Fraternity-Testvériség, 1998 (76. évfolyam, 1-4. szám)
1998-07-01 / 3. szám
FRATERNITY Page 5 FROM THE SECRETARY’S OFFICE ■ ANNOUNCING Two- or Three- Payment Whole Life Contracts The premium is paid in two or three installments over a one- or two-year period. Approximately 60 percent is the minimum initial payment on the $5,000 face amount and approximately 40 percent on the $10,000 face amount is required. The balance of the two or three payment premium will be established as a loan against the cash value of the policy. The loan interest is waived if the loan is repaid within one or two years from the policy date of issue. The repayment is the responsibility of the insured. There will be no payment notices sent from the Home Office. a. PLAN I $5,000 (two payments) the initial premium is approximately 60 percent of the single premium. The balance must be repaid within one year from the issue date. b. PLAN II $10,000 (three payments) the initial premium is approximately 40 percent of the single premium. The balance must be repaid within two years from the issue date. OPTIONS: The loan balance can be paid in twelve (Plan I) or twenty-four (Plan II) equal monthly installments or in one sum at the end of the one year (Plan I) or two year (Plan II) period. Once the applicant selects a loan payment plan, there will be no change in the plan. 1. Plan I - $5,000 ages 0 through 50 and $3,000 for age 51 and over. Plan II - $10,000 ages 0 through 50 and $5,000 for age 51 and over. 2. The initial payment must be paid with the application 3. The balance of the premium will be a loan against the policy cash value. No interest will be charged if paid within the specified installment period. 4. Interest of 6 percent will be applied to the policy loan if the loan is not repaid within the specified installment period. 5. If the insured’s death occurs during the installment period, the unpaid installments will be deducted from the death benefit of the certificate. For any questions, please call the Home Office at 202-328-2630. Endre Csornán, Secretary THE NUTS AND BOLTS OF THE INSURANCE WORLD ÉÉ Insurable Interest and Beneficiaries - How and Why They’re Interdependent In order to prevent the use of life insurance as a means of deriving a fraudulent monetary benefit upon the death of an insured person, it is the common practice to have rules forbidding the issue of policies in which the beneficiary does not have an insurable interest in the life of the insured person. First, it is clearly evident that each person has an insurable interest in his own life and policies can be issued with the face amount payable to the estate of the insured life. However, the common situation is for the insured person to name a beneficiary to receive the benefits of the insurance, but the beneficiary must have an insurable interest in the life of the insured. The most common case is the insurable interest which exists between husbands and wives. And, there is a limited insurable interest between a parent and a child. That is the parent can insure the life of a child but the loss arising from the death of a young child is very different from the monetary loss that occurs on the death of a husband or wife. So the common case is to have the husband insuring their life for the benefit of the wife and/or children or the husband insuring the wife for the benefit of the husband and/or children. The not so common cases are the use of life insurance to provide for the loss which can arise between persons (or a person and a corporation) who are parties involved with a pecuniary interest. That is partners in a business have an insurable interest in the life of the co-partners. And a creditor has an insurable interest in the life of his debtor. A corporation has an insurable interest in the officers or key employees. However, note that the amount of insurance in these non-family situations may be limited, for example in a creditor/debtor situation the face amount should have a reasonable relationship to the amount of the debt. Frank Stokes, HRFA Consulting Actuary
