Exam (elaborations)
DELAWARE STATUTES
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Exam of 11 pages for the course Delaware Life Insurance at Delaware Life Insurance (DELAWARE STATUTES)
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DELAWARE STATUTES, RULES,REGULATIONS, AND BULLETINS: Life and
Health Insurance
Credit Life and Health - ANS--Credit life Insurance: Insurance on the life of a debtor in
connection with a specific loan or credit transaction
-Credit health insurance: Insurance on a debtor to provide indemnity for payments
becoming due on a specific loan or other credit transaction while the debtor is disabled
Types of Credit Life and Health - ANS-Individual Policies
-Life insurance issued to debtors on the term plan
-Health insurance issued to debtors on a term plan, or disability benefit provisions in
individual policies of credit life insurance
Group Policies
-Life insurance issued to creditors providing insurance upon the lives of debtors on the
term plan
-Health insurance issued to creditors on a term plan insuring debtors, or disability
benefit provisions in group credit life insurance policies to provide such coverage
Credit Insurance and Penalties - ANS-Amount of Insurance
- Credit life insurance: may not exceed initial indebtedness
- Credit health insurance: may not exceed the aggregate of the periodic scheduled
unpaid installments on the indebtedness
Penalties: Violation of credit life and health insurance rules
- $15,000 maximum per individual violation
- $50,000 max per company violation
Life and Health Guaranty Association - ANS--Purpose: To protect policyowners,
insureds, beneficiaries, and annuitants against failure of contractual obligations due to
insolvency of an insurer
-Prohibited advertising: no person may advertise the existence of the Guaranty
Association for the purposes of sales, solicitations, or inducements to purchase any
form of insurance
Life and Health Guaranty Association (Cont) - ANS-The association's max liability
regardless of the number of policies, is as follows:
-$300,000 in life insurance death benefits
, -$100,000 in cash surrender values for life insurance
-$250,000 in the present value of annuity benefits
-$500,000 in medical expense or major medical
-$300,000 for disability income insurance
-$300,000 for long-term care insurance
-$100,000 for health insurance not listed above
AIDS-Related Testing - ANS--Insurers may request an applicant to take an AIDS-related
test
-The use of the test must be disclosed to the applicant and written consent obtained
-The results of testing must be maintained in confidentiality between the insured and
insurer
-Insurers are permitted to ask diagnostic questions regarding AIDS; vague subjective,
unfairly discriminatory, overly technical questions are prohibited
Life Insurance Provisions - ANS-Policy Loan
- Policy must have been in force at least 3 years and have a cash surrender value
- 8% is the maximum loan interest rate
- Insurer may delay loan proceeds up to 6 months
Payment of Claims
- Insurer must pay life insurance claim within 60 days of receipt of proof of loss
Facility of Payment - ANS-An industrial life insurance policy may stipulate that if the
designated beneficiary does not make a death claim under the policy within the period
stated in the policy (not less than 30 days), then the insurer may make payment to
-The executor or administrator of the insured; or
-To any person appearing to the insurer to be equitably entitled by reason of having
incurred expense for the maintenance, medical attention, or burial of the insured
Annuity Standard Provisions - ANS-Reinstatement: contract may be reinstated within
one year from default of payment
Standard Nonforfeiture Laws - ANS--Life insurance policies will include nonforfeiture
provisions including the following: cash surrender value (CSV); extended term
insurance; reduced paid-up insurance
-Insurer may defer CSV payment up to 6 months
- Any paid-up nonforfeiture benefit, if there is nonpayment of premium on the policy
anniversary, will be at least equal to crash surrender value on policy
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