Life Insurance Term Policies

purest form of term insurance

annually renewable term insurance (ART)

level premium term insurance example: a $100,000 10-year level term policy will provide a $100,000 death benefit if the insured dies any time during the 10-year period • the premium will remain level during the ___________________ • if policy renews at end of 10-year period, the premium will be based on the insured's attained age at _____________________

10- year period the time of renewal

renewable provision: o Premium for new term policy will be based on the insured's current age o For example: A 10-year term policy that is renewable can be renewed at the end of the 10-year period for a subsequent 10-year period without evidence of insurability However, the insured will have to pay a premium that is based on their attained age • If the ind. Purchased a 10-year term policy at the age of 35, he or she will pay a premium based on the age of _____ upon renewing the policy

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Upon selling, renewing, or converting the term policy, the premium is figured at __________ ____ (insured's age at time of transaction)

attained age

convertible provision: o Premium will be based on the insured's _______________ at the time of conversion

attained age

o This provision provides the policyowner with the right to convert the policy to a permanent policy without evidence of insurability

convertible provision

term insurance: only the amount of the _______ _________ may fluctuate depending on type of term insurance

death benefit

There are 3 basic types of term coverage available, based on how the face amount (________ _________) changes during the policy 1 2 3

death benefit level increasing decreasing

annually renewable term insurance (ART) o ___________ _________ remains level (in this sense, it is a level term policy) o and policy may be guaranteed to be renewable each year ____________________________________ o premium ____________ annually according to the attained age, as the probability of death increases

death benefit without proof of insurability increases

ROP: o traditional term policies offer a low-cost, simple-death benefit for a specified term but have no investment component or cash value --> when the term is over, the policy expires, and the insured is without coverage o an ROP policy offers the pure protection of a term policy, but if the ensured remains healthy and is still alive once the term limit expires, the insurance company _____________________________________ o since the amount returned equals the amount paid in, the returned premiums are ______ _________

guarantees a return of premium not taxable

decreasing term policies o feature a _____________________ & _______________________ that decreases each year over the duration of the policy term o primarily used when the amount of needed protection is time sensitive, or ____________ over time

level premium & death benefit decreases

o provides a level death benefit and a level premium during the policy term

level premium term insurance

o most common type of term insurance purchased o word level refers to the death benefit that does NOT change throughout the life of the policy

level term insurance

term life: • Provide for greatest amount of coverage with _________ ___________ as compared to any other form of protection • Usually a ______ _______above which coverage will not be offered or at which coverage cannot be renewed

lowest premium max age

decreasing term policy: o commonly purchased to insure the payment of a ____________ or ___________________ if the insured dies prematurely o amount of coverage thereby _______________ as the outstanding loan balance _____________ each year o this type of policy is usually convertible - however, is usually not renewable since the death benefit is _____ at the end of the policy term

mortgage or other debts decreases / decreases $0

ROP: o pays an additional death benefit to the beneficiary equal to the amount _____________________ o this is paid if the death occurs ____________________________ or if the insured ___________________________

of the premiums paid within a specific period of time / or outlives the policy

Regardless of the type of term insurance purchased, the ____________ is level throughout the term of the policy

premium

ROP: o these policies are structured to consider the low risk factor of a term policy, but at a significant increase in ___________ cost - sometimes as much as 25% - 50% more

premium cost

special features - most term policies are ______________, _____________, or ____________

renewable convertible or both

this provision allows the policyowner the right to renew the coverage at the expiration date without evidence of insurability

renewable provision

o increasing term insurance policy

return of premium

Term life insurance - temporary protection because only provides protection for a ________________ also known as _____ ________ insurance

specific period of time pure life

Term life insurance provides what is known as pure death protection: • If insured dies during this term, policy pays death benefit to the ______________ • If policy is canceled or expires prior to the insured's death, __________ is payable at the end of the term • There is no ______________ or other __________________

the beneficiary nothing cash value or other living benefits