Types of Insurance Policies
What are modified endowment contracts?
Policies exceeding max premium, losing tax benefits.
What is Variable Universal Life Insurance?
Policy owner controls premium, investment accounts, and returns.
What is Non-Medical Life Insurance?
Policy that doesn't require medical exam.
What is Juvenile Insurance?
Policy written on children under parental control.
What is annual renewable term insurance?
Provides a level face amount that renews annually.
What is decreasing term insurance?
Provides an annually decreasing face amount over time.
What is increasing term insurance?
Provides an increasing face amount over time.
What is whole life insurance?
Provides death benefits and cash values for life.
What are credit policies?
Purchased using a decreasing term life insurance policy to cover the life of a debtor.
What is Target Premium?
Suggested premium for Universal Life policies.
Who is typically the policyowner, payor, and beneficiary in IOLI?
The investor.
How does the investment account grow in Variable Life Insurance?
Through mutual funds, stocks, and bonds.
How can policyholders link accumulation values in Equity Index Universal Life Insurance?
To an outside equity index like S&P 500.
What is the purpose of Variable Life Insurance?
To offset inflation.
What is the investment strategy in Equity Index Universal Life Insurance?
80-90% in fixed income securities, remainder in contracts tied to stock index.
What is a term rider?
A type of life insurance product which covers children under their parent's policy.
What is convertible term insurance?
Allows policyowners to convert their term insurance into permanent policies.
What is Investor-Originated Life Insurance Policy (IOLI)?
An illegal policy where an investor purchases a policy on someone else's life to profit upon their death.
When do whole life policies mature?
At age 100.
What is Equity Index Universal Life Insurance?
Combines life insurance with earned interest based on equity index.
What is limited pay life insurance?
Coverage until age 100 or death with limited premium payments.
What is straight life insurance?
Coverage until death with lifetime premiums.
What are joint life policies?
Covers 2 individuals, pays after first death.
What is a Joint Survivor/Last Survivor Policy?
Covers two people and pays death benefit after last insured dies.
What is required to sell Variable Life Insurance?
FINRA securities registration and an insurance license.
What are modified whole life policies?
Fixed premium for a few years then increase.
What are the characteristics of Equity Index Universal Life Insurance?
Guaranteed minimum interest rate, tax deferral, policy loan access, death benefit based on coverage amount and account value.
What is renewable term insurance?
Guarantees the insured the right to continue term coverage after expiration of the initial policy period.
What is level term insurance?
Has a level face amount and level premiums.
What is Variable Life Insurance?
Includes regulated securities and investment accounts.
What is a Universal Life Policy?
Incorporates flexible premiums and adjustable death benefit.
Why is IOLI illegal?
It circumvents insurable interest requirements and positions the policyowner to benefit upon the death of the insured.
What is the premium type for whole life policies?
Level premium.
What is an Adjustable Life Policy?
Offers flexible premiums and adjustable death benefit.
What is an Endowment Policy?
Pays face amount at end of fixed period or at death.
What is a Face Amount Plus Cash Value Policy?
Pays face amount plus cash value at death.
What is a Family Income Policy?
Pays income for specified period from policy issue date.
What is a Family Maintenance Policy?
Pays monthly income and face amount at end of period.
What are the types of Variable Life Insurance?
Variable Life, Universal Variable life, Variable Whole Life, and Variable Annuity.