HLLQP ETHICS COMMON LAW |Segment 1|: Key Terms | Full HLLQP Ethics Course

Summary

In this Licensing Academy session, instructor Ramen introduces the first module on ethics, focusing on key terms essential for understanding life insurance policies. The discussion covers the roles of the insurer, policyholder, life insured, and successor policyholder. Ramen explains the importance of beneficiaries, including preferred beneficiaries and the distinction between revocable and irrevocable beneficiaries. The session aims to provide a solid foundation for upcoming modules, emphasizing the need for a quiet study environment and active note-taking to grasp these fundamental concepts.

Takeaways

• 📚 The video is an introductory session on ethics for the Licensing Academy of Team Alpha.
• 🔗 There are resources available for navigating the website and preparing for exams, including mock exams.
• 🗣️ Rameen is the licensing instructor leading the session on ethics, focusing on key terms and concepts.
• 🏢 The term 'insurer' refers to the insurance company providing the policy.
• 📜 'Policyholder' or 'insured' is the person who owns the insurance contract and has legal rights to it.
• 👤 'Life insured' is the person whose life is covered by the policy.
• 🔄 'Successor policyholder' is the person who takes over the policy if the original policyholder dies before the policy is paid out.
• 💰 'Beneficiary' is the person or entity that receives the policy's benefits upon the life insured's death.
• 🛡️ 'Preferred beneficiaries' include spouse, child, grandchild, and parents, whose benefits are protected from creditors.
• ✅ 'Revocable beneficiary' can be changed by the policyholder without notifying the beneficiary, while 'irrevocable beneficiary' requires written permission from the beneficiary to change.
• 🔄 'Contingent' or 'secondary beneficiary' is named in case the primary beneficiary is unable to receive the benefits.

Q & A

What is the main topic of the first segment in the Licensing Academy of Team Alpha?

The main topic of the first segment is 'Ethics', which is the first module in the course.

Who is the instructor for the Licensing Academy of Team Alpha?

The instructor for the Licensing Academy of Team Alpha is Ramen.

What is the role of the 'insurer' in the context of life insurance policies?

The 'insurer' refers to the insurance company that issues the life insurance policy.

What does the term 'policyholder' signify in a life insurance contract?

The 'policyholder', also known as the insured, is the person who owns the insurance contract and has all the legal rights to it.

How is the 'life insured' defined in the script?

The 'life insured' is the person whose life is covered by the life insurance policy.

What is a 'successor policyholder' and what happens when they are involved?

A 'successor policyholder' is the person who takes over the policy if something happens to the main policyholder before the policy is paid out.

What is the 'face amount' mentioned in the context of life insurance policies?

The 'face amount' is the total coverage or the amount of money that the policy is issued for.

Who is considered a 'beneficiary' in a life insurance policy?

The 'beneficiary' is the person who receives the benefit or payout from the life insurance policy.

What are 'preferred beneficiaries' and why are they significant?

Preferred beneficiaries are a class of beneficiaries, such as spouse, child, grandchild, and parents, whose benefits are protected from creditors.

What is the difference between a 'revocable' and an 'irrevocable' beneficiary?

A 'revocable' beneficiary can be changed by the policyholder without notifying the beneficiary, while an 'irrevocable' beneficiary requires written permission from the beneficiary to be changed.

What is a 'contingent' or 'secondary' beneficiary and why is it important?

A 'contingent' or 'secondary' beneficiary is a backup beneficiary who receives the benefit if the primary beneficiary is unable to do so, ensuring the funds have a designated recipient.

Why might someone choose to have an 'irrevocable' beneficiary?

An 'irrevocable' beneficiary is often chosen due to court orders, such as when someone is required to get life insurance to ensure support payments, giving the beneficiary more control and protection.

Outlines

00:00

📚 Introduction to Ethics and Key Terms

This segment introduces the first module of the Licensing Academy of Team Alpha, focusing on ethics. The instructor, Ramen, emphasizes the importance of studying in a quiet place with a notebook and pen ready. The session aims to cover the key terms that will be foundational for understanding the entire licensing program. The terms include 'insurer', which refers to the insurance company; 'policyholder' or 'insured', who holds the legal rights to the insurance contract; and 'life insured', whose life is covered by the policy. The segment also introduces the concept of a 'successor policyholder', who takes over the policy if the original policyholder dies before the policy is paid out. The instructor encourages students to be attentive and engaged with the material.

05:02

👪 Understanding Beneficiaries and Their Types

The second segment delves into the concept of a 'beneficiary', who is the person that receives the benefit from the insurance policy. The instructor explains the term 'face amount', which is the total coverage amount of the policy. The segment further discusses 'preferred beneficiaries', which include spouse, child, grandchild, and parents, and whose benefits are protected from creditors. The instructor also covers 'revocable' and 'irrevocable' beneficiaries, explaining that revocable beneficiaries can be changed without notifying them, while irrevocable beneficiaries require written permission to change. The segment also touches on 'contingent' or 'secondary' beneficiaries, who receive the benefit if the primary beneficiary is unable to. Lastly, the concept of a 'restricted' beneficiary is introduced, where the policyholder cannot be the beneficiary for their own policy without losing certain protections.

10:03

🔐 Restricted Beneficiary and Conclusion

The final segment of the script reiterates the importance of understanding the term 'restricted beneficiary', highlighting the potential conflict of interest when the policyholder and beneficiary are the same person. This arrangement may lead to the loss of protection from creditors. The instructor summarizes the key terms covered in the introductory segment, emphasizing their significance for the modules to come. The segment concludes with a reminder that these terms will be revisited and expanded upon in future sessions, and the instructor expresses anticipation for the next segment, indicating a structured and progressive learning approach.

Keywords

💡Insurer

The insurer is the insurance company that provides the policy coverage. In the context of the video, the insurer is ABC Insurance, which would pay out the benefit in the event of Kelly's death, as per the life insurance policy held by Tom. The term is crucial as it sets the foundation for understanding the roles and responsibilities within an insurance contract.

💡Policyholder

The policyholder, also known as the insured, is the person who owns the insurance contract and has the legal rights to make changes to it. In the video's example, Tom is the policyholder because he holds the life insurance policy on his wife Kelly's life. The concept is central to the video's theme as it discusses the rights and obligations of the person who is directly involved with the insurance policy.

💡Life Insured

The life insured refers to the person whose life is covered by the insurance policy. In the script, Kelly is the life insured because the policy is on her life. This term is significant as it identifies the individual whose life is being protected by the insurance, and it is a fundamental aspect of life insurance contracts.

💡Successor Policyholder

A successor policyholder is the person who takes over ownership of the policy if something happens to the original policyholder before the policy is paid out. In the video, Tom's brother would become the successor policyholder if Tom were to pass away before Kelly. This concept is important as it ensures the continuity of the policy and its benefits in the event of the policyholder's death.

💡Beneficiary

The beneficiary is the person or entity designated to receive the benefit from the insurance policy. In the video, Susan, Tom and Kelly's daughter, is the beneficiary of the life insurance policy. The term is integral to the video's message as it discusses who will receive the payout and under what conditions.

💡Face Amount

The face amount is the total coverage or the amount of money that the insurance policy will pay out in the event of a claim. In the script, the face amount of the life insurance policy on Kelly is $250,000. This term is essential as it quantifies the financial protection provided by the insurance policy.

💡Preferred Beneficiaries

Preferred beneficiaries are a class of beneficiaries whose benefits are protected from creditors. This includes spouses, children, grandchildren, and parents. The video explains that if Kelly, who is a preferred beneficiary as Tom's child, receives the benefit, it is protected from her creditors. This concept is important as it highlights the financial security provided to certain beneficiaries.

💡Revocable Beneficiary

A revocable beneficiary is one that can be changed by the policyholder without the need to notify the current beneficiary. The video uses the example of Tom making Kelly, his wife, a revocable beneficiary, which means he can change her status without her knowledge. This term is relevant as it discusses the flexibility and control the policyholder has over the designation of beneficiaries.

💡Irrevocable Beneficiary

An irrevocable beneficiary cannot be changed without written permission from the beneficiary themselves. This is often used in situations mandated by a court, such as child support orders. The video explains that this type of beneficiary has more power as they are part of the contract. This concept is important as it discusses the limitations and legal implications of beneficiary designations.

💡Contingent Beneficiary

A contingent beneficiary, also known as a secondary beneficiary, is the person who would receive the benefit if the primary beneficiary is unable to, such as due to their own death. The video suggests that one can also name a third beneficiary, creating a backup plan for the distribution of benefits. This term is significant as it ensures that the insurance payout has a designated recipient even if the primary beneficiary is not available.

💡Restricted Definition

A restricted definition in the context of beneficiaries means that the policyholder cannot name themselves as the beneficiary. If they do, the benefit is no longer protected from creditors. The video explains that this is to avoid conflicts of interest and ensure the financial protection is for the intended recipient. This concept is crucial as it maintains the integrity and purpose of the insurance policy.

Highlights

Introduction to the Licensing Academy of Team Alpha's first session on ethics.

Navigation guidance for finding materials, exam prep, and mock exams on the website.

Emphasis on the importance of studying in a quiet place with necessary materials for effective learning.

Overview of the first module on ethics, which sets the stage for subsequent modules.

Introduction of key terms essential for understanding life insurance contracts.

Definition of 'insurer' as the insurance company in a life insurance policy.

Explanation of 'policyholder' or 'insured' as the owner of the insurance contract.

Clarification of 'life insured' as the person whose life is covered by the policy.

Discussion on the role of the 'successor policyholder' who takes over the policy if the primary holder dies.

Description of 'beneficiary' as the person who receives the policy's benefits.

Details on 'face amount', which is the total coverage issued by the insurance policy.

Information on 'preferred beneficiaries' who are protected from creditors.

Differentiation between 'revocable' and 'irrevocable' beneficiaries regarding the ability to change beneficiaries.

Explanation of 'contingent' or 'secondary' beneficiaries who receive benefits if the primary beneficiary cannot.

Concept of 'restricted definition' where the policyholder cannot be the beneficiary for protection reasons.

Anticipatory guidance for the next segment in the series.

Transcripts

[Music]

all right hello and welcome everyone to

our epic segment for the licensing

Academy of Team Alpha it's also

licensing Academy this is our first

session for ethics and if you missed the

intro uh videos you can go ahead and

click on the link and find them there

and they're great to kind of navigate

you through the website how to find the

material how to do exam prep uh how to

do mock exams so all that information is

there since this is our first session so

I will get right into uh the material so

we're not wasting too much time so we're

starting with the first module today and

that is ethics and we're going to be

breaking the segments down into smaller

chunks to cover the different topics

that you will be introduced in this uh

module and make sure that you guys again

reminder are sitting in that quiet study

place so you utilize the time to the

best of your ability you have a notebook

you have your pen and you're good to go

all right perfect so we're going to go

ahead and get started

um with our first segment today the

first segment is going to cover terms so

key terms that you need to know and

because ethics is the first module it

kind of gives us a little bit of a

flavor for all the modules to come so we

were introduced to many things that will

um will be elaborated on in the upcoming

modules all right perfect so my name

again if you missed it is ramen and I

will be your licensing instructor and

we'll work through

um to make sure that we are getting uh

your e-licensed as soon as possible

um so let's go ahead and get started

all right so this is segment one for

ethics

all right so we're going to be starting

off today with going over some of the

key terms that this module is going to

introduce uh and I'm going to be

starting off with the terms um that will

be used in a lot of the questions as

well so we'll begin with that all right

so let's get right into it

perfect so the first uh terms that you

will see

we will begin with

is a term in shorter now this is a term

that you will see used in all of the

modules to come and what this term is

referring to is pretty much the

insurance company

so they will give you

um a question and say uh Tom has a life

insurance policy on his wife Kelly from

ABC Insurance

um and if anything were to happen to

Kelly the benefit will be paid out to

their daughter Susan so in that who is

the insurer who is the policy holder so

they will be asking you questions like

that right so we will go through that so

insurance is always your insurance

company

the next term that we have

is policy holder

or also known as the insured and what

this is this is the person who has all

of the legal rights

or the owner

of the contract right so the example

that I just shared with you guys with

Tom and Kelly Tom would be uh the the

policy holder or the insured in that

case because he's the one who owns the

policy

um and he's the one who can make any

changes if he needs to so he would be

your insurer

um and it's it's under him

then we have another term who which is

called the life in short and this term

is pretty self-explanatory so we don't

need to go too much into it but this is

a life that's being insured so whose

life is the policy on right so going

back to the example Kelly would be the

life and short in the example I shared

with you because the policy is on

Kelly's life many times these two can be

one person so if I were to get a policy

on my own life I would be both the

insured and the life insured right so

then it would be one but if there's two

separate people then these two can also

be different as well

so

um those are the key terms that when

we're starting off in terms of

introducing the life insurance contract

and with the policyholder we can also

have something called the successor

policy holder

and what this person would be this is

who does a policy go to if anything were

to happen to the main person before that

policy is paid out so I always like to

use an example because I think it makes

more sense when you use it in an example

so going back to the example that we

shared

so let's say Tom has he's a policy

holder and he writes that if anything

were to happen to him before Kelly

passes away then his brother would be

the new policy owner so that's the

successor policy holder that's a person

who takes over that policy in case if

anything happens to the policyholder

while that policy is still in effect

right so that's um that's what that term

would be

and then the next term that we're going

to be looking at and a very important

term here is the beneficiary

and this is the person who receives the

benefit right so in an insurance policy

you always have an amount and that is

we'll write it here

face amount

so this is your total coverage

so going back let's stick with our

example that we've been using so Tom has

a life insurance policy on Kelly for two

hundred and fifty thousand dollars

that's called the face amount so that's

the coverage that the policy is

um is issued forth and in that policy if

anything were to happen to Kelly the

benefit would be paid out to Susan their

daughter so Susan would be the

beneficiary

okay so beneficiary can be anybody it

can be children it can be uh Charities

you can name

um donates it to someone so you can name

other organizations as well only thing

is if children are named as

beneficiaries and they're minors so

they're under 18. they won't actually

receive the benefit until they're 18

right so that it will be held in a trust

for them and once they turn 18 they will

be able to access that benefit so that

is important to know

um with the beneficiary if somebody is

naming children is that they won't be

able to get that benefit right away

um I'm just going to try to move this up

Perfect all right now with the

beneficiaries there's a lot of things

that kind of stream from this term as

well so with the beneficiary we have

something called preferred beneficiaries

now what is uh or what are preferred

beneficiaries

Who falls under this class now preferred

beneficiaries if you were to name

so this is someone this is a class of

beneficiaries who are protected from

creditors so you can name anyone as your

beneficiary hitting your best friend you

can name uh brother sister parent anyone

but if you were to name someone from

this class which is known as preferred

group of beneficiaries

they're that benefit is protected from

creditors so who falls under this this

class so this would be

spouse

child and for spouse it also includes

common law spouses as well child

grandchild

and parents

okay so notice siblings are not on this

even though they're your direct family

they do not fall under the preferred

beneficiaries so going back to our

example that we've been using so Tom has

a policy on Kelly's life and he named

his daughter as a beneficiary so that's

his child so let's say Kelly owed a lot

of debt to everyone she she had a lot of

creditors those creditors cannot go

after that money because it's a

preferred beneficiary

if Tom had named let's say his brother

or his Uncle as a beneficiary they would

still get the benefit however creditors

can go after that money because they're

no longer part of this group right so

that's something we think is that

they're not part of the preferred

beneficiaries that money is not really

fully protected

um so they are able to go after that

and also still under uh the

beneficiaries there are a little bit

more that we that strands from this

definition so we can also have

whoops something called the revocable

or the irrevocable beneficiary now

revocable

means that it can be changed without

notifying uh the beneficiary

one of them most of the time people do

have revocable beneficiaries so that

means that

Tom let's say he puts

um you know people like different

example so if Tom were to buy a policy

on his own life and he puts Kelly his

wife as a beneficiary he makes her

revocable that means that he can change

her uh in the future so many times this

happens with divorce and even with

examples for exams uh those are usually

the examples that they use so if they

were to get divorced in the future then

he can change her and maybe if you were

getting remarried out of new stuff right

so revocable means that he doesn't have

to notify the beneficiary you don't have

to tell the beneficiary I'm changing you

or you don't need any extra forms you

just change the beneficiary however

irrevocable just as the name suggests

means that

you need written permission

from the beneficiary

so you cannot change unless you have

actually written permission from the

beneficiary stating that it is okay

um for you to change so the only

difference is here you're giving more

power to the beneficiary because they're

part of the contract now as opposed to

here you could just do it without even

them knowing right so why why would

anybody choose irrevocable

many times and even with examples for

exam purposes it's usually done by a

court order so for example if somebody

is behind on child support payments

spousal support payments the court might

order that particular person to get that

life insurance and make their spouse

irrevocable beneficiary right so it's

it's kind of mandated it's not something

that a lot of times is done by choice

um it could be because of uh because of

something that is um that is needed

all right and also with beneficiary you

can have

a contingent

which is also known as a secondary

beneficiary

right so you don't just name one

beneficiary you name a secondary that if

anything happened to the beneficiary

themselves then what happens to the

funds so you name a secondary you can

also name a third uh beneficiary as well

so you have kind of like backups to your

beneficiaries um so that would be uh

also made up in the contract that they

would be there as well

now

um only different so there is a

restricted

definition and what does this mean

this means now let's say Tom owns a

policy on his wife Kelly's life

Tom cannot name himself as a beneficiary

if he does he may still receive the

funds but they're no longer he's no

longer protected because if you name

yourself as a beneficiary and you are

the owner if the policy holder and the

beneficiary are the same there's kind of

like a conflict of interest

um you know it can lead into other

things so that's why it's no longer

protected from creditors so if anything

were to happen to Kelly and he's the

owner and the policy

um holder and the beneficiary he may

still receive the benefit but it doesn't

have any protection right so that is um

kind of like a restricted definition

that they avoid or discourage

um people from choosing themselves as a

beneficiary

all right so those are our key terms

um that we have for our first

introductory segment these will come up

again and again with the different

modules

um so just make sure you guys understand

them what they mean and I will see you

in segment two

[Music]