Types of Life Insurance Policies

Industrial Life Policy Provisions

1. A 31-day grace period (28 days for weekly premium policies) is provided. 2. The application is not required to be part of the policy. 3. Medical examinations are not required. 4. Cash values do not accumulate sufficiently to provide loans. 5. Settlement options do not apply because of limited cash value. 6. Suicide provisions are not included in the policy because of the small benefit amount. 7. Nonforfeiture provisions do not allow the cash option until premiums have been paid for five years (compared with three years for ordinary policies). 8. Dividends are used to reduce the premium payment or to purchase paidup additions.

Life settlement Broker disclosures

1. Complete description of all offers, counteroffers, acceptances, and rejections 2. Affiliation between broker and person making an offer on a proposed life settlement contract 3. All estimates of life expectancy of the insured

advantages of flexible policies.

1. Flexible policies provide the opportunity to customize the policy to the needs and wants of the insured. 2. Flexible policies may include a securities component, which is considered an effective hedge against inflation. 3. Premium flexibility allows policyowners to pay what they can, when they can. This provides the opportunity to increase cash values more rapidly when the policyowner has the resources to do so. It also provides the opportunity for policyowners to skip payments when their financial circumstances dictate without losing insurance protection.

Disadvantages of Flexible Policies

1. Flexible policies that include a securities component may not have guaranteed returns. Returns may be low, or even negative, in policies based on separate securities accounts. 2. Some policyowners need the forced discipline of a mandated premium schedule to ensure that they regularly contribute enough to ensure adequate cash value growth. Many flexible premium policies lack a required premium schedule.

Life settlement Provider disclosures

1. Gross purchase price paid for policy 2. Amount to be paid to policy owner 3. Full disclosure of compensation to broker or any party involved in the life settlement transaction 4. Contact information for broker

Disadvantages of Term Insurance

1. Over time, renewable term insurance becomes more and more expensive. Although initially the level term premium is low, it increases with each renewal on the basis of the increased age of the insured and the increased risk of mortality for the insurance company. Thus, a relatively low premium at age 35 becomes an expensive premium at age 55 or 60. 2. Because term insurance provides temporary protection for a limited time, the insured can be left without insurance at a time (older age) when protection is needed the most. 3. Term insurance is pure death protection only. It offers no living benefits such as guaranteed cash values. 4. Even if the term policy is renewable, it generally is not renewable beyond a certain age, such as age 65 or 70.

Disadvantages of Specialized Policies

1. Policies set up to meet a specific need may become obsolete if the need changes over time. 2. Certain policies, if not set up carefully, may incur negative tax consequences.

Characteristics of Industrial Life Insurance

1. Premium payments are made frequently. 2. Benefits are usually less than $2,000. 3. Premiums are collected by the agent at the insured's home or workplace. 4. Sales are made in premium units rather than in insurance units. The rate book lists the amount of insurance that can be bought with a specified weekly or monthly premium. (This has been changing for larger amounts of insurance.) 5. All family members are covered from birth to age 65 or 70. 6. Usually a medical examination is not required.

Advantages and Uses of Specialized Policies

1. Specific combinations of term and permanent insurance can be used to match the need exactly. 2. The cost of the policy may be lower than ordinary whole life insurance.

Credit Life Policy Provisions

1. The number of insureds under the policy must be maintained at a specified level (usually 100); if participation drops below that number, the insurer may not insure new debtors. 2. Unlike standard group insurance policies, the policy does not have a conversion privilege.

` Disadvantages of Whole Life Insurance

1. The premium-paying period may last longer than the insured's incomeproducing years. 2. It does not provide as much protection per premium dollar as term insurance does.

Advantages and Uses of Whole Life

1. The principal advantage of whole life is that it is permanent insurance and can be used to satisfy permanent needs such as the cost of death, dying, and final burial expenses. 2. The level premium allows the policyowner to know exactly what the cost of insurance will be and offers a form of forced savings. 3. Whole life builds a living benefit through its guaranteed cash value, which enables the policyowner to use some of this cash for emergencies, as a supplemental source of retirement income, and for other living needs.

When a policyowner applies for a life settlement transaction, it is important that the following disclosures be made.

1. There are possible alternatives to the life settlement (i.e., accelerated benefits). 2. The transaction may have tax implications and advice should be sought from a qualified tax advisor. 3. The transaction may affect creditors' rights. 4. There may an effect on conversion rights and waiver of premium benefits. 5. A life settlement transaction may limit ability to purchase future life insurance. 6. Rescission rights exist. 7. The date by which funds will be available must be disclosed. 8. The owner will be required to disclose medical, financial, and personal information. 9. The insured will be contacted periodically to determine health status.

Variable life insurance characteristics.

1. They have a guaranteed minimum death benefit (the actual death benefit may be higher and will vary with the success of the investments). 2. They have cash values that are not guaranteed (these vary with investment success and may change daily). 3. These contracts are regulated as securities.

annual renewable term (ART) insurance

A popular (and initially less expensive) form of renewable term insurance

survivorship life policy

A variation of the joint life policy. It pays the insured amount, not upon the death of the first insured to die but upon the death of the last surviving insured. Joint life policies can also be sold as term life.

policy loan

An insured may also borrow a portion of the cash value, but this must be paid back (with interest) in order to restore policy values. If the insured dies before the loan has been repaid, any indebtedness will reduce the face amount of the policy accordingly: it will be subtracted from any death benefit.

Home Service Life Insurance

Another variation in the industrial life concept. Policies are usually modest in size, ranging from $10,000 to $15,000 in face value, and are typically sold on a monthly debit plan (automatic bank draft) or payments by mail, which eliminates the need for an agent to collect the premiums.

Index-Linked Policies

As a hedge against high inflationary periods, many companies offer policies with face amounts that increase by the amount of inflation. The policy amounts are generally linked to the Consumer Price Index. There are two ways of providing this additional coverage. Either the premium is increased every year to cover the increased insurance amount or the life insurance company makes assumptions about what it expects the increases to be at policy inception, and the insured pays the same (but higher than average) premium over the life of the policy.

Front-end load

Deducts from premiums as they are paid

Universal life insurance providing cash value loans

If a loan is taken, it is subject to interest and, if unpaid, both the interest and the loan amount will reduce the face amount of the policy (same as whole life). Many of these types of policies continue to credit the outstanding loan amount at the guaranteed interest rate and the remaining cash value amount at the current interest rate. For this reason, there is an advantage to the policyowner to take a loan out (if the policyowner is going to take a loan out on one of her life policies) on a UL policy versus a whole life policy.

separate account, also called a separate asset,

Premiums paid for variable life insurance must be placed in the insurer's separate account, which consists primarily of a portfolio of common stocks and other securities-based investments. Because this portfolio is subject to considerable investment risk, there can be no guarantees as to future value.

Advantages and Uses of Term Insurance

One of the most common uses for term is to provide a substantial amount of coverage at a minimum cost. Since term insurance provides pure protection, it allows a person with a limited income to purchase more coverage than might otherwise be affordable. This is particularly important when there is a clear need for additional protection.

two options available regarding the death benefit payable under a universal life policy.

Option 1 (also known as option A) provides a level death benefit equal to the policy's face amount. As the policy's cash value increases, net death protection actually decreases over the life of the policy, which making the policy structure similar to a whole life contract. Option 2 (also known as option B) provides for an increasing death benefit equal to the policy's face amount plus the cash account. In terms of policy structure, this contract is more like a combination of level term insurance and increasing cash value than whole life insurance.

Level Premiums

Premiums for permanent insurance policies are designed to remain level during the entire period the policy is in force. In the early years of the contract, the insured actually pays in more premium than is needed to provide the current year's insurance protection, whereas in later years less than is needed is paid in. The net result is that the premium remains the same for the entire life of the contract. In addition, the company has the opportunity to invest the money at a favorable return, which helps reduce the cost of insurance.

Equity Indexed Life Insurance

Some companies offer policies with face amounts that are linked to an equity index, for example the S&P 500. Naturally, an additional premium must be charged for the increased amount of protection, and it may be obtained in one of two ways: the insurance company may simply increase the premium when it increases the coverage, or it might make advance assumptions about the rate of inflation and charge a slightly higher premium from the original inception date.

Nonforfeiture Value

The cash value in the policy belongs to the policyowner. If the policyowner wishes, some or all of the cash value may be withdrawn from the policy. Any withdrawal of cash value will reduce both the face value of the policy and the amount of cash value available.

Level Face Amount

The face amount of the policy (the amount payable upon death at any age) is fixed and will not change while the policy remains in effect.

cash withdrawal (partial surrender)

This is not treated as a loan. A partial surrender is not subject to any interest and will reduce the total cash value in the account (rather than the face amount). If this withdrawal is later repaid, it will be treated as a premium payment. Many universal life policies will permit.

Variable Universal Life

This product blends a combination of the variable and universal life insurance concepts. The policy has elements of variable life insurance because it is backed by equity investments. The policy has elements of universal life insurance because it allows the policyowner to adjust the amount of the death benefit and/or the premium.

Graded premium whole life policies

a gradual increase in premiums compared with a modified life, which has just one increase. With a graded premium whole life policy, the premium increases each year during the early years of the contract (usually five years) and remains the same after that time.

Life insurance can be structured to provide:

a guaranteed death benefit only, using term insurance; a guaranteed death benefit plus cash accumulation, using some type of permanent insurance; a guaranteed death benefit plus premium flexibility, using universal life; a guaranteed death benefit plus premium and investment flexibility, using variable or variable universal life; and liquidity for estates.

Interim Term

When a person wants immediate protection and is thinking of starting a permanent insurance policy in the near future, this term may be used to cover the period before permanent protection is to begin. Many companies write this term on an automatically convertible basis—that is, they provide the insured with temporary term protection that will convert automatically at some future date, usually no later than 11 months. The premium for the this term is based on the age at application. The premium for the permanent coverage is also based on attained age when permanent protection begins.

indebtedness

When a policyowner takes a cash value loan, the amount borrowed and any accumulated interest due on the loan

Guaranteed Cash Value

Whole life policies include a savings element that is guaranteed to accumulate and earn a specified rate of interest. Usually, the policy has little or no cash value during the first couple of policy years (due to the way front end expenses are allocated). In the third year, cash values begin to accumulate.

Endowment life insurance

a combination of a pure endowment plus term insurance for a specified period. The pure endowment provided a living benefit at the end of the endowment period. The term insurance paid a death benefit if the insured died before the end of the endowment period.

Deposit Term Insurance

a level term insurance policy that has a much higher premium for the first year than for subsequent years. The initial premium is significantly higher than the average premium needed to cover the cost of mortality during the term period. The excess front-end premium (the deposit) is then set aside to earn interest, and these dollars (deposit plus interest) will be applied to reduce the premium payments required in the following years. The premium levels are set so that the entire deposit will be exhausted when the final annual premium is paid. In effect, this arrangement provides a method of paying a portion of the premium in advance.

Minimum deposit or financed insurance

a method of paying for insurance and not a type of policy. It is a high cash and loan value whole life policy. The cash value of a permanent policy is used to pay the premiums on that policy through the use of policy loans. To achieve sufficient cash value, the first two of these premium payments must be paid by the policyowner and then loans may be used, but only if during the first seven years of the policy at least four of the seven annual premiums are paid from funds other than policy loans. (This is a rule imposed by the IRS.) One of the advantages of this type of insurance is that, under certain circumstances, interest paid on policy loans used to finance premium payments still may be deductible. Disadvantages include the fact that its administration is complex.

Adjustable Life Insurance

a policy that offers the policyowner the option to adjust the policy's face amount, premium, type of protection, and/ or length of protection, without having to complete a new application or actually exchange policies. allows conversion from one form of insurance to another, and makes appropriate premium adjustments, if necessary. For example, a given amount of term insurance could be converted to a lesser amount of whole life insurance, or a lesser amount of whole life insurance could be converted to a greater amount term insurance, without a premium change. Converting a given amount of term insurance into an equal amount of whole life insurance would require a higher premium charge. The insurance company may require evidence of insurability if any change is made that increases the death benefit.

Preneed Funeral Insurance

a type of life insurance used to pay for an insured's funeral (usually at a particular funeral home). pays the face amount upon an insured's death. Really, it is just a contract to provide a preplanned funeral and cemetery services funded by a life insurance contract or annuity. Typically, the funeral home has the insured buy a life insurance policy, naming the funeral home as the beneficiary. The funeral home usually is paid a commission on the policy sale as well. The policy will have an increasing face amount so that the funeral will be fully funded, even if burial costs increase.

Joint Life Policies

a whole life contract written with two or more persons as named insureds. Most commonly, the policy is issued on two lives with the insured amount payable on the death of the first insured.

Single Premium Whole Life

a whole life policy with one premium payment (a lump sum amount which, together with the interest it will earn, will be sufficient to cover all future premium payments). The entire cost of this policy is paid up at the time of purchase. These whole life policies accumulate immediate cash value. The premium for such a policy might be many thousands of dollars. The advantage offered by this type of policy is that the policyowner will pay less for the policy than if the premiums were stretched over several years.

economatic policy

a whole life-type policy with a term rider that uses dividends to purchase additional paid-up insurance. As policy dividends are declared, they are used to purchase additional paid-up insurance. As the paid-up insurance is added, an equal amount of term insurance is removed from the policy, thus maintaining the full face amount at no additional cost.

retirement income policy

accumulates a sum of money for retirement while providing a death benefit. Upon retirement, the policy pays an income such as $10 per $1,000 of life insurance for the insured's lifetime or a specified period.

Limited-payment whole life

allow the policyowner to pay for the entire policy in a shorter period of time or to a specific age. Common forms of this are 20-payment life (meaning payments spread out over 20 years), 30-payment life, and life paid-up at age 65. Although the policy is fully paid-up at the end of this period, it has not yet matured. It will continue to provide protection and cash value accumulation until the scheduled maturity date at age 100, or death. Premiums will be higher than those for continuous payment policies because the total premiums have to be paid over a shorter period of time (the cash value will also be slightly higher because more money is paid into the contract during the early years). For example, the policyowner will pay a higher premium in a 20-pay whole life policy than the policyowner would have in a 30-pay whole life. The shorter the payment period, the higher the premium.

convertible term policy

allows a policyowner to exchange the temporary protection for some form of permanent protection without evidence of insurability. The exchange must be made prior to expiration of the term. When a policy is converted, the premium will be based on attained age.

Variable life insurance, also called variable whole life

another product that was developed in response to the low returns earned by traditional cash value policies. Once again we find that the policy has two elements: death protection and a savings/investment element. However, instead of the cash values being linked to interest rates, they are backed by equity investments and securities and are not guaranteed.

Juvenile life insurance

any form of coverage written on the lives of minors.

Specialized Policy Forms

are available to meet different types of insurance needs. Many of these exist in the form of a base policy with one or more other types of coverage attached as riders.

variable insurance contracts

are equity products. they are subject to regulation by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and other federal bodies, as well as by state insurance departments. In order to sell variable life insurance, an agent must be licensed to sell life insurance and must pass the appropriate securities exam. In order to prevent agents from misleading members of the public about the possible returns that can be expected with variable life insurance, during sales solicitations they must follow the 12% Rule. This means that variable life illustrations may not be based on projected interest rates greater than 12%. For example, if a policy actually earned 15% during one exceptional year, the agent would be prohibited from projecting that return annually for a 20-year period. This prevents both the agent and the policyholder from assuming excessive and unrealistic rates of return. A variety of policy performance illustrations at different rates (such as 8%, 10%, and 12%) would be the preferred method for clearly explaining variable life products. Agents should also stress that rates are not guaranteed and that historical performance may not be duplicated in the future. Variable life policies have a level premium.

jumping juvenile policy

automatically increases in face amount at a given age, usually 21, but the premium remains level.

Increasing term policies

begin with little or no insurance protection, and the face amount grows over time. Although not very common, increasing term insurance is sometimes sold as a rider to another type of policy in order to provide an additional death benefit equal to total premiums paid or some other value.

Multiple protection policies

combinations of whole life and term in which the amount of protection is higher in the early years of the policy and less in the later years.

Family Maintenance Policies

combines ordinary life insurance and level term insurance. It affords the payment of a monthly income during a stated period of 10, 15, or 20 years or to age 65 as preselected by the insured. The monthly income is pay able from the date of death to the end of the preselected period. The payment of the face amount of the policy is payable at the end of such preselected period.

The Family Policy (Family Protection Policy)

consists of whole life on the breadwin ner and convertible term on the spouse and children. Once the policy is issued, additional children are automatically included at no extra cost. term insurance coverage is provided without additional premium for children born or adopted after the policy is issued. The term insurance expires on each child as that child reaches a specified age— 18, or perhaps 21, and sometimes as late as 25. Coverage on the children is usually convertible to any permanent insurance without evidence of insurability.

general account, also called a general asset

consists primarily of safe and conservative investments (such as high grade bonds, real estate, and certificates of deposit). The safety of these investments makes it possible for the insurer to guarantee its policies.

mortgage redemption policy or rider

decreasing term insurance. The benefit amount of the term element is intended to be sufficient to pay off the unpaid remainder of the mortgage loan if the insured dies before paying it off.

Credit Life Insurance

designed to insure the lives of debtors for the benefit of a creditor (who is the policyowner). In the event that the insured debtor dies, it pays the outstanding balance of the loan. may be written on an individual or group basis. It is usually written as decreasing term insurance in connection with a purchase being financed. Usually, the individual debtor pays the total premium, which is often added to the installment loan payments so that, in effect, the insurance premium is being financed along with the item being purchased. may not be written for an amount greater than the total debt. In the event of death, if the coverage exceeds the loan amount, the remainder of the death benefit will be paid to the estate. is a collateral (temporary) assignment. The creditor is the owner and beneficiary, and the debtor pays the premiums. Credit insurance is often written as decreasing term insurance. Insureds are given a certificate of coverage. In addition, the debtor's coverage terminates if debt is paid off, transferred, refinanced, or becomes significantly overdue.

Juvenile endowment policies

designed to mature at a specific age, such as age 18, to help fund a college education.

Whole Life Insurance (same as permanent)

designed to provide coverage for the whole of life (usually up to age 100, although some mortality tables have been adjusted to age 120).

Universal life insurance

developed in response to the relatively low interest rates (generally 3.5-5%) earned by traditional whole life insurance cash values, which made the whole life product less attractive during periods of high inflation. might pay higher interest rates (such as 8%, 10%, or 12%) during inflationary times. These policies also provide greater flexibility because they allow policyowners to adjust the death benefits and/or premium payments. similar to a whole life policy in the sense that it has the same two components: death protection and cash value. However, instead of being fixed and guaranteed amounts, the death protection resembles one-year renewable term insurance and the cash account grows according to current interest rates. Premium payments are separated and paid toward the insurance protection; the loading cost and the remaining balance is used to build the cash value (with interest). The policyowner may increase or decrease the death benefit during the policy term, subject to any insurability requirements. Premium amounts may be changed as long as enough premium is paid to maintain the policy. The interest earned by the cash account will vary, subject to a guaranteed minimum. Universal life contracts are actually subject to two different interest rates—the current annual rate and the contract rate.

Modified Premium Plan (Modified whole life policies)

distinguished by premiums that are lower than typical whole life premiums during the first few years (usually three to five years) and then higher than typical thereafter. During the initial period, the coverage and premium are based as if it was a term life policy. Afterward, the premium is higher than that of a typical whole life policy.

reentry term policy

gives the insured the opportunity to provide evidence of insurability at the end of the term and qualify for reduced premium rates (lower than the guaranteed rate that is available for a renewable term policy).

Current assumption whole life policies (also known as interest-sensitive whole life)

offer flexible premium payments that are tied into current interest rate fluctuations. The insurance company reserves the right to increase or decrease the premium within a certain range depending on interest rate fluctuations. During a period of relatively high interest rates, premiums could be reduced. During periods of low interest rates, premiums could be increased within certain limits. Usually, premium adjustments are made on an annual basis. There are two rates of return received on the cash value, either a guaranteed rate or a current rate, whichever is higher. These policies can receive a rate of return other than just a fixed (guaranteed) rate.

Flexible Policies

include adjustable life, universal life, and variable life insurance. These newer life insurance products generally offer the policyowner flexibility in terms of premiums, face amounts, and investment objectives. offer the policyowner the opportunity to change one or more of these components (premiums, cash values, and face amounts) in response to changing needs and circumstances.

viatical settlements

individuals with a terminal illness or severe chronic illness sell their life insurance policies to viatical companies. During the underwriting process, the viatical settlement provider will contact the insured's physician or clinic to verify records and determine the insured's life expectancy. Throughout this process, the insured's information may be shared only with the appropriate people involved in the settlement to protect the insured's privacy.

Level term policies

issued for a fixed face amount, which remains the same during the term of coverage. may be issued for an annual period, for a specified number of years, or until a specified age. Premiums may increase annually or be level

renewable term policy

issued for a specified term and may be renewed at the end of that term without evidence of insurability. may be limited in the number of renewals or to a specified age beyond which renewals will not be available. premium will be based on the insured's attained age at the time of renewal.

nonrenewable term policy

issued for a specified term and may not be renewed. (An insured may always apply for a new policy at the end of the term, but there are no guarantees and the risk may be accepted or rejected based on current underwriting standards.)

Decreasing term policies

issued for an initial face amount that declines during the term period and reaches zero at policy expiration. For example, a 20-year decreasing term policy issued for $100,000 may only provide a death benefit of $50,000 after 10 years. This type of policy is ideal for many types of insurance needs that decrease over time (such as protecting the unpaid balance of a mortgage).

For life settlement transactions, the insured's identity and personal financial and medical information should not be disclosed unless it is:

necessary to put the life settlement contract in place and the owner and insured have provided prior written consent; necessary in order to sell the life settlement contracts as investments, provided the applicable securities laws are followed and the owner and insured have provided prior written consent; provided in response to an investigation/examination by the Commissioner; a condition to the transfer of a settled life insurance policy by one provider to another provider, and the receiving provider agrees to comply with the Insurance Code's confidentiality provisions; or necessary to allow the provider, life settlement broker, or their authorized representative to make contact for purposes of determining health status of the insured.

Family Income Policies

not commonly sold but sometimes appear on state license exams. Combining whole life insurance with decreasing term coverage, these plans provides an income to be paid upon the death of the bread winner. This policy combines decreasing term insurance with a permanent policy. Income payments begin when the insured dies and continue for a period specified from the date of policy issue (not from the date of the insured's death).

Term life insurance policies:

provide temporary insurance protection for a specified period of time, also called the policy term (for example, the term may be 1 year, 5 years, 10 years, 30 years, or to a specified age, such as age 65); pay a death benefit (or mature) only if the insured dies during the term of coverage; and do not accumulate cash value. Term insurance provides pure protection and is the least expensive form of life insurance. Term insurance policies may be characterized according to their renewability and convertibility provisions.

pure endowment

provided for the payment of the policy's face amount only if the insured lived to the maturity date. If the insured died before the endowment date, all benefits were forfeited. Because this was essentially a high-risk savings plan (all savings were lost upon early death), it was rarely sold.

Endowments

provides for the payment (to the beneficiary) of the face amount upon the death of an insured during a specified period or the payment of the face amount at the end of the specified period if the insured is still alive, whichever comes first. not as popular today as they once were. These contracts were originally designed to combine life insurance and savings elements. may be issued for specified periods such as 5, 10, 20, 25, or 30 years, or up to a specified age such as age 65. Once the specified period has passed and the insured is living, the face amount would be paid to that insured in a lump sum or in installments. The premium payments are higher than for traditional whole life contracts because their savings features and premium levels depend upon the period selected. generally are not sold today because the tax consequences have changed, eliminating many of the benefits that once made them attractive.

Life settlements

similar to viatical settlements, except the policyowner is not necessarily terminally or chronically ill. Many states are reclassifying viatical settlements as a type of life settlement. This transaction is a transfer of an ownership interest in a life insurance policy to a third party for compensation less than the expected death benefit under the policy or the sale of a life insurance policy for a dollar amount that is less than the policy's face. It is important that the life settlement broker ensure that the transaction is suitable and appropriate for the seller, and the broker should perform due diligence to obtain and evaluate offers from multiple providers.

cash in a policy

surrendering your policy in exchange for its cash value.

face amount (face value)

the amount of money listed on the face page (first page) of the policy. This is the amount that will be paid in the event of the insured's death.

permanent insurance (same as whole life)

the maturity date is beyond the life expectancy of most individuals. However, a whole life policy actually consists of a combination of a savings element (the advancing cash value) and a decreasing amount of net insurance. When a whole life policy reaches its maturity date (age 100), the cash value would equal the face amount. Because whole life policies include cash values in addition to net insurance protection, the premiums have to cover mortality costs, expenses, and the savings account. For this reason, whole life policies are more expensive than term life policies

contract rate

the minimum guaranteed interest rate, and the policy will never pay less than that amount.

Continuous premium whole life

the most common type of whole life insurance sold. These policies stretch the premium payments over the whole life of the insured (to age 100). This type of policy is often referred to as straight life insurance.

current annual rate

varies with current market conditions and may change every year

retirement endowment

was one of the most commonly sold endowment contracts. This type of policy was issued to mature at age 65 when the insured planned to retire. Like whole life insurance, the face value was payable as a death benefit if the insured died before the maturity date. However, at maturity, the full face amount became payable, usually in the form of monthly installment income.

Industrial Life Insurance

written for a small face amount, usually $2,000 or less, and the premiums are payable as frequently as weekly and, occasionally, monthly.