Life’s Risks

Table of Contents

Chapter 1: Insuring from the Beginning		1
	The Patient Protection & Affordable Care Act of 2010	1
	Background	1
	The Act’s Reforms	1
	Not all Elements of the Affordable Care Act Implemented	2
	Pregnancy and the ACA	2
	Other Elements of the ACA	4
Chapter 2: Recognizing Life’s Risks		8
	Critical Illness Insurance	8
	The Early Years	11
	529 College Savings Plans	14
	Types of Plans: Savings Plans, Prepaid College	14
	Benefits of 529 Savings Plans	15
	Sport Insurance and Group Event Insurance	16
	Sports Insurance Programs	16
	Special Event Coverage	17
	Travel Insurance; Trip Cancellation Coverage	20
	Credit Card Insurance	23
	Terrorism Insurance	25
	Defining “Act of Terrorism”	25
	TRIA	26
	President Bush Signed the Act	27
	The Role of Terrorism Insurance	27
	Policy Restrictions	29
	Business Interruption Insurance	29
	Workers’ Compensation and Other Coverage	30
	Coverage under Terrorism Insurance	30
	Domestic Terrorism	36
	Hate Crime / Terrorism	37
	Common Insurance Coverage	39
	Life Insurance	39
	Health Insurance	40
	Long-Term Disability Insurance	40
	Automobile Insurance	41
Chapter 3: Life Insurance		42
	Basic Concepts	42
	Determining Size of Life Insurance Policies	43
	Calculating Expenses	44
	Debt Repayment	44
	Coming to a Conclusion	45
	Insurance Companies Measure Risk	46
	What Type of Life Insurance is Appropriate?	47
	What Will the Insurance Cost?	47
	Term Insurance	48
	Permanent Insurance	52
	Universal Life Insurance Policies	55
	Universal Life Evolution	56
	How Do Universal Life Policies Compare to Traditional Plans?	57
	The Life Insurance Contract	59
	Defining the Contract	60
	Policy Application	61
	Policy Ownership	62
	Preventing Money Laundering Activities	62
	Policy Features & Provisions	62
	Premiums	63
	Policy Options	63
	Dividend Options	63
	Settlement Options	64
	State Required Provisions	66
	Incontestability	66
	Misstatements in the Application	67
	Deferment Clause	67
	Nonforfeiture	67
	Loan Values	68
	Grace Periods and Reinstatement	68
	Allowed Policy Provisions/Suicide/Aviation/War	69
	General Provisions	70
	Deduction of Indebtedness and Premium Refund	70
	Change of Beneficiary	70
	Assignment	71
	Beneficiary Designations	71
	Policy Payments	73
	Cash Values	73
	Dividends/Proceeds/Special Clauses	74
	Contract Use	76
	Group Insurance Principles	76
	Eligible Groups / Single Employer Groups	76
	Multiple Employer Trusts/Unions, Associations & Other Groups	77
	Creditor-Debtor Groups	77
	Underwriting Advantages	78
	Keeping Current with Business Needs	79
	Informed Consumers	80
	Providing Quotes	80
	Contract Participants: The Insurer and The Insured	82
	The Insurance Contract	82
	Underwriting and Rating	83
	Finance	83
	A Public Interest	84
	Key Person Insurance	85
	Buy-and-Sell Agreements	85
	The Key Person Principle	86
	Insurable Interest for Life Insurance	87
	Health Insurance on Key Employees and Owners	88
	The Small Company’s Exposure	90
	Loss of the Small Business Owner	90
	Insuring Entities	94
	Private and Government Insurance	94
	Private Insurers	94
	Life Insurers	95
	Property and Liability Insurers	95
	Government Insurers: Voluntary and Compulsory	96
	Mutual Companies	97
	Assessment Mutuals	97
	Non-Assessable Mutuals	99
	Conversions	100
	Reciprocal or Inter-Insurer Associations	100
	Stock and Mutual Underwriting	102
	Factory Mutuals	102
	Superior Agents and Brokers	103
Chapter 4: Health Insurance		106
	The Patient Protection and Affordable Care Act	106
	Long-Term Care Policies (LTC)	114
	Defining Policy Benefits	115
	Care Levels	119
	What Benefit Levels Should be Recommended?	120
Chapter 5: Disability Insurance		124
	Defining Disability	124
	Who Needs Disability Coverage?	125
	Insuring 100% of Income	126
	Determining Coverage Levels	126
	Waiting Periods	128
	Benefit Longevity	128
Chapter 6: Auto Insurance		130
	The Automobile Insurance Policy	130
	Underwriting Risk	131
	Six Policy Components in Auto Insurance	131
	Rising Premium Rates	132
	Insuring a New Vehicle	133
	Insuring Classic Cars	134
	Delivery Drivers	136
	RV Insurance	137
	Motorcycle Insurance	137
	Mechanical Breakdown Insurance (MBI)	138
	Car Rentals During Foreign Travel	139
	Pay-As-You-Go Policies	140
	Safe Drivers Pay Less for Auto Insurance	140
	A New Issue for Insurers: Legalized Marijuana	142
	Distracted Driving	144
	Teenage Drivers	147
	Affordable Coverage	149
	Perils & Hazards	153
	Reading the Auto Policy	155
	Conditions in an Auto Policy	156
	Family Automobile Policy (FAP)	158
	Auto Liability Insurance	159
	Property Damage Liability Insurance	161
	Medical Auto Insurance	161
	No-Fault Insurance	162
	Personal Injury Protection (PIP)	164
	Collision	164
	Comprehensive Coverage	165
	Auto Insurance for School-Sanctioned Events	166
	Uninsured and Under-Insured Motorists Coverage	166
	Driving Uninsured: No-Pay, No-Play Laws	167
	Towing and Service or Rental Car Reimbursement	168
	Wage Loss and Substitute Services Coverage	168
	Determining Auto Insurance Rates	168
	When an Auto Accident Occurs	170
	Broad Form Auto Insurance	170
	Insuring Above All Other Liability Policies	172
	Single-Limit Policies/Split-Limit Policies	172
	Umbrella Policies	173
	Judging Liability Insurance Amounts	173
	Property Damage/Wage Loss & Substitute Services	174
	Reviewing an Issued Policy for Correctness/Negligence Laws	174
	Three Types of Negligence	175
	Loss-Adjustment Provisions	175
	Notice of Loss/Processing an Automobile Claim	176
	Auto Insurance Fraud	178
Chapter 7: Homeowner’s Insurance		182
	Renter’s Insurance	182
	Insuring Your Home	182
	Section I of Form #1	186
	Form #2	188
	Form #3	188
	Form #4	190
	Form #5	190
	Form #6	191
	Form #8	191
	Exceptions	192
	Natural Disasters	193
	Volcanoes/Hurricanes and Tornadoes	195
	Personal Property	196
	Umbrella Insurance	197
	Homeowner’s Liability Insurance	199
	Old Problems and New Trends: Assignment of Benefits	201
Chapter 8: Annuities		206
	Defining an Annuity	206
	Annuity Choices: Joint & Survivorship/Guaranteed and Lifetime/Level Annuities	207
	Capital-Back Annuities/Escalating Annuities/Inflation-Linked Annuities/Enhanced Annuities	208
	Annuity History	209
	Annuity Terminology	212
	Annuity Basics	216
	Choosing Between Fixed and Variable Annuities	216
	Choosing Between a Lifetime Annuity and Term Annuity	217
	Company Financial Strength	219
	Annuity Extras: Principal Protection/Cost of Living Protection	219
	The Ups and Downs of Annuities	220
	Tax Efficiency/Supplementing Other Retirement Income	220
	Reasons to Buy an Annuity/Reasons to Avoid Buying Annuities	221
	Making the Right Annuity Choices	222
	Multiple Annuity Choices	223
	Annuities for Retirement	224
	Everyone is Living Longer these Days	225
	Putting Off Retirement	225
	Fixed Rate Annuities	227
	How Fixed-Period Annuities Work	227
	Variable Annuities	229
	Annual Expenses	229
	Funding Variable Annuities/Variable Annuity Fees	230
	Variable Annuity Death Benefit/Surrender Fees/Early Withdrawal/Taxation	231
	Equity-Indexed Annuities	231
Chapter 9: Anti-Money Laundering		233
	Terrorism Produces Insurer Risk	233
	Legal Requirements Adopted	234
	Broker-Dealer Requirements	236
	AML Program Requirements	237
	Know Your Customer (KYC)	239
	Compliance	239
	Suspicious Activity Reports Filing Requirements	240
	Agents Must Now be Vigilant	240
	A Global Problem	242
	Covered Products	243
	9 Identified Money Laundering Methods	245
	Money Laundering Indicators Not Unique to Insurance Products	247
	Policyholder Characteristics and Behaviors	248
	A Known Criminal or Criminal Associate or Relative	249
	Erratic or Abnormal Use of Policies/High Premiums Compared to Verifiable Income	250
	Lack of Concern for Charges or Costs	251
	Undue Interest in Payout Options/Change of Beneficiary	251
	Insurance on Assets that Appear Inconsistent with Income/Early or Suspicious Claims	251
	Product Characteristics and Maintenance	253
	Customer Due Diligence (CDD)	255
Chapter 10: Identity Theft Insurance		257
	Identity Theft Defined	258
	Mortgage Fraud	262
	Civil Liability for Mortgage Fraud	263
	Identity Theft and Assumption Deterrence Act	263
	Factors for Consideration	264
	Technical Amendments to Title 18, United States Code	264
	Insurance Identity Theft/When Insurance Theft Occurs	265
	Insurance Statistics	266
	Sample Policy	267
Chapter 11: Debt Affects Insurance		275
	Debt Affects Premium Rates	275
	Changing the Spending Pattern	278
	When 20% is not actually 20%	282
Chapter 12: Employment Practices Liability Insurance		284
	Potential Interview Mistakes	285
	Negligent Hiring Liability	286
	A Policy Overview	288
	Do Employers Really Need EPLI?	290
	Low-Cost Protection	293
	New Technology Firms/All Companies are Vulnerable	294
	Educating the Employers	295
Chapter 13: Ethical Insurance Practices		297
	Ethic Subject Matter for Continuing Education	297
	Meeting Education Requirements in a Timely Manner	298
	The Doctrine of Utmost Good Faith (Breach of Utmost Good Faith)	300
	Duty of Disclosure	300
	Representations and Warranty/Representations/Warranty	301
	Action Taken by Insurer Against a Breach	302
	Principle of Waiver and Estoppel	302
	Guaranty Associations	302
	Knowledge of the Product	308
	Ethics from an Agent’s Standpoint: Introducing narrator Harry Bobs	309
	It is a Matter of Perspective	310
	Establishing Ethical Goals	312
	Why Be Ethical?	314
	Following the Laws	315
	Ethics in the Workplace	316
	The Same by Any Name	317
	Putting the Past into the Future	318
	Personal Values	318
	Companies Set Guidelines	321
	Promoting Ethical Behavior	326
	Is It Possible to Teach Ethical Behavior to Others?	328
	What is the Scope of Ethics?	329
	What Does it Take to be a Moral Person?	330
	What Quality of Work do you Want to Perform?	331
	What do I Want my Legacy to be?	331
	The Leaders of the Pack	331
	What are our Responsibilities to Other Moral Persons?	333
	Objectivist Ethics	335
	Holding on to our Ethical Code	336
	Looking the Part	341
	Courtesy/Mores	342
	Mores are Established Patterns of Action to which an Individual is Expected to Conform	343
	Education	346
	Getting Education in a Timely Manner	347
	Product Knowledge	348
	Laying Out Policy Benefits and Limitations	349
	Policy Replacement	351
	Why Agents Replace their Own Business	352
	When Agents Allow Misconceptions	353
	When the Client Thinks the Premiums are too High	354
	Obtaining Proper Application Signatures/Keeping in Touch After the Sale	354
	Selling “Fast Buck” Items	355
	Commingling Funds/The Professional	356
	Preparing for Tomorrow	357
	Due Diligence	358
	Legal Versus Moral	366
	Last page:	369

United Insurance Educators, Inc.

PO Box 1030

Eatonville, WA  98328

(253) 846-1155

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