Types of Life Insurance Polices

What are variable life options for Death Benefits?

- A: Death benefit remains level - B: Death Benefits varies with fluctuating cash values

What are the Options of Universal Life Policy

- A: Level death benefit equal to policy face value - B: Increasing death benefit equal to cash value plus face value of policy.

Which policies can have loans withdrawn on them?

- Whole Life - Variable Life - Universal Life

Disadvantages of term Life Insurance

- only lasts for limited time: (renting) - premiums increase as policy holder ages

Policy Loan

Allows policy holder to borrow up to the cash value on the policy. Death benefits stay intact, but the loan is subject to interest.

Convertibly

At the end of term insurance policyholder will have the option to covert to permeant plan. This is based on Attained age and original age.

Cash Values

Build over time due to premium payments and interest and insure that death benefits are paid.

Joint Life Policy

Cover multiple people with death benefits being paid if insured dies. Cheaper than buying multiple individual plans. - "first to die"

Juvenile life Insurance

Coverage for child or minor. Most of the time permeant. Helps lock in low-cost premiums.

Decreasing Term Policy

Death Benefit decreases over the course of the policy and reaches zero at the end of a Term policy. Can be used for financial obligations like mortgages. Premium stays level.

Increasing Term Policy

Death Benefits Increase throughout policy. Premium Increases

Single Premium Whole Life

Entire whole life premium cost is paid for in one payment at the start of the plan.

Jumping Juvenile Polices

Face amount of these policies will jump five times its face value at ages 18-21 depending on the policy.

Interest Sensitive Whole Life

Insurer makes investment with premiums paid by policy holder and investments are credited to cash value on account. Amounts credited are based off of current interest rates. - Fixed Death Benefits

Advantages of term Life Insurance

Least expensive type of Life insurance policy due to the fact only it offers death benefits.

Term level

Limited coverage. Death benefits and premium remained fixed

Survivorship Life Policy

Pays death benefits when the last insured dies -"last to die"

Whole Life Insurance

Permanent Life Insurance designed to remain in force for insured's whole life. Premiums do not increase but are more expensive. Death benefits remain Level. Endows at age 100.

Variable policy

Permanent Life Insurance with cash values and death benefits. Designed to allow policy holders to partake in cash accumulating strategies and avoid taxes until the policy is surrendered. Utilizes a separate account. Performance is not guaranteed. Agents must register with the SEC and FINRA to offer these plans.

Equity-Indexed Universal Life

Permanent Policy that increased cash value by in direct links to stock market index values. Riskier since it follows the stock market could go up or down.

Renewability

Policy holder does not need to re-apply or prove insurability to gain identical coverage after the term/plan has expired. Subject to premium increases.

Indeterminate Premium

Premium is subject to change and is based on the investment earnings, morality and expenses.

Level Premium

Premium stays at the same rate for the duration of the plan

Straight Life

Premiums remain the same for the entirety of a whole life plan

Modified Premium Payment

Premiums start off low then gradually increase until they level off at a specified date.

Graded Premium Payment

Premiums start out high then lower gradually and eventually level off at a specified date.

Cash Surrender

Termination of a life insurance policy and allows for policy holder to obtain cash value of policy. Is subjected to Taxes if applicable.

Death Beneifit

The amount paid to beneficiary If insured dies. equal to face value depending on plan can also include cash value of policy.

Universal Life

UL polices offer flexible premiums and the premiums contribute with interest to the cash value of the policy. Loans and withdraws on the cash value are allowed. Policy holder can also surrender/cash in to obtain the current cash value at anytime.

Adjustable Life Insurance

allows policy owner to adjust death benefits, premiums and length of coverage while staying on the same policy. Allows term and whole life coverages on the same policy.

Separate Account

funds held by the insurer and is maintained separately from insurer's assets. It is used to hold variable premiums used to purchase investments/funds.

Limited Payment- Whole Life

premiums for a whole life plan are paid in full over a specified time period. The shorter the period the quicker cash value accumulates.