SC Insurance Law 2

julianknox5's version from 2015-07-09 17:31

Life Insurance

Question Answer
What are the two basic types of life insurance?term insurance and permanent insurance.
What is a term insurance?Term insurance covers the insured for a term of one or more years. It pays a death benefit to the beneficiary only if the insured dies during the policy term. Premiums that are paid generally does not build up any cash value.
Permanent insurance is…provides long-term financial protection. With permanent insurance, an insured is entitled to maintain the policy during the insured’s lifetime provided that the premiums are paid. May include savings.
Whole life insurance is?insurance that does not increase premiums as the holder ages.
Universal life insurance is…when certain amounts of the policy are flexible, such as its premium, death benefit, and cash value.
If application of life ins. policy is orally issued by insurer, what is not allowed by the insurer?a defense to the policy.
Insurer must deliver what with the application?the policy (app. (offer) + policy (accep) = K)
One of the grounds upon which an insurer may contest a life insurance policy during the 2 year contestability period is when….the insured made a material misrepresentation.
SC follows the majority rule of misrepresentation which does not require that the insured’s death be causally related to the insured’s material misrepresentation under a void life insuance policy . (death does not have to be related to omission or misrepresentation i.e smoker says non-smoker then dies in a fire.
What are the five elements the insurer must prove after the insured dies during the first 2 years of a life insurance policy to make the policy void due to the insured’s misrepresentation?(1) applicants statements untrue; (2) their falsity was known to the applicant; (3) that they were material to the risk; (4) the insurer relied on the statements; and (5) that they were made with the intent to deceive and defraud the insurer.
An applicant who pays initial premium when filing application is…guaranteed immediate coverage.
Insurer is entitled to K against liability resulting frompre-existing diseases.
Some companies provide in their application that the contract for insurance shall not take effect untilits approved; first premium paid; and the policy delivered has substantial advantages.

life insurance policy

Question Answer
Insurer must refund any premium paid if…..the purchaser elects to cancel and return the policy to the insurer for any reason during the “free look period” which is at least 10 days from the date of the policy is delivered to the purchaser. If policy is sold by a direct response insurer by mail order then 31 days.
A life insurance policy is not contestable aftertwo years after its inception.
What must a life insurance policy provide upon the insureds death?it must provide that when the policy becomes a claim by the insured’s death settlement must occur upon the insurer’s receipt of proof of death.
Is the insured entitled to a grace period?31 day grace period after the first premium is paid.

matters affecting Life insurance policy

Question Answer
What is the effect of divorce as it pertains to a the beneficiary?Divorce does not affect one spouse’s rights as a designated beneficiary in a Life insurance policy absent a change in the designation of beneficiary.
Are insurance policies exempt from the insured’s creditors?Other than the insured’s estate, when these proceeds and cash values are expressly for the primary benefit of the insured’s spouse, children, or dependents.
What is the rule for exclusion for suicide within and after first two years of policy?(1) If the insured is commits suicide within the first two years of the policy the suicide exclusion provision may limit payment of benefits, but must allow for at least the return of premiums paid on the policy. (2) After two years the insurer may not limit payment of benefits.
Equation for the return of premiums by insurer?Premiums paid – indebtness to insurer.
May the life insurance policy restrict the insurer’s liability in the event of death occurring when the insured is a resident of a specified foreign country?Yes, under SC law.
What other restrictions may the life insurance policy propose?War, Some aircraft, Hazardous sports & occupations.
Who has the burden to prove suicide was cause of death?the insurer

Accident and Health insurance

Question Answer
What is a pre-existing condition?A medical condition known to the have existed when the person filed an application for insurance.
In SC when may a false statement in an A&H policy bar right to recover? Who has the burden?(1) the false statement was made with actual intent to deceive; and (2) the false statement materially affected either the acceptance of the hazard or the risk assumed by the insurer. The insurer has the burden.
Usually payment of premium will result in immediate coverage protection, but what reservations are the insurer entitled to? An insurer can reserve the decision of whether an applicant is an insurable risk as of the application date.

Automobile insurance

Question Answer
What is additional coverage?a motor vehicle liability policy may provide for additional or excess coverage beyond the legally required coverage.
What is at fault insurance?the not-at-fault party may pursue a tort claim against the party at-fault for some harm. (comparative negligence)
Insurance carriers must provide what coverage as mandated by SC law?uninsured motorist coverage
Uninsured motorist coveragereferred to as “UM,” is a type of auto insurance policy that pays you for your damages for bodily injury and property damage when an at-fault motorist is without any insurance, or insurance is less than the minimum limits (25/50/25). A motor vehicle is considered uninsured if the owner or operator is unknown, such as a hit-and-run. Uninsured motorist coverage in South Carolina is mandatory. (25/50/25 UM coverage is mandatory).
Underinsured motorist coveragereferred to as “UIM,” is a type of auto insurance policy that that can be triggered if the at-fault motorist is underinsured. Unlike UM insurance, the at-fault motorist has insurance but the vehicle’s liability policy limits are not enough to compensate all of the plaintiff’s damages. UIM coverage is optional.
In SC does the insured vehicle need to be involved in incident to trigger coverage? No, UM and UIM coverage are personal and portable meaning an insured vehicle need not be involved in incident to trigger coverage.
UM and UIM coverage mandates that the passenger, as an insured, is entitled to receive…UM and UIM benefits in the basic limits from the policy that the passenger maintained on the non-involved automobile. (personal and portable).
When is UIM coverage not portable?Coverage is not portable from insured vehicles to uninsured vehicles owned by the same insured.
What elements need to be satisfied under SC law for a right of action in an accident involving an unknown vehicle (uninsured vehicle)?(1) insured or witness reports accident to police within RT; (2) injury or damage caused by physical contact of unknown vehicle; and (3) insured was not negligent in failing to determine identity of the other vehicle and identity of the driver during time of the accident.
Is a farm tractor a motor vehicle?no
What is stacking?An insured’s recovery of damages under more than one policy in succession until all damages are satisfied or until the total limits of all policies have been exhausted.
Who may stack and when?Owner and class one insureds may stack UIM/UM coverage from other owned vehicles But limited to same amount of coverage of involved vehicle. Can only stack when the involved vehicles cannot take care of the damage.
What are the two classifications of insureds?Class one and Class two.
What are class one insureds? What are Class two insureds?the named insured, a spouse, and relatives residing in the household. (away at school and still dependent). Class two insureds are all other insureds not covered in class one.

Recent badges