EXAM FX CH 2
Viatical Settlement Purchaser
Anyone who gives a lump sum of money as consideration for a lifer insurance policy. A person who owns, acquires, or is entitled to a beneficial interest in a trust that owns viatical settlement contract or is the beneficiary of a life insurance policy which is or will be the subject of a viatical settlement contract.
Needs Approach
Based on the predicted needs of the family after the premature death of the insured, looks at income amount of debt, investments, and ongoing expenses
Preferred Risks
Individuals who meet certain requirements and qualify for lower premiums than the standard risk
Sub-Standard Risks
applicants are not acceptable at standard rates because of physical condition, personal or family history of disease, occupation, or dangerous habits
Traditional Net Cost Index
compares the cash values available to buyers if they surrender the policy in 10 or 20 years
Interest-Adjusted Net Cost Index
compares the death benefits that are paid at death in 10 or 20 years, if the insured died at that time, and accounts for the time value of money
Variable Life Insurance
contracts in which the cash values accumulate based upon a specific portfolio of stocks with out guarantee of performance
Permanent Life
forms of whole life insurance policies that remain in effect to age 100 as long as the premium is paid
Standard Risks
people who are entitled to insurance protection with out extra raising or special restrictions, representative of the majority of people
Participating Mutual Policy
refers to any policy that distributes its dividends to policy owners by cash payments, reduced premiums, units of paid up insurance, a savings program, or by the purchase of term insurance
Term Life
Life insurance provided for a specific period of time
Fixed Life Insurance
offer guaranteed minimum or fixed benefits that are stated in the contract
Viatical Settlement Broker
A licensed person that negotiates vatical settlement contracts between the viator and viatical settlement providers for a fee
Viatical Settlement Provider
A person who enters into or effectuates a viatical contract. Does not include banks, financial institutions, or the issue of a life insurance policy
Human Life Value Approach
Gives the insured an estimate of what would be lost to the family in the event of premature death of the insured and calculates an individual's life value by looking at the insurred's wages, inflation, the number of years until retirement, and the time value of money
Stock Purchase
used by privately owned corporations when each stockholder buys a policy on each of the others
Cross Purchase
used in partnerships when each partner buys a policy on the other
Stock Redemptions
used when the corporation buys one policy on each shareholder
Entity Purchase
used when the partnership buys the policies on their partners
Group Life Insurance
written as a master policy covering the lives of more than one individual covered under the single policy