Types of life policies

Whole life insurance

Provides lifetime protection (permanent) and accumulates cash value

What are the characteristics of term life insurance

Provides temporary, pure death protection, with no cash value. *provides the greatest amount of coverage for the lowest premium*

convertible

Provides the policyowner with the right to convert the policy to a permanent insurance policy without evidence of insurability

General characteristics

Pure protection Last for specific terms No cash value

Target premium

Recommend amount that should be paid in order to cover the cost of insurance protection

Features of term policy

Renewable Convertible

Decreasing Term

A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.

Minimum premium

Amount needed to keep the policy, this will make the policy perform as an annually renewable term product

What is annually renewable term insurance?

Annually renewable term (ART) is the purest form of term insurance in which the death benefit remains level; the policy may be guaranteed renewable each year without proof of insurability, but the premium increases annually according to the attained age

Annuities parties

Annuitant - insured Beneficiary - will receive any amount contributed to annuity Owner -has all rights to policy

Straight life also know as (ordinary life or continuous premium whole life)

Basic whole life policy. The policyowner pays the premium from the time the policy is issued until death or age 100( lowest annual premium)

Adjustable life

Can assume the form of either term insurance or permanent. The insured typically determines how much coverage is needed and the affordable amount of premium, then the insurer will determine the appropriate type of insurance to meet the insured needs

Variable life

Fixed premium minimum death benefit Cash value and death benefit not guaranteed Assets in Separate accounts Agents must be dually licensed in insurance and in securities

What two components does a universal life policy has

Insurance component and cash account, this will always be annually renewable term insurance

3 basic types of coverage

Level Increasing Decreasing

Level premium term

Level death benefits and level premium

The key characteristics of whole life insurance are ?

Level premium-premium based on the issue age (remains the same throughout policy) Death benefit-guaranteed remains level for life Cash value-scheduled to equal the face amount of the policy when insured reaches age 100(policy maturity date) Living benefits- policyowner can borrow against the cash value while the policy is in effect.

Return of premium ROP

Life insurance is an increasing term insurance policy that pays an additional death benefit to the beneficiary equal to the amount of the premiums paid. The return of premium is paid if the death occurs within a specified period of time or if the insured outlives the policy term.

What happens if an insured skips a premium payment on a universal life policy

Missing premium may be deducted from the policy's cash value the policy will not lapse

Universal life (flexible premium adjustable life)

Policyowner has the flexibility to increase the amount of premium paid into the policy and to later decrease it again

Limited pay life and single premium life

Premiums for coverage will he completely paid up well before 100

Traditional whole life products What is permanent

Used to refer to various forms of life insurance policies that build cash value and remain in effect for the entire life of the insured

Single premium

Premiums paid in one lump sum coverage continues to age 100

Limited payment

Premiums paid until certain time coverage I'm effect until age of 100

Annually renewable term

Renews each year without proof of insurability Premiums increase due to attained age

Annuities phases

Accumulation (pay in) payments made into the annuity Annuitization (pay out) payments made to the annuitant from the annuity

renewable insurance policy

Allows the policyowner the right to renew the coverage at the expiration date without evidence of insurability.

What does level term insurance refer to

Death benefit (this will not change)

Single premium whole life (spell)

Designed to provide a level death benefit to the insured age 100 for a 1 time lump sum payment.

Types of annuities

Fixed- guaranteed Variable- not guaranteed Indexed - interest rate tied to an index

Combination plans

Joint life Premium is based on the joint average age of the insured Death benefit upon the first death only Survivorship. _premium is based on the joint average age of the insured Death benefit upon the last death

Flexible premium general characteristics

Types of whole life insurance Flexible premium