Viator = ill owner who sells; provider = buyer; broker represents only the owner.

CA rescission: 30 days after signing or 15 days after receiving proceeds, whichever is sooner.

Terminally ill = death expected within 24 months; STOLI is illegal.

Conditional receipt: covered from the application date only if insurable as applied for.

Binding (temporary) receipt: covered immediately, regardless of later underwriting, until declined.

The agent's report is not part of the contract; collect a statement of good health at delivery if no premium was paid.

California grace period: at least 60 days (§10113.71), not 30-31.

Free look: 10 to 30 days (§10127.9); owners 60 or older: at least 30 days (§10127.10).

Absolute assignment = permanent transfer; collateral assignment = temporary security for a loan.

Incontestable after 2 years (§10113.5); nonpayment of premium is the exception.

Misstated age or sex: adjust the benefit; do not void the policy.

Reinstatement: lapsed (not surrendered) policies; proof of insurability plus back premiums with interest.

Suicide within the exclusion period (usually 2 years): premiums are refunded.

Per stirpes = a deceased beneficiary's share passes to their descendants.

Per capita = split equally among the surviving named beneficiaries.

Example: per stirpes gives each branch 1/3; per capita gives P and S 1/2 each.

An irrevocable beneficiary must consent in writing to changes, loans and assignment.

Probate Code §224: if survival is not proven, the insured is treated as surviving the beneficiary.

The common disaster clause steers proceeds to the contingent beneficiary.

Fixed period: time fixed, amount varies. Fixed amount: amount fixed, time varies.

Interest only: principal kept; interest paid and taxable.

The spendthrift clause protects installment proceeds from the beneficiary's creditors.

Three options: cash surrender, reduced paid-up, extended term.

The automatic option is the one named in the policy (usually extended term); elect within 60 days (§10160).

A cash surrender gain above cost basis is taxable.

Five dividend options: cash, reduce premium, accumulate at interest, one-year term, paid-up additions.

Dividends are a return of premium, not taxable until they exceed premiums paid; interest on them is taxable.

Paid-up additions are bought at attained age with no evidence of insurability.

STOLI = policy started for an investor with no insurable interest at issue; prohibited in California.

Insurable interest must exist at policy issue; later sale of a legitimately bought policy can be legal.

A life agent licensed 1+ year may act as the owner's settlement broker after notifying the Commissioner within 10 days and paying $85.

Life Buyer's Guide: before accepting the initial premium, or, if the free look is at least 10 days, with the policy or before it is delivered.

Cost indexes: Surrender Cost Index and Net Payment Cost Index, 10 and 20 years; lower = cheaper.

Annuities: NAIC Annuity Buyer's Guide with or before delivery.

Nonforfeiture 3: cash surrender, reduced paid-up, extended term.

Dividend 5: cash, reduce premium, accumulate at interest, one-year term, paid-up additions.

UL Option A = level death benefit; Option B = face plus cash value.