Study Notes for the Long Term Insurance Examination (2011 Edition)

(c)Exclusions: the normally applicable exclusions, which are commonlyfound with personal accident covers, include:(i)(ii)(iii)(iv)(v)(vi)Self-inflicted injuries (including suicide, at any time);War-related injuries;Injuries whilst involved in illegal activities;Disease or illness (unless caused by an accident);Childbirth & pregnancy;Injuries resulting from hazardous sports (as defined).3.3 ACCELERATED DEATH BENEFITSThe meaning of this is that in certain serious situations, all or part of the deathbenefit under the policy may be payable to a policyowner-insured, although death has notyet occurred. Provisions for this are contained in accelerated death benefit riders, alsoknown as living benefit riders. Common features with the different riders concerned are:(a)(b)(c)(d)(e)Basic reasons: the benefits are released at times of great personal stress, undergrave and life-threatening circumstances. They are to assist with relatedexpenditure and to provide at least partial relief from the extra burden of financialworry at times which are already grief-laden.Eligible plans: the riders are only likely to be permitted with policies having asignificant face amount, i.e. the larger policies, with a face amount of perhaps theequivalent of US$100,000 or more.Beneficiaries: since pre-death payments to the policyowner-insured will have animpact upon the expectations of named beneficiaries, the latter is usually requiredto sign a release (or release form), acknowledging that the death benefit standsreduced by the amount of the accelerated death benefit payment.Assignees: similar considerations to those in (c) above arise with any assignee,who must also sign such a release form.Types of benefits: we shall consider two such accelerated death benefits, namelythe critical illness and the long-term care benefits.3.3.1 Critical Illness BenefitThe basic features of this rider are:(a)Meaning: a stated portion of the death benefit is paid to thepolicyowner-insured when:3/6