Oklahoma § 36-4037 - Definitions to be delivered to applicant for replacement

§ 36-4037. Definitions to be delivered to applicant for replacement

life insurance policy or annuity.

The following definitions shall be on a form prepared by the

insurer and shall be delivered to the applicant for a replacement

life insurance policy or a replacement annuity policy along with the

notice and statement provided for in Sections 4035 and 4036 of the

Life Insurance and Annuity Policyholders Protection Act, Sections

4031 et seq. of this title:

DEFINITIONS

Premiums: Premiums are the payments you make on the

life insurance or annuity contract. They are unlike deposits in a

savings or investment program because if you drop the policy you

might get back less than you paid in.

Cash Surrender Value: This is the amount of money

you can get if you surrender your life insurance policy or annuity.

If there is a policy loan, the cash surrender value is the

difference between the cash value printed in the policy and the loan

value. Not all policies have cash surrender values.

Lapse: A life insurance policy may lapse when you do

not pay the premiums within the grace period. If your policy had a

cash surrender value, the insurer might change your policy to as

much extended term insurance or paid-up insurance as the cash

surrender value will buy. Sometimes the policy lets the insurer

borrow from the cash surrender value to pay the premiums.

Surrender: You surrender a life insurance policy

when you either let it lapse or tell the company you want to drop

it. If a policy has a cash surrender value, you can receive such

value in cash if you return the policy to the company with a written

request.

Place on Extended Term: This means you use your cash

surrender value to change your insurance to term insurance with the

same insurer. In this case, the net death benefit will be the same

Oklahoma Statutes - Title 36. Insurance

as before but you will only be covered for a specified period of

time.

Borrow Policy Loan Values: If your life insurance

policy has a cash surrender value, you can usually borrow all or

part of said amount from the insurer. Interest will be charged

according to the terms of the policy, and if the loan and unpaid

interest ever exceeds the cash surrender value the policy will be

terminated. If you die, the amount of the loan and any unpaid

interest due will be subtracted from the death benefits.

Evidence of Insurability: This means proof that you

are an acceptable risk. You have to meet the standards of the

insurer regarding age, health, occupation, and such other standards

as the insurer feels necessary to be eligible for coverage.

Incontestable Clause: This says that after one (1)

or two (2) years, according to the provisions of the contract, the

insurer shall not resist a claim because you made a false or

incomplete statement when you applied for the policy. During the

first two (2) years if there are false or incomplete answers on the

application and the insurer discovers them, the insurer can deny a

claim as if the policy has never existed.

Suicide Clause: This says that if you commit suicide

after being insured for less than two (2) years, your beneficiaries

will receive only a refund of the premiums that were paid.

The definitions of incontestable clause and suicide clause shall be

in 12-point type.

Added by Laws 1983, c. 80, § 7, eff. Nov. 1, 1983. Amended by Laws

1984, c. 149, § 15, eff. Nov. 1, 1984.