Life and Health Terms in the Insurance Exam

All right, hello, this is Melissa, the insurance exam queen, and we're gonna do a video on provisions that show up on both the life exam and the health exam. So I currently have my life slides pulled up, but I'm gonna focus on just the ones that show up on life and health. And then sometimes between the life and health ones, they're a little bit different. So I'll switch over to my health slide show to share those ones with you. But this is gonna be, now this, I could take two, three, in fact, the current recorded lesson I have on provisions is about almost three hours in total. So this is gonna be a little abbreviated in terms of the examples I give you and how long I talk about everything. So if you want a longer explanation, because provisions are the most tested topic pretty much in every state. It's almost always right around 20%, if not more, of the state exam. And some chapters can be as low as three or 5%. So by knowing provisions, which are mostly definitions, you're locking in a great 20% of the exam. So it's super helpful, especially if you're taking both life and health, many of the provisions and the ones we're covering today overlap. So they're the same. So you're kind of double dipping by really knowing provisions and knowing provisions really well. Okay, so I got about an hour to go through this. I do have a live class happening right now as I'm teaching this. Feel free to drop questions in the chat box. I may or may not be able to respond to them, but I will give some time at the end. So this video will probably be somewhere around 40-ish minutes, we'll see. And then I'm gonna leave some time at the end to answer the questions that I got live in my class. And if you're ever interested in a live class, check out insuranceexamqueen.com live class schedule or book your spot, I think it's what it's called on the homepage and join us for a live class. Okay, you guys see the right screen? Yes, okay. So let's talk for a minute, what is a provision? You're not actually gonna be tested on the word provision. Provision is just how we do things. Like I like to think like, this is how we do it. It's just a way of how we set up the policy, okay? So it's like things that are inside the policy. There are some that are optional, some that are required, but a provision itself is just, this is how we do it. This is how we set it up, okay? So there are components of a policy, they outline the benefits, they outline the rules and other important features, but you won't actually be tested on the word provision, but you're gonna see the word provision a lot. So I kind of wanted to alert you to that. All right, now, in this slideshow, so if you're taking Just My Life or Just My Health, I try to show you what is on both. And I'm gonna focus on the ones that have this blue check mark. Because again, in the purpose of this video is to briefly cover the provisions that show up on both life and health and not just one or the other. Okay, so the first one is the entire contract. So if it's got the blue check mark, it's what I'm covering and it comes in both life and health. So this is anything that I'm teaching right now is a double dipper. It helps you not only on the life side, but it helps you on the health side if you're taking both. If you're taking Just Life, cool. If you're taking Just Health, cool. Either way, you're learning what you need to learn. So the first thing is the entire contract. When a person fills out an application for insurance and then you staple the policy that they get from that contract, that is known as the entire contract. So the application that I use to fill out to get my insurance plus the policy that is my insurance, I staple them together and they are now known as the entire contract because insurance is a contract. So no matter what policy you have, life policy, health policy, car insurance policy, whatever, they're all contracts. And it's so important to know contract law. That is definitely one of the most tested topics as well, contract law, but that's for another video. Although I do have some on my YouTube channel you can grab for contract law. But anyway, now sometimes when they talk about entire contract, they drag out the definition and they'll say a question like policy plus riders plus addendums plus application. All of those things are the entire contract anyway, or I mean, riders plus addendums are parts of the policy. They're just kind of dragging out the word policy. So whether I say policy plus riders addendums, I'm just saying policy. This would be like saying hamburger with lettuce and cheese. It's all still a hamburger. You just got extra stuff on it, okay? All right, the insuring clause sometimes also called the insuring agreement. Oh no, that went down the wrong way. My bad. Okay, so sometimes the insuring clause is also called the insuring agreement. So be kind of prepared to see it both ways. Now what this is, is this is known as the promise to pay. So inside the policy, this is the section that basically makes the insurance policy what it is. That we promise to pay you this amount of money if this were to happen. This is the essence of the policy. Without the insuring agreement, you don't have a policy. So the insuring agreement, the insuring clause is the promise. We promise, so it'll say this party, the insurer, promises to pay this party, the insured, they're gonna put your names there, if the covered peril were to occur. And peril is the loss. So in life insurance, this would say death. Or in health insurance, it would say sickness or accidental injury or something like that, okay? So it's the insurer promises to pay the insured if the peril occurs. That is the insuring clause, insuring agreement. Tomato to motto, whether they say clause or agreement, it's all the same. And one of the biggest parts to remember of this is the promise to pay, the promise to pay. And if you see, the insuring clause has a lot of P's, promise, pay, parties, perils. The one thing it doesn't have is premium. So the premium is not in the insuring clause. The premium is not in the insuring agreement. But the rest of the P's are promise to pay, parties, perils. Sometimes they'll just say that the insuring agreement lists the parties to pay. Sometimes they'll say the insuring agreement contains the promise to pay. So it's the P's, all the P's except premium. That's enough. Sorry, dogs are always, guard dogs over here. Free look period, free look period. So when you sell a customer an insurance policy, they have a free look period. Hang on, let me, the crazy dog. That's enough barking. I don't know if you guys hear it really badly, I do. Zoo, shh, the benefits of working from home. You get to be with your dog who barks and ruins all your videos, shh. You are a chihuahua, you are not gonna get anybody. Lay down. All right, anyway, so the free look period, when you sell a policy to someone, there needs to be a window of time that they can look at that policy and decide if it's truly for them or not. Because the interesting thing about insurance is you don't know exactly what you got until after you already bought it, right? So you can't fully see everything until you have actually purchased it and then you get to see what it's all about. So once you purchase the policy, there is a, and it's delivered to you. That's a key thing about the free look. It has to be delivered to you. And what I mean by that is it has to be in your hands. You have to be able to look at it. If it's not, Zoo, Zoo, that's okay. Sorry. One second, can I pause my recording? Where's my, I can't even see my recording screen thing. Thank you, Forest. Zoo, lay down. You're not a guard dog. You're a chihuahua. You're seven pounds. Okay, I think we'll be good. Okay, sorry. Okay, so it has to be in your hands. Delivery is when the free look period starts. So this could actually be a tricky question where they'll say, when does the free look period start? And the questions could be when the policy starts or when it's delivered. And then usually there's two questions that are like throw away that you can just get rid of. So, and then there's sometimes where they give you questions with actual dates. So they will say the policy was started on the 10th. It was delivered to the customer on the 15th. When is the end of the free look period? And you would have to go 10 days from the 15th because that's when it is delivered to them. So the free look begins at delivery, free look begins at delivery, free look begins at delivery, okay? So, during this free look period is when I get to look at the policy and decide if it's truly for me and then return it for a full refund if I don't want it. So, and I get all my money back. So whether I paid for one month or I paid for an entire year, I get all of my money back if I terminate the policy during the free look period. If I go after the free look period, then they will only refund me going forward. They will not refund me going backwards. In order to get all of my money back, I have to cancel it during the free look period. Now on the health side of things, it is usually still a 10 day period. However, with Medicare and long-term care, in most states, it's actually 30 days. So if you get a question on the free look for Medicare or you get a question on the free look for long-term care, most states will actually give you 30 days for that. Not every state, but the majority of them will. I think Massachusetts is one of them that still is 10 day for long-term care. But some states do have longer free look periods. So every state, that's actually a test question, who runs insurance? The state. Every state gets to pick their own insurance laws. And so if they want a free look period that's 15 days or 20 days, whatever, they can make that a state law and then that's what the free look period is. But generally across the board, most places it's gonna be 10 days for both life and health, 30 days for Medicare and long-term care. All right, consideration. And this is actually also an element to a contract. So this is a double dipper. This concept can be tested multiple times. And in fact, it's usually tested three different ways. They're gonna ask you, what is consideration? Both parties must bring value. And then they're gonna know what is the value that both parties bring? So consideration can be asked about as a definition, both parties bring value. And then they could ask you, what is consideration on the side of the insured? And what is consideration on the side of the insurer? And one thing I wanna point out is to really make sure you pay attention to insured or insurer. And if you ever struggle, let me show you actually on my health slide, I've got a little slide for this one. If you ever struggle with the difference between insured and insurer, the D, the insured is the customer, they are dependent upon. So with the D, I'm the insured, I'm the customer, I am dependent upon the insurer. The insurer is who I go to in an emergency, ER room. Insurer, I go to them in an emergency. Someone in my family dies, I go to the insurer to pay the bill. I crashed my car, I go to the insurer for them to fix it. My house burns down, I go to the insurer. You go to the insurer after an emergency. And if you ever struggle, if you find yourself getting questions wrong because you misplaced them, then start saying them like I am, insured and insurer. Like say it funny in your head or out loud, not on the test, you can't say it out loud, but emphasize the E-D and the E-R. This could be a difference between a 69 and a 70 is you misread it, you read it too quickly. You read insurer when you should have read insured. It's literally one letter off, R versus D, okay? So you gotta slow down, make sure you're gathering the right one, insured versus insurer, okay? All right, now, so back to consideration. First, we wanna know that consideration is both parties must bring value to the other party. So if I'm coming to the insurance company transferring my risks to them, what value am I gonna bring them? And then what value is the insurance company gonna bring me? You cannot have a contract in place with any legal contract in the US, because again, this is not just a provision, this is also an element to a legal contract. Any legal contract has to have both parties giving value to the other party. So both parties have to give value to the other party, okay? Now, on the state exam, they will not say what value does the customer bring? Or what value does the insurer bring? They're gonna use the word consideration. What is consideration on the side of the insured? On the side of the insured, the customer, it's app plus premium. The application is all of my risks, all of the things that I wanna transfer, the risk of getting sick, the risk of accident and getting injured, I wanna transfer that to the insurance company and let them pay the bill. And my risks are so valuable, I'm willing to pay you premium to take them. So the value, the consideration that the customer brings, the insured brings, is app plus premium. On the side of the insurer, what value does the insurance company give us? It is promise to pay. They promise to pay that if my health, if I get sick, if I have an accidental injury, they will be the ones to pay the bill. So that is the consideration on the side of the insurer. All right, I'm gonna skip the ones that are not on both life and health. So again, this is a video that goes over the provisions that are on both exams. And as you can see, life has a lot more. So there's a lot more stuff you gotta learn there, but we're skipping to the life and health stuff. All right, beneficiary designations. So a beneficiary is the person who gets the money on the policy after you die. And this shows up on the health side because on the health side, there are some policies that include death. Mostly life insurance is about death, but there are a couple of health policies that also include death. So this will show up on both the life and health exam. Now, there are two types of beneficiaries. There is revocable and irrevocable. A revocable beneficiary is one that I can change at any time. So let's say I set up my life insurance and I put my sister as my beneficiary. And then one day I get mad at her and I'm like, nevermind, I don't want you to be my beneficiary. I could literally go to my insurance company, take her name off, put someone else's name on. And I can do that at whim. I can do that whenever I want, if they are revocable. If my beneficiary is irrevocable, I am not allowed to change them at whim. I must get their consent. My sister would actually have to sign a paper that says I no longer want to be a beneficiary. She would have to give permission to me and the insurance company to take her name off. The biggest one about irrevocable is requires consent. Irrevocable requires consent. It is so important. That is why I put this big, red, ugly thing on my slide. I'm like, my slide is still pretty good, but I have to remind them how important it is that irrevocable requires consent. Irrevocable requires consent. I mean, drill that into your head because that is the question they're gonna ask you about when it comes to irrevocable is you cannot remove their name off of the policy unless you have consent. Now, most beneficiaries, because everyone usually asks this, most beneficiaries are revocable. It's pretty rare to have an irrevocable beneficiary. It's usually done in the cases of divorce where there's still young children and one spouse wants to know that if the other spouse dies, that they will be able to receive funds to help them with the children that are left behind. And it could be even court ordered to have an irrevocable beneficiary. But that doesn't matter for our exam. What matters for our exam is that irrevocable requires consent. Irrevocable requires consent, okay? All right, mode of premium payment. Mode of premium payment. What mode means is basically how often we pay the premium. So you could pay your premium monthly. You could pay your premium quarterly. You could pay your premium semi-annually. You can pay your premium bi-annually. You can pay your premium annually. Mode refers to how often am I paying that bill, okay? And the exam, and also the more you split it up, the more you're gonna pay. So this is, I say this little phrase when it comes to mode of premium payment. The more I pay, the more I pay. So the more times I pay, the more premium I pay. So the more I split up my bill, the more I will pay overall. So like, I think I have an example here. Right, so here I show an example. My monthly, if I were to pay monthly, that means I'm paying 12 times. Now, I may only pay $10, okay? But it's gonna cost me a total of 120. So it's gonna cost a total of 120. If I were to pay yearly only one time, I would just pay 100, and the total would be 100, okay? So the more I break up my payment, and if I were to split it up four times, I would pay only 28 each time, but overall, by the time the year is over, I would pay 112. So what we're trying to say with mode of premium payment is the more I break up the payments, the more I will pay overall. Yes, my payment itself is smaller, but when I add them all up, you are spending extra money by breaking up your payments. What's interesting is you're technically getting a loan from the insurance company. Premiums are based on an annual basis. So when you pay less, if you pay more than annually, you are financing your premium with the insurance company. So they're charging you a little interest rate here by making you pay extra when you pay monthly, okay? Now, for the test question, this is what you wanna be prepared for, is they're gonna ask you about switching premiums. They're gonna say something like, Mary was paying her premium monthly. She started paying her premium yearly. What can Mary expect to happen to her premium? So if you go from monthly to yearly, you will actually see a decrease. You will have a lower overall premium if you were to go from monthly to yearly, okay? On the flip side of that, if they say Tom was paying his premium yearly and now he is paying it monthly, what can he expect to happen to his premium? It's gonna be a higher overall premium. He's ultimately gonna pay more money by breaking it up monthly. And yes, if it has a blue check mark, it's in both life and health, okay? And that is the only things that I'm covering in this section right now is things that show up on both exams. So if you've noticed, I've actually skipped a couple of slides because it doesn't actually apply to both life and health. So if on the life side, you are missing some things, but we're covering things that show up for both life and both health. So I am only teaching the slides that have a blue check mark, which means it shows up on not only the life exam, but it also shows up on the health exam as well, okay? All right, now here's a, oh, oh, perfect. I even typed it all out. I just gave you an example and I have it all typed out. So this is the example premium. So an insured was paying her premium blank. She switched it to paying blank. What can she expect to happen to her premium? If it's monthly to yearly, if this first line is monthly, the second line is yearly, she's gonna have a lower overall premium. If she was paying yearly and she switched to monthly, she's gonna have a higher overall premium. And this is usually what pops up when it comes to mode of premium payment, okay? Now on the health side of things, oh, I got it here, nevermind, okay. All right, so the next one is grace period. And grace period is basically the time that I'm allowed to be late and still covered. So if my due date is like the first of the month and I don't pay my premium, I will still have coverage for a while before it's officially canceled. And in life insurance, they usually just say 30 to 31 days. They don't always set a number. They'll just say 30 to 31. I think it's because it's a month and it just depends on if the month has 30 days or if the month has 31 days. But I don't think they really stress the number of days with grace period on the life side of things. On the health side, grace period actually depends upon the mode of premium payment. And you could pay weekly, you could pay monthly or all other, which is the quarterly, biannually or annually. So on the health side, your grace period is seven days if you have a weekly premium, 10 days if you have a monthly premium and 31 days for all other modes like annually. All right, now this is a visual to help us understand. This was the due date of the premium and it's not paid. So I fall into the grace period. So this is a missed due date. During this time, however long my grace period is, 30, 31 days, seven days for weekly, 10 monthly, however long it is, any claim that I filed during this time is covered. Once the grace period ends and the premium has not been paid, my coverage will end. If I pay my premium in the middle of the grace period or any point during the grace period, all is well, my policy continues on like normal. But if I fail to pay by the time the grace period is over, my coverage has officially ended, there is no more coverage after that point. All right, now, unpaid premium. So what this is, is talking about any claims paid during the grace period will be reduced by the amount of the missed bill. So what we're saying is, let's say you died and you're not paying your insurance anymore because you died. To the insurance company, you fall into the grace period. So to them, it looks like you haven't paid your bill, but then you get the claim that you died. And so they will say, okay, well, Melissa missed her bill before she died. She didn't pay us 100 for this month and she should have. Our payment to you is $100,000, but we're gonna subtract the 100 that she owes us from the death benefit payout. So unpaid premium is basically taking your missed payment from your claim payout. So on the health insurance side, if you can't afford your bill, just go to the doctor, get another claim filed and it will pay your grace period. You'll still owe the doctor money, but your insurance will still keep going. So as long as you have a claim that they can take money from, then the policy gets paid and you get insurance for another month. You know, and you gotta make sure you pay your premium. So this is a visual again. This is the $100. So I use an example here. $100 premium payment is missed. I begin my grace period. During the grace period, I am still covered, but halfway through, I filed a $10,000 claim. From this $10,000 claim, the insurer will take 100 of it and apply it to the premium. At that point, the grace period is no longer relevant. The premium has been paid. And so it just stops because you don't need it anymore. Then I will only receive 9,900 from the covered claim. So even though my coverage is 10,000, because I missed a $100 premium, they will take it from the claim amount and they will only give me what is left over, which is the $9,900 check for the covered claim, okay? All right, here's another example, a written example. So an insured has a $500,000 life policy. The insured missed their $100 life premium payment on the first of the month, and then they died on the fifth. When they claim is filed, the beneficiary will receive $500,000 minus $100 of unpaid premium for a total of $4,999, okay? So they simply subtract what you owed them from the death benefit, and that's what is sent to the beneficiary, okay? And this example was kind of more like a health example, and this one is more like a life example, but it all works the same. Whether they say you died or filed a claim, doesn't matter, right? They're gonna, the unpaid premium subtracts what you owed them and pays off the policy, or pays that monthly premium during that grace period. So what we're saying with the unpaid premium, any claims filed during the unpaid premium, they will take what you owe them from that claim and only send you what is left over. All right, that's life. All right, reinstatement. Now the rules here, the rules here are for, okay, only the first bullet point is for life, okay? So let me talk about reinstatement. Reinstatement is when I fail to make my payment and the grace period ends, so I have no more coverage. So my policy is officially canceled due to nonpayment. It lapses, the word they use is lapsed. The policy lapses due to nonpayment. I didn't want to cancel it, I just couldn't afford my premium or I didn't submit my premium in. There's a difference between canceling and lapsing. Canceling is calling them and saying, end my insurance. Lapsing is they heard nothing and they received nothing and so it just dissipated, right? Now in life insurance, I can reinstate my policy up to three years. So for three years of the date that the policy ended, I can call the insurance and say, I want my policy back. Now they will make me pay past due premium. So all the premiums that I missed on the life side, this is on the life side, they will charge me all of my past due premiums and they could make me undergo a medical exam. So who is likely to reinstate a policy? A person who is healthy and has no problems or a person who knows problems are happening and on the rise? The people who reinstate their insurance are the people who really need it back and so they're gonna make you undergo a health exam to see if you have any major medical changes in your history and if you have, they may not reinstate it. They don't have to reinstate. It's an option that the insurer has, but if they decide we don't wanna restate it, they don't have to. So you may be able to, you may not be able to. If you've had a major health change and then you try and reinstate, they may not, like if your policy canceled because you couldn't afford it and then six months later you're diagnosed with cancer, they're not gonna wanna reinstate it because they know you're gonna die and they know you're gonna have to pay out. So they're not gonna be willing to reinstate it and that's why they make you undergo a medical exam. Now you may ask why would someone just not start a new insurance policy? Why pay back three years worth of premium when they could just start a new life insurance? Well keep in mind with life insurance, the older you are, the more expensive your premium will become. And if I'm 50 years old and I can reinstate a policy that I started when I was 20, that premium is probably much cheaper than me trying to start a policy today. So that's a reason why people may reinstate, even back pay three years worth of premium to reinstate because the premium they had on that policy is probably way cheaper than any new premium they can get today because every year that you're older, the more your insurance goes up and that is true for both life and health. Now on the health side, so there is a difference on reinstatement between life and health. On the health side, you don't get three years, they don't even, I don't know if you get three years or not but I know they don't test on it. So they will not ask you about up to three years, that's on the life side of things. With the health side of things, the biggest thing they test you on is that you get, there's a 10 day probation for sickness. So if you reinstate your health insurance and then the next day you file a claim for sickness, they won't actually cover it. So there's a 10 day probation window of when they will not cover sickness after you reinstate. Now, if you fall and break your arm, that is considered a accident, they would cover that immediately following reinstatement. They just don't cover sickness following reinstatement for that 10 day period. Incontestability, now this one is actually called time limit on certain defenses when it comes to health. And I'm actually gonna pop up the health slide is when I'm done talking about this one because they're a little bit different. So right now I'm speaking to life insurance and I'll speak to health insurance here in a minute. They're similar, they go together and sometimes you may even have a test question that says, time limit to certain defenses is similar to and the answer is incontestability or incontestability is similar to time limit on certain defenses. So they go together but they're just a little bit different. One, just by the name, incontestability, time limit on certain defenses. So they even have different names. Now, the basis is and what I'm about to say works for both. In the first two years that your policy is active. So I start a policy whether life or health, I get a policy started and then it's going for two years. In those two years, if the insurer discovers that something I told them on the application is not true or I messed up or I made an error, they can deny the claim. So in the two years after starting my policy, whether life or health and something about what I said on my application was wrong, incorrect, they can deny the claim for that thing. After two years, they can no longer deny the claim. They have to pay the claim. That's the incontestability period and that's time limit on certain defenses. In the first two years, if something I said on the application was wrong or incorrect, I misspoke, whatever, like if I said something like, no, I don't have cancer, but I did have cancer and they discover that, they will not have to pay the claim in the first two years. Now, here's the difference between life and health. Life insurance says that after two years, they will pay the claim for anything, even if I lie, even if I outright lied on my application. So if that question was, do you have cancer? And I said, no, and I outright lied. As long as I don't file a claim for a cancer death in two years and I make it past the two year mark and then I die and they have all the evidence that I knew I had cancer because they see all the treatment, whatever, they will still pay the claim. In life insurance, you can lie, okay? In time limit on certain defenses, I cannot lie. Okay, so let me grab the time limit on certain defenses one, okay. So on time limit on certain defenses, if they discover an inaccuracy or a lie, they can deny the claim. And then after the two year period, they cannot decline a claim for any reason except for lies. So basically, time limit on certain defenses does not allow you to lie after two years. Life insurance does allow you to lie after two years. So I just wanna make that distinction. They're similar, but they're a little bit different. So here's what it looks like in terms of a visual. You have your policy start date here, and then you have a two year period. Claims can be denied for inaccuracy or lies in the application for both life and health. This is true for both life and health. After two years, claims cannot be denied. Now on the health side of things, this slide changes just slightly to where claims can be denied for fraud and lying. So again, on the health side, I cannot lie. On the life, life is almost, you're free to lie, right? So think of the word life, L-I-F-E, that F is free to L-I-E. On the life side, you are free to lie. But again, if they catch you in the first two years lying, they can deny the claim. After two years, they won't deny the claim for lying, okay? So on the life and health side, or sorry, on the health side, lying or fraud is always a reason they can deny the claim on the health side, okay? All right, moving on. All right, misstatement of age or gender. So this one is interesting because it doesn't relate to time limit on certain defenses or incontestability. So most people would think, well, if you gave them the wrong age, it only matters if they discovered in the first two years. After that, they can't do anything, not for misstatement of age or gender. The big thing that you wanna know about misstatement of age or gender is if the person gave the wrong age or the wrong gender, whether by accident or on purpose, or somebody transposed the numbers, like maybe you're 63, but somebody wrote it as 36, right? So, or somebody wrote a five that kind of looked like a two or something like that, whatever. Somebody made a mistake along the way. The major thing about misstatement of age or gender is they will adjust. So for misstatement of age and gender, they adjust. Misstatement of age and gender, adjust. No matter when they find out, one month in, one year in, two years in, 10 years in, 20 years in, 30 years in, as soon as they find out that your age or gender was misstated, they will adjust the policy. And this one, again, is for both life and health. So again, if we're looking at a slide and it's got the blue check mark, which is the only ones I'm teaching, they go for both life and health. So misstatement of age and gender, adjust. Misstatement of age and gender, adjust. That is what we wanna memorize, and that's the answer question we wanna choose when we're taking the exam. And again, time limit on certain defenses and incontestability has no effect. So again, whether they discover one month in or 10 years in, they adjust. Okay, they adjust, they adjust, they adjust. All right, this is life, life. All right, the rest of this is actually life. So those were all of the, oh, AD&D, here we go, I found one. All right, so there's a lot of life stuff we bypass. So again, this is not an exclusive, this is not a full video for the life provisions, which has way more than health provisions, by the way, but I'm covering the ones that show up on both. So it helps you whether you're doing just life or just health or both, but this is not all-encompassing of every life provision. Okay? All right, so AD&D is known as accidental death and dismemberment. This is an example of a health policy that actually includes a beneficiary. So that's why we had to learn irrevocable and revocable on both life and health, is there are some health policies that have beneficiaries. Now, for this one, with the AD&D, there's two ways. When they talk about this on the life side, so AD&D on the life side, this is a rider that you can add on top of your life insurance. So like when you die, it pays out however much money you have. If you have $100,000 policy and you die because you got murdered, you die because you fell off a cliff, you die because you had a heart attack, you die because you got COVID, whatever reason you die, you die. Life insurance will pay out the amount of money. When you add AD&D, accidental death, to your life insurance, it will multiply by double or triple your life insurance payout. So if my life insurance payout is $100,000, regardless of how I die, $100,000 pays out. With an AD&D rider on it, and I die from an accident, it will double my money. So if I die from falling off a cliff, which is an accident, not only will I get $100,000, I will get another $100,000 because I had the AD&D rider attached to my life insurance. So on the life side of AD&D, it would focus on double or triple indemnity. That by having an AD rider to my life insurance, it will double or triple my payout. On the health side of things, they focus on principal sum or capital sum, which is what you see here on the slide. And it's not to say that you won't see principal or capital on the life exam either, it's just the focus tends to be more about double or triple indemnity on the life side. On the health side, accidental death and accidental dismemberment pays out differently. If you die from an accidental death, they will pay the principal sum, which is the full amount. So the AD&D, you can buy the AD&D attached to life insurance or you can buy it all by itself. So you can buy just an AD&D policy that if you die from an accident or get accidentally dismemberment, sorry, not disfigured, dismemberment, it'll be a policy that pays out. So if I buy this on the health side, not attached to my life insurance, it's not doubling or tripling, it just pays out if I die from an accident or if I have an accidental dismemberment. So when it pays out, if I have $100,000 AD&D policy, if I were to die from an accident, it would pay me the principal sum, which is the full amount. If I have accidental dismemberment, it'll pay out capital sum, which is half the amount. So if I have $100,000 policy and my arm gets cut off in a bullying accident because I put my arm in the thingy and my arm got cut off, then I would only get $50,000. Now, if I lose two limbs, if I'm in an accident where I lose two limbs or two hands or two feet or one leg, one arm, whatever, then I get principal sum as well. So principal is death or two limbs. Capital is one limb. Life, life, these are all life. Life, life, life, life, life, life, life, life, life, life, life, life, life, life, life, life, life, life, life. Yep, the rest of these are life. All right, so what we did in this video, again, was covering the provisions that show up on both the life side of things and the provisions that show up on the health side of things. There are way more life things and there are way more health things, but we double dipped on the ones that show up on both. So remember, we had the entire contract policy plus app. We had the grace period, how long I can be late on my payment and still covered. We had the insuring agreement. This insurer is covering this insured. There was the promise to pay. We had the consideration. Both parties must bring value to the other party. What is consideration on the side of the insured at plus premium? What is consideration on the side of the insurer promise to pay? What else did we have? Time limit on certain defenses, incontestability, that two-year period that if they catch me either lying or false information, whether it was an accident or not, they can deny the claim. After that, they cannot. Except on the health side, if I lied, they can. We had our beneficiaries. Irrevocable requires consent. Revocable doesn't require consent. Yeah, so that was the ones I could remember. So again, these are provisions from both sides. If you want more in-depth lessons to each of these, learning all of the life or all of the health, you're gonna wanna get my gold class series on insuranceexamqueen.com and you'll be able to find full extensive lessons for both of these. So this is your insurance exam queen sending you all the loves, all the vibes to pass your exam. Have an amazing day. And again, subscribe to the channel and like the video and all the love.