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Life Insurance - Points to remember

IMPORTANT THINGS TO REMEMBER

Check with your agent to make sure the policy is actually issued by a company license to do business in      California.

Identify your need.

Select the type of policy and amount that best fills your need.

Investigate the reliability and stability of the life insurance company through the insurance rating      organizations and the California Department of Insurance Hotline at 1-800-927-HELP.

In most cases California law will only apply if the contract was issued in by a company authorized to do          business in California.

Review all illustrations and other sales presentations carefully, and ask for them to be confirmed in writing      with a copy to be retained by you.

Be sure that you are dealing with an entity licensed to do business in California.

GLOSSARY OF LIFE INSURANCE TERMS

Accelerated Benefit Provision - A provision in many new policies which will allow the policy owner to receive a portion of the death benefit early if the insured person is diagnosed with a terminal illness or permanently confined to a nursing home.

Accidental Death Benefit - A rider added to a policy that provides an additional benefit if the insured dies from accidental causes.

Certificate - A document provided to a person insured under a group insurance policy evidencing that the coverage exists.

Evidence of Insurability - Medical and other information about a person applying for insurance that the life insurance company keeps confidential, but uses to decide whether the policy can be issued and what premiums to charge.

Face Amount -The amount to be paid to the beneficiary when the insured dies. It will be reduced by any unpaid policy loans and interest on those loans and may be increased by any dividends.

Free Look - A required period, of 10 or more days after a policy has been delivered to the policy owner, during which the policy can be returned for a refund of all amounts paid.

Grace Period - A period (usually 31 days) after the premium due date, during which an overdue premium may be paid without penalty. The policy remains in force throughout the period.

Guaranteed Insurability - An option that permits the policy holder to buy additional stated amounts of life insurance at certain times in the future without having to provide new evidence of insurability.

Illustration - A document used in life insurance sales presentations showing year-by-year numbers indicating how a policy will work. Usually it assumes that amounts being paid today will continue in all future years.

Insured - The person on whose life an insurance policy is issued.

Lapse - Discontinuation of insurance without cash values when required premiums are not paid. If cash value exists there be non forfeiture provisions available.

Loan Value - The amount which can be borrowed by the policy owner from the company using the value of the policy as collateral. Usually the interest rate payable on the loan varies based on an index defined in the policy.