+ 0, +0. I + &',/%+ &,0))+0%+ /'+% (&%(/8,0'(+, 0 80+ & *&+* + &, +0 +' + (-/% 80 + ;&**&' - &' 0 + &',/%+ &, +0. I + &',/%+ &,0))+0%+ ;&-/ +)*0'0&-' (-/%, )&(0** ;&** &' 0 + &',/%+ &, +0 -% )%+,/8+ + +0 -'* & 1 + &',/%+ 0, ++' 8&,,&' -% (+%0&' )+%&- - &8+ )&(0** seen years 2 0 &*&+' / /',/((+,,/* ,+0%( 0, ++' -'+ -% + &',/%+ 3 '- -'+ 0, 0 (-88/'&(0&-' ;& + &',/%+ ,&'(+ + &,0))+0%+. U)-' %+(+&<&' + (-/% -%+% + &',/%0'(+ (-8)0' 80 )0 + )%-(++, - + (*0&80' & + )-*&( &, &' -%(+ - + )%+,/8+ +0 - + &',/%+. T/, ;+' 0' &',/%+ &,0))+0%, + +'+&(&0% + )-*&( -;'+% -% 0' -+% &'+%+,+ )0% ;&** 0<+ - )0 + /+ %+'+;0* )%+8&/8, 0 ;&** + /+ - ++) + )-*&( &' -%(+. I' 0' (0,+ ;+%+ + )-*&( *0),+, +-%+ + (-/% &,,/+, + -%+% +' + &',/%+% ;&** 0<+ '- *&0&*&.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 6" - 113
Bene(iciar- ron(u''-
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 61 - 113
CHAPTER 1>: PRINCIPLES OF +ROUP INSURANCE POLIC0
G%-/) &',/%0'(+ )-*&( (-<+%, 0 '/8+% - )+-)*+ %0+% 0' 0' &'&<&/0* -% -'+ 08&*. T+ G%-/) &',/%0'(+ )-*&( (-'%0( &, (0**+ J &as#er +roup Insurance Con#rac#. T+ (-'%0( &, +;++' + &',/%0'(+ (-8)0' +roup Insurer 0' + +roup Po'ic-$o'"er. T+ %-*+ - G%-/) P-*&(-*+% &, 0*8-, ,08+ 0, 0 - 0 P-*&(-;'+% - 0' &'&<&/0* &',/%0'(+ )-*&(. #/ +%+ + P-*&(-;'+% 0, ,-8+ -;'+%,&) %&, ;&( G%-/) P-*&(-*+% -+,'> 0<+ *&+ '08&' + +'+&(&0%. T+ &',/%+ )+-)*+ /'+% + G%-/) &',/%0'(+ )-*&( &, (0**+ 0, +roup insure" &' US +roup 'i(e insure" &' C0'00 -% *&+ &',/%0' (+ 0' +roup person insure" &' C0'00 -% +0* &',/%0'(+. T+ G%-/) &',/%0'(+ )-*&( &, - ;- )+,: Non2con#riu#or- P'an: I' &, )*0' + &',/%+ %-/) 8+8+%, 0%+ '- %+B/&%+ • (-'%&/+ 0' )0% - + )%+8&/8. Con#riu#or- P'an: I' &, )*0' + &',/%+ %-/) 8+8+%, 0<+ - )0 ,-8+ -% 0** - • + )%+8&/8 )0%. Forma#ion o( #$e Con#rac#
T+,+ 0%+ + -/% %+B/&%+8+', -% 0 %-/) &',/%0'(+ (-'%0(. M//0** 0%++ - + (-'%0(>, +%8, #- )0%&+, 8/, 0<+ + (-'%0(/0* (0)0(& M/, +(0'+ *+0** 0+B/0+ (-',&+%0&-', M/, -%8 + (-'%0( -% 0 *0;/* )/%)-,+ T+ &%, %++ 0%+ ,08+ 0, 0 - 0' &'&<&/0* )-*&( (-'%0(. T+ *0, )-&' &, ,-8+;0 &+%+' +%+. I' (0,+ - 0' &'&<&/0* (-'%0( + )%+,+'(+ - &',/%0*+ &'+%+, 8/, + )%+,+' • • • •
-% &,. #/ &' (0,+ - 0 %-/) (-'%0( + )/%)-,+ - +'+& &, ,/&(&+' - <+%& + -/% )-&' '- '+(+,,0%&* + &',/%0*+ &'+%+,. T+ P-*&(-*+% &,%&/+, 0 ;%&+' -(/8+' Cer#i(ica#e o( Insurance - + %-/) &',/%+, 0 +,(%&+,: C-<+%0+ + (-'%0( )%-<&+, G%-/) &',/%+,> %&, /'+% + (-'%0( G%-/) I',/%+, 0%+ 0*,- (0**+ 0, Certificate holder. S-8+&8+, + (-<+%0+ + +'+&, 0' + %&, 0%+ 8+'&-'+ &' 0 --*+ (0**+ 0, S)+(&0* #+'+& --*+. • •
+roup Insurance Un"er,ri#in
S&'(+ %-/) &',/%0'(+ -+,'> %+B/&%+ + +<&+'(+ - &',/%0&*& ,- + /'+%;%&+% -(/,+, -' + (0%0(+%&,&(, - + %-/). T+,+ 0%+ + G%-/) U'+%;%&&' C-',&+%0&-',: •
Reason (or #$e roup9s e.is#ence: A, )+% + &',/%0'(+ *0;, &' + US +%+ 0%+ ,+<+' %-/), 0 0%+ +*&&*+ -% +&' 0 %-/) )-*&(. T+,+ 0%+ 1. Sin'e2Emp'o-er +roup: T+ )-*&(-*+% - 0 ,&'*++8)*-+% %-/) &',/%0'(+ (-'%0( &, +&+% + +8)*-+% -% + %/,++, - 0 %/, /' (%+0+ +
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 62 - 113
+8)*-+% 0' + +8)*- ++, 0%+ + &',/%+ %-/) 8+8+%,. A #rus# &, 0 &/(&0% %+*0&-',&) &' ;&( -'+ -% 8-%+ )+%,-', #rus#ees -* *+0* &*+ )%-)+% #rus# (un" -% + +'+& - 0'-+% )+%,-' #rus# ene(iciar-. A (i"uciar- &, 0 )+%,-' ;- -*, 0 )-,&&-' - ,)+(&0* %/,.
2. Laor Union +roup: T+ (-'%0( &, &,,/+ - 0 *0-% /'&-' - &',/%+ + 8+8+%, - + *0-% /'&-' . T+ ++%0* Ta(#2Har#'e- Ac# &' + US )%-&&, +8)*-+%, %-8 80&' )%+8&/8 (-'%&/&-', -' +0* - +8)*-++, ;+*-' - 0 *0-% /'&-' unless + (-'%0( &, &,,/+ - 0 %/, +,0*&,+ -% + )/%)-,+ - )/%(0,&' &',/%0'(+ -% /'&-' 8+8+%,. L0-% /'&-' %-/), 0%+ 0*,(0**+ 0, T0H0%*+ %/,++, -% '+-&0+ %/,++,&),.
3. &u'#ip'e2emp'o-er +roup: A %-/) &',/%0'(+ (-'%0( &',/%&' + +8)*-++, - 8-%+ 0' -'++8)*-+% 80*0-% + &,,/+ - -% 0 %/, 0 (%+0+ 0 ;8-%+ +8)*-+%, ;- -% 8-%+ /'&-', 3 -'+ -%&,8-%+ +8)*-+%, 0'-%-'+ -% 8-%+ *0-% /'&-',.
4. De#or2Cre"i#or +roup: T+,+ %-/), (-',&, )%&80%&* - )+%,-', ;- 0<+ -%%-;+ /', %-8 0 *+'&' &',&/&-' ,/( 0, 0 0'. T+ (%+&-% &, + )-*&(-*+%.
5. Cre"i# Union +roup: T&, %-/) (-',&,, - + 8+8+%, - -'+ -% 8-%+ (%+& /'&-',.
6. Associa#ion +roups: T+,+ 0,,-(&0&-', 0%+ -%8+ -% 0 )/%)-,+ -+% 0' -0&' &',/%0'(+. T+,+ 0%+ + 0,,-(&0&-', 0 0%+ +*&&*+ -% %-/) &',/%0'(+. a5 Tra"e Associa#ion: A' 0,,-(&0&-' - &%8, 0 -)+%0+ &' 0 ,)+(&&( &'/,% 5 Pro(essiona' Associa#ion: A' 0,,-(&0&-' - &'&<&/0*, ;- ,0%+ 0 (-88-' -((/)0&-'. E: M+&(0* D-(-%, E'&'++%, 0-%'+, c Emp'o-ee Associa#ion: A' 0,,-(&0&-' - &'&<&/0*, +8)*-+ c5 Pu'i 0 ,0+ (-/' -% (& -<+%'8+' -% 0 ,0+ -% *-(0* ,(--* -0% "5 Common In#eres# Associa#ion: A' 0,,-(&0&-' - &'&<&/0*, ;- ,0%+ 0 (-88-' ,0+ -% 0 (-88-' &'+%+,. E: %+&%+ )+%,-', 0*/8'& - 0 ,)+(&&( (-**++ )0%&(&)0', - 0 ,)+(&&( ,)-%
7. Discre#ionar- +roups: G%-/), 0 -+, '- & &' + 0-<+ %-/), / SID 0))%-<+, -% %-/) &',/%0'(+ (-<+%0+ &' (0**+ 0, D&,(%+&-'0% %-/). I' +<0*/0&' ;++% - 0))%-<+ ,/( 0 %-/) SID (-',&+% 0(-%, ,/( 0, ;++% &,,/&' + )-*&( &, &' + +, &'+%+, - + )/*&( 0' ;++% + )-*&( +'+&, 0%+ %+0,-'0*+ &' %+*0&-' - + )%+8&/8, 0 ;&** + (0%+ -% + (-<+%0+. E(+) E8)*-++E8)*-+% %-/) -+% %-/) )-*&(-*+%, /,/0** 0%+ '- %+B/&%+ - )0 0 )-%&-' - + %-/) &',/%0'(+ )%+8&/8. •
Si!e o( #$e roup: T+ ,&?+ - + %-/) 0, 0 ,%-' &8)0( -' + /'+%;%&+%>, 0&*&
- )%+&( %-/)>, 0)%-0*+ T+ *0%+%+ + %-/) + %-/) ;&** + +)+%&+'(+ *-,, %0+*-,, 0 %0+. 0))%-&80+, )%+&(+ *-,,8-%+ %0+. *&+* 0 + !+' + %-/) )-*&( ;0, &'%-/(+ 8&'&8/8 5" )+-)*+ ;+%+ %+B/&%+ &' + %-/) -% )-*&(&+,. #/ '-; 0, &',/%+%, 0%+ &,,/&' + %-/) )-*&(&+, -% 1" - 15 %-/) &',/%+,
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 63 - 113
0*,-. I' (0,+ - ,80** %-/), %-/) &',/%+%, 80 0, - ,/8& ,0&,0(-% +<&+'(+ - &',/%0&*& -% +0( %-/) &',/%+, ,+)0%0+*. •
F'o, o( ne, memer in #$e roup: Y-/' 0' '+; 8+8+%, 0%+ '+++ 1 - %+)*0(+ -,+ ;- *+0<+ + %-/) ,- 0 + ,&?+ ,0*+ 2 - ++) + 0+ &,%&/&-' - + %-/) ,0*+.
•
S#ai'i#- o( #$e roup: I + %-/) -+, '- %+80&' 0 %-/) -% 0 %+0,-'0*+ *+' - &8+ +' + 08&'&,%0&<+ (-, &' &,,/&' 0 )-*&( ;-/* +(-8+ &. E: 0 %-/) - +8)-%0% 0' ,+0,-'0* ;-%+%,
•
Par#icipa#ion 'e*e' o( #$e roup: I' + US 8-, ,0+ *0;, %+B/&%+ 0** +*&&*+
+8)*-++, - )0%&(&)0+ &' 0 '-'(-'%&/-% )*0' 31GG )0%&(&)0&-' *+<+*. #/ &' (0,+ - 0 (-'%&/-% )*0' + )0%&(&)0&-' *+<+* ,-/* + 0 8&'&8/8 - 75. #/ & <0%&+, %-8 ,0+ - ,0+ 0*,- +)+', /)-' + &',/%+%. T+ )%-<&'(&0* *0;, &' C0'00 - '- &8)-,+ 8&'&8/8 )0%&(&)0&-' %+B/&%+8+',. •
Bene(i# 'e*e's: T+ %-/) )-*&(-*+% ;-%, ;& + &',/%+% - +,0*&, + +0 +'+& *+<+*, )%-<&+ - + &',/%+, &' 0 0&% 80''+% - 0<-& 0'&,+*+(&-'. S-8+ %-/) )-*&(&+, 0**-; (-<+%+ %-/) 8+8+%, - ,+*+( 0&&-'0* (-<+%0+ %-8 0 ,(+/*+ - -)&-'0* (-<+%0+,. I' +,+ ,&/0&-', + %-/) &',/%+% 8&'&8&?+, + ++(, - 0'&,+*+(&-' 1 *&8&&' + -)&-'0* (-<+%0+, 0' 2 %+0&'&' + %& - %++( 0' &',/%+,> +*+(&-' - + -)&-'0* (-<+%0+ & + +'+& *+<+*, 0%+ & 0' + &',/%+, (0''- )%-<&+ ,0&,0(-% +<&+'(+ - &',/%0&*&.
•
Ac#i*i#ies o( #$e roup: A %-/) &, 0,,&'+ 0 %&, (*0,,&&(0&-' = S0'0% S/,0'0% -% +(*&'+ 0,+ -' + %-/)>, '-%80* 0(&<&&+,. E: 0 %-/) - (-0* 8&'+%, &, ,/ ,0'0%.
+roup Insurance Po'ic- Pro*isions •
E'iii'i#- Reuiremen#s: P-*&(&+, 0%+ )+%8&+ *0; - +&'+ +*&&*+ +8)*-++, %+*0+ - (-'&&-', - +8)*-8+' ,/( 0, ,0*0% -((/)0&-' -% *+' - +8)*-8+'. S-8+ %-/) )-*&(&+, )%-<&+ (-<+%0+ - -% %-/) 8+8+%, 0' -% +&% +)+'+',. #/ +'+%0** + +)+'+', -+, '- 0<+ + %& - '08+ + +'+&(&0% - &, (-<+%0+ &',+0 + %-/) 8+8+% ;&** + + +'+&(&0% -% +)+'+',> (-<+%0+.
F-% '+; 8+8+%, +,+ 0%+ + ;- )%-<&,&-',: Ac#i*e'-2a#2,or% )%-<&,&-': A' +8)*-++ 8/, + 0(&<+* 0 ;-% %0+% 0' -' *+0<+ -% &** -' + 0 + (-<+%0+ &, - 0+ ++( Proa#ionar- Perio" )%-<&,&-': I ,0+, + *+' - &8+ /,/0** 1 - 6 8-', 0 0 '+; 8+8+% 8/, ;0& +-%+ +(-8&' +*&&*+ - +'%-** &' + %-/) &',/%0'(+ )*0'. T&, )+%&- &, (0**+ Proa#ionar- perio". #/ & + )*0' &, (-'%&/-% +' &, )+%&- &, -**-;+ e'iii'i#- perio" +'%-**8+' )+%&- /,/0** 310,. T&, &, + &8+ /%&' ;&( 0 '+; 8+8+% 80 &%, +'%-** -% (-<+%0+. A, )0% - + +'%-**8+' )%-(+,, + +8)*-++ 8/, ,&' 0 ;%&+' 0/-%&?0&-' - 80+ )0%-** +/(&-'. I 0' +8)*-++ ;0', - +'%-** &' + )*0' 0+% +*&&&*& )+%&- +' ,+ (0' -&' -'* 0+% ,/8&&' ,0&,0(-% +<&+'(+ - &',/%0&*&.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 64 - 113
•
+race perio" Pro*is ion: ;1 0,. #/ & + )-*&( +%8&'0+, 0+% + %0(+ )+%&- +(0/,+ - '-')08+' - + %+'+;0* )%+8&/8, + )-*&(-*+% &, *+0** -*&0+ )0 + )%+8&/8 /%&' + %0(+ )+%&-.
•
Incon#es#ai'i#- Pro*ision: C-'+,0*+ )+%&- &, ,08+ 0, -% + &'&<&/0* )-*&(&+,. #/ &' (0,+ - %-/) )-*&(&+, &, )%-<&,&-' 0*,- 0**-;, 0' &',/%0'(+ (-8)0' - (-'+, 0' &'&<&/0* %-/) 8+8+%>, (-<+%0+ ;&-/ (-'+,&' + <0*&& - + 80,+% %-/) (-'%0(.
•
Termina#ion Pro*isions: 1. Termina#ion o( #$e +roup Insura nce Po'ic-: T+ %-/) )-*&(-*+% 80 +%8&'0+ + )-*&( 0 0' &8+ '-&&' + &',/%+% &' ;%&&'. T+ &',/%0'(+ (-8)0' 0*,- 0, + %& - +%8&'0+ + )-*&( -' 0' )%+8&/8 /+ 0+ &
(+%0&' (-'&&-', 0%+ 8+ *&+ )0%&(&)0&-' *+<+*,. T+ &',/%+% 8/, )%-<&+ 0 ;%&+' '-&&(0&-' - + )-*&(-*+% &' 0<0'(+ %+0%&' +%8&'0&-' ;& + 0+. 2. Termina#ion o( #$e +roup Insure"9s Co*e rae: T+ (-<+%0+ - + %-/) &',/%+ ;&** +%8&'0+ & + %-/) &',/%+ 0 (+0,+, - + 0 8+8+% - ,)+(&&+ (*0,, +%8&'0+, +% +8)*-8+' - %-/) 8+8+%,&) -% 3 0&*, - 80+ 0 %+B/&%+ (-'%&/&-' - + )%+8&/8. +roup Insurance Premiums U'*&+ &'&<&/0* )-*&(&+, + )%+8&/8 %0+ -% 0 %-/) )-*&( /,/0** %+(0*(/*0+ +<+% +0%. I',/%+%, /,+ %++ &' - %0&', - +,0*&, + &'&&0* )%+8&/8 %0+ 0' - (0*(/*0+ + %+'+;0* )%+8&/8 %0+, &' ,/((++&' +0%,. •
•
•
&anua' Ra#in: A 8+- - (0*(/*0&-' ;&( + &',/%+% /,+, &, -;' )0, +)+%&+'(+ 0' -+% &',/%+%,> - +,&80+ 0 %-/)>, +)+(+ (*0&8, 0' +)+',+,. E.perience Ra#in: A 8+- - (0*(/*0&-' ;&( + &',/%+% (-',&+%, + )0%&(/*0% %-/)>, )%&-% (*0&8, 0' +)+',+ +)+%&+'(+. B'en"e" Ra#in: : E.perience R0&',.
I' &, 8+- &',/%+% /,+, 0 (-8&'0&-' - &anua' 0'
Premium Ra#e: S+ +<+% +0% 0' ,0+ 0, 0 %0+ )+% 1""" - +0 +'+& )%-<&+ + )-*&( Premium Amoun#: A(/0* )%+8&/8 )0& - + &',/%+% -% + (-<+%0+ <0%&+, +<+% 8-' +)+'&' -' + (-<+%0+ Premium Re(un"s: I &, /,/0** (0**+ dividends. C-8)0'&+, 0 - no# &,,/+ )0%&(&)0&' )-*&(&+, +'+%0** (0** +,+ %+/', 0,
Experience refund. I &, )00*+ - %-/) )-*&(-*+% +<+' & + )*0' &, (-'%&/-%. A' &' (0,+ - 0 (-'%&/-% )*0' )-*&(-*+% -+,'> ,0%+ + %+/', ;& + %-/)8+8+%, /'&* + %+/' +(++, + )-*&(-*+%>, )%+8&/8 )0% 0' &' (0,+ - +(+,, + +8)*-+% 80 0))* & - )0 0 )-%&-' - + +8)*-++,> (-'%&/&-', /%&' '+ +0% -% - )0 -% 0&&-'0* +'+&, -% (-<+%+ +8)*-++,. +roup P'an A"minis#ra#ion Insurer2a"minis#ere" P'an: T+ &',/%+% ++), + (-'0&' '08+ - +0( )*0' )0%&(&)0', + 08-/' - &',/%0'(+ -' +0( )0%&(&)0' 0' '08+ - +0( +'+&(&0%.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 65 - 113
Se'(2a"minis#ere" P'an: T+ %-/) )-*&(-*+% ++), + (-'0&' '08+ - +0( )*0' )0%&(&)0', + 08-/' - &',/%0'(+ -' +0( )0%&(&)0' 0' '08+ - +0( +'+&(&0%.
#/ &' +&+% (0,+ + &',/%+% %+(+&<+, 8-'* %+)-%, %+0%&' + (-8)-,&&-' - + %-/) 0' 0' (0'+, &' + %-/).
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 66 - 113
CHAPTER 14: +ROUP LIFE INSURANCE)
!+ +&' -/% &,(/,,&-' - %-/) *&+ &',/%0'(+ +,(%&&' -; %-/) *&+ &',/%0'(+ &, %+/*0+ &' + U'&+ S0+, 0' C0'00 0' ,-8+ )%-<&,&-', 0 )&(0** &'(*/+ %-/) *&+ &',/%0'(+. T+' ;+ ,0** &,(/,, + <0%&-/, )+, - %-/) *&+ &',/%0'(+ )-*&(&+, 0' &'0** ;+ ,0** &,(/,, -; %-/) (%+&-% *&+ &',/%0'(+ )-*&(&+, &+% %-8 -+% -%8, - %-/) *&+ &',/%0'(+. Reu'a#ion o( +roup Li(e Insurance) •
Regulation of /mployee Benefits. - S0+ )%-<&'(&0* ++%0* *+&,*0/%+ 0, +'0(+ *0;,
+,&'+ - +',/%+ 0 0** +8)*-+%, 0%+ %+0+ +B/0** &' + ;-%)*0(+. E8)*-8+' *0;, )%-&& 0' ,-% - &,(%&8&'0&-' %+0%&' &%&' 0<0'(+8+' ;0+ 0' -+% +%8, 0' (-'&&-'. T+%8, 0' (-'&&-' &'(*/+, +8)*-++ +'+&, ,/( 0, %-/) *&+ &',/%0'(+. T/, + +8)*-+% 8/, +',/%+ 0 0** +'+& )*0', (-8)* ;& *0;,. A '/8+% - ++%0* *0;, &' U.S. %+/*0+ + %-/) &',/%0'(+ )-*&(&+, 1 Ae Discrimina#ion in Emp'o-men# Ac# 3ADEA5 2 Americans ,i#$ Disai'i#ies Ac# 3ADA5 3 Emp'o-men# Re#iremen# Income Securi#- Ac#3ERISA5) M-, - + +8)*-+++8)*-+% %-/) *&+ 0' +0* &',/%0'(+ &' U.S. 8/, (-8)* ;& ERISA. ERISA +&'+, 0' )*0' 0, 0 #elfare "enefit plan 0 0' +8)*-+% +,0*&,+, - )%-<&+ ,)+(&&+ 0(&*&&+, - + )*0' )0%&(&)0' 0' +&% +'+&(&0%. ERISA 0*,- (-'0&', +0&*+ )%-<&,&-', 0 %+/*0+ +8)*-+%,)-',-%+ %+&%+8+' )*0',. ERISA %+B/&%+, + ;+*0%+ +'+& )*0', - + 80&'0&'+ 0((-%0'(+ 0 ;%&+' -(/8+' ;&( ,0** +,(%&+: T+ +'+&, 0 0%+ )%-<&+ + )*0' H-; + )*0' + /'+ T+ )%-(+/%+ 0 ;&** + -**-;+ - 80+ 08+'8+', &' + )*0' T+ ;%&+' -(/8+' 8/, 0*,- 8+'&-' + '08+, - + &/(&0%&+,. ERISA ,+, +0&*+ )*0' -% +8. T+ 0%+ %+,)-',&*+ -% + +'+& - + )*0'. I' (0,+ - 0' *-,, + 0%+ )+%,-'0** %+,)-',&*+. ERISA &8)-,+, 0 *- - &,(*-,/%+ 0' %+)-%&' *0;, -% 0 )*0'. T+ p'an a"minis#ra#or &, %+,)-',&*+ -% +',/%&' 0 + ;+*0%+ )*0' (-8)*&+, ;& + &,(*-,/%+ 0' %+)-%&' *0;,. A ,/880% )*0' +,(%&)&-' 8/, + )%-<&&' - +0( - + )0%&(&)0', 0' ++%0* Depar#men# o( Laor 3DOL5 . A' 0''/0* %+)-% 8/, + &**+ - In#erna' Re*enue Ser*ice 3IRS5. •
State and Proincial Regulation of Insurance. - I' 8-, - U.S. 0<+ +'0(+ *0;, 0,+ -' + !IC "roup #ife Insurance $odel !ct %!IC $odel !ct 0' /, + *0;, 0%+ 0&%* /'&-%8 0(%-,, + ,0+,. I' C0'00 (-88-' *0; /%&,&(&-', + &',/%0'(+ *0;, 0%+ 0,+ -' + 'niform Insurance !ct. I' /++( &'&<&/0* 0' %-/) &',/%0'(+ )-*&(&+, 0%+ 0((-%&' - + /++( C&<&* C-+. I' 0&&-' - +,+ + CLHIA -<+%', (+%0&' 0,)+(, - %-/) &',/%0'(+. T+,+ *0;, *&, + %-/), 0 0%+ +*&&*+ -% %-/) &',/%0'(+ 0' + <0%&-/, )%-<&,&-', 0 8/, + &'(*/+ &' + )-*&(&+,.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 67 - 113
+roup Li(e Insurance Po'ic- Pro*isions)
I' &, ,+(&-' ;+ ,0** +)*0&' + )&(0* )%-<&,&-', 0 0%+ &'(*/+ &' + %-/) &',/%0'(+ )-*&(&+,: 1. Bene(i# Amoun#s: E<+% %-/) *&+ &',/%0'(+ )-*&( 8/, &+'& + 08-/' -% + 8+- - ++%8&'+ + 08-/' 0 + &',/%+% ;&** )0 + %-/) &',/%+. Bene(i# sc$e"u'e +&'+, + 08-/' -% + %-/) &',/%+. One #-pe &, 0 + +'+& 80 + (0*(/*0+ -' + 0,&, - 0 -%8/*0 0, -% +08)*+ ,-8+ 8/*&)*+ - + ,0*0% %+(+&<+ + %-/) &',/%+. T+ o#$er #-pe ,)+(&&+, 08-/' (-<+%0+ +&+% 1 -% 0** %-/) &',/%+ -% 2 -% +0( (*0,, - %-/) &',/%+. I + &',/%0'(+ (-<+%0+ (-<+%, + +)+'+', +' + )-*&( &'(*/+, 0 ,+)0%0+ +'+& ,(+/*+ 0 +&'+, + +)+'+' +'+&. I',/%0'(+ (-8)0' %+B/&%+8+', 0' + *0;, - 80' /%&,&(&-', %+B/&%+ 0 + 08-/' - (-<+%0+ )%-<&+ -' + +)+'+', ,-/* + *+,, 0' + +'+& )0& - + %-/) &',/%+.
2. Bene(iciar- Desina#ion: U'+% + +%8, - 0 %-/) *&+ &',/%0'(+ )-*&(/'*+,, & &, 0 (%+&-% %-/) *&+ )-*&(+0( &',/%+ %-/) 8+8+% 0, + %& - '08+ 0 +'+&(&0% ;- ;&** %+(+&<+ + &',/%0'(+ +'+& 0 &, )00*+ ;+' + %-/) &',/%+ &+,. T+ &',/%+ %-/) 8+8+% 0, + %& - %+<-(0&-' 0' + '- + )-*&(-;'+%. I + )-*&( 0, +)+'+' (-<+%0+ +' + %-/) &',/%+ 0, + %& - +,&'0+ + +'+&(&0% &' &, (0,+ 0*,-. A((-%&' - NAIC 8-+* A( -'* ,/8, /) - 2""" (0' + )0& 0, aci'i#- pa-men# (*0/,+.
3. Con*ersion Pri*i'ee: T+ NAIC M-+* A( 0' + CLHIA G/&+*&'+, %+B/&%+ %-/) *&+ &',/%0'(+ )-*&(&+, - &'(*/+ 0 (-'<+%,&-' )%&<&*++. T+ conersion priilege 0**-;, + %-/) &',/%+ ;-,+ (-<+%0+ +%8&'0+, -% (+%0&' %+0,-', - (-'<+% +% %-/) &',/%0'(+ - &'&<&/0* (-<+%0+. T+%+ 0%+ ;- (0,+, -% ;&( + %-/) &',/%+>, %-/) (-<+%0+ 80 +%8&'0+ = 1 + %-/) &',/%+ 0**, -/ - + %-/) 2 + %-/) &',/%0'(+ +%8&'0+,. Insured3s /ligi"ility for 4roup Insurance 'erminates. I' -%+% - ++(/+ + (-'<+%,&-' )%&<&*++ + &',/%+ 8/, 0))* -% + &'&<&/0* )-*&( 0' 8/, )0 + &'&&0* )%+8&/8 ;&&' 31 0, %-8 + 0 - +%8&'0&-' - &, %-/) &',/%0'(+ (-<+%0+. I' 0((-%0'(+ - NAIC M-+* A( /'*&+ CLHIA G%-/) G/&+*&'+, 80' %-/) *&+ &',/%0'(+ (-8)0'&+, 0**-;, (-'<+%,&-' -'* 0+% + 0+ - 65 %,. I' +'+%0* + &',/%+ (0' / 0' )+ - &'&<&/0* )-*&( 0 &',/%+% 0<+ 0 0 &8+ / + +'+& - + )-*&( &, *&8&+. M0' %-/) &',/%0'(+ (-8)0'&+, 0**-;, - (-'<+% - + 0(+ 08-/' - + -%&&'0* %-/) *&+ &',/%0'(+ / 8-, - + &',/%0'(+ (-8)0' &' 0((-%0'(+ - + NAIC M-+* A( 0' CLHIA G%-/) /&+*&'+, ,0+ 0 + 0(+ 08-/' - + &'&<&/0* )-*&( 80 '- +(++ + &+%+'(+ +;++' 1 + 08-/' - + %-/) &',/%+>, (-<+%0+ /'+% + -%&&'0* %-/) *&+ )-*&( 0' 2 + 08-/' - + %-/) (-<+%0+ -% ;&( + &',/%+ ;&** +(-8+ +'&*+ ;&&' + 31 0, (-'<+%,&-' )+%&-. I' 0&&-' - &, + CLHIA /&+*&'+, ,0+, 0 + 0(+ 08-/' - ,/( )-*&( - *&8& - 2"""". 4roup Life Insurance Policy 'erminates. A((-%&' - + NAIC M-+* A( + C-'<+%,&-' )%&<&*++ %+80&', - 0 %-/) &',/%+ & + %-/) &',/%0'(+ )-*&( %+80&'+ &' -%(+ -% (i*e +0%, +-%+ +%8&'0&-'. I' ,/( 0 ,&/0&-' + &',/%+ (0' / 0 &'&<&/0* )-*&( ;&-/ ,/8&&' + )%-- - &',/%0&*& ;&&' + (-'<+%,&-' )+%&- - 31 0,. T+ 80&8/8 (-<+%0+ &, +B/0* - + *+,,+% - +&+% 1 1"""" 2 + 08-/' - (-<+%0+ &' -%(+ /'+% + %-/) )*0' 8&'/, + 08-/' - %-/) (-<+%0+ -% ;&( + &',/%+ +(-8+, +'&*+ ;&&' 31 0, - + )-*&(>, +%8&'0&-'. I' C0'00 + CLHIA G/&+*&'+, &%+( 0 %-/) *&+ &',/%0'(+ )-*&( - &'(*/+ !P %&+%. S- &'(0,+ + )-*&( +%8&'0+, +' + &,0*+ 8+8+%>, )*0' ;&** (-'&'/+ 0, -/ + )-*&( %+80&'+ &' ++(.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 6 - 113
/5tension of Deat$ Benefit. T+ NAIC M-+* A( ,0+, 0 & + %-/) &',/%+ &+, ;&&' + (-'<+%,&-' )+%&- ;&-/ (-'<+%&' +% )-*&( - 0' &'&<&/0* )-*&( +' + &',/%+% &, -/' - )0 + 08-/' 0 ;-/* 0<+ ++' (-<+%+ & + &',/%+ 0 -)+ -% 0' &'&<&/0* )-*&(. I' C0'00 +%+ &, '- ,/( )%-<&,&-' / + &',/%0'(+ (-8)0'&+, +'+%0** )/ 0 ,&8&*0% )%-<&,&-',.
4. &iss#a#emen# o( Ae : T+ 08-/' - + +'+& )00*+ &, +(&+ + +'+& ,(+/*+. T/, &' (0,+ - 0 8&,,0+8+' - 0+ 8-, - + %-/) &',/%0'(+ )-*&( ,0+, 0 & + 08-/' - + )%+8&/8 &, ;%-' /+ - 8&,,0+8+' - 0+ +' + &',/%+% ;&** %+%-0(&<+* 0/, + 08-/' - + )%+8&/8 %+B/&%+ -% + (-<+%0+ - %+*+( + (-%%+( 0+.
5. Se##'emen# Op#ions: G+'+%0** + )-*&( )%-(++, 0%+ )0& &' + */8),/8 8-+. S-8+&8+, ,+*+8+' -)&-', 0%+ &<+' +' &' 0 (0,+ 0** + /,/0* 8-+, - ,+*+8+' -)&-', 0%+ 80+ 0<0&*0*+. +roup Li(e Insurance P'ans)
1. +roup Term Li(e Insurance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sur*i*or income p'an) T&, )*0' )%-<&+, )+%&-&( )08+', - + ,/%<&<+ +)+'+',. M-, - + )-*&(&+, )0 0 (+%0&' )+%(+'0+ - + %-/) &',/%+ ,0*0% 0 + +0 &8+. F-% +08)*+ + )*0' 80 )0 1 2" - + S0*0% - + ,/%<&<-% ,)-/,+ & +%+ &, '- +)+'+' (&* 2 3" & +%+ &, 0' +)+'+' (&*. T+ +'+&, )0& - + ,/%<&<&' ,)-/,+ ;&** (-'&'/+ /'&* + +0%*&+% - 1 - 0 (+%0&' &8+ 0+% + ,)-/,+ %+80%%&+, 2 + ,)-/,+ %+0(+, 0+ - 65 +0%,. T+ +'+& )0& - + /'80%%&+ (&* 80 (-'&'/+ - 1 19 +0%, - 0+ + &8+ ;+' ,+ +(-8+, 0 /**&8+ ,/+' 2 &** + (&* &, '- *-'+% 0 /** &8+ ,/+' -% ,+ %+0(+, 0' 0+ - 23 +0%, ;&(+<+% +0%*&+%. A, &' + )+%<&-/, (0,+ & + -0* + -0* (-<+%0+ +(++, 5"""" +' + +8)*-++ 8/, )0 &'(-8+ 0 -' + )%+8&/8 08-/', 0 + +8)*-+% )0, -% + +(+,, (-<+%0+. 2. Acci"en#a' Dea#$ an" Dismemermen# P'ans : ADD +'+&, 80 + &'(*/+ 0, 0 )0% - + %-/) &',/%0'(+ -% + 80 + &<+' 0, ,+)0%0+ )*0',. T+ *-; (-, - ADD 80+, & 0' 0%0(&<+ )-*&(. !+' 0((&+'0* +0 +'+& &, 0+ - 0 %-/) &',/%0'(+ )-*&( +' +'+%0** + (-<+%0+ &, +B/0* - 0,&( +'+& - + %-/) &',/%0'(+ (-<+%0+. M0' (-8)0'&+, )%-<&+ 0((&+'0* +0 +'+& /+ %0<+* - &, +8)*-++,. I' ,/( 0 ,&/0&-' + +'+& &, &<+' & + 0((&+' -((/%, & 0' 0((&+' -((/%, ;&*+ %0<+**&' -% + (-8)0'.
3. +roup Permanen# P'ans: G%-/) )+%80'+' )*0', 0%+ *+,, )-)/*0% ,&'(+ + - '- %+(+&<+ 0' 0 )%&<&*++. I' 8-, (0,+, + %-/) )+%80'+' )-*&(&+, 0%+ &,,/+ 0, supplementary coverage. T&, 8+0', 0 + (-<+%0+ &, )%-<&+ 0, -)&-'0* 0,&, -% 0, 0&&-', - %-/) +%8 &',/%0'(+ (-<+%0+. G+'+%0** + -**-;&' )*0', 0%+ 0<0&*0*+ /'+% &, )*0':
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 69 - 113
4roup Paid-6p Plans. T+ )*0' &, +'+%0** (-/)*+ ;& +(%+0,&' +%8 &',/%0'(+. T+ )*0', 0%+ (-'%&/-% + )%+8&/8 )0& + +8)*-++ &, /,+ -% /&' ,&'*+ )%+8&/8 )0&/) )+%80'+' )-*&(. T+ )%+8&/8 )0& + +8)*-+% &, /,+ - )%-<&+ + %-/) +(%+0,&' +%8 &',/%0'(+ (-<+%0+. T+ -0* (-<+%0+ /'+% + )0& /) )-*&(&+, &'(%+0,+, +<+% +0% 0' + +%8 (-<+%0+ +(%+0,+, +<+% +0% /, ++)&' + -0* (-<+%0+ - 0 )%+++%8&'+ *&8&. T+ ,08+ *-&( %+0%&' + &'(-8+ 0 0*,- 0))*&+, &' &, (0,+. Leel Premium 7$ole Life Plans. L+<+* )%+8&/8 %-/) )-*&(&+, 0%+ 0*,0<0&*0*+. I &, +'+%0** )0&/) ;-*+ *&+ )-*&( 0 + 0+ 65 +0%,. #+(0/,+ +,+ )-*&(&+, 0<+ (0, <0*/+ +8)*-+%, /,+ +,+ - )%-<&+ %+&%+8+' +'+&. I + )*0' &, '-'(-'%&/-% +' + +8)*-++ -+, '- 0<+ 0' <+,+ %& -' + )-*&( /, & + )-*&( +%8&'0+, +' + 0((/8/*0+ (0, <0*/+ -+, - + +8)*-+%. I + )*0' &, (-'%&/-% +' + +8)*-++ 0, + <+,+ %& /)-' + 08-/' - + (0, <0*/+ 0((%/+ + -% &, )+ - )%+8&/8 )-*&(&+,. )0& +%. A ,80** )-%&-' - + )%+8&/8 )0& + +8)*-+% 4roup 6niersal Life Plans. G%-/) U'&<+%,0* L&+ P*0', 0%+ <+% ,&8&*0% &'&<&/0* *&+ &',/%0'(+ )-*&(&+,. H+%+ + +8)*-++ 0, + %& - (--,+ + )%+8&/8 + ;0', - )0. G+'+%0** + +8)*-+% -+, '- )0 0'&'. G%-/) /'+%;%&&' 8+-, 80 + /,+ / & + (-<+%0+ &, <+% & +' + &',/%+% 80 0, -% + )%-- - &',/%0&*&. T+ +8)*-++ 80 0*,- &'(%+0,+ -% +(%+0,+ + (-<+%0+ &' (0,+ - &'(%+8+' + &',/%+% 80 0, -% )%-- - &',/%0&*&. T+ +)+',+, -% %-/) /'&<+%,0* *&+ &',/%0'(+ (-<+%0+ 0%+ *+,, 0' (-%%+,)-'&' &'&<&/0* /'&<+%,0* &',/%0'(+ )-*&(. G%-/) U'&<+%,0* L&+ I',/%0'(+ P-*&(&+, 0%+ '-;' 0, por#a'e co*erae6 ;&( 8+0', 0 + %-/) /'&<+%,0* )*0', (0' + (0%%&+ 0, %-/) )*0', +<+' & + %-/) &',/%+ 0**, -/ - + %-/). 4. +roup Cre"i#or Li(e Insurance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
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 7" - 113
CHAPTER 1: ANNUITIES AND INDIVIDUAL RETIRE&ENT SAVIN+S PLANS
D+&'&&-' - Annui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nnui#- Con#rac#: T+ +%8, - 0' 0''/& (-'%0( -<+%' + %&, 0' /&+, - + (-'%0(&' )0%&+,. T+ )0%&+, - 0' 0''/& (-'%0( 0%+ + •
•
T+ &',/%+% 0 &,,/+ + (-'%0( 0' T+ )+%,-' ;- 0))*&+ -% 0' )/%(0,+ + (-'%0( '-;' 0, + con#rac# $o'"er.
T+ &',/%+% ;&** &,,/+ 0 )-*&( - + (-'%0( -*+% ;&( ;&** (-'0&' 0** + +%8, - + (-'%0(/0* 0%++8+' +'+%+ &'- + )0%&+,. A''/&&+, (0' + - ;- )+,: I'&<&/0* G%-/) • •
A, )+% + +%8, - + (-'%0( + (-'%0( -*+% ;&** )0 + &',/%+% 0 ,+%&+, - )%+8&/8, -% 0 ,&'*+ )%+8&/8. P%+8&/8, 0 + &',/%+%, %+(+&<+ -% 0''/&&+, 0%+ +'+%0** %++%%+ - 0, annui#- consi"era#ions. T+ &',/%+% (0*(/*0+, + 08-/' - + )+%&-&( 0''/& +'+& )08+', 0 & ;&** + *&0*+ )0 /'+% 0, 0''/& )-*&( 0,+ -' + -**-;&' 0,&( 80+80&(0* (-'(+): A ,/8 - 8-'+ '-;' 0, principa' 0 &, &'<+,+ -% 0 (+%0&' period of time 0 0 stated rate of interest (0' + )0& -/ &' 0 ,+%&+, - )+%&-&( )08+',&' 0' 0''/&-<+% 0 ,0+ period of time. S-8+ &8)-%0' 0(, 0' &/%+,: In"i*i"ua' an" +roup Annui#ies in (orce in 1 3as a percen#ae o( premiums5: • I' USA: G%-/) 54 I'&<&/0* 46 • I' C0'00: G%-/) 42 I'&<&/0* 5
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 71 - 113
C'assi(ica#ions o( Annui#ies
A''/&&+, (0' + (*0,,&&+ -' + -**-;&' (%&+%&-': • • • • •
H-; + 0''/& ;0, )/%(0,+ H-; -+' )+%&-&( 0''/& +'+&, 0%+ - + )0& !+' 0''/& +'+& )08+', 0%+ ,(+/*+ - +&' T+ '/8+% - 0''/&0', (-<+%+ + 0''/& )-*&( !++% 0''/& <0*/+, 0%+ /0%0'++ -% <0%&0*+
Ho, #$e annui#- ,as purc$ase":
T+ (0+-%&+, - 0''/&&+, /'+% &, )0%08++% 0%+ + -**-;&': •
Sin'e2premium annui#-: A' 0''/& 0 &, )/%(0,+ + )08+' - 0 ,&'*+ */8) ,/8 )%+8&/8. #+'+& )08+', /'+% 0 ,&'*+)%+8&/8 0''/& 80 +&' ,-%* 0+% + )%+8&/8 &, )0& -% 80 +&' 0+% 0 (-',&+%0*+ /%0&-' - &8+ %-8 + )%+8&/8 )08+' 0+.
•
Perio"ic 'e*e'2premium annui#- : T+ (-'% 0( -*+ % )0, +B/0* )%+8&/8 -% + 0''/& 0 %+/*0%* ,(+/*+ &'+%<0*, ,/( 0, 8-'* -% 0''/0** /'&* ,-8+ )%+ ++%8&'+ //%+ 0+.
•
F'e.i'e2premium annui#-: T+ (-'%0( -*+% )0, )%+8&/8, -' 0 )+%&-&( 0,&, -<+% 0 ,0+ )+%&- - &8+ + 08-/' - +0( )%+8&/8 )08+' (0' <0% +;++' 0 ,+ 8&'. 0' 80. A8-/'. T+ (-'%0( -*+% 80 (--,+ - +<+' ,&) + )08+' - )%+8&/8 - 0 )0%&(/*0% &',0**8+'. T+ %+B/&%+8+' &, - )0 + 8&'&8/8 ,0+ )%+8&/8 -% 0 +0%.
Sin'e2premium annui#ies are #$e mos# popu'ar (o''o,e" - F'e.i'e2premium annui#ies) Perio"ic 'e*e'2premium annui#ies are #$e 'eas# pre(erre")
Ho, o(#en ene(i#s are pai" Annui#- perio": T+ &8+ ,)0' +;++' +0( - + )08+', &' + ,+%&+, - )+%&-&( 0''/& +'+& )08+',. T+ %+B/+'( - )+%&-&( 0''/& +'+& )08+', +)+', -' + *+' - + 0''/& )+%&-. • •
&on#$'- annui#-: !+' + 0''/& )+%&- -% 0' 0''/& )-*&( &, 1 8-'. Annua' annui#-: !+' + 0''/& )+%&- -% 0' 0''/& )-*&( &, 1 +0%.
T+%+ (-/* + uar#er'- -% semiannua' 0''/&&+, 0*,-.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 72 - 113
$en Bene(i# pa-men#s ein
T+ 0+ -' ;&( + &',/%+% +&', - 80+ + 0''/& +'+& )08+', &, '-;' 0, + 0''/&>, ma#uri#- "a#e -% + annui#- "a#e. D+)+'&' -' ;+' + &',/%+% &, - +&' 80&' )+%&-&( 0''/& +'+& )08+', ;+ (-/* 0<+ Imme"ia#e annui#ies 0' De(erre" annui#ies. Imme"ia#e annui#-: T+,+ 0%+ 0''/&&+, ;+%+ + +'+& )08+', 0%+ ,(+/*+ - +&' -'+ 0''/& )+%&- 0+% + 0''/& &, )/%(0,+. G+'+%0** +,+ 0%+ ,&'*+)%+8&/8 0''/&&+,. S/( 0' 0''/& )-*&( &, (0**+ sin'e2premium imme"ia#e annui#- SPIA. De(erre" Annui#-: A' 0''/& /'+% ;&( + )+%&-&( +'+&, 0%+ ,(+/*+ - +&' 8-%+
0' -'+ 0''/& )+%&- 0+% + 0+ -' ;&( + 0''/& ;0, )/%(0,+. T+ )+%&- /%&' ;&( + &',/%+% 80+, + 0''/& +'+& )08+', &, '-;' 0, + pa-ou# perio" -% 'iui"a#ion perio". T+ )+%&- +;++' + (-'%0(-*+%>, )/%(0,+ - + )-*&( 0''/& 0' + -',+ - + )0-/ )+%&- &, '-;' 0, + accumu'a#ion perio". D++%%+ 0''/&&+, (-/* + - Sin'e2premium "e(erre" annui#ies 3SPDA5 0' F'e.i'e2 premium "e(erre" annui#ies 3FPDA5. A )-&' - '-+ &, 0 0' 0''/& )/%(0,+ ;& + )08+' - )+%&-&( )%+8&/8, &, +&'&&-' 0 ++%%+ 0''/&. A((/8/*0+ <0*/+ - 0 ++%%+ 0''/& N+ 08-/' )0& -% 0''/& I'+%+, = !&%0;0*, T+ 80''+% &' ;&( + )-*&( )%-<&+, -% &'<+,8+' +0%'&', -' + 0((/8/*0+ <0*/+ +)+', -' ;++% + ++%%+ 0''/& &, 0 &++'+& 0''/& -% 0 <0%&0*+ 0''/&. i#$"ra,a' pro*ision: T&, )%-<&,&-' %0', + (-'%0( -*+% + %& - ;&%0; 0** -% 0 )-%&-' - + 0''/&>, 0((/8/*0+ <0*/+ /%&' + 0((/8/*0&-' )+%&-. i#$"ra,a' C$are: M-, )-*&(&+, &8)-,+, 0 (+&*&' -' + 08-/' ;&%0; 0*+ %-8 + 0((/8/*0+ <0*/+ -% 0 ++%%+ 0''/& )+% +0% ;&-/ (0%+. I + (-'%0( -*+% ;0', ;&%0; 8-%+ 0' &, 08-/' +' + &',/%+% +'+%0** &8)-,+, 0 ,i#$"ra,a' c$are. Cas$ surren"er *a'ue: A 0' )-&' - + 0((/8/*0&-' )+%&- + (-'%0( -*+% 0, + %& - ,/%%+'+% + )-*&( -% &, 0((/8/*0 + <0*/+ *+,, 0' surren"er c$ares &'(*/+ &' + )-*&(. Surren"er C$are: T&, &, )&(0** &8)-,+ & + )-*&( &, ,/%%+'+%+ ;&&' 0 ,0+ '/8+% - +0%, 0+% & ;0, )/%(0,+. T+ 08-/' - ,/%%+'+% (0%+ /,/0** +(%+0,+, -<+% &8+.
C0, S/%%+'+% V0*/+ -' ++%%+ 0''/& A((/8/*0+ <0*/+ = S/%%+'+% C0%+, Pa-ou# op#ion pro*ision &, 0' 0''/& )-*&( 0 *&,, 0' +,(%&+, +0( - + )0-/ -)&-', %-8 ;&( + (-'%0( -*+% 80 ,+*+(.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 73 - 113
$en Bene(i# Pa-men#s En"
T+%+ 0%+ %++ +'+%0* )+, - )0-/ -)&-', 0<0&*0*+: • • •
L&+ 0''/& A''/& (+%0&' T+8)-%0% *&+ 0''/&
Li(e Annui#- &, 0' 0''/& 0 )%-<&+, )+%&-&( +'+& )08+', -% 0 *+0, + *&+&8+ - 0 '08+ &'&<&/0*. S-8+ *&+ 0''/&&+, 0*,- )%-<&+ /%+% )08+' /0%0'++,.
T+ '08+ &'&<&/0* ;-,+ *&+&8+ &, /,+ 0, + 8+0,/%&' *&+ &' 0 *&+ 0''/& &, -+' %++%%+ - 0, + annui#an#. Annui#- Bene(iciar- &, + )+%,-' -% )0% 0 + (-'%0( -*+% '08+, - %+(+&<+ 0' ,/%<&<-% +'+&, 0 0%+ )00*+ /%&' + 0((/8/*0&-' )+%&- - 0 ++%%+ 0''/&. Pa-ee &, + )+%,-' ;- %+(+&<+, + 0''/& +'+& )08+', /%&' + )0-/ )+%&-. Annui#- Cer#ain &, 0' 0''/& )-*&( ;&( ;&** )%-<&+ )+%&-&( )08+', -<+% 0 )+%&- - &8+ 0 &, /'%+*0+ - + *&+&8+ - 0' 0''/&0'. T+ ,0+ )+%&- -<+% ;&( + &',/%+% ;&** 80+ +'+& )08+', &, (0**+ + perio" cer#ain . A + +' - + )+%&- (+%0&' + 0''/& )08+', (+0,+. Temporar- Li(e Annui#- )%-<&+, )+%&-&( +'+& )08+', /'&* + +' - 0 ,)+(&&+ '/8+% - +0%, -% /'&* + +0 - + 0''/&0' ;&(+<+% -((/%, &%,. O'(+ + ,0+ )+%&- +)&%+, -% + 0''/&0' &+, + 0''/& +'+&, (+0,+. F-% +08)*+ &' 0 5 +0%, +8)-%0% *&+ 0''/& + 80. L+' - &8+ &' ;&( + 0''/& +'+&, ;&** + )00*+ &, 5 +0%,. #/ & + 0''/&0' &+, +-%+ 0 &8+ + )08+' (+0,+,.
T$e numer o( annui#an#s co*ere" - #$e po'icoin# an" sur*i*or annui#- or oin# an" 'as# sur*i*or annui#- &, 0' 0''/& ;&( )%-<&+, +'+& )08+', %-/-/ + *&<+, - - + 0''/&0',. T+ +%8, - 0 -&' 0' ,/%<&<-% 0''/& ++%8&'+, ;++% + 08-/' - +0( )+%&-&( +'+& )08+' %+80&', + ,08+ 0+% + +0 - -'+ - + 0''/&0', -% ;++% & +(%+0,+, 0' &' 0 (0,+ ;0 )+%(+'0+ -% 08-/'.
$e#$er Annui#- *a'ues are +uaran#ee" or Varia'e
T+ &'<+,-%, - 0''/&&+, 0<+ &+%+' )/%)-,+, &' 8&' ;& -,+ /', 0' 0*,- 0<+ &+%+' (0)0(&&+, -% 0,,/8&' &'0'(&0* %&, ;+' + )*0(+ 8-'+ &' 0''/&&+,. M0' &',/%+%, -+% 2 +'+%0* -)&-', - 0''/& )/%(0,+%,: •
G/0%0'++ - )0 0 *+0, 0 ,0+ &'+%+, -' + 0''/& /', & -*, O%
•
P0 &'+%+, 0 0 %0+ 0 &, '- /0%0'++ &',+0 + &'+%+, %0+ ;&** <0% 0((-%&' + +0%'&', - (+%0&' &'<+,8+', +* + &',/%+%.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 74 - 113
Fi.e"2Bene(i# Annui#ies 0%+ 0''/&&+, /'+% ;&( + &',/%+% /0%0'++, 0 0 *+0, 0 +&'+ 08-/' - 8-'* 0''/& +'+& ;&** + )%-<&+ -% +0( 0))*&+ - )/%(0,&' + 0''/&.
M-, &++'+& 0''/&&+, ,)+(& 0 -'(+ + &',/%+% +&', )0&' + 0''/& +'+&, + 08-/' - + +'+& )08+' 80 '- (0'+. #/ &, &, '- 0 %/*+. I' ,-8+ (0,+, + &',/%+% 80 +(*0%+ 0 (0'+ - + 08-/' - + +'+& 08-/'. I' (0,+ - ,&'*+ )%+8&/8 &88+&0+ 0''/&&+, + +'+& 08-/' &, +'+%0** &+. I' (0,+ - ++%%+ 0''/&&+, 0''/& )-*&( &'(*/+, 0 (0% - 0''/& <0*/+,. T&, (0% ;&** *&, + 08-/' - 0''/& +'+& 0 &, /0%0'++ )+% 1""" - 0((/8/*0+ <0*/+. A &++'+& ++%%+ 0''/& )-*&( 0*,- +,(%&+, + 80''+% &' ;&( + &',/%+% ;&** (%+& &'<+,8+' +0%'&', - + )-*&(>, 0((/8/*0+ <0*/+. Varia'e Annui#ies 0%+ 0''/&&+, &' ;&( + 08-/' - + )-*&(>, 0((/8/*0+ <0*/+ 0' + 08-/' - + 8-'* 0''/& +'+& )08+' */(/0+ &' 0((-%0'(+ ;& + )+%-%80'(+ - 0 ,+)0%0+ 0((-/'. T+ &'&<&/0* ;- )/%(0,+, 0 <0%&0*+ 0''/& 0,,/8+, + &'<+,8+' %&, - + )-*&(. #+(0/,+ + &',/%+% 80+, '- /0%0'++, %+0%&' + &'<+,8+' +0%'&', -% + 08-/' - 0 <0%&0*+ 0''/&>, +'+& )08+', + &',/%+% %+0&', '- %&, /'+% + )-*&(.
T+ 8+(0'&,8 0 0**-;, &, &'<+,8+' %&, %0',+% %-8 + &',/%+% - + )/%(0,+% &, + separa#e accoun#. T&, &, (0**+ + serea#e" accoun# &' C0'00. T&, 0((-/' &, (-8)*++* ,+)0%0+ %-8 + &',/%+%>, +'+%0* &'<+,8+' 0((-/'. I',/%+%, )&(0** -+% 0 '/8+% - &+%+' ,+)0%0+ 0((-/', 0' + -**-; 0 &+%+' &'<+,8+' ,%0+ -% +0( ,/( 0((-/'. T+ <0*/+ - 0 ,+)0%0+ 0((-/' 80 &'(%+0,+ -% +(%+0,+ +)+'&' -' + )+%-%80'(+ - + 0((-/'>, &'<+,8+',. V0%&0*+ 0''/& (-'%0( -*+%, 80 ,+*+( %-8 &, *&, - ,+)0%0+ 0((-/', 0' 80 )+%&-&(0** %0',+% /', %-8 -'+ ,/( 0((-/' - 0'-+%. Accumu'a#ion uni#s %+)%+,+' + -;'+%,&) ,0%+, - 0 <0%&0*+ 0''/& (-'%0( -*+% &' 0 ,+)0%0+ 0((-/'. T+ '/8+% - /'&, 0 0 (-'%0( -*+% (0' -;' +)+', -' + )%+8&/8 0 + )0,. A, )%+8&/8, 0%+ )0& %-/-/ + 0((/8/*0&-' )+%&- + '/8+% - 0((/8/*0&-' /'&, 0 0 (-'%0( -*+% -;', &'(%+0,+,.
T+ &',/%+% 8/, )+%&-&(0** %+(0*(/*0+ + <0*/+ - 0' 0''/& /'& 0,+ -' + &'<+,8+' +)+%&+'(+ - + ,+)0%0+ 0((-/'. T+ &',/%+% +' %+(0*(/*0+, + 08-/' - + )+%&-&( +'+& )08+' 8/*&)*&' + -0* '/8+% - 0''/& /'& &8+, + (/%%+' <0*/+ - 0' 0''/& /'&.
Li(e E.pec#anc- Fac#or
I' + (0,+ - *&+ 0''/&&+, + *+' - )0-/ )+%&- &, *&'+ - + 0''/&0'>, *&+&8+. S- + *&+ +)+(0'( 0(-% &, (-',&+%+ ;+' (0*(/*0&' + 08-/' - )+%&-&( 0''/& +'+& 0 (0' + )%-<&+ -% 0 ,)+(&&+ )%+8&/8 08-/'. Annui#- mor#a'i#- ra#es+ 8-%0*& %0+, +)+%&+'(+ )+%,-', )/%(0,&' *&+ 0''/&&+,0%+ '- &+'&(0* - + 8-%0*& %0+, +)+%&+'(+ )+%,-', &',/%+ LI )-*&(&+, -% 0 &<+' 0+ 0' +'+%.
T+ &+%+'(+ &' -%8 - 0'&,+*+(&-' &' + (0,+ - 0''/&&+, (-8)0%+ - 0 &' LI )-*&(&+,:
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 75 - 113
P+-)*+ &' -- +0* 0' ;- 0'&(&)0+ 0 *-' *&+ 0%+ 8-%+ &'+%+,+ &' )/%(0,&' *&+ 0''/&&+, +' 0%+ -,+ &' )--% +0*. T&, &, /, + -))-,&+ - 0 0))+', &' + (0,+ - 0 LI )-*&(. M-%0*& %0+, +)+'&' -' +'+% 0' 0''/& )%+8&/8 %0+,: M-%0*& ,0, ,-; -,+ +80*+, 0, 0 %-/) 80 0'&(&)0+ *&<&' *-'+% 0' 80*+, 0, 0 %-/). T&, &, ; &',/%+%, +'+%0** +' - (0%+ &+% )%+8&/8 %0+, %-8 +80*+, 0' -% 80*+, - + ,08+ 0+. I' %+(+' +0%, *+&,*0/%+, 0' (-/%, 0%+ +08&'&' ;++% + /,+ - +'+%0,+ )%+8&/8 %0+ &, 0 -%8 - /'*0;/* &,(%&8&'0&-' -' + 0,&, - +'+%. S-8+ &',/%+%, /,+ unise. mor#a'i#- #a'es 0' (0%+ 80*+, 0' +80*+, ;& + ,08+ )%+8&/8 %0+, -% 0''/&&+,.
T)+, - L&+ A''/&&+,: T+ 3 <0%&0&-', - *&+ 0''/& 0 &',/%+%, (-88-'* -+% 0%+ 1. S%0& *&+ 0''/& 2. L&+ &'(-8+ 0''/& ;& )+%&- (+%0&' 3. L&+ &'(-8+ ;& %+/' 0''/& S#rai$# 'i(e annui#- )%-<&+, )+%&-&( )08+', -% -'* 0, *-' 0, + 0''/&0' *&<+,. T&, -%8 - 0''/& &, + *+0, )-)/*0% 0, +%+ &, 0 %&, - + 0''/&0' )0&' 8/( 8-%+ 8-'+ 0, )%+8&/8 0' + 0(/0** %+(+&<+, 0, )0-/ %-8 + 0''/& 0, + +)&%+ +0%* /%&' + )0-/ )+%&-. Li(e income annui#- ,i#$ perio" cer#ain /0%0'++, 0 + 0''/& +'+&, ;&** + )0& %/
-/ + 0''/&0'>, *&+ 0' /0%0'++, 0 + )08+', ;&** + 80+ -% 0 *+0, 0 (+%0&' )+%&- +<+' & + 0''/&0' &+, +-%+ + +' - 0 )+%&-. I' &, (0,+ + (-'%0( -*+% ,+*+(, 0 con#inen# pa-ee ;- %+(+&<+, + )0-/ +'+&, &' (0,+ + 0''/&0' &+,. P*+0,+ '-+ 0 & + 0''/&0' &+, 0+% + +)&%0&-' - + )+%&- (+%0&' + '- +%0 +'+&, 0%+ )0& - + (-'&'+' )0++. Li(e income ,i#$ re(un" annui#- 0*,- '-;' 0, 0 %+/' 0''/& )%-<&+, 0''/& +'+&, %/ -/ + *&+&8+ - + 0''/&0' 0' /0%0'++, 0 0 *+0, + )/%(0,+ )%&(+ - + 0''/& ;&** + )0& &' +'+&,. T&, /0%0'++, 0 & + 0''/&0' &+, +-%+ + -0* +'+& )08+', +B/0* + )/%(0,+ )%&(+ - + 0''/& 0 %+/' ;&** + 80+ - + (-'&'+' )0++. T&, %+/' &, + &+%+'(+ +;++' + )/%(0,+ )%&(+ - + 0''/& 0' + -0* 08-/' - +'+&, 0 0 ++' )0& /%&' + *&+&8+ - + 0''/&0'.
R+/' 0''/& &, 0<0&*0*+ &' 2 -%8,: • •
Cas$ re(un" annui#- ;+%+ + %+/' &, )0& 0, 0 */8) ,/8. Ins#a''men# re(un" annui#- ;+%+ + %+/' &, )00*+ &' 0 ,+%&+, - )+%&-&( )08+',.
C-8)0%&,-' - P%+8&/8 R0+,: P%+8&/8 %0+, -% + ,%0& *&+ 0''/&&+, 0%+ + *-;+,.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 76 - 113
Annui#- Con#rac# Pro*isions: • • •
•
•
•
E'&%+ (-'%0( )%-<&,&-': S08+ 0, 0 - LI F%++*-- )%-<&,&-': S08+ 0, 0 - LI I'(-'+,0&*& )%-<&,&-': T)&(0** 0' 0))*&(0&-' - 0' 0''/& -+, '- (-'0&' B/+,&-', %+0%&' + &',/%0&*& - + 0))*&(0'. S- + -+, '- '++ - )%-<&+ 0' %+)%+,+'0&-', -' ;&( + &',/%+% 0,+, &, +(&,&-' - &,,/&' 0' 0''/&. I' ,/( (0,+, + &'(-'+,0&*& )%-<&,&-' ,0+, 0 -'(+ + (-'%0( +(-8+, ++(&<+ + &',/%+% 80 '- (-'+, + <0*&& - + (-'%0(. I' (0,+ + 0''/& )%-/( 0, 0' ,/))*+8+'0% +'+& %&+%, 0,,-(&0+ ;& & +' + 0))*&(0' -% ,/( 0 %&+% +'+%0** 8/, )%-<&+ )%-- - &',/%0&*&. I' ,/( 0 (0,+ + &'(-'+,0&*& )%-<&,&-' &<+, + &',/%+% 0 ,)+(&&+ )+%&- = ,/( 0, -'+ -% ;- +0%, = &' ;&( - (-'+, + <0*&& - + (-<+%0+ )%-<&+ + %&+% 0,+ -' 0 80+%&0* 8&,%+)%+,+'0&-' &' + 0))*&(0&-'. M&,,0+8+' - 0+ -% ,+ )%-<& ,&-': ,0+, 0 & + 0''/& 0'>, 0+ -% ,+ ;0, 8&,,0+ +' + 0''/& +'+&, )00*+ ;&** + -,+ 0 + )%+8&/8, )0& ;-/* 0<+ -% + (-%%+( 0+ -% ,+. A,,&'8+' )%-<&,&-': U'*&+ &' + (0,+ - LI )-*&(&+, +%+ + (-'%0(, +'+%0** ,0+ 0 & + (-'%0( &, )0% - ,)+(&&+ )+, - B/0*&&+ %+&%+8+' )*0', +' + (-'%0( 80 '- + ,-* 0,,&'+ %0',+%%+ -% )*++ 0, (-**0+%0* -% 0 *-0' -% 0' -+% )/%)-,+ - 0' -+% )+%,-'. S/( (-'%0(, 0%+ '- 0,,&'0*+ ++%0* *0;,. S+*+8+' -)&-', -% P0-/ -)&-', )%-<&,&-': &+'&&+, 0' +,(%&+, +0( - + )0-/ -)&-', 0 0 (-'%0( -*+% 80 +*+( -% + )08+' - 0''/& +'+&,.
S-8+ 0&&-'0* )%-<&,&-', ;&( 0%+ )-,,&*+ 0,+ -' + )+ - + 0''/& (-'%0( 0%+: •
•
•
#+'+&(&0% )%-<&,&-': &<+, + (-'%0( -*+% + %& - '08+ + +'+&(&0% ;- ;&** %+(+&<+ 0' ,/%<&<-% +'+&, )00*+ & + 0''/&0' -% + (-'%0( -*+% &+, +-%+ 0''/& +'+& )08+', +&'. !&%0;0* )%-<&,&-': %& - ;&%0; 0** -% )0% - + 0''/&>, 0((/8/*0+ <0*/+ /%&' + 0((/8/*0&-' )+%&-. S/%%+'+% )%-<&,&-': + %& - ,/%%+'+% + 0''/& -% &, ,/%%+'+% <0*/+ /%&' + 0((/8/*0&-' )+%&-.
F&+)%+8&/8 0''/&&+, +'+%0** &'(*/+ + -**-;&' 0&&-'0* )%-<&,&-',: • •
G%0(+ )+%&- )%-<&,&-': S08+ 0, &' LI. R+&',0+8+' )%-<&,&-': S08+ 0, LI.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 77 - 113
Reu'a#ion o( Annui#ies
T+ %+/*0&-', 0%+ ,08+ &' - USA 0' C0'00 0, &, &' + (0,+ - LI )-*&(&+,. T&, &, +(0/,+ &, -'* &',/%0'(+ (-8)0'&+, ;&( 0%+ 0**-;+ - ,+** 0''/&&+,. F-% <0%&0*+ 0''/&&+, + %+/*0&-', 0%+ + ,08+ 0, &, &' + (0,+ - <0%&0*+ LI )-*&(&+,. Ta.a#ion o( Annui#ies
A''/&&+, 0%+ 0' &'(%+0,&'* )-)/*0% )%-/( &' + US 0' + 0( 0 0 )%-/( 0 B/0*&&+, 0, 0' 0''/& &' 0((-%0'(+ ;& ++%0* 0 *0;, )%-<&+, 0<-%0*+ ++%0* 0 %+08+' &, )0%* %+,)-',&*+ -% 0. F-% + )/%)-,+ -**-;&' 2 )0%,:- &'(-8+ 0+, +0( 0''/& +'+& )08+' &, (-',&+%+ - (-',&, - + 1. O'+ )-%&-' &, + %+/%' - )%&' (&)0* ;&( &, '- 00 *+ +(0/,+ + )/%( 0,+% 0, 0*%+0 )0& &'(-8+ 0+, -' 0 08-/'. 2. T+ %+80&'+% )-%&-' - +0( +'+& )08+' &, (-',&+%+ 00*+ &'<+,8+' &'(-8+ +(0/,+ + )/%(0,+% 0, '+<+% )0& &'(-8+ 0+, -' + )-*&(>, &'<+,8+' +0%'&',. # (-'%0, C0'00>, 0 *0;, - '- )%-<&+ &, 0<-%0*+ %+08+' -% 0''/&&+,. I'<+,8+' &'(-8+, -% 0''/&&+, 0%+ 00*+ &'(-8+, %/ -/ + *&+ - + 0''/&. T+ -'+ +(+)&-' &, 0''/& /,+ - /' 0 B/0*&&+ %+&%+8+' )*0'. In"i*i"ua' Re#iremen# Sa*ins P'ans
#- + G-<. - USA 0' C0'00 0<+ +'0(+ *0;, 0 )%-<&+ ++%0* IT 0<0'0+, &'&<&/0*, ;- +)-,& /', &'- -<+%'8+'B/0*&&+ %+&%+8+' ,0<&', )*0',. H+%+ ;+ ;&** +,(%&+ ,-8+ - +,+ B/0*&&+ &'&<&/0* %+&%+8+' ,0<&', )*0', -(/,&' -' + )*0', 0 80 + 80%++ LI (-8)0'&+,. F-% ++%0* IT )/%)-,+, + 08-/' 0 (+%0&' &'&<&/0*, +)-,& &'- B/0*&&+ %+&%+8+' ,0<&', )*0',/) - 0 ,0+ 80&8/80%+ /,/0** +/(&*+ %-8 +&% %-,, &'(-8+, &' + +0% &' ;&( -,+ /', ;+%+ +)-,&+ &'- + )*0',. I' 0&&-' + &'<+,8+' +0%'&', -' 0 B/0*&&+ 0((-/' +'+%0** 0%+ '- 0+ /'&* + /', 0%+ ;&%0;'. In Uni#e" S#a#es o( America:
T+%+ 0%+ 2 )+, - &'&<&/0* %+&%+8+' ,0<&', )*0', ;&( B/0*& - %+(+&<+ 0<-%0*+ ++%0* IT %+08+': • •
IRA K+- HR 1" )*0',
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 7 - 113
Fe"era' 'a,s • • •
D+&'+ ;&( &'&<&/0*, 80 +,0*&, +0( )+ - B/0*&&+ )*0'. P*0(+ *&8&, -' + 08-/', 0 0)0+% 80 (-'%&/+ - +0( )+ - B/0*&&+ )*0'. E,0*&, %/*+, -% + 00&-' - )*0' ;&%0;0*,.
IRA 3In"i*i"ua' Re#iremen# Arranemen#5
IRA 80 0+ -'+ - + -**-;&' 2-%8,: In"i*i"ua' re#iremen# accoun# &, 0 %/, 0((-/' (%+0+ &' + US -% + +(*/,&<+ +'+& - 0' &'&<&/0* 0' &, +'+&(&0%&+, + %/,++ 8/, + 0 0' &'<+,8+' (-8)0' ,-( %-+%0+
-% ,&8&*0% -%0'&?0&-'. In"i*i"ua' re#iremen# annui#- &, 0' &'&<&/0* 0''/& &,,/+ 0' &',/%0'(+ (-8)0'. I',/%+%, /,+ + 0(%-'8 IRA - %++% - 0' in"i*i"ua' re#iremen# annui#-.
T+ ,)-',-%&' &'0'(&0* &',&/&-' 0'*+, + 08&'&,%0&<+ 0,)+(, - 0' IRA )*0'. I +',/%+, 0 + IRA )*0' 8++, + *+&,*0&<+ %+B/&%+8+', - B/0*& 0, 0' IRA 0%%0'+8+' 0' -0&' 0))%-<0* %-8 + In#erna' Re*enue Ser*ice 3IRS5 0 + )*0' B/0*&&+,. T0 %+08+' -' IRA, <0%&+, -' + 0,&, - ;++% &>, 0 Reu'ar IRA -% 0 Ro#$ IRA. R+/*0% IRA 0, ++' +,0*&,+ &' 1974. T+ -**-;&' &, 0 ,/880% - + 0 %+08+' -' 0 %+/*0% IRA: 1. A'-'+ ;- &, *+,, 0 ' 0+ 7" 12 0' ;- 0 , +0%'+ &'(-8+ 80 (-' %&/+ /) 2""" )+% +0% - + +0%'+ &'(-8+ &'- 0 %+/*0% IRA. 2. T00&-' - &'<+,8+' +0%'&', &, ++%%+ /'&* /', 0%+ ;&%0;'. !& -'* 0 +; +(+)&-', -;+<+% )+'0*&+, 0%+ &8)-,+ -' ;&%0;0*, 80+ +-%+ + 0)0+% 00&', 0+ 59 W. 3. T0)0+%, 8/, +&' 80&' 0''/0* ;&%0;0*, - 0 *+0, 0 ,)+(&&+ 8&'&8/8 08-/' ;+' + %+0( 0+ 7" 0' 0+% 0 &8+ + 80 '- 80+ 0&&-'0* (-'%&/&-', - +&% IRA,. R- IRA, 0<+ ++' +,0*&,+ ,&'(+ 0' 1 199. T+ )%&80% &+%+'(+ &' + 0 %+08+' - 0 R- IRA 0' 0 R+/*0% IRA 0%+ 0, -**-;,: •
•
•
N- (/%%+' 0 +/(&-', 0%+ 0**-;+ -% (-'%&/&-', - 0 R- IRA. T/, R- IRA (-'%&/&-', 0%+ 80+ ;& 0+%0 -**0%, ;+%+0, R+/*0% IRA (-'%&/&-', 0%+ 80+ ;& )%+0 -**0%,. /0*&&+ ;&%0;0*, %-8 0 R- IRA 0 + 0)0+% 0, +* -% 0 *+0, 5 +0%, 0%+'> ,/+( - &'(-8+ 00&-'. Mua'i(ie" ,i#$"ra,a' &'(*/+, ;&%0;0*, 0+' 0+% + 0+ 59 W 0' + ;&%0;0*, 80+ 0 1 , &8+ -8+/+%. U'*&+ R+/*0% IRA, R- IRA, 0%+'> ,/+( - 8&'&8/8 &,%&/&-' %+B/&%+8+',.
A<0&*0*+ -% ,+*+8)*-+ &'&<&/0*,. A &'0'(&0* &',&/&-' ,/( 0, 0' &',/%0'(+ (-8)0' -% 0' &'<+,8+' (-8)0' 8/, ,)-',-% + )*0'. I',/%0'(+ (-8)0'&+, 80%+ &'&<&/0* 0''/& (-'%0(, 0 B/0*& 0, K+- )*0',.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 79 - 113
T+ 08&'&,%0&<+ 0,)+(, - + K+- 0%+ 0'*+ + ,)-',-%&' -%0'&?0&-'. IRS 0))%-<0* &, '+(+,,0% -% K+- )*0',. F-**-;&' &, 0 ,/880% - &8)-%0' &'-%80&-' 0-/ K+- )*0',. •
• • •
F/', - + K+- )*0', 80 + )*0(+ &' 0' - + ,+<+%0* )+, - &'<+,8+', ,/( 0, ,-(, -', -% %+0* +,0+, +(. T+ +)-,& - 0 K+- )*0' &, +/(&*+ %-8 00*+ &'(-8+ /) - 0 (+%0&' *&8&. !&%0;0*, %-8 0 K+- 0((-/' 0%+ 00*+ 0, &'(-8+. P+'0*&+, -' + ;&%0;0*, 80 + )00*+ & + *+&,*0&<+* +&'+ %+B/&%+8+', -% 80&' ;&%0;0*, 0%+ '- 8+.
In Cana"a:
A B/0*&&+ %+&%+8+' 0((-/' &, '-;' 0, 0 reis#ere" re#iremen# sa*ins p'an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• •
• •
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ " - 113
CHAPTER 1: +ROUP RETIRE&ENT AND SAVIN+S PLAN)
I' &, (0)+% ;+ ,0** *+0%' 0-/ + -**-;&': REGULATION OF RETIREMENT PLANS. TYPES OF RETIREMENT PLANS. COMPONENTS OF RETIREMENT PLANS. GOVERNMENT SPONSERED RETIREMENT PLANS. • • • •
Reu'a#ion o( re#iremen# p'ans)
I' -%+% - +'(-/%0+ +8)*-+%, 0' *0-% /'&-' - / %+&%+8+' )*0', -% + 8+8+%, - &' U'&+ S0+, 0' &' C0'00 ++%0* &'(-8+ 0 *0;, )%-<&+ &'(-8+ 0 +'+&, - - + plan sponsors = + +8)*-+%, 0 +,0 *&, + )*0' 0' + plan participants = + +8)*-++,. I' -%+% - 0<+ + 0 +'+& + )*0', 0<+ - 8++ (+%0&' %+/*0&-',. I' U'&+ S0+, +,+ )*0', 0%+ '-;' 0, qualified plans 0' &' C0'00 + 0%+ '-;' 0, registered plans! I' C0'00 + )*0', 0<+ - + 0))%-<+ 0' %+&,+%+ ;& R+<+'/+ C0'00 )%&-% - + +,0*&,8+' - ,/( )*0',. I' U'&+ S0+, )*0' ,)-',-%, 0%+ '- %+B/&%+ - -0&' )%&-% 0))%-<0* - I'+%'0* R+<+'/+ S+%<&(+ + + (--,+ - -0&' )%&-% 0))%-<0* -%8 IRS. !+ ,0** '-; &,(/, + ,0*&+' *0;, 0 -<+%' + -%8/*0&-' - ,/( )*0', &' U.S. 0' &' C0'00. Uni#e" S#a#es: 2 M-, - + *+&,*0&-' )0% (-8+, %-8 Employee (etirement Income Security !ct 0/RISA2. F-**-;&' 0%+ + %+B/&%+8+', 0 ERISA &8)-,+, -' %+&%+8+' )*0',. 1. Non "iscrimina#ion %+B/&%+8+', )%-&& B/0*&&+ )*0', %-8 -&' -% + +'+& - &* )0& +8)*-++,. 2. Ves#in reuiremen#s 8/, + (*+0%* ,0+ &' 0 )*0'. T&, %& &<+ <+,+ &'+%+, - + +8)*-++ -' + +'+&, - )*0' +<+' + *+0<+, + ,+%<&(+ )%&-% - %+&%+8+'. T&, %+B/&%+8+' ,-/* (*+0%* ,0+ 0 ;+' + +8)*-++ 0, + %& - )-*&( +'+&, 0' ;+' -+, ,+ 0<+ + <+,+ &'+%+, -' + +8)*-+%>, (-'%&/&-'. 3. Securi#- %+B/&%+8+', 8/, + /*&**+ - ,0+/0% + &'+%+, - + )*0' )0%&(&)0',.
4. Repor#in 0, - + -'+ + )*0' ,)-',-% - -<+%'8+' 0+'(&+, 0' - + )*0' )0%&(&)0', %+0%&' + )*0' )%-<&,&-',.
5. Fi"uciaries 0%+ %+,)-',&*+ - 08&'&,%0+ + )*0' 0' - -* + )*0' 0,,+,. T+ 0%+ -/' - - +&% / &' 0((-%0'(+ - + ,0/-% /&+*&'+, 8+'&-'+ &' ERSIA.
6. Ta. ene(i#s: 2 0 !&&' ,0+ *&8&, + (-'%&/&-', 80+ %-8 + +8)*-+%, +' &, (-',&+%+ 0, 0 )0% - +8)*-+%>, (/%%+' +)+',+ 0' +'(+ &, '- (-',&+%+ 0, 00*+ &'(-8+. T+ +8)*-+%>, (-'%&/&-' - ++ )*0' &, '- (-',&+%+ 0, 00*+ &'(-8+ -% + +8)*-++. T+ 0 -' +8)*-+%>, (-'%&/&-' &, ++%%+ &** ,+ 0(/0** %+(+&<+, + +'+&, %-8 + )*0'. ( A** + &'+ %+, +0%'&', 0%+ 0**- ;+ - 0((%/ + 0%++. T+ )*0' )0% &(&)0' 0(/0** )0, + 0 -' + &'+%+, +0%'&', -' %+(+&<&' + +'+&, %-8 + )*0'. R+&%+8+' )*0', (0' +&+% + contri"utory -% non-contri"utory! S&'(+ +%+ &, '- 0 +'+& -' + +8)*-++>, (-'%&/&-' 8-, - + %+&%+8+' )*0', &' U.S. 0%+ - '-' (-'%&/-% )+. Cana"a: 2 T+ C0'0&0' ++%0* -<+%'8+' 0' 0** + )%-<&'(&0* -<+%'8+' 0<+ +0( +'0(+ 0 Pension Benefits Act! T+ P+',&-' #+'+&, A(, %+B/&%+ 0 ;+' 0' +8)*-+% +,0*&,+, 0 )+',&-' )*0' & 8/, + %+&,+%+ ;& 0 ,)+(&&+ -<+%'8+' 0+'(. I' -%+% - B/0*& -%
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 1 - 113
%+&,%0&-' & 8/, (-8)* <0%&-/, '/8+%, - %/*+, ;&( 0%+ B/&+ ,&8&*0% ;& %+B/&%+8+', &8)-,+ ERISA. T+ &+%+' %+B/&%+8+', -% + P+',&-' #+'+& A( 0%+: 1. T+ )*0' 8/, (-'0&' ,)+(&&+ 8&'&8/8 *es#in reuiremen#s. 2. T+ )*0' 8/, + por#a'e &.+. + +'+&, (0' + %0',+%%+ %-8 -'+ %+&,+%+ )*0' + -+%. 3. P'an asse#s mus# e in*es#e" &' 0((-%0'(+ - P#A. I' -%+% - + 0<-%0*+ 0 +'+&, + )*0' 8/, + 0))%-<+ 0' %+&,+%+ R+<+'/+ C0'00. I' -%+% - + %+&,+%+ R+<+'/+ C0'00 + )*0' 8/, + %+&,+%+ &' 0((-%0'(+ P+',&-' #+'+& A(. T+ %+B/&%+8+', 0 0%+ 8+'&-'+ -% R+<+'/+ C0'00 0%+: 1. E8)*-+%>, (-'%&/&-', ;&&' ,)+(&&+ *&8&, 0%+ "e"uc#i'e %-8 +8)*-+%>, (/%%+' 00*+ &'(-8+. 2. E8)*-+%>, (-'%&/&-' &, '- (-',&+%+ 0, +8)*-++>, 00*+ &'(-8+. 3. !&&' ,)+(&&+ *&8&, +8)*-++>, (-'%&/&-', 0%+ 0 ++. 4. I'<+,8+' +0%'&', 0%+ 0**-;+ - 0(( %/+ 0%++ /'&* )0%&(&)0', %+(+&<+ + +'+&,. T-pes o( Re#iremen# P'ans)
E8)*-+%, +,0*&, %++ +'+%0* )+, - B/0*&&+ %+&,+%+ %+&%+8+' )*0', &' + U'&+ S0+, 0' &' C0'00. Pension plans. - T+,+ 0%+ )*0', 0((-%&' - ;&( + +8)*-+% )%-8&,+, - )0 )+',&-' - + +8)*-++, 0+% +&% %+&%+8+'. M-, +8)*-+%, ,)-',-%+ )+',&-' )*0', &' U.S. 0%+ B/0*&&+ )+',&-' )*0', 0' 0%+ %++%%+ 0, qualified plan) I' C0'00 ,/( 0 )*0' &, '-;' 0, 0 registered pension plan 0RPP2 . #- B/0*&&+ 0' %+&,+%+ (0' + (0+-%&?+ 0, + -**-;&': De(ine" Bene(i# P'a ns: T&, )*0' +&'+, 0 + )0%&(&)0' ;&** %+(+&<+ 0 • &+ 08-/' 0, %+&%+8+' +'+&. T+ +'+& &, /,/0** &<+' 0, 8-'* 0''/&. T+ ,+%<&(+, - 0' 0(/0% 0%+ )&(0** %+B/&%+ - ++%8&'+ + 08-/' - (-'%&/&-' %+B/&%+ -% + )*0'. C-'%&/&-', 80+ -% 0** + )*0' )0%&(&)0', 0%+ )--*+ &'- -'+ &'<+,8+' 0((-/' 0' 0%+ 0**-(0+ &'&<&/0* )*0' )0%&(&)0', 0, + %+&%+ 0((-%&' - + )*0'>, )%-<&,&-'. •
De(ine" Con#riu# ion Pension P'ans : I' &, )*0' + +8)*-+% ,0+, + 08-/' - (-'%&/&-' 0 ;&** + )0& -% +0( )*0' )0%&(&)0',. T+ (-'%&/&-', 0%+ &'<+,+ &'- ,+)0%0+ 0((-/', -% +0( )0%&(&)0'. T+ )0%&(&)0', + + +'&%+ 0((%/+ 08-/' 0, 0 */8) ,/8 -% 0, 8-'* 0''/&. T+%+ 0%+ 0<0'0+, 0 + D+&'+ C-'%&/&-' P*0', 0<+ -<+% D+&'+ #+'+& P*0',&%,* + +8)*-+% '-;, + 08-/' 0 ;&** + )0& -% + )*0' &' 0<0'(+ ,+(-'* + +8)*-+% -+, '- 0<+ - +)+' -' + 0(/0%>, +,&80&-'. M-%+-<+% ERSIA &8)-,+, 8-%+ (-8)*&(0+ *0;, -% #+'+& P*0',. Profit S$aring Plans. - T&, &, 0 %+&%+8+' )*0' 0 &, )%&80%&* /'+ %-8 + +8)*-+%>, )%-&,. I' C0'00 +,+ )*0', 0%+ '-;' 0, "e(erre" pro(i# s$arin p'an 3DPSP5) T+ +0/ %+, 0%+ B/&+ ,&8&*0% - + +&'+ (-'%&/&-' )*0', . S&'(+ + +8)*-+% &, 80&' (-'%&/&-' %-8 + )%-&, ,- & 8& '- )0 + (-'%&/&-', ;+' + (-'%&/&-' ;0%%0', +8. /0*&&(0&-' %/*+, &' U.S. ,0+, 0 +8)*-+%>, (-'%&/&-' 8/, + ,/,0'&0* 0' %+(/%%&' 0' ,-/* '- +'+& & )0& +8)*-++,. T- B/0*& 0, DPSP &' C0'0 0 0 )*0' 0 +&'+, + 08-/ ' - + +8)*-+%>, (-'%&/&-', - re(erence #o pro(i#s 8/, )%-<&+ 0 0 *+0, 1 - -,+ )%-&, ;&** + (-'%&/+. I + )*0' +&'+, + 08-/' - + +8)*-+%>, (-'%&/&-', ou# o( pro(i# +' *&8&0&-', 0%+ &8)-,+ / -,+ 0%+ '- 0, ,%&'+' 0, 1 %/*+.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 2 - 113
Mua'i(ie" Re#iremen# Sa*ins P'ans) Uni#e" S#a#es: A' +8)*-+% 80 )%-<&+ 0 t$rift and saings plan. T&, )*0' ;-%, &' + ,08+ ;0 0, P%-& S0%&' P*0', + -'* &+%+'(+ &, 0 + +8)*-+%>, (-'%&/&-' &, -*&0-%. A' 0((-/' &, +,0*&,+ -% +0( )*0' )0%&(&)0',. T+ +8)*-++>, (-'%&/&-' &, ,/+(+ - ,0/-% *&8&, 0' + +8)*-+% +'+%0** )0, 0' 08-/' +B/0* - + +8)*-++>, (-'%&/&-'. T+ +8)*-++>, (-'%&/&-' - &, )*0' -+, '- +'- 0' ++%0* &'(-8+ 0 +'+&,. I' -%+% - )%-<&+ 0 +'+&, *0;, &' U.S. 0**-;, + +8)*-++, - )0%&(&)0+ &' ,)+(&0* )+ - %& 0' ,0<&', )*0' '-;' 0, 89:0%2 plan! T+ +8)*-++>, (-'%&/&-' &, (-',&+%+ 0, 00*+ &'(-8+ / ,+ 0, - )0 0 ;+' ,+ ;&%0;, + 8-'+ %-8 ,/( 0 )*0'. I' -%+% - )0%&(&)0+ &' 4"1 )*0' + +8)*-++ +'+%, &'- 0 ,0*0% %+/(&-' 0%++8+'. A'-+% )+ - B/0*&&+ %+&%+8+' )*0' 0 &, +,0*&,+ -% +8)*-+% ;& '- 8-%+ 0' 1"" +8)*-++, &'
Incentie / *atc$ for /mployees + )%+(+&' +0%. T&, )+ - )*0' &, '-;' 0, Saings 0SI*PL/ plan2 . T+ +8)*-++ 0%++, - %+/(+ +% (-8)+',0&-' + Plans %+/(&-' &, 0*,00*+. T+ *&8&0&-', - + (-'%&/&-' - + SIMPLE IRA 0%+ +'+%0** &+% 0' -+% )+ - IRA, / 0 &, *-;+% 0' + *&8&0&-', )%-<&+ - -+% B/0*&&+ )*0',. T+ +8)*-+% 0*,- '++, - (-'%&/+ - + )*0', / ;&&' (+%0&' *&8&,. T+%+ &, (*0/,+ -% '-'&,(%&8&'0&-' 0' -+% %+/*0&-', 0%+ B/&+ ,&8)*+. A** (-'%&/&-', - 0 SIMPLE IRA 0((-/', 8/, + <+,+ &' + +8)*-++. Cana"a: A' &'&<&/0* ;- ;&,+, - +,0*&, 0 %+&%+8+' )*0' &' C0'00 (0' / R+&,+%+ R+&%+8+' S0<&', P*0' 0' ;&&' ,0+ *&8&, (0' +/( %-8 &, (/%%+' 00*+ &'(-8+. M0' +8)*-+% , / roup RRSP) E8)*-++, 0' +8)*-+%, 0%+ )+%8&+ - 80+ (-'%&/&-' - + )*0' / + (-'%&/&-' %-8 + +8)*-+%>, +' &, (-',&+%+ 0, 0 + +8)*-++ 80+ +8. H+'(+ + +8)*-++ 0, + <+,+ %& -<+% + 08-/' - + )*0' -%8 <+% +&''&'. A' (-'%&/&-' - + )*0' &, 0%++. Nonua'i(ie" Re#iremen# Sa*ins P'ans)
M0' '-'B/0*&&+ )*0', 0%+ +,0*&,+ - 0<-& + (-8)*+ *+&,*0&<+ '-%8, 0 -<+%' + B/0*&&+ %+&,+%+ )*0',. !+ ,0** '-; &,(/,, + '-'B/0*&&+ %+&%+8+' )*0', &' U.S. 0' &' C0'00.
Uni#e" S#a#es: F-% ,80** +8)*-+%, +%+ &, simplified employee pension 0S/P2 plan! T+ +8)*-++ &, %+B/&%+ - +,0*&, +% -;' IRA &' ;&( + +8)*-+% ;&** 0 +% (-'%&/&-'. T+ (-'%&/&-' 80+ + +8)*-+% &, (-',&+%+ 0, +% +)+',+, 0' +'(+ +/(&*+ %-8 +% (/%%+' &'(-8+. T+ +8)*-+%>, (-'%&/&-' &, (-',&+%+ 0, 00*+ &'(-8+ -% + +8)*-++ / ,+ &, 0**-;+ - 0+ (+%0&' 0 +/(&-',. T+ +/(&*+ -% + (-'%&/&-' 80& - SEP IRA &, 8-%+ 0' &' -+% IRA,. SEP 0%+ +0,&+% - 08&'&,%0+ ,&'(+ & &'<-*<+, *+,, 08-/' - )0)+% ;-%. Cana"a: S-8+ C0'0&0' +8)*-+%, 0<+ +,0* &,+ employee3s profit s$aring plans 0/PSPs2 0 0%+ '-'%+&,+%+ ,0<&' )*0',. C-'%&/&-', 8/, + 80+ +<+% +0%. T+ (-'%&/&-', 80+ + +8)*-+% 0%+ +/(&*+ %-8 &, )%+,+' 00*+ &'(-8+. T- + + 0 +'+& + +8)*-+% 8/, ,0%+ + )%-& /'+% re(erence #o pro(i# 0 &, + ,0%+ 8/, + 1. T+ +8)*-++ 0, - )0 0 -' - + (-'%&/&-', 80+ + +8)*-+% 0' +%,+*. Componen#s o( a Re#iremen# P'an) •
•
T$e p'an: T+ +%8, - 0 )*0' 0%+ ;%&+' &' 0 -(/8+' '-;' 0, plan document! T&,
-(/8+' (%&+%&0 ,)+**, -/ )%-<&,&-', -% +08)*+: +)0%&(&)0', )*0' 8/, 0%+ ,0+/** + +*&&&*& -% + + &+%+' )*0' )0%&(&)0', +0, &8+ ;+' + <+,+ + &8+ ;+' ,+ ;&** %+(+&<+ + +'+&, -%8 + 0,,+, - + )*0'. P'an a"minis#ra#or: T+ )*0' ,)-',-% '08+, 0 )*0' 08&'&,%0-% ;- &, %+,)-',&*+ -% <0%&-/, 0,)+(, - + )*0'>, -)+%0&-'. T+ 08&'&,%0-% (0' + + ,)-',-%&' +8)*-+%
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 3 - 113
•
-% 0 -0% - (-88&++ 0 ;&** + +,0*&,+ + +8)*-+%. T+ 08&'&,%0-% &, %+,)-',&*+ -% 80&'0&'&' + %+(-%, -% 0** )0%&(&)0',. T+ 08&'&,%0-% /,+, +,+ %+(-%, - )%-<&+ %+)-%, - + -<+%'8+'0* 0+'(&+, 0' - + )*0' )0%&(&)0',. I' 80' (0,+, + 08&'&,%0-% 80 %+B/&%+ 80' -+% ,+%<&(+, &' -%+% - 80&'0&' + )*0'. S+ &, %+,)-',&*+ -% &%&' +,+ ,+%<&(+,. L&+ &',/%+%, )%-<&+ - )*0', 0' 08&'&,%0&<+ ,+%<&(+,. Fun"in *e$ic'es: A /'&' <+&(*+ &, + 8+0', - &'<+,&' + )*0'>, 0,,+, 0, + 0%+ 0((/8/*0+. T+ 8+0', (0' + 0' 0''/& 8//0* /' *&+ &',/%0'(+ (-'%0( -+%,. T+ )*0' ,)-',-% &, %+B/&%+ - -**-; (+%0&' *&8&, ;&*+ ,+*+(&' + /'&' <+&(*+ -% + )*0'. F/'&' <+&(*+ )%-<&+ + &',/%0'(+ (-8)0'&+, 0%+ /0%0'++ 00&', (+%0&' &'0'(&0* *-,, 0' 8-%0*& %0+,. T+ <0%&-/, /'&' <+&(*+ )%-<&+ + &',/%0'(+ (-8)0' 0%+: 1. +roup De(erre" Annui#-: E0( +0% + (-'% &/&-', 80+ -% +0( )*0' )0%&(&)0', 0%+ /,+ - / ,&'*+ )%+8&/8 ++%%+ 0''/&. !+' + )0%&(&)0' %+&%+, + +'+&, %-8 + )*0' 0%+ &<+' 0, /,/0* %+&%+8+' +'+&,. #+(0/,+ + (-'%&/&-', 0%+ /,+ - / )*0', +-%+ + %+&%+8+' - + - + )0%&(&)0', +,+ )*0', 0%+ 0*,- '-;' 0, fully insured products! 2. Deposi# A"minis#ra#ion Con#rac#s: T+ )*0' ,)-',-% )*0(+, + 0,,+, - + )*0' &' + G+'+%0* I'<+,8+' A((-/' - + &',/%+%. !+' + )0%&(&)0' %+&%+, + &',/%+% /, 0' &88+&0+ 0''/& ;& + 08-/' - &, ,0%+ %-8 + 0((-/'. T+ &',/%+% +'+%0** /0%0'++, 00&', &'<+,8+' *-,,+, 0' ,0+, 0 8&'&8/8 08-/' 0 + )0%&(&)0' ;&** %+(+&<+. 3. Imme"ia#e Par#icipa#ion +uaran#ee Con#rac#s 3IP+5: H+%+ 0*,- + 0,,+, - + )*0' 0%+ )*0(+ &' + G+'+%0* I'<+,8+' A((-/' - + &',/%+% / &, (-'%0( -+, '- /0%0'++ 00&', &'<+,8+' *-,,+,. I',+0 + (-'%0( 0**-;, + ,)-',-% - )0%&(&)0+ &' + 0&' 0' + *-,, - + &',/%+%. H-;+<+% +%+ &, 0 *&8& - ;&( + ,)-',-% ,0%+, + *-,, - + &',/%+%. 4. Separa#e accoun# Con#rac#s: T&, &, ,-8+&8+, (0**+ 0, inestment facility contract + &',/%+% &'<+,, + 0,,+, &' ,-(, ,-%+%8 &'<+,8+', 8//0* /', +(. T+ &',/%+% 80&'0&', &'<+,8+' ,%0+&+, -% &+%+' 0((-/', 0' + ,)-',-%+ (--,+, -'+ -% 8-%+-0((-/', &' ;&( + 0,,+, ;&**-+ G+'+%0** ,+)0%0+ 0((-/', '- /0%0'++ + )+%-%80'(+ +&'<+,+. 0((-/'.
5. +uaran#ee" In*es#men# Con#rac#s 3+IC5: H+%+ + &',/%+% 0((+), + 0,,+, -%8 + ,)-',-% -% 0 (+%0&' '/8+% - +0%,. T+ &'+%+, &, +'+%0** /0%0'++. T+ &'+%+, +0%'+ -' + &'<+,8+' (0' + 0''/0** %+/%'+ - + ,)-',-% -% (0' + 0((/8/*0+ &** + )+%&- +',. A + +' - + )+%&- + 0((/8/*0+ ,/8 &, %+/%'+ - + ,)-',-%. +o*ernmen# Sponsore" Re#iremen# P'ans) Cana"a: I' C0'00 ;+ 0<+ + -**-;&' %+&%+8+' )*0', 0 0%+ ,)-',-%+ + -<+%'8+': )ld age Security Act. T&, 0( )%-<&+, )+',&-' - 0** C0'0&0', - 0+ 0-<+ 65 +0%,. T+ )+',&-' 08-/' &, '- +)+'+' -' + )%+%+&%+8+' ;0+ 80%&0* ,0/, (/%%+' -((/)0&-' +(. E<+%-'+ ;- 0, %+0(+ 0' 0+ - 65 0' 0, 8+ (+%0&' %+,&+'&0* (%&+%&0 &, +*&&*+ - %+(+&<+ + )+',&-'. T+ 8-'+ - /' +,+ )+',&-', &, 0+' -%8 ++%0* -<+%'8+' +'+%0* 0 %+<+'/+,. Canada Pension Plan and ;ue"ec Pension Plan. T+,+ 0%+ ++%0* )%-%08, 0
)%-<&+ )+',&-' - ;-%+%, ;- 0<+ (-'%&/+ 8-'+ &'- + )*0' /%&' +&% ;-%&' +0%,. T+ CPP 0' PP ;-% <+% (*-,+* 0' +'(+ + )0%&(&)0', (0' + +0,&* %0',+%%+ %-8 -'+ )*0' - 0'-+%. P0%&(&)0&-' -% 0** ;-%+%, &' +,+ )*0', &, 80'0-%. T+ (-<+%+ +8)*-++ 8/, )0 0 (+%0&' 08-/' - +% &'(-8+ &'- + )*0' 0' + +8)*-+% 0, - )0 + ,08+
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 4 - 113
08-/' 0, + +8)*-++. T+ ,+*+8)*-+ ;-%+% '++, - )0 0 &+% 08-/'. T+ +'+& - + )*0' +)+', -' + 08-/' (-'%&/+ / &, *&8&+ - 0 *+&,*0&<+* +,0*&,+ 08-/'. Uni#e" S#a#es: N+0%* 0** )+-)*+ &' U.S. 0%+ (-<+%+ + O'" Ae6 Sur*i*ors6 Disai'i#- an" Hea'#$ Insurance 3OASDHI5 Ac# -% ++% '-;' 0, Socia' Securi#- +(+)&' +; %-/),. A, -% +08)*+ ++%0* (&<&* ,+%<&(+ ;-%+%, 0%+ (-<+%+ Ci*i' Ser*ice Re#iremen# Ac# %0&*%-0 ;-%+%, 0%+ (-<+%+ Rai'roa" Re#iremen# Ac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
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 5 - 113
CHAPTER 1: &EDICAL EPENSE COVERA+E
M+&(0* +)+',+ (-<+%0+ 0%+ &'+8'& +'+&,. M+&(0* +)+',+ (-<+%0+ 0%+ 80&'0&'+ &anae" care p'ans. &anae" care P'ans 0%+ 8+&(0* +)+',+ )*0', 0 (-8&'+ &'0'(&' 0' +*&<+% - +0* (0%+ ;&&' 0 ,,+8 0 80'0+, + (-, 0((+,,&&*& 0' B/0*& - (0%+.
2 M0'0+ (0%+ )*0', 0%+: 1) Hea'#$ &ain#enance Orani!a#ions3 H&O 5 /) Pre(erre" Pro*i"er Orani!a#ions3 PPO 5 Basic me"ica' e.pense co*erae : C-',&,, - ,+)0%0+ +'+&, -% +0( (-<+%+ 8+&(0* (0%+ (-,.
S-8+ (-88-' 0,&( +)+',+ (-<+%0+,: H-,)&0* +)+',+ : H-,)&0* +)+',+, *&+ %--8 -0% 8+&(0&-' *0 +,, +(. S/%&(0* +)+',+,: I')0&+' 0' O/)0&+' ,/%+% P,&(&0'>, +)+',+ (-<+%0+: P,&(&0'>, <&,& - &' 0' -/ - + -,)&0*. T+%+ (-/* + -'+ )-*&( -% +0( (-<+%0+ -% -'+ )-*&( - 0** &', - (-<+%0+,. T+,+ 0%+ 0*,- '-;' 0, &%,-**0% (-<+%0+ ,&'(+ &',/%0'(+ (-8)0'&+, ,0%, %+&8/%,&' %& %-8 + &%, -**0% - + +)+',+ 0' '- (-'%&/&-' &, 0,+ %-8 &',/%+. &aor me"ica' insurance: T&, 8+&(0* +)+',+ )*0' )%-<&+, ,/,0'&0* +'+& - + ,08+ (0+-% - +)+',+, )%-<&+ 0,&( +)+',+ (-<+%0+ 0' ,-8+&8+, 0*,- (-'0&', )%+<+'&<+ (0%+.
A 80&8/8 +'+& *&8& -% *&+&8+ /'*&8&+ 80&8/8 +'+& &, ,)+(&&+. 2 )+, 0<0&*0*+: 1. S/))*+8+'0* 80-% 8+&(0* )-*&(: P%-<&+, (-<+%0+ -% 08-/' 0 +(++ + *&8& 0 (-8+, ;& 0,&( 8+&(0* (-<+%0+ -% (-<+%0+, 0 (0' + -/ ,+)0%0+*. 2. C-8)%++',&<+ M0-% 8+&(0* )-*&(: C-8&'0&-' - 0,&( 8+&(0* (-<+%0+ 0' ,/))*+8+'0* 8+&(0* (-<+%0+. M-, )*0' 0%+ - &, )+. U,/0* %+0,-'0*+ 0' (/,-80% ++,: UCR &, + 80&8/8 -**0% 08-/' - 0 &<+' (-<+%+ +)+',+, 0 + &',/%+% ;&** &' +*&&*+ -% %+&8/%,+8+'. #0,+ -' ,0&,&(, %-8 '0&-'0* ,/ - ++, 0 ,0'0% +)+',+ *+<+* &, ,+ -% 0 *-(0*& -% 0 (+%0&' (-<+%+ +)+',+, 0))*&' 0 )%+++%8&'+ -%8/*0. T&, +'+& 08-/' &, UCR ++. !+' 0 (*0&8 &, )%-(+,,+ + )%-(++ &, ++%8&'+ ;++% + 08-/' &, ;&&' UCR -% '-. E)+',+ )0%&(&)0&-': E'(-/%0+, &' %+/(&' + (-<+%0+ )%+8&/8. &',/%+, - ++) +'+& 08-/' - 0 8&'&8/8 0' /, +*) 2 &', - )0%&(&)0&-':
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 6 - 113
1.De"uc#i'e: A *0 08-/' 0 &',/%+ '++, - )0 &%, +-%+ + (-<+%0+ *+<+* ,0%,. L&+ &%, 2". T+ +/(&*+ - %-/) )-*&(&+, &, /,/0** *-;+% 0' &'&<&/0*, -'+,. 2.Ca'en"ar -ear "e"uc#i'e: T-0* 80&8/8 +/(&*+ &'(/%%+ &' 0 +0% -% <0%&-/, (-<+%+ +)+',+,. 3.Coinsurance: A+% + +/(&*+ 0, ++' )0& + +'+& %+&8/%,+8+' *+<+* ,0%,. H-;+<+% &, )%-<&,&-' ,0+, 0 -% &, *+<+* 0*,- &',/%+ '++, - )0 0 )+%(+'0+ - + +)+',+. 4.S#op Loss pro*ision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
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 7 - 113
6. L-' T+%8 C0%+: T&, )*0' )%-<&+, (-<+%0+ -% )+-)*+ ;- +(0/,+ - -* 0+ -% 0' -+% (0/,+. &e"icare Supp'emen# Co*erae:
I' USA + O* A+ S/%<&<-%, D&,0&*& 0' H+0* I',/%0'(+ OASDHI 0*,- '-;' 0, ,-(&0* ,+(/%& )%-<&+, 8+&(0* (-<+%0+ /'+% M+&(0%+ )%-%08. I',/%0'(+ (-8)0'&+, 0<+ &',/%0'(+ )%-/(, ;&( )%-<&+ ,/))*+8+'0* (-<+%0+ -<+% M+&(0%+. T+,+ 0%+ '-;' 0, M+&0) )-*&(&+,. G-<. S)-',-%+ P%-%08,: M+&(0%+ 0' M+&(0& &e"icare:
E*&&&*&: 1. A+ 65 0' 0<+ ,-(&0* ,+(/%& +'+&, 2. H0<+ 2 +0%, - +*&&*+ &,0&*& &'(-8+ +'+&, 3. H0<+ %+&%+8+' +'+&, /'+% R0&*%-0 %+&%+8+' 0( 4. T-,+ ;- 0%+ 0*&(+ ;& = -% 0%+ + +)+'+' - 0 )+%,-' 0*&(+ ;& = &'+ &,+0,+ 0 %+B/&%+, &0*,&, -% %0',)*0' T+%+ 0%+ 2 )0%, - &, )%-%08: Par# A: #0,&( &',/%0'(+ (-<+%0+ 0' &, 0/-80&(0** ++'+ - +<+%-'+ ;&-/ 0' )%+8&/8. D+/(&*+ 0' (-&',/%0'(+ )%-<&,&-' &, )%+,+'. I'(*/+, 1. H-,)&0*&?0&-' 2. C-'&'+8+' &' 0' ++'+ (0%+ 0(&*& 0+% -,)&0*&?0&-' 0' 3. -8+ +0* (0%+ ,+%<&(+,. F&'0'(+ )0%-** 0 &8)-,+ -' +8)*-++, %-/ S-(&0* S+(/%& )%-%08. Par# B: S/))*+8+'0% (-<+%0+ (0' + -/ )0&' )%+8&/8 - 45.5".
F&'0'(+ )%+8&/8 - )+-)*+ &',/%+ 0' ++%0* -<+%'8+' +'+%0* %+<+'/+,. I'+%8+&0%&+,: T&% )0%&+, ;- 08&'&,+% P0% A. C0%%&+%,: T&% )0%&+, ;- 08&'&,+% P0% #. &e"icai": • • •
• • • •
P%-%08 -% )--% )+-)*+. S0+ 0' ++%0* /'+ )%-%08. E0( ,0+ 08&'&,+%, &, -;' )%-%08 0' +,0*&,+, &, -;' +*&&&*& (%&+%&0. T/, M+&(0& <0%&+, /+* %-8 ,0+ - ,0+ 8/, 0** -**-; 0 8&'&8/8 ++%0* 80'0+ -% %+B/&%+8+',. M+&(0& 8/, (-<+% *-'+%8 (/,-&0* '/%,&'-8+ (0%+. P+%,-' %+(+&<&' S/))*+8+'0* S-(&0* S+(/%& SSI 8/, %+(+&<+ M+&(0&. D&,0*+ 0' *&' )+%,-' 8/, %+(+&<+ M+&(0& M+&(0& &, 0*;0, + ,+(-'0% )0-% - +'+&,
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ - 113
M0-% D&+%+'(+, +;++' L&+ 0' H+0* I',/%0'(+: Li(eInsurance V0*/+C-'0( O'+&8+)08+' S80**+%E+(
I'+)+'+'
Hea'#$Insurance C-'%0(-I'+8'& M/*&)*+ E+( - &'*0&-' (0'+, &' +(-'-8 0' (0'+, &' 8+&(0* )%0(&(+ ++( + 08-/' - +'+&, *0%+*. E+(++-%0)&(0**-(0&-'
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
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 9 - 113
CHAPTER 1: DISABILIT0 INCO&E COVERA+E)
I'&<&/0* 0' (-88+%(&0* &',/%0'(+ (-8)0'&+, )%-<&+ "isai'i#- income co*erae 0 )%-<&+, 0 ,)+(&&+ )+%&-&( &'(-8+ %+)*0(+8+' +'+&, - 0' &',/%+ 0 +(-8+, /'0*+ - ;-% +(0/,+ - 0' &**'+,, -% 0' 0((&+'0* &'/%. De(ini#ion o( To#a' Disai'i#-)
E0( &,0&*& &'(-8+ )-*&( ,)+(&&+, + +&'&&-' - total disa"ility 0 + &',/%+% /,+, - ++%8&'+ ;++% 0 (-<+%+ )+%,-' &, +'&*+ - + + &,0&*& +'+&,. An- Occupa#ion: A -'+ &8+ + &,0&* & ;0, +&'+ 0, + ,0+ ;+%+ + (-<+%+ • )+%,-' +(-8+, &,0*+ - )+%-%8 0' ,-% - -((/)0&-'. #+(0/,+ - + ,%&( ,+',+ -
•
•
•
•
+ +&'&&-' 8-, - + (-<+%+ )+%,-' ;&** '+<+% + +'&*+ - + +'+&,. T/, + &',/%0'(+ (-8)0'&+, '-; /,+ 0 8-%+ *&+%0* +&'&&-'. Curren# Usua' De(ini#ion: T&, )%-<&+, 0 0' &',/%+ &, (-',&+%+ -0** &,0*+ & 0 + ,0% - &,0&*& + &,0&*& )%+<+', &8 %-8 )+%-%8&' + +,,+'&0* /&+, - &, regular occupation. A + +' - + ,)+(&&+ )+%&- /,/0** ;- -% &<+ +0%, 0' &',/%+ &, (-',&+%+ 0, -0** &,0*+ & &, &,0&*& )%+<+', &8 %-8 ;-%&' 0 any occupation -% ;&( + &, %+0,-'0* &+ +/(0&-' %0&'&' -% +)+%&+'(+. P-*&(&+, 0 /,+ &, +&'&&-' -;+<+% 80 ,0+ 0 + &',/%+ ;&** '- + (-',&+%+ 0, &,0*+ & + <-*/'0%&* %+/%', - 0' -((/)0&-'. O,n Pre*ious Occupa#ion: T&, +&'&&-' ;&( &, +'+%0** &'(*/+ &' &'&<&/0* )-*&(&+, %0+% 0' %-/) )-*&(&+, ,0+, 0 + )-*&( ;&** )0 &,0&*& +'+&, & + &',/%+ +(-8+, /'0*+ - )+%-%8 + 0(, - +% o#n preious occupation! T/, +<+' & + &',/%+ ,0%, ;-%&' 0 0' -+% 0&'/* -((/)0&-' &+%+' %-8 &, )%+<&-/, -((/)0&-' + &, +'&*+ - %+(+&<+ + +'+&,. Income Loss: T&, +&'&&-' &, +'+%0** &'(*/+ &' &,0&*& (-<+%0+ '-;' 0, income protection coerage! T+ +&'&&-' - -0* &,0&*& -% + &',/%+ ,0+, 0 + &',/%+ &, &,0*+ & + ,/+%, 0' &'(-8+ *-,, -% &, &,0&*&. A, 0 %+,/* + &',/%+% )0, + +'+& - ;&*+ + &',/%+ &, -0** /'0*+ - ;-% 0' ;&*+ + &, 0*+ ;-% / &, &,0&*& 0, %+/(+ &, &'(-8+. T+ )-*&( ,)+(&&+, - 1 0 80&8/8 +'+& 08-/' 0 ;&** + )0& ;+' 0' &',/%+ ;&** + (-8)*++* /'0*+ - ;-% 0' 2 0 8+- - ++%8&'&' + 08-/' - *-, &'(-8+ ;+' + &,0*+ &',/%+ &, ;-%&'. Presump#i*e Disai'i#ies: A )%+,/8)&<+ &,0&*& &, 0 ,0+ (-'&&-' 0 & )%+,+' 0/-80&(0** (0/,+, + &',/%+ - + (-',&+%+ -0** &,0*+ /, + &',/%+ ;&** %+(+&<+ + /** +'+&, +<+' + %+,/8+, &, -%&&'0* -((/)0&-'. T&, +'+%0** &'(*/+, -0* 0' )+%80'+' *&''+,, *-,, - + /,+ - 0' ;- *&8, 0' *-,, - ,)++( -% +0%&'.
Bene(i# Perio")
#+'+& )+%&- &, &8+ -% ;&( + &',/%+% )0, + &,0&*& &'(-8+ +'+&,. #0,+ -' &, + )-*&( (0' +&+% + (*0,,&&+ &'- ,-% +%8 -% *-' +%8. S$or#2#erm roup "isai'i#- income co*erae )%-<&+, 0 80&8/8 +'+& )+%&- - • *+,, 0' -'+ +0% ,/( (-<+%0+ (-88-'* ,)+(&&+, 80&8/8 +'+& )+%&- - 13 26 Lon2#erm income co*erae -% 52 ;++,. )%-<&+, 0 80&8/8 )+%&- - 8-%+ 0' -'+roup +0% "isai'i#+ 80&8/8 +'+& )+%&- (-88-'* ++', +'+& - + &',/%+>, '-%80* %+&%+8+' 0+ -% - 0+ 7".
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 9" - 113
•
I'&<&/0* &,0&*& &'(-8+ (-<+%0+ &, ,+*-8 -+%+ ;& 0 80&8/8 +'+& )+%&- - *+,, 0' -'+ +0%. T/, s$or#2#erm in"i*i"ua' "isai'i#- income co*erae )%-<&+, 0 80&8/8 +'+& )+%&- - -'+ - &<+ +0%,. Lon2#erm in"i*i"ua' "isai'i#- income co*erae )%-<&+, 0 80&8/8 +'+& )+%&- - 0 *+0, &<+ +0%,. T+ +'+& )+%&- &' &, (0,+ 80 ++' /'&* + &',/%+ %+0(+, 65+0%, - 0+ &' ,-8+ (0,+, +'+&, 0%+ )%-<&+ -% + &',/%+>, *&+&8+.
E'imina#ion Perio")
A' +*&8&'0&-' )+%&- &, + ;0&&' )+%&- -% ;&( + &',/%+ 0, - + &,0*+ %+(+&<+ + +'+&,. T+ +*&8&'0&-' )+%&- %+/(+, + (-, -% )%-<&&' + +'+&, -% &,0&*& 0 *0,, -% <+% ,-% )+%&-,. L-'+% + +*&8&'0&-' )+%&- ,-%+% ;&** + + (-, - + (-<+%0+. T+ *+' - +*&8&'0&-' )+%&- -% - ,-% 0' *-'+%8 &'&<&/0* &,0&*& &'(-8+ %-8 3" 0, - 6 8-',. M-,/+ ,-%+%8 %-/)0' *&+0'&,0&*& &'(-8+ (-<+%0+(-<+%0+ (-'0&',*0, '- +*&8&'0&-' )+%&- -% &,0&*& - 0((&+', +*&8&'0&-' )+%&- - 1 ;++ -% &,0&*& -% ,&('+,,. M-, *-'+%8 &,0&*& (-<+%0+ 0, 0' +*&8&'0&-' )+%&- - 3" 0, - 6 8-',. Bene(i# Amoun#)
A, 0 +'+%0* %/*+ + +'+& 08-/' 0<0&*0*+ %-/ &,0&*& &'(-8+ (-<+%0+ &, '- &'+'+ - %+)*0(+ /** 0' &'&<&/0*>, )%+&,0&*& &'(-8+. I',+0 + +'+&, 0%+ *&8&+. D&,0&*& &'(-8+ 08-/', -;+<+% ,-/* '- + ,- *-; 0 + &',/%+ 0(+, 0 %0,&( &'(-8+ *-,,. T+ &',/%+% +'+%0** /,+, +&+% - + -**-;&' ;- 8+-, - ++%8&'+ + +'+& 08-/',. T+ 8+--*- +)+', -' ;++% + )-*&( &, 0 %-/) )-*&( -% &'&<&/0* )-*&( -% -' ;++% + )-*&( &, 0 ,-%+%8 -% *-'+%8 )-*&(. Income Benefit (ormula. T&, &, +'+%0** /,+ -% %-/) &,0&*& &'(-8+ +'+& • )-*&(&+,. H+%+ + &',/%+% ,0+, + +'+& 0, ,-8+ )+%(+'0+ - + &',/%+>, )%+&,0&*& &'(-8+. T+ &',/%+% (-',&+%, 0** ,-% - &,0&*& &'(-8+. F-% %-/) *-' +%8 &,0&*& &'(-8+ (-<+%0+ + +'+& +'+%0** 08-/', - 6575 - + )%+&,0&*& &'(-8+. F-% +08)*+ + &',/%+% 80 ,0+ 0 + &',/%+ ;&** %+(+&<+ 7" - &, )%+&,0&*& &'(-8+ 0' + +'+&, ;&** + %+/(+ & + %+(+&<+, &,0&*& &'(-8+ -%8 0' -+% ,-/%(+,. G%-/) ,-%+%8 &,0&*& &'(-8+ (-<+%0+ 0, &, )+%(+'0+ 0, 9"1"". (lat Amount. T&, &, +'+%0** /,+ -% &'&<&/0* )-*&(&+,. H+%+ + &',/%+% 8+'&-', 0 • *0 08-/' - + )0& ;+' + &',/%+ +(-8+, -0** &,0*+. T+ 08-/' - + +'+& +)+', -' + &',/%+>, +0%'&', 0 + &8+ + )/%(0,+ + )-*&(. #/ +%+ + +'+& -+, '- +)+' -' +0%'&', -%8 0' -+% ,-/%(+. T+ &',/%+% (0%+/** *&8&, + 80&8/8 +'+& -% ;&( + &',/%+ (0' / + )-*&(. T+ &',/%+% +'+%0** (-',&+%, + -**-;&' 0(-%, ;&*+ ,+&' /) + 80&8/8 +'+& %-8 + )-*&(: 1. T+ 08-/' - + 0))*&(0'>, /,/0* +0%'+ &'(-8+ +-%+ 0. 2. T+ 08-/' - + 0))*&(0'>, /'+0%'+ &'(-8+ ,/( 0, &<&+', 0' + &'+%+, 0 ;&** (-'&'/+ ;+' + &',/%+ +(-8+ &,0*+. 3. A&&-'0* &'(-8+ /%&' &,0&*& ,/( 0, &'(-8+ +'+&, %-8 %-/) )-*&( 0' -<+%'8+' ,)-',-%+ )-*&(. 4. T+ 0))*&(0'>, (/%%+' 0 %0(+. I' +'+%0* + 80&8/8 08-/' - &,0&*& &'(-8+ +'+& 0 &',/%+% ;&** )%-<&+ &, 5" - 7" - &, )%+0 +0%'&',.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 91 - 113
Supp'emen#a' Bene(i#s)
!+ ,0** '-; +,(%&+ (+%0&' ,/))*+8+'0* +'+&, 0 0%+ /,/0** 0+ - &,0&*& &'(-8+ (-<+%0+. T+,+ 0%+ +&+% 0+ 0/-80&(0** ;& + )-*&( -% 0%+ 0+ 0, 0' -)&-' )0&' +%0 )%+8&/8 -% ,/( +'+&,. Partial Disa"ility Benefits. I' &, (0,+ (+%0&' +'+& &, )%-<&+ - + &',/%+ & + 0, • par#ia' "isai'i#-0 &,0&*& 0 )%+<+', + &',/%+ %-8 )+%-%8&' (+%0&' 0(, - &, -;' -((/)0&-' -% )%+<+', &8 %-8 +&' 0 /** &8+ +8)*-++ - &, )%+,+' -((/)0&-'. T&, 08-/' &, )&(0** +&+ % 0 *0 08-/' -% -+' 5" - + -0* &,0&*& +'+&. U,&' + -%8/*0 8+- + +'+& 80 <0% +)+'&' -' + &',/%+>, *-,, - &'(-8+ /+ - )0%&0* &,0&*&. (uture Purc$ase )ption Benefit. I' (0,+ - *0 +'+& + &',/%+% 80 )%-<&+ 0 //%+ •
•
)/%(0,+ -)&-' ;&( %0', + &',/%+ - &'(%+0,+ + +'+&, 0, &, &'(-8+ &'(%+0,+,. T+ -)&-' &, +'+%0** )%-<&+ & + &',/%+ (0' ,-; 0 &, &'(-8+ ;&** &'(%+0,+ (-',&+%0* &' + //%+. H-;+<+% + &'(%+8+' - ,/( +'+&, &, *&8&+. T+ &',/%+% -+, '- '++ - )%-<&+ )%-- - &',/%0&*& - &'(%+0,+ + +'+& 08-/'. Cost of Liing Ad
E.c'usion)
1. 2. 3. 4.
F-**-;&' 0%+ + +(*/,&-' (%&+%&0 -% + &,0&*& &'(-8+ +'+&,: I'/%&+, -% ,&('+,, 0 %+,/* %-8 ;0% +(*0%+ -% /'+(*0%+. I'+'&-'0** ,+*&'*&(+ &'/%&+,. I'/%&+, %+(+&<+ 0, 0 %+,/* - 0(&<+ )0%&(&)0&-' &' 0 %&-. O((/)0&-'%+*0+ &,0 &*&&+, -% ,&('+,, -% ;&( + &',/%+ &, +'&*+ - %+(+&<+ &'(-8+ +'+&, /'+% ,-8+ %-/) -% -<+%'8+' &,0&*& )%-%08.
Specia'i!e" T-pes o( Disai'i#- Co*erae) T+,+ (-<+%0+ 0%+ +,&'+ - )%-<&+ +'+&, -+% 0' *-,, &' (-8+ & + &',/%+ +, &,0*+. I' C0)+% 4 ;+ +,(%&+ 0 0 (*-,+* +* /,&'+,, ;&** ,/+% %-8 0 &'0'(&0* *-,, & + + )+%,-' -% 0' - + )0%'+%, &+,. L&+;&,+ + /,&'+,, 80 ,/+% %-8 0 *-,, - &'(-8+ & + + )+%,-' -% 0' - + )0%'+%, +, &,0*+. , -% -;'+%>, &'+%+, ,-/* + +(-8+ &,0*+. Business O*er$ea" E.pense Co*erae: S-/* + -;'+% +, &,0*+ ,&** + 8& • &'(/% +)+',+, - -)+%0+ &, /,&'+,,. F-% +08)*+ -&(+ %+' 8-%0+ )08+', +(. T&, (-<+%0+ )%-<&+, &,0&*& +'+&, - (-)+ /) ;& + -<+%+0 +)+',+,. I',/%+%, +,(%&+ oer$ead e5penses 0, + /,/0* 0' '+(+,,0% /,&'+,, +)+',+ &'(*/&' +8)*-++>, ,0*0% %+' +*+)-'+ +*+(%&(& 0, 0' -+% +)+',+, 0 0%+ %+B/&%+ ++) + /,&'+,, -)+'. +o*ernmen#2Sponsore" Disai'i#- Income Prorams) Uni#e" S#a#es: U.S. ;-%+%, ;- 0%+ /'+% 0+ 65 0' ;- 0<+ )0& 0 ,)+(&&+ 08-/' - S-(&0* S+(/%& T0 -% 0 )%+,(%&+ '/8+% - B/0%+%+0% )+%&-, 0%+ +*&&*+ - %+(+&<+ Social Security Disa"ility Income 0SSDI2! F-% &, + &,0&*& &, +,(%&+ 0, 0 )+%,-'>, &'0&*& - ;-% +(0/,+ - 0 ),&(0* -% 8+'0* ,&('+,, -% &'/% 0 0<+ *0,+ -% +)+(+ -
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 92 - 113
*0, 0 *+0, -% -'+ +0% -% 8& *+0 - +0 - + &',/%+. T+ 8-'* +'+& &, +B/0* - + 08-/' - %+&%+8+' +'+& 0 + )+%,-' ;-/* 0<+ %+(+&<+. T+ +'+& -+, '- +&' /'&* + &',/%+ &, &,0*+ -% 5 8-',. H+'(+ 0))%-&80+* + +'+&, ,0% 0+% 6 8-',. T+ +'+& (-'&'/+, /) - 1 2 8-', 0+% + &,0&*& +', 2 + &',/%+ &+, 3 + &',/%+ %+0(+, 65 +0%, - 0+ ;+' + +(-8+, +'&*+ - %+(+&<+ %+&%+8+' +'+&,. T+ &,0&*& )*0' 8& 0*,- )%-<&+ +)+'+' +'+&,. H-;+<+% +%+ &, 0 *&8& - + 80&8/8 08&* (-<+%0+. Cana"a: S-%+%8 &'(-8+ +'+&, 0%+ 0<0&*0*+ /'+% + ++% 0* 6nemployment Insurance Act . T&, &, &<+' - 0** ;-%+%, ;- 0<+ ;-%+ -% 0 ,)+(&&+ '-. - ;++, &' + )%+(+&' 52 ;++, )+%&-. T+ +'+& +&', 0+% 0 ,-% ;0&&' )+%&- & + 0,+'(+ %-8 ;-% &, %+,/* /+ - 0' 0((&+' -% ,&('+,, -% )%+'0'(. T+ )*0' &, &'0'(+ (-8)/*,-% (-'%&/&-' - + +8)*-++ 0' + +8)*-+%. T+ +8)*-+% (0' %+/(+ &, (-'%&/&-' +&' &',/%+ %-/ )%&<0+ )*0',. I' &, (0,+ + )%&<0+ )*0', 0%+ + first payor. L-'+%8 &,0&*& &, 0<0&*0*+ %-8 ++;-%+% 8/, 1 0<+ 80+ -% 0 ,0+ )+%& - 2 + CPP /'+%0' 65PP. +0%,T-B/0*& 0+ 3 0*&(+ ;& seere and(-'%&/&-' prolonged &,0&*&. S+<+%+ &,0&*& )%+<+', + ;-%+% %-8 +'0&' &8,+* &'- 0' 0&'/* -((/)0&-' 0' )%-*-'+ &,0&*& ,0+, 0 + &,0&*& &, -&' - *0, *-' -% 8& (0/,+ + (-<+%+ ;-%+%>, +0. T+ 08-/' - + +'+& +)+', -' + ;-%+%>, )%+&,0&*& ;0+ 0' &, (-'%&/&-' - + )*0'. T+ +'+& (-'&'/+, + &,0&*& &, %+(-<+%+ -% &** + &',/%+ %+0(+, 0' 0+ - 65 +0%, -% &** + &+,. D+)+'+' (&*%+' +'+& &, 0*,- )%+,+' &' +,+ )*0',.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 93 - 113
CHAPTER /G:TRADITIONAL +ROUP HEALTH INSURANCE PLANS
+roup Hea'#$ Insurance Po'ic-: I>, 0 (-'%0( +;++' + Insurer + +PH %-/) )-*&(-*+% 0 )/%(0,+ + %-/) &',/%0'(+ (-<+%0+.
+roup Hea'#$ Insurance Po'ic-
+roup & e"ica' E .pense P o'ic-
+roup D isai'i#- I ncome P o'ic-
$a# "oes #$e +roup &e"ica' E.pense IP speci(-J 1. T+ )+ - 8+&(0* +)+',+, - + (-<+%+. 2. T+ +'+& 80&8/8, & 0'. 3. T+ +/(&*+ 08-/'. 4. T+ (-&',/%0'(+ +0/%+,.
1.
3.
$a# "oes #$e +roup Disai'i#- Income IP speci(-J T+ +*&8&'0&-' )+%&-. 2. T+ 8+- - ++%8&'&' + 08-/' - + &,0&*& &'(-8+ +'+&. T+ 80&8/8 +'+& )+%&-. Impor#an# poin#s #o rememer
1 G%-/) M+&(0* E)+',+ P-*& (&+, 3+&EP5 )%-<&+ 0' -)&-' - (-<+% +8)*-++,> +)+'+',. #/ -% &, + +8)*-++ (/8 &',/%+ 0, - +0% + 0&&-'0* )%+8&/8 -% + +)+'+',.
2
G%-/) D&,0&*& I'(-8+ P-*&(&+, 3+DIP5 - '- )%-<&+ + -)&-' 0 0**.
$a# are #$e e.#ra pro*isions inc'u"e" on'- in #$e +roup Hea'#$ Insurance Po'icies ? no# in T$e +roup Li(e Insurance Po'iciesJ T+%+ 0%+ 4 ,/( )%-<&,&-', + 0%+: 1. P%++&,&' (-'&&-', )%-<&,&-'. 2. C-'<+%,&-' )%-<&,&-'. 3. C--%&'0&-' - +'+&, )%-<&,&-'. 4. P,&(0* +08&'0&-' )%-<&,&-'.
15 Pre2E.is#in Con"i#ions Pro*ision:
I' G%-/) P-*&(&+, 0 pre-e5isting condition &, +&'+ - + 0 (-'&&-' -% ;&( 0' &'&<&/0* %+(+&<+, 8+&(0* (0%+, /%&' + %++ 8-', &88+&0+* )%&-% - + ++(&<+ 0+ - &,+% (-<+%0+. T&, )%-<&,&-' ,0+, 0 + +'+&, 0%+ '- )00*+ -% )%++&,&' (-'&&-', /'&* + &',/%+ 0, ++' (-<+%+ /'+% + )-*&( -% 0 ,)+(&&+ *+' - &8+.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 94 - 113
$a# are=is #$e cri#eria=n #$a# "eci"e=s #$e e'iii'i#- o( an insure" (or #$e co*eraeJ 1. T+ &',/%+ 0, '- %+(+&<+ %+08+' -% 0 (-'&&-' -% 3 (-',+(/&<+ 8-', Or 2. T+ &',/%+ 0, ++' (-<+%+ /'+% + )-*&( -% 12 (-',+(/&<+ 8-',. $a# is HIPPAJ HIPPA ,0', -% )ealth Insurance *ortability and !ccountability !ct. I ;0, +'0(+ + U.S. C-'%+,, &' >96. T&, A( &8)-,+, 0 '- - %+B/&%+8+', -' +8)*-+% ,)-',-%+ %-/) +0* &',/%0'(+ )*0', +0* &',/%0'(+ (-8)0'&+, +0* 80&'+'0'(+ -%0'&?0&-',. A((-%&' - &, 0( + 80&8/8 *--0( )+%&- 00&', J P%++&,&' C-'&&-', &, ,& 8-',.
/5 Con*ersion Pro*ision:
T&, )%-<&,&-' %0' , 0' &',/%+ ;- &, *+0<&' + %-/) 0 *&8&+ %& - )/%(0,+ 0' In"i*i"ua' &EP ;& + )%+,+'&' + +<&+'(+ - &',/%0&*&. T+ %& &, *&8&+ &' 0 + &',/%+% (0' %+/,+ - &,,/+ + &'&<&/0* )-*&( & + (-<+%0+ %+,/*, &' + &',/%+ %-/) 8+8+% +(-8&' -<+%&',/%+. F-% &',0'(+ 0' +8)*-++ ;->, (0'&' &,+% - ;&** + +*&&*+ -% +&EP %-8 &,+% '+; +8)*-+% ;-/* + (-',&+% + -<+%&',/%+ & + ;+%+ 0*,- &,,/+ 0' In"i*i"ua' &EP) Disa"*an#aes o( Con*ersion (rom +&EP #o I&EP: 1. H&+% )%+8&/8 &, (0%+. 2. #+'+&, )%-<&+ 0%+ 8-%+ %+,%&(+.
I' 8-, ,0+, &' + U.S. %+B/&%+ - &'(*/ + &, )%-<&,&- ' -% +&EP) H-;+<+% &, &, '- 0 80'0-% )%-<&,&-' - + &'(*/+ &' GMEP &' C0'00 ;5 Coor"ina#ion o( Bene(i#s 3COB5 Pro*ision:
CO# &, +,&'+ - )%+<+' 0 %-/)&',/%+ ;- &, (-<+%+ /'+% 8-%+ 0' -'+ GMEP %-8 %+(+&<&' +'+& 08-/', %+0+% 0' + 8+&(0* +)+',+, 0(/0** &'(/%%+. F-% &',0'(+ ,)-/,+, ;- - ;-% 0%+ +*&&*+ -% (-<+%0+ /'+% +&% -;' +8)*-+%,> %-/) )-*&( +&% ,)-/,+,> %-/) )-*&(. I +'+&, )00*+ /'+% ,/( /)*&(0+ (-<+%0+ ;+%+ '- (--%&'0+ + &',/%+ (-/* %+(+&<+ /** +'+&, %-8 - + )-*&(&+, (-',+B/+'* ;-/* )%-& %-8 0' &**'+,, -% &'/%.
Ho, is i# #a%en care o(J # +&'&' -'+ P'an 0, + Primar- + -+% 0, + Secon"ar-.
T+ Primar- Pro*i"er )0, + /** +'+& )%-8&,+ /'+% + )*0'. O'(+ + &',/%+ %+(+&<+, &, +'+& 0' +' + &',/%+ (0' (*0&8 - + ,+(-'0% )*0' 0*-' ;& + +,(%&)&-' - + +'+& 08-/', + )%&80% )*0' )0&. T+ Secon"ar- Pro *i"er +' ++%8&'+, + 08-/' )00*+ -% + (*0&8 &' 0((-%0'(+ ;& + +%8, - 0 )*0'.
$a# are #$e "i((eren# #-pes o( COB Pro*isionJ 1. A**-;0*+ E)+',+,. 2. N-'/)*&(0&-' - #+'+&,.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 95 - 113
$a# is A''o,a'e E.penseJ T&, &, + %+0,-'0*+ (/,-80% +)+',+ 0 + &',/%+ &'(/%%+ 0 &, (-<+%+ /'+% 0 *+0, -'+ - + &',/%+ GMEP. No#e +%+ 0 + Secon"ar- Pro*i"er )0, + &+%+'(+ +;++' + 08-/' - A''o,a'e E.pense + 08-/' 0*%+0 %+(+&<+ %-8 + Primar- P'an) U'+% &, )+ - 0 CO# + &',/%+ "oes no# pa- an- por#ion - + +)+',+,.
$a# is Non2"up'ica#ion o( Bene(i#sJ I>, 0 CO# )%-<&,&-' & &'(*/+ &' 0 ,+(-'0% )%-<&+%>, )*0' *&8&, + 08-/' )00*+ + ,+(-'0% )*0' - + &+%+'(+ & 0' +;++' + 08-/' )0&
+0 )%&80% )*0'++' + ;-/* 0<+ ++' )00*+ + ,+(-'0% )*0' 0 )*0' +08-/' )%&80%0 )*0'. T$is pro*ision reui res #$e insure" #o ear a por#ion o( #$e o( co*ere" me"ica' e.penses) 3P'ease o #$ru #$e e.amp'es)QP No)2 ;2;15
A +; 0(, 0-/ CO#: I 0' &'&<&/0* &, (-<+%+ ;- )*0', -'+ &' ;&( ,+ 0(, 0, + +8)*-++ 0' + -+% &' ;&( ,+ 0(, 0, + +)+'0' +' + )%&80% )0-% &, + -%8+% )*0'. I 0' &'&<&/0* &, (-<+%+ ;- )*0', -'+ - ;&( 0, + CO# )%-<&,&-' +' & +(-8+, + )%&80% )0-%. I &'&<&/0* &, (-<+%+ 0, +)+'0' ;- )*0', ,/( 0, 0 (&* (-<+%+ )*0', - +% )0%+', +' 0((-%&' - J E0%* #&%0 R/*+ + )%&80% )0-% ;&** + + )*0' - + )0%+' ;- 0, + +0%*&+% #&%0.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 96 - 113
>5 P$-sica' E.amina#ion Pro*ision:
T&, &, &'(*/+ &' 8-, +DIP %0', + &',/%+% + %& - +08&'+ + &',/%+ ;- 0, (*0&8+ 0 &,0&*& &'(-8+ 0 -(-% - + &',/%+%>, (-&(+ 0 + &',/%+%>, +)+',+. T&, )%-<&,&-' 0*,- 0**-;, + &',/%+% - 80+ + &,0*+ /'+%- 8+&(0* +08&'0&-', 0 %+/*0% &'+%<0*, ,- 0 + &',/%+% (0' <+%& 0 + &',/%+ &, ,&** &,0*+.
+roup Hea'#$ Insurance Un"er,ri#in:
A %-/)>, %&, (*0,,&&(0&-' = ,0'0% ,/,0'0% -% +(*&'+ = ;&** + +,0*&,+ -' + 0,&, - + %-/)>, 8-%&& %0+.
$a# are (ac#ors "eci"e #$e + e.pec#e" ra#e o( a roupJ 1. #$e T+ '0/%+#$a# - + &'/,% %-/) mori"i#8+8+%, ;-%
2. T+ 0+ &, %&/&-' - + %-/ ). T+ %0+ &'( %+0,+, 0, &'(% +0,+, + 0+ - + %-/) 8+8+%,. 3. T+ &,%&/&-' - + 80*+, + +80*+, &' + %-/). F+80*+, +)+%&+'(+ &+% 8-%&& %0+, 0' - 80*+, - + ,08+ 0+. Fun"in &ec$anisms:
T+ ;0 &' ;&( 0 %-/) &',/%0'(+ )*0'>, (*0&8 (-,, 08&'&,%0&<+ +)+',+, 0%+ )0& &, '-;' 0, + )*0'>, F/'&' M+(0'&,8.
$a# are #$e #,o main (un"in mec$anisms (or +roup Insurance P'ansJ
1.
(ully Insured Plans H+%+ + %-/) )-*&(-*+% 80+, + 8-'* )%+8&/8 )08+', - + I',/%0'(+ C- 0' + I',/%0'(+ C-. +0%, + %+,)-',&&*& -% 0** (*0&8 )08+',. T&, &, 0*,- '-;' 0, Tra"i#iona' Fun"in Arranemen#)
2.
(ully Self Insured Plans = H+%+ + +8)*-+% 0+, + (-8)*++ %+,)-',&&*& -% 0** + (*0&8 )08+', %+*0+ +)+',+,.
=!
)t$er f unding mec$anisms f all " et#een t$ose t#o!
(ollo#ing t$ree mec$anisms are "uilt upon t$e (ully Insured Plans.
Re#rospec#i*e Ra#in Arranemen#s U'+% &, + &',/%+% 0%++, - (0%+ + %-/) )-*&(-*+% 0 *-;+% 8-'* )%+8&/8 0' & ;-/* '-%80** (0%+ 0,+ /)-' + %-/)>, )%&-% (*0&8 +)+%&+'(+. O' + -+% 0' + G%-/) P-*&( H-*+% 0%++, - )0 0' 0&&-'0* 08-/' - + &',/%+% & 0 + +' + )-*&( +0% + %-/)>, (*0&8 +)+%&+ '(+ +(-8+, /'0<-% 0*+. RRA /,/0** &'(*/+, 0' +)+%&+'(+ %+/' +0/%+ ;&( 8+0', & + %-/)>, (*0&8 +)+%&+'(+ &, 0<-%0*+ + &',/%+% ;&** %+/' ,-8+ 08-/' - + %-/) )-*&(-*+%.
Premium De'a- Arranemen#s T&, 0**-;, + %-/) )-*&(-*+% - )-,)-'+ )0&' 8-'* %-/) &',/%0'(+ )%+8&/8 -% 0 ,0+ )+%&- - &8+ /,/0** 6" -% 9" 0, +-' + +)&%0&-' - + )-*&(>, %0(+ )+%&-. T&, +*), + %-/) )-*&(-*+% - 80+ /,+ - 0 08-/' &' &, -;'
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 97 - 113
)/%)-,+. #/ + %-/) )-*&(-*+% 8/, )0 + ++%%+ )%+8&/8, & 0' - + &',/%+% ;+' + (-'%0( +%8&'0+,.
&inimum Premium P'ans U'+% &PP6 + %-/) )-*&(-*+% +)-,&, &'- 0 ,)+(&0* 0((-/' /', 0' 08-/' 0 &, ,/&(&+' - )0 0 ,0+ 08-/' - (*0&8,. T+ &',/%+% )0, + (*0&8, /'&* &, /' &, +0/,+. T+%+0+% + &',/%+% &, %+,)-',&*+ -% )0&' + (*0&8, %-8 &, -;' /' 00&', 0 <+% '-8&'0* )%+8&/8 %-8 + %-/) )-*&(-*+%. I' &PP + )%+8&/8 0+, + (-',&+%0* %+/(+.
(ollo#ing t$ree mec$anisms are "uilt upon t$e Self Insured Plans.
Sa'ar- Con#inua#ion P'an U'+% &, )*0' + +8)*-+% )%-<&+, 1"" - + &',/%+ +8)*-++>, ,0*0% -' + &%, 0 - + +8)*-++>, 0,+'(+ /+ - ,&('+,, -% &'/% (-'&'/&' 0 -% ,-8+ ,)+(&&+ &8+.
S#op Loss Co*erae I 0 ,+*&',/%+ %-/) +)+%&+'(+, ,+<+%0* (00,%-)&( 8+&(0* (*0&8, &' -'+ +0% + +8)*-+% 80 '- 0<+ 0 8/( /' - (-<+% 0** ,/( (*0&8,. T- +0* ;& ,/( ,&/0&-', 80' +8)*-+%, )/%(0,+ S#op2Loss Insurance %-8 0' &',/%0'(+ (-. ,- 0 + (0' %0',+% +&% *&0&*& - + &',/%0'(+ (-. ;+' + (*0&8, +(++ 0 (+%0&' -**0% 08-/'.
T+%+ 0%+ ;- )+, - ,-)*-,, (-<+%0+ 0<0&*0*+. U'+% Indiidual Stop-Loss Coerage > Specific Stop-Loss Coerage + &',/%+% )0, 0 )-%&-' - + +0( (*0&8 0 +(++, 0 ,0+ 08-/'. U'+% Aggregate Stop-Loss Coerage + &',/%+% )0, ;+' + +8)*-+%>, -0* (*0&8, +(++ 0 ,0+ -**0% 08-/' ;&&' 0 ,0+ )+%&- - &8+ /,/0** 12 8-',. No#e:
1 T+ &',/%+% &' S-)L-,, C-<+%0+ &, '-;' 0, + S-)L-,, C0%%&+%. 2 T+ (0%%&+% -+, '- )0 + +'+&, &%+(* - + &',/%+. I %+&8/%,+, + +8)*-+% ;- ,0', %+,)-',&*+ -% 80&' + )08+', - + %-/) &',/%+.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 9 - 113
P'an A"minis#ra#ion S-8+ ,+*&',/%&' +8)*-+%, )/%(0,+ A"minis#ra#i*e Ser*ice On'- 3ASO5 con#rac#s %-8 0' &',/%0'(+ (-8)0' -% 0 T$ir" Par#- A"minis#ra#or 3TPA5 - +0* ;& + 08&'&,%0&<+ 0,)+(, - 0 %-/) &',/%0'(+ )*0'. A TPA &, 0' -%0'&?0&-' -+% 0' 0' &',/%0'(+ (-8)0' 0 )%-<&+, 08&'&,%0&<+ ,+%<&(+, - + ,)-',-%, - G%-/) #+'+& P*0',. U'+% 0' ASO (-'%0( + +8)*-+% )0, 0 ++ &' +(0'+ -% + 08&'&,%0&<+ ,+%<&(+, )%-<&+ + &',/%+% -% + TPA. T+,+ ++, 0%+ '- ,/+( - ,0+ )%+8&/8 0+,. $a# are #$e ene(i#s o( Fu''- Se'( Insurance #o #$e Fu''- Insure" P'ansJ 1 N-)%+8&/8,'++-+)0&0'&',/%+%. 2 S-0<-&,&',/%+%>,+)+',+(0%+,.
3 A<-&, -+&',/%+%. 4 A<-&,)0&' )0&')%-& (-88&,,&-', -0+',. 5 E8)*-+% %+0&', + 8-'+ -% + )%+8&/8 ;& & ;&( *+0, 0<&' 0' &8)%-<+ (0, *-; +0%'&' &'+%+, -' 0. M-%+ &8)-%0'* ,+*&',/%+ )*0', 0%+ ++8)+ %-8 S0+ L0;, )%-<&&' 8-%+ %++-8 - + ,+*&',/%0'(+ +8)*-+% &' +,&'&' + )*0',. H-;+<+% 80' ,+*&',/%+ )*0', &' + US 0%+ ,/+( - %+/*0&-' + ++%0* ERISA.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 99 - 113
CHAPTER /1: TRADITIONAL INDIVIDUAL HEALTH INSURANCE POLICIES
P+-)*+ ;- 0%+ -+%;&,+ '- +*&&*+ -% %-/) +0* &',/%0'(+ (-<+%0+ +'+%0** )/%(0,+ &'&<&/0* +0* &',/%0'(+ )-*&(&+,. T&, &, 0 (-'%0( +;++' + &',/%+% 0' + )-*&( -;'+%. T+ )-*&( ;&** +,(%&+ + (-<+%0+ )%-<&+ + +'+&, )00*+ 0' + )%+8&/8 08-/', 0' +&% /+ 0+,. T+ )-*&( -;'+% 0' + &',/%+ 0%+ /,/0** + ,08+ )+%,-'. T+ &',/%+% )&(0** )0, + +'+&, &%+(* - 0 )+%,-' -% - 0 8+&(0*(0%+ )%-<&+% -' +0* - 0 )+%,-'. T+ '/8+% - (-<+%0+ -)&-', 0 &',/%+%, -+% - %-/) )-*&(-*+%, &, /,/0** '- 0<0&*0*+ )-*&( #/&'&<&/0* + 0))*&(0' --;'+%,. 0' &'&<&/0* +0* &',/%0'(+ )-*&( &, +'+%0** )+%8&+ - 80+ (-&(+, (-'(+%'&' + -**-;&': • • • •
#+'+& *+<+*, R+'+;0* )%-<&,&-', A8-/' - + )-*&(>, +/(&*+ -% &'&<&/0* 8+&(0* +)+',+ )-*&(&+, C-8&'0&-', - +*&8&'0&-' )+%&-, 0' 80&8/8 +'+& )+%&-, -% &'&<&/0* &,0&*& &'(-8+ )-*&(&+,
In"i*i"ua' Hea'#$ Insurance Po'ic- Pro*isions
M0' - + )%-<&,&-', -% I'&<&/0* H+0* I',/%0'(+ )-*&(&+, 0%+ ,08+ 0, ;& + G%-/) H+0* I',/%0'(+ )-*&(&+,. H+%+ ;+ &,(/,, ,-8+ - + )%-<&,&-', )&(0** &'(*/+ &' + I'&<&/0* H+0* I',/%0'(+ )-*&(&+,. Rene,a' Pro*ision
T&, )%-<&,&-' +,(%&+, •
•
T+ (&%(/8,0'(+, /'+% ;&( + &',/%+% 0, + %& - %+/,+ - %+'+; -% + %& (0'(+* + (-<+%0+. T+ &',/%+%>, %& - &'(%+0,+ + )-*&(>, )%+8&/8 %0+.
T%0&&-'0** C0'0&0' &',/%+%, 0' US 0<+ /,+ + -**-;&' 5 +'+%0* (*0,,&&(0&-', - &'&<&/0* +0* &',/%0'(+ )-*&(&+,.
•
Cance'a'e Po'ic-. Op#iona''- rene,a'e po'ic-. Con"i#iona''- rene,a'e po'ic-. +uaran#ee" rene,a'e po'ic-.
•
Non2cance'a'e po'ic-.
• • •
Cance'a'e Po'ic- %0', + &',/%+% + %& - +%8&'0+ + )-*&( 0 0' &8+ -% 0' %+0,-'
,&8)* '-&&' + )-*&( -;'+% 0 + )-*&( &, (0'(+**+ 0' %+/'&' 0' 0<0'(+ )%+8&/8 0 0, ++' )0& -% + )-*&(. S-8+ ,0+, &' + US - '- )+%8& &',/%+%, - &,,/+ (0'(+*0*+ )-*&(&+,.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 1"" - 113
Op#iona''- Rene,a'e Po'ic- &<+, + &',/%+% + %& - %+/,+ 0 )-*&( -' (+%0&' 0+, ,)+(&&+ &' + )-*&(/,/0** +&+% + )-*&( 0''&<+%,0% 0+ -% 0' )%+8&/8 /+ 0+. I',/%+% &, 0*,- 0**-;+ - 0 (-<+%0+ *&8&0&-', 0' - &'(%+0,+ + )%+8&/8 %0+ & & -+, ,- -% 0' -)&-'0** %+'+;0*+ )-*&(.
A c'ass o( po'icies (-',&,, - 0** )-*&(&+, - 0 )0%&(/*0% )+ -% 0** )-*&(&+, &,,/+ - 0 )0%&(/*0% %-/) - &',/%+. Con"i#iona''- Rene,a'e Po'ic- %0', + &',/%+% 0 *&8&+ %& - %+/,+ - %+'+; 0' &'&<&/0* +0* )-*&( 0 + +' - 0 )%+8&/8 )08+' )+%&-. T+ +(&,&-' 8/, + 0,+ -' -'+ -% 8-%+ ,)+(&&( %+0,-', ,0+ &' + )-*&(. T+ %+0,-', canno# e %+*0+ - + &',/%+>, +0*. T+ age and employment status of the insured 0%+ -+' *&,+ 0, %+0,-', -% )-,,&*+ '-'%+'+;0*.
+uaran#ee" Po'ic8+0', 0 + &',/%+% 8/, %+'+; + &' )-*&(0, *-' 0, )%+8&/8 )08+', 0%+ Rene,a'e 80+0 *+0, /'&* + &',/%+ 00&', + 0+ *&8& ,0+ + )-*&(. M-,* &, 0+ &, 6" -% 65. S-8+&8+, & (-/* + 7" 0' +%+ 0%+ (0,+, ;+' + )-*&( &, 0 /0%0'++ %+'+;0*+ )-*&( %-/ + *&+&8+ - + &',/%+. Non2cance'a'e Po'ic- &, /0%0'++ - + %+'+;0*+ /'&* + &',/%+ %+0(+, + *&8&&' 0+ ,0+ &' + )-*&(. I' 0&&-' + &',/%+% -+, '- 0<+ + %& - &'(%+0,+ + )%+8&/8 %0+ -% 0 '-'(0'(+*0*+ )-*&( /'+% 0' (&%(/8,0'(+, + /0%0'++ )%+8&/8 %0+ &, ,)+(&&+ &' + )-*&(.
D&,0&*& &'(-8+ )-*&(&+, )&(0** 0%+ '-'(0'(+*0*+ 8+&(0* +)+',+ )-*&(&+, 0%+ %0%+* '-' (0'(+*0*+. I' + US HIPAA +'0(+ &' 1996 &8)-,+, 0 +'+%0* %+B/&%+8+' 0 + &',/%+%, 8/, %+'+; -% (-'&'/+ 0' &'&<&/0* 8+&(0* +)+',+ &',/%0'(+ )-*&( &' -%(+ 0 + -)&-' - + )-*&( -;'+%. I' (-88-'*0; /%&,&(&-', - C0'00 8-, &'&<&/0* 8+&(0* +)+',+ )-*&(&+, 0%+ (0'(+*0*+ 0' 8-, &,0&*& &'(-8+ )-*&(&+, 0%+ '-'(0'(+*0*+. I' + )%-<&'(+ - /++( &'&<&/0* +0* &',/%0'(+ )-*&(&+, 0<+ ,+<+%0* (*0,,&&(0&-', %-8 ;&( + 0))*&(0' (0' (--,+ + -'+ - )/%(0,+. P%+8&/8 %0+, -% '-'(0'(+*0*+ )-*&(&+, 0%+ &+% 0' +B/&<0*+' )-*&(&+, &' + -+% (*0,,&&(0&-',.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 1"1 - 113
+race Perio" Pro*ision A**-;, + )-*&( -;'+% - )0 0 %+'+;0* )%+8&/8 ;&&' 0 ,0+ %0(+ )+%&- -**-;&' + )%+8&/8 /+ 0+. T+ *+' - + %0(+ )+%&- <0%&+, +)+'&' -' -; %+B/+'* %+'+;0* )%+8&/8, 0%+ )00*+. G+'+%0** )-*&(&+, ;& 8-'* %+'+;0* )%+8&/8, 0<+ 0 1"0 %0(+ )+%&-. P-*&(&+, ;& *+,, %+B/+' %+'+;0* )%+8&/8 )+%&-, 0<+ )&(0** 0 310 %0(+ )+%&-. Reins#a#emen# Pro*ision S0+, 0 & (+%0&' (-'&&-', 0%+ 8+ + &',/%+% ;&** %+&',0+ 0 )-*&( 0 0, *0),+ -% '-')08+' - )%+8&/8,. T+ )-*&( -;'+% /,/0** 8/, )0 0' -<+%/+ )%+8&/8, 0' 8/, (-8)*++ 0 %+&',0+8+' 0))*&(0&-'. I',/%+% 0, + %& - +<0*/0+ + %+&',0+8+' 0))*&(0&-' 0' - +(*&'+ - %+&',0+ + )-*&( -' + 0,&, - ,0+8+', &' 0 0))*&(0&-'.
I + &',/%+% -+, '- + +<0*/0&-' ;&&' ,0+ '/8+% - 0,&' 8-, ,0+, 45 0,0+% %+(+&<&' +(-8)*++ %+&',0+8+' 0))*&(0&-' -% &0 + &',/%+% 0((+), 0' -<+%/+ )%+8&/8 ;&-/ 0 %+&',0+8+' 0))*&(0&-' +' + )-*&( &, /,/0** (-',&+%+ - + 0/-80&(0** %+&',0+. C-<+%0+ /'+% 0 %+&',0+ )-*&( &, *&8&+ - 0((&+', 0 -((/% 0+% + 0+ - %+&',0+8+' 0' - ,&('+,,+, 0 +&' 8-%+ 0' 1" 0, 0+% + 0+ - %+&',0+8+'. Incon#es#ai'i#- pro*ision M-, &'&<&/0* 8+&(0* +)+',+ )-*&(& +, (-'0&' 0 )%-<&,&-' +'&*+ #ime 'imi# on cer#ain "e(enses. T&, &, 0*,- '-;' 0, incon#es#a'e c'ause -% incon#es#ai'i#- pro*ision. T&, ,0+, 0 0+% + )-*&( 0, ++' -%(+ -% 0 ,)+(&&+ )+%&- /,/0** 2 -% 3 +0%, + &',/%+% (0'> /,+ 80+%&0* 8&,%+)%+,+'0&-', &' + 0))*&(0&-' +&+% - <-& + )-*&( -% - +' 0 (*0&8 /'*+,, + 8&,%+)%+,+'0&-', ;+%+ %0//*+'.
M-, &'&<&/0* &,0&*& +)+',+ )-*&(&+, (-'0&' 0 &'(-'+,0&*& )%-<&,&-' ;&( ,0+, 0 0+% + )-*&( 0, ++' -%(+ -% 0 ,)+(&&+ )+%&- /,/0** 2 -% 3 +0%, + &',/%+% (0'> (-'+, + )-*&(>, <0*&& -' + %-/' - 80+%&0* 8&,%+)%+,+'0&-', &' + 0))*&(0&-'. T&, -+, '- &'(*/+ 0 %++%+'(+ - %0//*+' 8&,%+)%+,+'0&-'. E,,+'&0** &, &, ,08+ 0, 0 - + &'(-'+,0&*& )%-<&,&-' &' LI )-*&(&+, &' USA. Pre2E.is#in Con"i#ions Pro*ision M-, &'&<&/0* +0* &',/%0'(+ )-*&(&+, &'(*/+ 0 )%++&,&' (-'&&-', )%-<&,&-' ,0&' 0 /'&* + &',/%+ 0, ++' (-<+%+ /'+% + )-*&( -% 0 (+%0&' )+%&- + &',/%+% ;&** '- )0 +'+&, -% 0 )%++&,&' (-'&&-'.
A pre2e.is#in con"i#ion &, /,/0** +&'+ &' &'&<&/0* +0* &',/%0'(+ )-*&(&+, 0, 0' &'/% 0 -((/%%+ -% 0 ,&('+,, 0 &%, 0))+0%+ -% 80'&+,+ &,+* ;&&' 0 ,)+(&&+ )+%&-/,/0** 2 +0%,+-%+ + )-*&( ;0, &,,/+ an" 0 ;0, '- &,(*-,+ -' + 0))*&(0&-'. T+ &',/%+% 0, + -))-%/'& - +<0*/0+ ,/( 0 (-'&&-' 0' /, (0' ,)+(&&(0** +(*/+ + (-'&&-' %-8 + )-*&(>, (-<+%0+. I' 8-, ,0+, 0' %-/-/ C0'00 2 +0%, &, + 80&8/8 )+%&- /%&' ;&( 0' &',/%+% &, )+%8&+ - +(*/+ )%++&,&' (-'&&-', %-8 (-<+%0+. I',/%+%, 0%+ )+%8&+ - ,)+(& 0 ,-%+% +(*/,&-' )+%&- +(0/,+ 0 ,-%+% +(*/,&-' &, 8-%+ 0<-%0*+ - + &',/%+. I' USA HIPAA )%-&&, &',/%+%, %-8 &'(*/&' 0 )%++&,&' (-'&&-' &' + &'&<&/0* +0* &',/%0'(+ )-*&( &,,/+ - ,)+(&&+ &'&<&/0*,. C'aims Pro*isions
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 1"2 - 113
T&, +&'+ - + &',/%+>, -*&0&-' - )%-<&+ &8+* '-&&(0&-' - *-,, - + &',/%+% 0' + &',/%+%>, -*&0&-' - 80+ )%-8) +'+& )08+', - + &',/%+. I' C0'00 + )-*&( /,/0** %+B/&%+, + &',/%+ - '-& + &',/%+% - 0 (*0&8 &' ;%&&' ;&&' 3" 0, %-8 + 0+ + (*0&8 0%-,+ 0' - /%'&, + &',/%+% ;& )%-- - *-,, ;&&' 9" 0, %-8 + 0+ + (*0&8 0%-,+. T+ &',/%+% 8/, )0 +'+&, ;&&' 6" 0, - %+(+&) - )%-- - *-,, -% 0 8+&(0* +)+',+ (*0&8 0' ;&&' 3" 0, - %+(+&) - )%-- - *-,, -% 0 &,0&*& &'(-8+ (*0&8. P-*&(&+, &,,/+ &' + US (-'0&' ,&8&*0% %+B/&%+8+',. P$-sica' E.amina#ion Pro*ision
A+% + &',/%+ ,/8&, 0 (*0&8 + &',/%+% 0, + %& - 0<+ + &',/%+ +08&'+ 0 -(-% - + &',/%+%>, (-&(+ 0 + &',/%+%>, <+%& + <0*&& - &,0&*& &'(-8+ (*0&8,. +)+',+. T+ &',/%+% +%+-%+ 0, + 0&*& Lea' Ac#ions Pro*ision
T&, )%-<&,&-' *&8&, + &8+ /%&' ;&( 0 (*0&80' ;- &,0%++, ;& + &',/%+%>, (*0&8 +(&,&-' 0, + %& - ,/+ + &',/%+% - (-**+( + 08-/' + (*0&80' +*&+<+, &, -;+ /'+% + )-*&(. T+ *+' - &, &8+ )+%&- <0%&+, %-8 /%&,&(&-' - /%&,&(&-' / <0%&+, +;++' 1 - 3 +0%, 0+% + (*0&80' )%-<&+, + &',/%+% ;& )%-- - + *-,,. C$ane o( Occupa#ion Pro*ision
T&, 0**-;, + &',/%+% - 0/, + )-*&(>, )%+8&/8 %0+ -% + 08-/' - +'+&, )00*+ /'+% 0 )-*&( & + )-*&( -;'+% (0'+, &, -((/)0&-'. T+ &',/%+% &, )&(0** )+%8&+ - %+/(+ + 80&8/8 +'+& )08+' 08-/' )00*+ /'+% + )-*&( & + &',/%+ (0'+, - 0 8-%+ 0?0%-/, -((/)0&-'. I + &',/%+ (0'+, - 0 *+,, 0?0%-/, -((/)0&-' + )%-<&,&-' )+%8&, + &',/%+% - %+/(+ + )-*&(>, )%+8&/8 %0+. O*er insurance pro*ision
T&, &, &'+'+ - )%+<+' 0' &',/%+ %-8 )%-&&' %-8 0 ,&('+,, -% &'/%. T&, )%-<&,&-' ,0+, 0 + +'+&, )00*+ /'+% + )-*&( ;&** + %+/(+ & + &',/%+ &, -<+% &',/%+. A' o*er insure" )+%,-' &, -'+ ;- &, +'&*+ - %+(+&<+ +&+% •
•
M-%+ &' +'+&, %-8 &, 8+&(0* +)+',+ )-*&(&+, 0' + 0(/0* (-,, &'(/%%+ %+08+'. A %+0+% &'(-8+ 08-/' /%&' &,0&*& 0' + +0%', ;&*+ ;-%&'.
In"i*i"ua' Hea'#$ Insurance Un"er,ri#in
T+ /'+%;%&+% +<0*/0+, 0' 0))*&(0&-' -% &'&<&/0* +0* &',/%0'(+ )-*&( - ++%8&'+ + +%++ - 8-%&& %&, %+)%+,+'+ + )%-)-,+ &',/%+. &ori"i#- Fac#ors
T+ )%&80% 0(-%, 0 0+( + +%++ - 8-%&& %&, )%+,+'+ 0 )%-)-,+ &',/%+ 0%+ + &'&<&/0*>, 0+ (/%%+' 0' )0, +0* ,+ -((/)0&-' 0<-(0&-', ;-% &,-% 0' 0&, 0' *&+,*+.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 1"3 - 113
Ae: M-%&& %0+, +'+%0** &'(%+0,+ ;& 0+. Hea'#$: T+ (/%%+' +0* 0' + &'&<&/0*>, +0* &,-% 0%+ %+B/&%+ &' ++%8&'&' + 8-%&& %&,. Se.: F+80*+, 0<+ 0 &+% 8-%&& %0+ 0' 80*+, - + ,08+ 0+. Occupa#ion: T+ 8-%&& %&, 0*,- +)+', -' + 0))*&(0'>, -((/)0&-'. A' &'&<&/0*>, %&, (*0,,&&(0&-' 0' (-%%+,)-'&' )%+8&/8 %0+ (-%%+,)-' - + &'&<&/0*>, -((/)0&-' (*0,,. A*oca#ions: T+ &'&<&/0*>, 0<-(0&-', 0*,- 0<+ 0 ,%-' +0%&' -' &, )-+'&0* +0* &',/%0'(+ %&,. or% $is#or-: A' &'&<&/0*>, ;-% &,-% (0' 0*,- 0<+ 0 +0%&' -' +% 8-%&& %&,. Hai#s an" Li(es#-'e: T+ )+%,-'>, 0&, 0' *&+,*+ (0' +)-,+ &8 - 0 & +%++ - %&, 0' 0((&+'0* &'/% -% &**'+,,. Ris% C'assi(ica#ions
T+ %&, (*0,,&&(0&-', 0%+: • • •
S0'0% %&, S/,0'0% %&, D+(*&'+ %&,
E.c'usion ri"er 0*,- (0**+ + impairmen# ri"er ,)+(&&+, 0 +'+&, ;&** '- + )%-<&+ -% 0' *-,, 0 %+,/*, %-8 + (-'&&-' ,)+(&&+ &' + %&+%.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 1"4 - 113
CHAPTER //: &ANA+ED CARE PLANS
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rea"mission cer#i(ica#ion: I',/%+ 8/, (-'0( 0 UR 0+' & + ;&,+, - + 08&+ -,)&0*. UR 0+', +' ++%8&'+, + &' - ,+%<&(+ '+++ 0' 80+, )%-)+% 0%%0'+8+', 2. Concurren# re*ie,: !&*+ )0&+' &, &' -,)&0* UR ,0, 8-'&-%, + (-'&&-' 3. Re#rospec#i*e re*ie,s: S08+ 0, )%+08&,,&-' / &, -'+ 0+% + )0&+'>, %+*+0,+ %-8 -,)&0*. T&, &, 0 (-'(/%%+' %+<&+; ,+) - + ;-*+ 0'0*,&,. T&, 8& %+<+0* +%%-'+-/, (0%+, 0' &**&' +%%-%,. Case &anaemen#
C0,+ M0'0+8+' &, 0' ++',&-' - UR 0' &, 0 )%-(+,, ;&( 0 )*0' +<0*/0+, '- -'* + 8+&(0* '+(+,,& - (0%+ / 0*,- 0*+%'0&<+ %+08+', -% 8+&(0* (0%+. Hea'#$ care co*erae Con#inuum:
T%0&&-'0* I'+8'& P*0',
PPO
G0+++)+% PPO
O)+' +'+ HMO
HMO
P/%+ M0'0+ C0%+ )*0',
Hea'#$ &ain#enance Orani!a#ions 3H&O5
A HMO &, 0 +0* (0%+ &'0'(&' 0' +*&<+%&' ,,+8 0 )%-<&+, (-8)%++',&<+ +0* (0%+ ,+%<&(+, -% ,/,(%&&' 8+8+%, S/,(%&+%, &' 0 )0%&(/*0% +-%0)&( 0%+0. HMO, (0' + -;'+ -% ,)-',-%+ 80' &+%+',(--*, )+, -0' -%0'&?0&-',: '0&-'0* -%0'&?0&-', (-88+%(&0* &',/%+%, 0' 8+&(0* -,)&0*,. HMO, (0' +HMO -)+%0+ 0, +&+% '- -%)%-& -% -%)%-& -%0'&?0&-',.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 1"5 - 113
C$arac#eris#ics o( H&Os
1 C-8)%++',&<+ C0%+: HMO ,/,(%&+%, 0%+ +*&&*+ - %+(+&<+ (-8)%++',&<+ +0* (0%+ ,+%<&(+, &'(*/&' &8)0&+' 0' -/)0&+' %+08+' &' 0 -,)&0*. U'*&+ %0&&-'0* &'+8'& )*0', HMO +8)0,&?+ + )%0(&(+ - )%+<+'&<+ (0%+ &'(*/&' %-/&'+ ),&(0* +08&'0&-', &0'-,&( +,, )%+'00* 0' ;+**0 (0%+ 0' &88/'&?0&-',. 2 P%+)0& C0%+: I' 0 %0&&-'0* HMO ,/,(%&+%, %+(+&<+ (-8)%++',&<+ +0* (0%+ &' +(0'+ -% + )08+' - 0 )+%&-&( &+ ++. M-, HMO, %+B/&%+ + ,/,(%&+% - )0 0' 0&&-'0* ++ co2pa-men# -% (+%0&' 8+&(0* ,+%<&(+,. HMO, ,& 0** -% )0% - + &'0'(&0* %&, - + +0* (0%+ )%-<&+%,. 3 N+;-% P%-<&+%, 0' N+-&0+ F++,: HMO, (-'%0( ;& ),&(&0', 0' -,)&0*, - 80+ /) 0 '+;-% - +0* (0%+ HMO ,/,(%&+%, (--,+*&+: +&% 8+&(0* (0%+ )%-<&+%, %-8 ;&&' &, '+;-%. #)%-<&+%,. C-'%0(&' HMO, 0(&+<+8/, 0<0'0+, C0' (-'%-* + B/0*& - + )%-<&+%, C0' '+-&0+ ++, 0' /, %+/(+ + (-, • •
T+,+ 0%+ + ++ ,%/(/%+ 0%%0'+8+', 0 0%+ /,+ - )0 + )%-<&+%,. Capi#a#ion: U'+% &, 0%%0'+8+' + )%-<&+%, +, )0& PMPM )+% 8+8+% )+% 8-' -% 0 ,/,(%&+% %+0%*+,, - '/8+% - <&,&,. #/ PMPM 80 + &+%+' -% +0( HMO ,/,(%&+% Sa'ar-: P,&(&0', + 0 )%+++%8&'+ ,0*0% 0,+ -' + 0<+%0+ ,0*0%&+, - *-(0* ),&(&0', &' + ,08+ &+*. T+ 0*,- %+(+&<+ (+%0&' )+, - )+%-%80'(+ -'/,+, -% &'(+'&<+ )0. Discoun#e" (ee2(or2ser*ice: HMO )0, ),&(&0', 0 (+%0&' )+%(+'0+ - +&% '-%80* ++, *&+ 9". I &, '- 0, ;&+* /,+ 0, -+% ++ ,%/(/%+,. Fee Sc$e"u'e: T+ HMO ;&** )0 /) - 0 ,)+(&&+ 80&8/8 ++ -% +0( )%-(+/%+. I' &, (0,+ & &, %0',+%%&' 8-%+ %&, - + ,+%<&(+ )%-<&+%,. 4 I'+',&<+ U,+ - M0'0+ C0%+ T+('&B/+,: HMO %+B/&%+, ,/,(%&+%, - ,+*+( Primar- care p$-sician 3PCP5 ;- ,+%<+, 0, + &%, (-'0( ;& + HMO. I 0&&-'0* (0%+ '+++ PCP %++%, + ,/,( %&+% - ,)+(&0*&,, ;&&' + '+;-%. T0 &, ; + 0%+ -+' (0**+ a#e%eepers)
T-pes OF H&Os Open Pane' H&O : 0' ),&(&0' -% )%-<&+% ;- 8++, + HMO>, ,)+(&&( ,0'0%, (0' (-'%0( ;& + HMO 2 )+ C'ose" Pane' H&O: ),&(&0', +&+% 8/, +*-' - 0 ,)+(&0* %-/) - ),&(&0', 0 0, (-'%0(+ ;& + HMO -% 8/, + +8)*-++, - + HMO 2 )+ &i.e" &o"e's: (-8&'+ (0%0(+%&,&(, - ;- -% 8-%+ 8+-,. Open Pane' In"i*i"ua' Prac#ice Associa#ion 3IPA5 mo"e': U'+% &, 0%%0'+8+' HMO +'+%, &'• 0 (-'%0( ;& 0' IPA ;&( &, 0' 0,,-(&0&-' - ),&(&0', &'+)+'+' )%0(&&-'+%, 0 0%++, - )%-<&+ ,+%<&(+,. P,&(&0', )%-<&+ ,+%<&(+, - +&% -;' )0&+', 0, ;+** 0, - + HMO ,/,(%&+%,. T&, 8-+* %+B/&%+, *+,, ,0%/) (0)&0* 0' (0' -+% 0 %-0
%0'+ - ,)+(&0*&,,. IPA 8-+* &, +'+%0** (-8)+',0+ X(0)&0&-'> -% X&,(-/'+ ++-%,+%<&(+> 0%%0'+8+',. S-8+ HMO %+B/&%+, ,/,(%&+%, - )0 (-)08+' 0*,-. #/ &' &, (0,+ + &'0'(&0* %&, %+,, ;& 0' IPA.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 1"6 - 113
•
Direc# Con# rac# H&O: H&O (-'%0(, &%+(* ;& + ),&(&0', )%&80% (0%+ ),&(&0', -% ,)+(&0*&,, '- %/ 0' 0,,-(&0&-', -% 8&*+80'. Fee s#ruc#ure 6 (inancia' ris%6 'ess s#ar#2up capi#a' 3o,n c'inic an" s#a((5 = ,08+ 0, 0-<+
C'ose" Pane' S#a(( &o"e': P,&(&0', 0%+ 0(/0** +8)*-++, - + HMO 0' +'+%0** -/ - -&(+, • &' + HMO>, 0(&*&&+,. T+ ,0 8-+* HMO 80 -;' -% (-'%0( ;& -,)&0*, *0-%0-%&+, )0%80(&+, 0' -+% -%0'&?0&-', - )%-<&+ '-'),&(&0' 8+&(0* ,+%<&(+,. U,+, XS0*0%> ,%/(/%+,. F&'0'(&0* %&,, -' + HMO (-,* - ,0% /) / 0<+ %+0+% (-'%-* -<+% ),&(&0', ,- (0' 80'0+ /&*&?0&-' - +0* (0%+ ,+%<&(+, ++% 0' -+% 8-+*,. +roup &o"e': F/'(&-', ,08+ 0, 0 ,0 8-+* +(+) 0 + ),&(&0', 0%+ +8)*-++, • - 0 ),&(&0',> %-/) )%0(&(+ %0+% 0' +8)*-++, - + HMO. T+ ),&(&0', &'
,/( 0 %-/) ,0%+ -&(+ ,)0(+ ,0 0' 8+&(0* +B/&)8+' 0 0 (-88-' +0* (+'+% -% (*&'&(. E: K0&,+% P+%80'+'%+ &' + US. I + %-/) HMO (-'%0(, ;& 8-%+ 0' 0 %-/) +' & &, (0**+ 0 ne#,or% mo"e' H&O) P0 - + %-/) X(0)&0&-'> 8+- %-/) )0, + ),&(&0' X,0*0%&+,> 0,+ -' +&% )+%-%80'(+ +)+%&,+ 0' 08-/' - 08&'&,%0&<+ ;-%. F&'0'(&0* %&, -' + ),&(&0',> %-/). Pre(erre" Pro*i"er Orani!a#ions 3PPO5
U'*&+ HMO PPO -+, '- )%-<&+ +0* (0%+ &%+(* %0+% & 0(, 0, 0 %-+% -% 8&*+80' (-'%0(&' +;++' +0* (0%+ )%-<&+%, 0' +0* (0%+ )/%(0,+%, +8)*-+% , &%)0% 08&'&,%0&-', &',/%0'(+ (-8)0'&+, 0' /'&-',. PPO, (0' + -%0'&?+ -% ,)-',-%+ %-/) - ),&(&0', -,)&0*, #*/+ C%-,, -% #*/+ ,&+* )*0', TPA, -% +8)*-+%,. I' + US &',/%0'(+ (-8)0'&+, 0%+ + -8&'0' ,)-',-%, - PPO,. PPO, 0*,- /,+ 0 '+;-% - )%-<&+%, / 0*,- -+% ,-8+ (-<+%0+ -% 8+8+%, ;- (--,+ /,+ + ,+%<&(+, - '-''+;-% -% -/-'+;-% )%-<&+%,. O/-)-(+ +)+',+ +'+%0** 3" ;&** + 8-%+ &' (0,+ - -/-'+;-% )%-<&+% ,+*+(&-' -'* - +'(-/%0+ + ,/,(%&+%, - (--,+ + '+;-% )%-<&+%. PPO, )&(0** (-8)+',0+ +0* (0%+ )%-<&+%, -' 0 ++-%,+%<&(+ 0,&,. A, 0 %+,/* PPO, '- 0((+) + &'0'(&0* %&, - )%-<&&' +0* (0%+ ,+%<&(+, - &',/%+, / + )0,, & -' +&+% + &',/%+% -% + )-*&(-*+%. H-ri" P'ans •
•
Open2en"e" H&Os -% Poin# o( ser*ice 3POS5 P'an: T&, )*0' 0, ,-8+ +0/%+, - 0 %0&&-'0* HMO 0' ,-8+ - 0 %0&&-'0* &'+8'& )*0'. T+ ,/,(%&+% - &, )*0' +&+% /,+, + HMO '+;-% -% 80 (--,+ - /,+ 0 )%-<&+% 0 -+, '- )0%&(&)0+ &' + HMO. T+ ,/,(%&+% )&(0** )0, &+% -/-)-(+ +)+',+ 0' /'+% 0 %0&&-'0* &'+8'& )*0'. #/ &, )*0' (-'0&', &'0'(&0* &'(+'&<+, - +'(-/%0+ ,/,(%&+%, - /,+ '+;-% )%-<&+%,. +a#e%eeper PPOs: T&, PPO )*0' %+B/&%+, )*0' 8+8+%, - (--,+ PCP 0+++)+%, ;&&' + PPO '+;-% - ),&(&0',. I' &, (0,+ + -/-)-(+ +)+',+ ;&** + *-;+% 0' + /,/0* PPO.
A'-+% &+%+'(+ &, &, )*0' &, + (-8)+',0&-' 8+- - + )%-<&+%,. H+%+ PCP &, (-8)+',0+ -' 0 (0)&0&-' 0,&,. T/, 0+++)+% PPO, %0',+% &'0'(&0* %&, )%-<&+%,.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 1"7 - 113
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 1" - 113
CHAPTER /;: RE+ULATION OF HEALTH INSURANCE Reu'a#ion in #$e Uni#e" S#a#es S#a#e Reu'a#ion o( Hea'#$ Insurance: NAIC 0, +<+*-)+ +,+ 8-+* *0;, - %+/*0+ + +0* &',/%0'(+: • U'&-%8 I'&<&/0* A((&+' 0' S&('+,, P-*&( P%-<&,&-' L0; • G%-/) H+0* I',/%0'(+ D+&'&&- ' 0' G%-/) H+0* I',/%0'(+ S0'0% P%-<&,&-', M-+* A( • M-+* N+;-%' C&*%+' #&** • G%-/) H+0* I',/%0'(+ M0'0-% C-'<+%,&-' P%&<&*++ M-+* A( •
G%-/) C--%&'0&-' - #+'+&, R+/*0&-', 0' G/&+*&'+,
M-, ,0+ %+/*0&-', -% &'&<&/0* +0* &',/%0'(+ 0%+ ,&8&*0% 0, + 0%+ )0+%'+ ;& + NAIC 8-+* *0;, / ,0+ %+/*0&-', -% %-/) +0* &',/%0'(+ &+%, ;&+* %-8 ,0+ ,0+ 0, + 0%+ '- )0+%'+ ;& + NAIC 8-+* *0;,. Po'ic- Pro*isions: M-, ,0+ &',/%0'(+ *0;, %+B/&%+ &'(*/&' +,+ )%-<&,&-', &' + )-*&(: • M&'&8/8 %0(+ )+%&- + &'(*/+ &' &'&<&/0* 0' %-/) )-*&(&+, I'(-'+,0*+ (*0/,+ &' &'&<&/0* 0' %-/) )-*&(&+, • M-, ,0+, *&8& + &8+ ;&&' ;&( )%++&,&' (-'&&-', (0' + +(*/+ %-8 • (-<+%0+ &' &'&<&/0* 0' %-/) )-*&(&+, • C0'(+**0&-' 0' %+'+;0* )%-<&,&-', &' &'&<&/0* )-*&(&+, • R+&',0+8+' )%-<&,&-' &' &'&<&/0* )-*&(&+, 0' C-'<+%,&-' )%-<&,&-' &' %-/) )-*&(&+, • C--%&'0&-' - #+'+& CO# )%-<&,&-' &' %-/) )-*&(&+, 0' -<+%&',/%0'(+ )%-<&,&-' &' &'&<&/0* )-*&(&+,. Reu'a#ions Uniue #o +roup Hea'#$ Insurance: A-/ 0* - + ,0+, %+B/&%+ 0 8&'&8/8 '/8+% /,/0** 5 -% 1" /'+% 0 %-/) )-*&(. T+ &',/%+% (0' %+* ,-*+* -' &, -;' /'+%;%&&' %+B/&%+8+', - +(&+ + 8&'&8/8 %-/) ,&?+ & ,0+ -+,'> %+B/&%+ 0' 8&'&8/8 '/8+%. M-, ,0+ *0;, 0*,- ,0+, + +*&&&*& %+B/&%+8+', -% 0 %-/) - 0<+ 0 %-/) +0* &',/%0'(+ )-*&(. NAIC 8-+* *0;, ,0+, 0 + %-/) ,-/* + 0' +8)*-+% 0 *0-% /'&-' 0 (%+&-% 0 %/, +,0*&,+ 0' +8)*-+% -% /'&-' 0' 0,,-(&0&-' 0 (%+& /'&-' -% 0 &,(%+&-'0% %-/). &an"a#e" Bene(i#s: A))*&(0*+ - - %-/) 0' &'&<&/0* )-*&(&+,. T+ +'+&, 0 0<+ ++' 80'0+ &'(*/+ 08-' -+%, (-<+%0+ - '+;-%' (&*%+' %+08+' - 0*(--*&,8 0' %/ 0&(&-' (-<+%0+ - ,+%<&(+, )%-<&+ (&%-)%0(-%, ),(-*-&,, 0' )-&0%&,, (-<+%0+ - (+%0&' &0'-,&( +,, ,/( 0, 8088-%08,. #/ +,+ +'+&, ;&+* <0% %-8 ,0+ - ,0+. Reu'a#ion o( A'#erna#i*e Pro*i"ers: I' 0&&-' - %+/*0&' + &',/%0'(+ &'/,% 0' %0&&-'0* +0* &',/%0'(+ + ,0+, 0*,-
%+/*0+ PPO, 0' -+% +0*-(0%+ )*0',.0'S0+ *0;, -% %+/*0&' HMO, 0%+ 0,+ -'HMO, + NAIC M-+* HMO0*+%'0&<+ A(. I' -%+% B/0*& HMO 8/, )%-<&+ (+%0&' 0,&( +0* (0%+ ,+%<&(+, 0' 8/, 8++ 0 '/8+% - ,0/-% %+B/&%+8+', +,&'+ - +',/%+ + &'0'(&0* 0' -)+%0&-'0* <&0&*& - + )*0'.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 1"9 - 113
Ta.a#ion: H+0* &',/%+%, 0%+ ,/+( - ,0+ 0, ;+** 0, ++%0* 0+,. M-, ,0+, &8)-,+ 0 )%+8&/8 0 -' &',/%0'(+ )%+8&/8, %+(+&<+ &',/%+%, -)+%0&' ;&&' + ,0+. T+ ,0+, - '- 0 - ,+* /'+ +0* &',/%0'(+. T+ ,0+, +'+%0** - '- 0 )%+8&/8, )0& - + #*/+ C%-,, 0' #*/+ S&+* 0' HMO,. I' ,0+, 0' +8)*-+% 80 +/( 0, 0 /,&'+,, +)+',+ 0' %-/) +0* &',/%0'(+ )%+8&/8, & )0& -' +0* - + +8)*-++,. E8)*-++, 0*,- +'+%0** 0%+ '- 0+ -' )%+8&/8, )0& -' +&% +0* +(+) -% &,0&*& &'(-8+ +'+&,. Fe"era' Reu'a#ion o( Hea'#$ Insurance: Ae Discrimina#ion in Emp'o-men# Ac# 3ADEA5: A' +8)*-+% 0<&' 2" -% 8-%+ +8)*-++, 8/, (-8)* ;& &, 0(. T&, A( )%-+(, ;-%+%,
;0+ 4" 0'%+0%*+,, -*+% %-8 &,(%&8&'0+ - +&% 0+. A, )+% &, 0** 0(&<+0%+ +8)*-++, -+&' 0+ 8/, + +*&&*+00&', -% ++(0/,+ ,08+ +0* (0%+ (-<+%0+, 0'0( -*+% +8)*-++, (0''- + %+B/&%+ - )0 8-%+ -% 0 (-<+%0+ 0' -/'+% +8)*-+% )0. R+&%+ +8)*-++, 0%+ '- )%-+(+ + ADEA. Ti#'e VII o( #$e Ci*i' Ri$#s Ac# o( 1>: A' +8)*-+% 0<&' 15 -% 8-%+ +8)*-++, 0' 0 0%+ +'0+ &' &'+%,0+ (-88+%(+ 8/, (-8)* ;& &, 0(. T&, 0( )%-&&, +8)*-8+' &,(%&8&'0&-' -' + 0,&, - %0(+ (-*-% ,+ %+*&&-' -% '0&-'0* -%&&'. A 197 08+'8+' - &, 0( P%+'0'( D&,(%&8&'0&-' A( %+B/&%+, +8)*-+%, - %+0 )%+'0'( (&*&% -% %+*0+ 8+&(0* (-'&&-', + ,08+ 0, 0' -+% 8+&(0* (-'&&-',. A))*&(0*+ -% +8)*-++, 0, ;+** 0, - +&% ;&<+, Fami'- an" &e"ica' Lea*e Ac#: A' +8)*-+% 0<&' 5" -% 8-%+ +8)*-++, 8/, (-8)* ;& &, 0(. A, )+% &, 0( 0' +8)*-++ (0' 0+ /) - 12 ;++, - /')0& *+0<+ ;&&' 0' 128-' )+%&- /)-' + &% -% 0-)&-' - 0 (&* - (0%+ -% 0 ,+%&-/,* &** 08&* 8+8+% -% ;&*+ + ;-%+% &, &**. T+ A( 0*,- %+B/&%+, 0 + +8)*-+%, (-'&'/+ - )%-<&+ %-/) +0* &',/%0'(+ - ;-%+%, ;&*+ +
0%+ -' 08&* 0' 8+&(0* *+0<+. Emp'o-ee Re#iremen# Income Securi#- Ac# 3ERISA5: T+ +%8, - ERISA 0+ )%+(++'(+ -<+% 0' ,0+ *0;, 0 %+/*0+ +8)*-++ +'+& )*0',. A' +8)*-+% 0 ,)-',-% ;+*0%+ +'+& )*0', 8+&(0* ,/%&(0* -,)&0* &,0&*& +0 /'+8)*-8+' +'+&, +(. 8/, (-8)* ;& &, 0(. ERISA %+B/&%+, %-/) )*0', - 0<+ 0 ;%&+' )*0' -(/8+' - 0<+ 0 ,/880% )*0' +,(%&)&-' 0' - &*+ 0' 0''/0* %+)-% ;& + IRS 0' +,0*&,+, ,0'0%, - (-'/( -% )*0' &/(&0%&+,. Conso'i"a#e" Omnius Bu"e# Reconci'ia#ion Ac# 3COBRA5: A' +8)*-+% 0<&' 2" -% 8-%+ +8)*-++, 8/, (-8)* ;& &, 0(. CO#RA %+B/&%+, 0 (+%0&' )+%,-', ;-,+ %-/) +0* (-<+%0+ ;-/* -+%;&,+ +%8&'0+ + 0**-;+ - (-'&'/+ + (-<+%0+ 0 +&% -;' +)+',+ -% 0 ,0+ )+%&- -**-;&' 0 B/0*&&' +<+'. 1 8-' )+%&- &' (0,+ - - +%8&'0&-'. 36 8-' )+%&- &' (0,+ - 0 +0 -% &<-%(+. 36 8-' )+%&- -% 0 +)+'+' (&*. T+ &',/%+% (0' 0*,- 0 2 )+%(+' - + 0(/0* )%+8&/8 0, 0' 08&'&,%0&<+ ++. U)-' + -((/%%+'(+ - 0 B/0*&&' )+%&- )*0' 08&'&,%0-% 8/, '-& + (-<+%+ &'&<&/0*, - +&% %&, /'+% CO#RA. T+ (-<+%+ &'&<&/0*, 0<+ 0 ,)+(&&+ &8+ ;&&' ;&( + (0' +*+( (-'&'/+. Hea'#$ Insurance Por#ai'i#- an" Accoun#ai'i#- Ac# 3HIPAA5:
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 11" - 113
T&, 0( &8)-,+, %+B/&%+8+', -' +8)*-+%,)-',-%+ %-/) 8+&(0* +)+',+ &',/%0'(+ )*0', +(+)&-': 0((&+' -'* (-<+%0+ -'* &,0&*& &'(-8+ (-<+%0+ 0' &',/%+%, 0 &,,/+ &'&<&/0* 8+&(0* +)+',+ &',/%0'(+ (-<+%0+. HIPAA -+, '- )%++8) ,0+ &',/%0'(+ *0;, 0 0%+ 8-%+ 0<-%0*+ - + &',/%+,. HIPAA %+B/&%+, + /0%0'++ 0<0&*0&*& - &'&<&/0* 8+&(0* +)+',+ (-<+%0+ - (+%0&' &'&<&/0*, ;- 0<+ 0 %-/) 8+&(0* (-<+%0+. T+ &',/%+%, 0%+ ++8) %-8 &, %+B/&%+8+' & + ,0+ &8)*+8+', 0' 0*+%'0&<+ 8+(0'&,8 ;&( ,/( +*&&*+ &'&<&/0*, 80 -0&' (-<+%0+. R+/*0&-' - &'&<&/0* M+&(0* E)+',+ P-*&(&+,: HIPAA &8)-,+, 0 &',/%+%, 8/, %+'+; -% (-'&'/+ 0' &'&<&/0* )-*&( &' -%(+ 0 + -)&-' - + )-*&(-;'+%. H-;+<+% + &',/%+% (0' &,(-'&'/+ + (-<+%0+ &' (0,+ - '-')08+' - )%+8&/8 %0/ -% &'+'&-'0* 8&,%+)%+,+'0&-' (-8)*&' ;& - ,0/-% %+B/&%+8+', '-'*-'+% %+,&+, -% ;-%, &' + '+;-%>, +-%0)&( &' (0,+ 0 '+;-% +0* (0%+&',/%+ )*0' -% *-'+% 0' 0,,-(&0&-' 8+8+% &' (0,+ (-<+%0+ 0<0&*0*+ %/ 0' 0,,-(&0&-'. R+/*0&-' - G%-/) M+&(0* E)+',+ P-*&(&+,: HIPAA &8)-,+, 0 '/8+% - %+B/&%+8+', -' %-/) 8+&(0* )*0', &'(*/&' &'+8'& )*0', 0' 80'0+ (0%+ )*0',: HIPAA )*0(+, *&8&, -' + )%++&,&' (-'&&-' +(*/,&-'. T+,+ *&8&, 0%+ +,&'+ 0**-; %-/) &',/%+, 0 0<+ 0 )%++&,&' (-'&&-' - (0'+ + - ;&-/ *-,&' (-<+%0+ -% + (-<+%0+. T+ 80&8/8 *--0( )+%&- /'+% HIPPA -% )%++&,&' (-'&&-' &, ,& 8-',. HIPAA %+B/&%+, 0 %-/) +0* +'+&, )*0' - )%-<&+ 0 ,)+(&0* +'%-**8+' )+%&- -% ,)+(&&+ &'&<&/0*, ;- +(*&'+ + (-<+%0+ &%, &8+. HIPAA )%-&&, %-/) +0* +'+&, )*0', %-8 +,0*&,&' +*&&&*& %/*+, -% %-/) +0* (-<+%0+ 0,+ -' +0* ,0/, 8+&(0* (-'&&-' (*0&8, +)+%&+'(+ +'+&( &'-%80&-' 0' &,0&*&. I',/%+%, 0 -+% %-/) +0* (-<+%0+, 8/, %+'+; ,/( (-<+%0+ 0 + -)&-' - + %-/) )-*&(-*+%. A*-/ HIPAA )+%8&, &',/%+%, - &'(%+0,+ + )%+8&/8 %0+, (0%+ -% ,/( %+'+;0* (0%+,. •
•
•
•
•
&en#a' Hea'#$ Pari#- Ac#: T&, A( &8)-,+, 0 & + )*0' &, -+%&' + 8+'0* +0* )*0' +' & 80 '- ,+ 0' 0''/0* -% *&+&8+ 80&8/8 8+'0* +'+&, *&8& 0 &, *-;+% 0' 0' ,/( *&8&, -% 8+&(0* 0' ,/%&(0* +'+&,. A' & & -+, '- ,+ 0 *&8& -' 8+&(0* +'+&, 80 '- &8)-,+ ,/( 0 *&8& -' 8+'0* +0* +'+&,. Ne,orns9 an" &o#$ers9 Hea'#$ Pro#ec#ion Ac# o( 1: T&, *0; -+, '- %+B/&%+ )-*&(&+, - )%-<&+ +'+&, -% 80+%'& 0' '+;-%' (0%+ / & &8)-,+, ,)+(&&( %+B/&%+8+', -' )*0' 0 - )%-<&+ ,/( +'+&,. S/( )-*&(&+, 8/, )%-<&+ (-<+%0+ -% 0 *+0, 4-/% -,)&0* ,0 -**-;&' 0 '-%80* +*&<+% 0' 96 -/%, -% 0 (+,0%+0' ,+(&-'. omen9s Hea'#$ an" Cancer Ri$#s Ac# o( 1: A((-%&' - &, 0( &',/%+, ;%+(+&<+ +'+&, &' (-''+(&-' ;& 0 80,+(-8 0' ;- +*+( - 0<+ %+0, %+(-',%/(&-' -**-;&' + 80,+(-8 0%+ +'&*+ - %+(+&<+ +'+&, -% + %+(-',%/(&-'. Hea'#$ &ain#enance Orani!a#ion 3H&O5 Ac# o( 1;:
F++%0** B/0*&&+ HMO, 0'
+8)*-+%, 0 0<+ 25 -% 8-%+ +8)*-++, 0' 0 80+ (-'%&/&-', - 0' +8)*-++ +0* (0%+ )*0' 8/, (-8)* ;& &, 0(. T+ HMO 0( +'(-/ %0+ + +,0*&,8+' 0' +<+*-)8+' - HMO, )%-<&&' %0', 0' *-;&'+%+, *-0', - ,0% /) HMO, 0 8+
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 111 - 113
++%0* B/0*&&(0&-' %+B/&%+8+',. T+,+ %+B/&%+8+', &'(*/+ ,0'0%, (-'(+%'&' )*0' ,-*<+'( )*0' +,&' 0' +'+&, 0' )*0' 08&'&,%0&-'. Ta.a#ion: I' 8-, (0,+, + +8)*-+%>, (-'%&/&-', 0%+ '- (-',&+%+ 00*+ &'(-8+ - + +8)*-++. #/ &' (0,+ - 0 ,+*/'+ %-/) +0* )*0' & & 0&*, - 8++ + '-'&,(%&8&'0&-' %+B/&%+8+', - + ++%0* 0 *0;, +' + )0% - + +'+&, 0 &* (-8)+',0+ +8)*-++, %+(+&<+ 0%+ (-',&+%+ 00*+ &'(-8+ - -,+ +8)*-++,. M+&(0* +)+',+ +'+&, 0 +8)*-++, %+(+&<+ 0%+ '- (-',&+%+ 00*+ +(+) &,0&*& &'(-8+ +'+&,. D&,0&*& &'(-8+ +'+&, 0%+ '- 00*+ &'(-8+ ;+' %+(+&<+ /'+% 0' &'&<&/0* &,0&*& &'(-8+ )-*&( )/%(0,+ + &',/%+.
Reu'a#ion in #$e Cana"a Fe"era' Reu'a#ion o( Hea'#$ Insurance:
T+ ++%0* Canada $ealt$ Act +,0*&,+, + -**-;&' (%&+%&0 0 )%-<&'(&0* -,)&0* 0' 8+&(0* +)+',+ )*0', 8/, 8++ &' -%+% - B/0*& -% ++%0* &'0'(&0* 0,,&,0'(+: • •
• • •
T+ )*0' 8/, + 08&'&,+%+ -' 0 '-')%-& 0,&, + )%-<&'(+ -% 0 )%-<&'(&0* 0+'(. T+ )*0' 8/, + (-8)%++',&<+ (-<+%&' ,)+(&&+ +0* ,+%<&(+, )%-<&+ -,)&0*, 8+&(0* )%0(&&-'+%, 0' +'&,,. T+ )*0' 8/, )%-<&+ /'&<+%,0* (-<+%0+ (-<+% 0** %+,&+', - )%-<&'(+. P*0' +'+&, 8/, + )-%0*+. T+ )*0' 8/, )%-<&+ &',/%+ ,+%<&(+, -' 0 '-'&,(%&8&'0-% 0,&,.
I' -%+% - +'(-/%0+ + (-'&'/ 0'(+ - )%&<0+ &,0&*& &'(-8+ )*0' , + 6nemployment Insurance Act 0**-;, +8)*-+%, - %+&,+% B/0*&&+ )%&<0+ &,0&*& &'(-8+ )*0', ;& H/80' R+,-/%(+, D+<+*-)8+' C0'00. I' -%+% - B/0*& -% %+&,%0&-' 0 )%&<0+ )*0' 8/, 8++ + -**-;&' (%&+%&0: #+'+&, 8/, +&' '- *0+% 0' + 15 0 - &,0&*& 0' 8/, (-'&'/+ -% 0 *+0, • 15 ;++,. T+ +'+& *+<+* 8/, + 0 *+0, 6" )+%(+' - &',/%0*+ +0%'&',. E8)*-++, 8/, +(-8+ +*&&*+ -% +'+&, 0+% (-8)*+&' '- 8-%+ 0' %++ 8-', - (-'&'/0&-' ,+%<&(+. • •
Pro*incia' Reu'a#ion o( Hea'#$ Insurance
P%-<&'(&0* I',/%0'(+ L0;,: I' 8-, %+,)+( + %+/*0&-' - +0* &',/%0'(+ &, ,&8&*0% %-/-/ C0'00 ,&'(+ + 0<+ 0-)+ + Uni(orm Acci"en# an" Sic%ness Insurance Ac# 3Uni(orm A?S Ac#5 +<+*-)+ CCIR. T+ )%-<&'(&0* &',/%0'(+ *0;, (-'0&' %+B/&%+8+', %+*0&' - ,+<+%0* )%-<&,&-', 0 0%+ )&(0** &'(*/+ &' +0* &',/%0'(+ )-*&(&+,: I'(-'+,0&*& P%-<&,&-': 2 +0%, -% 8&,%+)%+,+'0&-' 0'&8+ &' (0,+ - 0 %0//*+' 8&,%+)%+,+'0&-' P%++&,&' C-'&&-': 2 +0%, C-'&'/0&-' - (-<+%0+ ;+' 0 %-/) )-*&( +%8&'0+, •
• • •
H-; &,0&*& &'(-8+ +'+&, 8/, +no# )0& ;+' 0' )+%,-' &, -<+%&',/%+. A '/8+% - )%-<&,&-', 0 &',/%+%, )&(0** %+B/&%+ &',/%+ )%-<&'(&0* &',/%0'(+ *0;, - &'(*/+ &' + )-*&(&+, *&+ %+&',0+8+' )%-<&,&-' %0(+ )+%&- )%-<&,&-' (-'<+%,&-' )%-<&,&-'.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 112 - 113
CLHIA +ui"e'ines:
T+ CLHIA 0, &,,/+: 4uidelines 4oerning Indiidual Accident and Sic%ness Insurance. 0%+,,+, 80+%, ,/( 0, + %+'+;0* )%-<&,&-' &' 0' &'&<&/0* +0* &',/%0'(+ )-*&(. Coordination of Benefits 0C)B2 4uidelines. - +',/%+ 0 + CO# )%-<&,&-', &'(*/+ &' %-/) +0* &',/%0'(+ )-*&(&+, %-/-/ C0'00 0%+ (-',&,+'. 4roup Life and 4roup Healt$ Insurance 4uidelines. )%-<&+ 0 8&'&8/8 ,0'0% -% %-/) &',/%0'(+ )-*&(&+,. T+ CLHIA %-/) /&+*&'+, -% +08)*+ &'(*/+ 0 '/8+% - )%-<&,&-', +,&'+ - )%-+( %-/) 8+8+%, ;+' + )-*&(-*+% 0, (0'+ &',/%+%,. Ta.a#ion: P%-<&'(+ - /++( %+0, (-'%&/&-', 0' +8)*-+% )0, -' +0* - 0' +8)*-++ /'+% 0
)%&<0+ +0* &',/%0'(+ )*0' 0, 00*+ &'(-8+ - + +8)*-++. O+%;&,+ & &, '-'00*+ +<+%;+%+. I' (0,+ - 0 &,0&*& +'+&, + 00*+ 08-/' )0% &, + -'+ -% ;&( + +8)*-+% 0' '- + 0)0+% 0, )0& + )%+8&/8.
P%&'(&)*+, - I',/%0'(+: L&+ H+0* A''/&&+, D0+: 26 F+ 2""3
P0+ 113 - 113