Texas Credit Life and Credit Accident & Health Insurance. Specialty License Training Program

Transcription

1 Texas Credit Life and Credit Accident & Health Insurance Specialty License Training Program 6/18/2009 Copyright American National Insurance Company CID-LAH TXLIC

2 PURPOSE To comply with the training requirements set forth in the Section 1(d) of Art , Texas Insurance Code The licenseholder agrees to comply with the training requirements in the Texas Insurance Code (TIC) and agrees to maintain records of such training by completion of the certificate at the end of this program.

3 PRODUCTS Coverage issued and administered by American National Insurance Company (ANICO): Credit Life Insurance Credit Accident & Health Insurance (Disability)

4 CREDIT LIFE INSURANCE Provides a death benefit to pay off or reduce the credit obligation in the event of an insured s death during the term of the coverage

5 Credit Life Insurance TYPES OF COVERAGE Single Life: Covers the primary debtor listed Joint Life: Covers the primary debtor and co-debtor listed Decreasing Term Life: Initial amount of insurance shown in the schedule reduces monthly during the term by an amount equal to the initial amount of insurance divided by the term of coverage Level Life: Initial amount of insurance shown in the schedule remains level for the term of coverage

6 Credit Life Insurance ADVANTAGES Pays in addition to any other insurance the customer has Coverage begins immediately Pays benefit directly to the lender Helps protect the family s credit rating Premiums are included in the customer s monthly loan payment Amount of coverage is tailored to the amount financed

7 Credit Life Insurance APPLICANT S S STATEMENT OF INSURABILITY Applicants for credit life insurance must read and sign the good health statement to determine if they are eligible for coverage. Coverage is not available to any applicant that is unable to certify the parameters of good health.

8 Credit Life Insurance EXCLUSIONS The amount of life insurance payable is limited to the amount of the premium(s) paid in the event the death of an insured within two (2) years of the effective date of the policy is the result of any of the following: (1) suicide, whether sane or insane, (2) war, declared or undeclared, (3) flight in non-scheduled aircraft.

9 Credit Life Insurance CANCELLATION PROVISIONS This insurance stops on the scheduled termination date; or when the loan is paid off, renewed, refinanced, or otherwise stops, whichever happens first. The termination will be without prejudice to any claim starting prior to termination. In case of termination prior to expiry, the refund of unearned premium shall be determined as follows: (a) gross decreasing and net balance life insurance refunds will be calculated by the rule of anticipation; (b) level life insurance refunds will be calculated by the pro rata method; and (c) disability refunds will be calculated by the rule of anticipation method.

10 Credit Life Insurance CANCELLATION PROVISIONS In calculating refunds on termination, no charge for credit insurance may be made for the first fifteen days of a loan month, and a full month may be charged for sixteen days or more of a loan month. We will make the refund or credit after we receive written notice of the termination. If the insured debtor dies, the life insurance premium is deemed earned, and no refund is due. The disability premium is not deemed earned in the event of the insured debtor s death and shall be refunded. Refunds or credits of a dollar or less will not be made.

11 Credit Life Insurance CANCELLATION PROVISIONS If joint coverage is provided and if coverage on one of the joint debtors is terminated due to: (a) successful contest of coverage; (b) exceeding the eligibility age limits and who correctly stated his/her age; (c) not meeting the eligibility employment requirements and who correctly stated his/her employment status in writing; or (d) suicide or any other life exclusions, the coverage on the other debtor shall be continued under a single policy.

12 CREDIT ACCIDENT & HEALTH INSURANCE Provides monthly benefit payments to the creditor beneficiary while the insured is disabled as a result of sickness or injury during the term of coverage

13 Credit Accident & Health Insurance TYPES OF COVERAGE Single A&H: Covers the primary debtor listed Joint A&H: Covers the primary debtor and co-debtor listed Retroactive Benefits: (14 day and 30 day) Provides benefits from the first day of disability once the claimant has been disabled the required number of days Non-retroactive Benefits: (14 day and 30 day) Provides benefits after the claimant has been disabled the required number of days

14 Credit Accident & Health Insurance ADVANTAGES Benefits are paid if the customer becomes totally disabled due to illness or injury Customer does not have to be hospitalized to collect benefits Helps protect customer s savings Helps protect customer s credit rating Pays benefits directly to the lender Coverage begins immediately

15 Credit Accident & Health Insurance APPLICANT S S STATEMENT OF INSURABILITY Applicants for credit disability insurance must read and sign the good health statement to determine if they are eligible for coverage. Coverage is not available to any applicant that is unable to certify the parameters of good health. All applicants applying for credit disability insurance must also certify they are working for wages or profit for 30 hours or more per week on the effective date of coverage.

16 Credit Accident & Health Insurance MONTHLY BENEFIT The policy provides a benefit equal to 1/30th of the monthly disability benefit shown in the schedule for each day of disability.

17 Credit Accident & Health Insurance EXCLUSIONS Benefits are not paid for disability resulting from: elective abortion, normal pregnancy, an intentionally self-inflicted injury, foreign travel or residence, flight in a non-scheduled aircraft, war or military service, pre-existing illness, disease, or condition for which medical diagnosis or treatment was received within the 6 months preceding the effective date as shown in the schedule, and which causes loss within 6 months following the effective date as shown in the schedule.

18 Credit Accident & Health Insurance CANCELLATION PROVISIONS This insurance stops on the scheduled termination date or when your loan is paid off, renewed, refinanced, or otherwise stops, whichever happens first. The termination will be without prejudice to any claim starting prior to termination. In case of termination prior to expiry, the refund of unearned premium shall be determined as follows: (a) gross decreasing and net balance life insurance refunds will be calculated by the rule of anticipation method; (b) level life insurance refunds will be calculated by the pro rata method; and (c) disability refunds will be calculated by the rule of anticipation method.

19 Credit Accident & Health Insurance CANCELLATION PROVISIONS In calculating refunds on terminations, no charge for credit insurance may be made for the first fifteen days of a loan month, and a full month may be charged for sixteen days or more of a loan month. We will make the refund or credit after we receive written notice of the termination. If the insured debtor dies, the life insurance premium is deemed earned, and no refund is due. The disability premium is not deemed earned in the event of the insured debtor s death and shall be refunded. Refunds or credits of a dollar or less will not be made.

20 Credit Accident & Health Insurance CANCELLATION PROVISIONS If joint coverage is provided and if coverage on one of the joint debtors is terminated due to: (a) successful contest of coverage; (b) exceeding the eligibility age limits and who correctly stated his/her age; (c) not meeting the eligibility employment requirements and who correctly stated his/her employment status in writing; or (d) suicide or any other life exclusions, the coverage on the other debtor shall be continued under a single policy.

21 CHARACTERISTICS OF CREDIT LIFE AND CREDIT ACCIDENT & HEALTH INSURANCE Types of Eligible Loans: Consumer Loans Agriculture Loans Balloon Loans Types of Ineligible Loans: Loans to Corporations Commercial Loans

22 CHARACTERISTICS OF CREDIT LIFE AND CREDIT ACCIDENT & HEALTH INSURANCE Term Insurance Coverage: Cannot exceed the scheduled term of indebtedness Rates and Policy Forms: Filed with and/or approved by the Texas Department of Insurance Beneficiary Designation: The creditor is the first beneficiary. If benefits exceed the amount necessary to pay off the debt, the excess is paid to a named second beneficiary. In the absence of named second beneficiary, the debtor s estate becomes beneficiary.

23 CHARACTERISTICS OF CREDIT LIFE AND CREDIT ACCIDENT & HEALTH INSURANCE Terminations and Refunds: Coverage automatically terminates and the debtor is entitled to a refund of any unearned premiums in the event the loan is prepaid, renewed, or refinanced prior to the scheduled date of maturity.

24 CHARACTERISTICS OF CREDIT LIFE AND CREDIT ACCIDENT & HEALTH INSURANCE Policy Limits and Guidelines: Both are determined by the type of coverage and policy equipment to be utilized Delivery of Policy Forms: The policy should be given to the consumer when the loan is made, or it must be delivered within 45 days of the effective date.

25 CONSUMER NOTIFICATION You must inform a prospective consumer of credit-related insurance products that the purchase of coverage is not a condition of the extension of credit, and that coverage may be purchased from an agent other than the lender or an affiliate of the lender.

26 The insured must be provided with a copy of the following notice with each new policy or certificate issued! IMPORTANT NOTICE REQUIREMENT: Provided in both English and Spanish Provides toll-free numbers and mailing address for the insurance company and the Texas Department of Insurance Outlines procedures for obtaining information for resolving claim disputes and filing complaints

27 CONSUMER BILL OF RIGHTS The Bill of Rights is a summary of the consumer s rights and does not become part of the policy. Texas and federal law give the consumer certain rights regarding credit life, credit accident and health (disability), and involuntary unemployment insurance. The Bill of Rights provides a toll-free telephone number to the Texas Department of Insurance. It also provides the consumer with information on enforcing his or her rights.

28 A Privacy Notice must be given to each customer upon the completion of the loan transaction.

29 PRIVACY NOTICES A copy of the Privacy Notice should be attached to the policy form or should be given to the customer at the point of sale. Subsequent Privacy Notices are mailed to the customer at the address of record on an annual basis. The customer will continue to receive the Privacy Notice as long as the policy remains in force. Our Customer Service Representatives will answer any general questions or inquiries concerning the Privacy Notices.

30 Texas Life, Accident, Health, and Hospital Service Insurance Guaranty Association Notice Residents of Texas who purchase life insurance, annuities, or health insurance should know that the insurance companies licensed in this state to write these types of insurance are members of the Texas Life and Health Insurance Guaranty Association (the Guaranty Association ). The purpose of this association is to assure that policy/contract owners will be protected, within limits, in the unlikely event that a member insurer becomes financially unable to meet its obligations. If this should happen, the Guaranty Association will assess its other member insurance companies for the money to pay claims of the insured persons who live in this state, and in some cases, to keep coverage in force. However, this valuable extra protection provided through the Guaranty Association is limited. This protection is not a substitute for consumers care in selecting companies that are well managed and financially stable.

31 Texas Life, Accident, Health, and Hospital Service Insurance Guaranty Association Notice Outlines the protection afforded policyholders that purchased insurance from companies that are members of the association The insurance company and its agents are prohibited by law from using the existence of the association for the purpose of sales, solicitation, or inducement to purchase any form of insurance.

32 Texas Life, Accident, Health, and Hospital Service Insurance Guaranty Association Notice Nonresidents of Texas who purchase life insurance, health insurance, and annuities approved by the Texas Department of Insurance from Texas-based business entities are not covered by the Texas Life, Accident, Health, and Hospital Service Insurance Guaranty Association. They may or may not be covered by a guaranty association in their state of residence. Customers not residing in Texas should be urged to contact their resident state insurance department or ANICO for further information concerning state guaranty associations.