Term & Universal Life & Ethics

Table of Contents

 

Chapter 1: Defining Life Insurance

6

 

Basic Concepts

6

 

How Much is Enough?

7

 

     Calculating Expenses

8

 

     Another calculating method

10

 

     An Emergency Fund

11

 

     Child-Care Expenses

11

 

     Educational Fund

11

 

     Debt Repayment

12

 

     Coming to a Conclusion

12

 

Insurance Companies Measure Risk

13

 

What Type of Life Insurance is Appropriate?

14

 

What Will the Insurance Cost?

15

 

Term Insurance

16

 

     Reentry Level Term

18

 

     Level Decreasing Term Insurance

19

 

Permanent Insurance

20

 

Universal Life Insurance Policies

23

 

Universal Life Evolution

24

 

How Do Universal Life Policies Compare to Traditional Plans?

25

Chapter 2: The Life Insurance Contract

29

 

Defining the Contract

30

 

Policy Application

30

 

Policy Ownership

31

 

Preventing Money Laundering Activities

32

 

Terrorism Produces Insurer Risk

32

 

     Legal Requirements Adopted

33

 

     Broker-Dealer Requirements

35

 

AML Program Requirements

36

 

     Employee training can be in several formats

37

 

     Know Your Customer (KYC)

39

 

Compliance

39

 

     Suspicious Activity Reports Filing Requirements

39

 

A Change in Thinking

40

 

     Three stages of money laundering

41

 

     A Global Problem

41

 

     Covered Products

43

 

     Nine Identified ML Methods

45

 

Money Laundering Indicators Not Unique to Insurance Products

47

 

     Policyholder Characteristics and Behaviors

48

 

     A Known Criminal or Criminal Associate or Relative

50

 

     Erratic or Abnormal Use of Policies

50

 

     High Premiums Compared to Verifiable Income

50

 

     Lack of Concern for Charges or Costs

51

 

     Undue Interest in Payout Options

51

 

     Change of Beneficiary

51

 

     Insurance on Assets that Appear Inconsistent with Income

51

 

     Early or Suspicious Claims

52

 

Product Characteristics and Maintenance

53

 

Customer Due Diligence (CDD)

55

 

     In Conclusion

57

Chapter 3: Policy Features and Provisions

58

 

Premiums / Policy Options

58

 

     Nonforfeiture Options

58

 

     Dividend Options

59

 

     Settlement Options

60

 

State Required Provisions

61

 

     Incontestability / Misstatements in the Application

62

 

     Deferment Clause / Loan Values

63

 

     Grace Periods and Reinstatement

64

 

Allowed Policy Provisions

65

 

     Suicide / Aviation / War

65

 

General Provisions

66

 

     Deduction of Indebtedness and Premium Refund

66

 

     Change of Beneficiary

66

 

     Assignment

67

 

Beneficiary Designations

67

 

Policy Payments

69

 

     Cash Values

69

 

     Dividends / Proceeds

70

 

     Special Clauses

71

Chapter 4: Contract Use

73

 

Group Insurance Principles

73

 

Eligible Groups

73

 

     Single Employer Groups

73

 

     Multiple Employer Trusts (METS) & Unions, Associations, and Other Groups

74

 

Creditor-Debtor Groups

74

 

Underwriting Advantages

75

 

Keeping Current with Business Needs

76

 

The Informed Consumer / Providing a Quote

77

 

The Contract Participants

79

 

     The Insurer & The Insured

79

 

     Insurance Contract & Underwriting and Rating

80

 

Finance  / A Public Interest

81

 

Key Person Insurance

82

 

Buy-and-Sell Agreements

83

 

The Key Person Principle

84

 

     Insurable Interest for Life Insurance

84

 

     Health Insurance on Key Employees and Owners

86

 

The Small Company’s Exposure

88

 

     Loss of the Small Business Owner

88

 

Planning Ahead for Death or Disability / Insuring Entities

92

 

Private and Government Insurance

92

 

Private Insurers:  Life Insurance

93

 

     Property and Liability Insurance

94

 

Government Insurance

95

 

     Voluntary Government Insurance & Compulsory Government Insurance

95

 

Mutual Companies:  Assessment Mutuals

96

 

     Non-assessable Mutuals

98

 

     Conversions

99

 

Reciprocal or Inter-Insurer Associations

99

 

Stock and Mutual Underwriting / Factory Mutuals

101

 

Superior Agents and Brokers

102

Chapter 5: Ethics

105

 

Making Choices

105

 

Ethics Beyond Philosophers / Being Ethically Responsible

106

 

Caring for Others

107

 

A Legal Liability / Ethics on the Job

110

 

Education Requirements

111

 

Responsibility

112

 

When We Have Failed to Do Something Important

115

 

Setting Up Professional Standards / Questions as well as Answers

116

 

Professional Conduct

119

 

Ethics in the Workplace

120

 

Ethical Excellence

122

 

Asking the Right Questions / Listening:  The Route to Success

124

 

Patience, Patience, Patience!

126

 

Customer Satisfaction / The Difficult Customer

127

 

Preparing for the Inevitable / Using Specific Language

129

 

Family Obligation

131

 

Free Choice

132

 

Egoism

133

 

Objectivist Theory

134

 

Cultural Ethics; Perception of Ethics

135

 

Moral Persuasion

137

 

Rationalizing Morals

138

 

Can Ethics Be Taught?

140

 

A Moral Habit

141

 

Violence in the Name of Ethics

142

 

The Addiction to Power

144

 

Objective Morality

145

 

Avoiding Negativity

147

 

Who Is the Teacher?

148

 

Is Manner Part of Ethics? / Ethical Investing

149

 

Investing in Familiar Products

150

 

Searching for Compatible Companies / Personal Involvement

151

 

Forcing Change Through Investing

152

 

Socially Responsible Investing (SRI) / The Avoidance Investor

153

 

Positive Investing Approach

154

 

The Activist Investor

156

 

Gadflies

157

 

Ethical Investing for Profit / Investing in Small Companies

159

 

Investing for the Long Term / Early Ethical Investment Trends

160

 

Where Does One Begin?

161

 

Two Basic Categories of Investments / Know Thyself

162

 

Investment Portfolios

163

 

Appraising Thyself

164

 

Considering Current Financial Status

165

 

Future Financial Concerns

166

 

Two Portfolios Constants

167

 

Ethical Banking

168

 

  Credit Unions

168

 

  Minority Owned Banks

169

 

Socially Responsible Credit Card Companies

169

 

United Insurance Educators, Inc.

8213 352nd Street East

Eatonville, Washington 98328-8638

 

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