Adjustable life
survivorship life
"second to die" "last survivor" policy; same as joint life, insures two or more lives; PAYS ON LAST DEATH rather than first; used to offset the liability of the estate tax upon the death of the second spouse
cash accounts
accumulates on a tax deferred basis each year and earns either the guaranteed contract rate or current rate, whichever is higher
flexible
ammount frequency of each installment varies
insurance component
annual renewable term insurance
variable annuity
annuitant may receive varying rates of return on the funds that are paid into the annuity
level
annuitant/owner pays a fixed installment
deferred annuity
annuity that either is purchased with single lump sum or purchased through periodic payments
variable Universal life
compination of universal life and variable life; flexible premiums and adjustable death benefit; policyowner decides where cash value is invested; cash values are not guaranteed and death benefit is not fixed; cash value and/or death benefit may bincrease or decrease over life of policy depending on investements. must have securites and life insurance
annuity
contract that provides income for a specified number of years or for life; protects a person against outliving his or her money; it is not life insurance but rather a vehicle for accumulation of money and the liquidation of an estate
interest-sensitive whole life
current assumption life; fixed premium whole life policy that provides a guaranteed death benefit to age 100; credits cash value with the current (nonguaranteed) interest rate that is usually comparable to money market rates; same as trad. whole life with benefits of: CURRENT INTEREST RATES which may allow for greater cash value or shorter premium paying period
Universal life
flexible premium adjustable life; introduced in 1970's ; can increase premium or decrease it; may skip paying a premium AS LONG AS sufficient cash value at the time to cover monthly deductions; allow the partial withdrawal or surrender of policy cash value; may be a charge for that
fixed annuity
guaranteed minimum rate of interest; income payment that do not vary from one payment to the next; insurance company guarantees the specified dollar amount for each payment and the length of the period of payments as determined by the settlement option chosen by the annuitant
adjustable life
increase or decrease premium; change premium paying period; increase or decrease face amount of coverage; proof of insurability is only required IF: increases to death benefit or lower premium
Joint Life
insures two or more lives; premium is based off joint average age between ages of insured; death benefit is ONLY paid on first death
single payment
lump sum payment of annuity
variable whole life
much like trad. whole life; fixed premium; death benefit and cash value are not guaranteed under variable life; may increase or decrease over the life of the policy depending on the investment performance; designed as a hedge against inflation must have securities and life insurance
Endowment
not sold in US anymore after 1984; another type of whole life insurance; slight variation in maturity date
periodic payments
premiums are paid in installments over a period of time
immediate annuity
purchased with a single, lump sum and provieds income payments that start within one yearfrom the date of purchase
annuitant
receives benefits or payment from an annuity; for whom the annuity is written
general account
where purchase payments are invested
