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MTHEL 131 (32)

Optional Benefits & Riders.docx

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University of Waterloo
Mathematics Electives
David Kohler

Optional Benefits & Riders Monday, October 14, 2013 11:46 AM Disability Benefits  Benefits in the event of disability  Waiver of Premium (WP) o Waivers premiums (or mortality and expense charges in the case of UL and current assumption policies) in the event of disability before a certain age, usually 65 o Dividends continue to be paid under par policies, CV grows, and loans are still available o Additional extra premium cost o Provisions associated with term  During disability, premiums for the term policy will be waived, but if converted, the new premiums are not waived  Waived premiums even under conversion  If converted at the end of the conversion period, then premiums are waived for new policies as well  Disability Income o Monthly benefit upon insured's disability o Usual waiting periods are 4-6 months before payment commences o Premiums on both base policy and disability income rider o Dividends are paid, no affect to death benefit Accelerated Death Benefits  Provisions or riders that provides payment of all or a portion of a life insurance's policy amount prior to the insured's death in the event of some specified, adverse medical condition  Terminal Illness Coverage o Specified (usually 25 - 50%) of the policy's face amount is paid out in the event of a diagnosis of terminal illness o Usually provided that the insured has a maximum of 6-12 months to live o Certification by a physician o Hospital or nursing home records o Medical examination o Usually no extra charge, other than some administrative expense charges as well as lost interest o Remaining death benefits, future premiums, CV, and dividends are reduced proportionately  Catastrophic Illness Coverage o Accelerated death benefit payments for conditions such as stroke, heart attack, cancer, coronary artery surgery, renal failure, and other diseases o Perspective buyers must be given numerical illustrations as to the effect of an accelerated pay-out on the policy's death benefit, future premiums, CV and policy loans  Long-Term Care Coverage o Monthly benefits paid in
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