Chapter 2: Types of Life Policies

a contract that provides income for a specified period of years, or for life

an annuity

why must the annuitant be a natural person regardless of who owns the policy?

because annuities are based on the life expectancy of an annuitant

coverage gradually decreases at predetermined times; best used when the need for protection declines from year to year

decreasing term

example reasons for joint life

-mortgage protection for married couple purchasing a house if both spouses work and earn close to the same amount of income -used to insure the lives of business partners in the funding of a buy-sell agreement and other business life needs.

2 types of annuity how many lives are covered

-single life -nultiple life: joint/joint & survivor

Universal Life

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

Who has all of the rights in an annuity?

The owner (such as naming the beneficiary and surrendering the annuity)

in life policies, the time when the face value is paid out

policy maturity

is a decreasing term policy usually convertible

YES

when do whole life policies endow?

at the insured's age 100

payment begins within 1 year with a ______________________ annuity

immediate

2 components of a universal life policy

insurance component & cash account

combination of universal and variable life

variable universal life

1. underlying investment 2. interest rate 3. license requirements

3 main characteristics of variable annuities

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

The missing premium may be deducted from the policy's cash value. The policy will NOT lapse.

What is the premium for the new term policy based on at the expiration of a renewable policy?

The insured will have to pay the premium that is based on their attained age

is guaranteed and also remains level for life

death benefit

which common whole life policy will have the lowest annual premium?

straight life

A policy covering 2 lives that is the least expensive because the premiums are based on an average age and pays a death benefit only at the first death

Joint Life Policy

(annuity type of premium payment) multiple payments; the principal is created over time (used for deferred annuity only)

periodic (flexible) premium

policies feature a level premium and a death benefit that decreases each year over the duration of the policy term

decreasing term

an annuity in which the income payments begin sometime after one year from the date of purchase.

deferred annuities

__________________________ are less risky than a variable annuity or a mutual fund but are expected to earn a higher interest rate than a fixed annuity.

equity indexed annuities

An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a

Equity Indexed Annuity The interest rates of Equity Indexed Annuities are tied to the S&P's Index

Parties in an Annuity

Owner, Annuitant, Beneficiary

immediate annuity is purchased with

a single premium

payments made into the annuity

accumulation (pay-in)

-the period of time over which the owner of the annuity makes payments (premiums) into an annuity -the period of time during which the payments can earn interest on a tax deferred basis

accumulation period (pay in period)

also called nonforfeiture value, does not usually accumulate until the THIRD POLICY YEAR and it grows TAX DEFERRED

cash value

created by the accumulation of premium, is scheduled to equal the face amount of the policy when the insured reaches age 100 (the policy maturity date), and is paid out to the policy owner

cash value

right to convert a term policy to a permanent policy without evidence of insurability

convertible (feature of a term policy)

joint life policy

covers the life of two insureds; rates are blended. Upon the death of the first insured, the policy ends

primarily used when the amount of needed protection or decreases over time

decreasing term

payments begin after 1 year with a ___________________ annuity

deferred

provides the same benefits as other traditional whole life policies with the added benefit of current interest rates, which may allow for either greater cash value accumulation or a shorter premium-paying period

interest-sensitive whole life

-premium is based on the joint average age of the insured -death benefit upon the first death only

joint life

what licenses must a producer have in order to sell variable universal life?

licensed for both securities and life and health

premiums paid until a certain time; coverage in effect to age 100

limited payment whole life

benefits in a life insurance policy that the policy owner cannot lose even if the policy is surrendered or lapses

nonforfeiture values

-basic policy -level death benefit -insured pays premiums for life or until age 100

ordinary whole life (continuous premium)

(in annuity) has all rights to policy (usually annuitant); can be corporation or trust

owner

the purchaser of the annuity contract but not necessarily the one who receives the benefits

owner

disposing of annuity proceeds

pure life annuity certain life refund annuity

an increasing term insurance policy that pays an additional death benefit to the beneficiary equal to the amount of the premiums paid

return of premium (ROP)

financial instruments that may trade for value (for example: stocks/bonds/options)

securities

(annuity type of premium payment) ONE lump sum payment; the principal is created immediately (both immediate and deferred annuities)

single premium annuity

what happens when a term is over?

the policy expires and the insured is without coverage

disadvantage to fixed annuities

the purchasing power that they afford may be eroded over time due to inflation

cash value builds up ________________________ for limited pay policies

FASTER

Your client wants. both protection and savings from the insurance and is willing to pay premiums until retirement at age 65. What is the right policy for his client?

Limited Pay Whole Life

a policy's savings element or living benefit

cash value

a requirement to determine if an insurance product is appropriate for a customer

suitability

is term insurance temporary or permanent

temporary

what does level in level term insurance refer to?

the death benefit which does NOT change

Owner pays into: Annuity & Annuity pays to

Annuitant

Provides income for a specified period of years or for life, and protects a person against outliving their money

Annuity

Two components of a Universal Life policy

Insurance Component and Cash Account

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy

Required a premium increase each renewal Annually Renewable Term policies' premiums are adjusted each year to the insured's attained age; however, the policy may be guaranteed renewable. Death benefits remain level, and as with any term policy, there are no cash values

Accumulation period/Pay-in period

The period of time over which the annuitant makes payments (premiums) into an annuity

Flexible Premium Adjustable Life

Universal Life

Which annuity requires a securities license?

Variable annuity

variable premiums purchase ______________________________ in the fund, which is similar to buying shares in a mutual fund

accumulation units

-guaranteed minimum rate of interest to be credited to the purchase payment(s) -income (annuity) payments that do not vary from one payment to the next -the 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

features provided by a fixed annuity

UNIVERSAL LIFE

flexible premium adjustable life policy holder has the flexibility to increase the amount of premium paid into the policy and decrease it again later

-permanent protection -guaranteed elements (face amount, premium, and cash value) until death or age 100 -level premium -cash value and other living benefits

general characteristics of whole life

premiums for whole life policies are usually ______________________ than for term insurance.

higher

in annuities, shorter life expectancy=

higher benefit

designed so that the premiums for coverage will be completely paid-up well before age 100.

limited-pay whole life

various forms of life insurance policies that build cash value and remain in effect for the entire life of the insured (or until age 100) as long as the premium is paid

permanent life insurance

-increase or decrease the premium or the premium-paying period -increase or decrease the face amount -change the period of protection

policy owner's options in adjustable life policy

renew the policy without evidence of insurability

renewable (feature of a term policy)

policy is completely paid-up after one premium and generates immediate cash

single premium whole life

a low cost, simple-death benefit for a specified term but has no investment component or cash value

traditional term policies

Is a decreasing term policy renewable?

usually not renewable because the death benefit is $0 at the end of the policy term

(type of annuity) payment not guaranteed, premiums in separate account, and invested in stocks and bonds

variable annuities

An individual purchased a $100,000 Joint life policy on himself and his wife. 8 years later, he died in an automobile accident. How much will his wife receive from the policy?

$100,000

In an annuity, the accumulated money is converted into a stream of income during which time period?

Annuitization period The "annuitization period" (annuity period) is the time during which accumulated money is converted into an income stream

The person who received annuity assets (either the amount paid into the annuity or the cash value, whichever is greater) if the annuitant dies during the accumulation period, or to whom the balance of annuity benefits is paid out.

Annuity Beneficiary

the amount of benefit stated in the life insurance policy

face amount

limited-pay whole life has a shorter premium-paying period than straight life insurance so the annual premium will be ____________________________________

higher

term types of coverage are based on

how the face amount (death benefit) changes during the policy term

the policy owner pays the premium from the time the policy is issued until the insured's death or age 100 (whichever occurs first)

straight life/ordinary life/continuous premium whole life

most common type of permanent insurance

whole life

what happens to accumulation units upon annuitization?

-accumulations units are converted to annuity units -the income is then paid to the annuitant based on the value of the annuity units -the number of annuity units received remains level, but the unit values will fluctuate until actually paid out to the annuitant

how do annuity payments work?

-annuities do not pay a face amount upon the death of the annuitant -in most cases, the payments stop upon the death of the annuitant

what living benefits does whole life have?

-cash values -policy loans -nonforfeiture values

2 types of annuity underlying investments

-fixed -variable

index whole life policy classification

-if the policy owner assumes the risk, the policy premiums increase with the increases in the face amount. -If the insurer assumes the risk, the premium remains level.

What license or licenses are required to sell variable annuities?

Both a life insurance license and a securities license Agents are required to have both a life insurance license and a securities license to sell variable annuities

relationship between the annuitant and the contract owner

the annuitant and the contract owner do not need to be the same person, but most often are

What are Equity Indexed Annuities?

Equity Indexed Annuities invest on an aggressive basis in order to yield higher returns. Like a fixed annuity, Equity Indexed Annuities have guaranteed minimum interest rates. The insurance company often keeps a predetermined percentage of the return and pays the rest to the annuity owner. Equity Indexed Annuities are less risky than variable annuities and earn higher interest rates than fixed annuities.

Why is an equity indexed annuity considered to be a fixed annuity?

It has a guaranteed minimum interest rate While equity indexed annuities earn higher interest rates than fixed annuities, both types of annuities guarantee a specific minimum interest rate.

Truth regarding the accumulation period of an annuity

It is a period during which the payments into the annuity grow tax deferred The "accumulation period" is the period of time over which the annuitant makes payments (premiums) into an annuity. This is the period of time during which the payments earn interest and grow tax deferred.

Two brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?

Joint Life

A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?

Joint life policy

do the insured and the policy owner have to be the same person?

NO

what living benefits does term insurance have?

NONE

-the time during which the sum that has been accumulated during the accumulation period is converted into a stream of income payments to the annuitant -may last for the lifetime of the annuitant or for a specified period which could be longer or shorter

annuity period/annuitization period/liquidation period

the insured's age at the time the policy is issued or renewed

attained age

decreasing term is commonly purchased to insure the payment of

a mortgage or other debts if the insured dies prematurely

a corporation, trust, or other legal entity may own an annuity, but the annuitant must be

a natural person

immediate annuities are most commonly known as

a single premium immediately annuity (SPIA)

developed to provide the policy owner with the best of permanent life and term coverage (can be either term or permanent insurance)

adjustable life

the purest form of term insurance

annually renewable term (ART)

If the annuitant dies during the accumulation period, who will receive the annuity benefits?

the beneficiary If the annuitant dies during the accumulation period, the beneficiary received benefits from the annuity: either the amount paid into the plan or the cash value-whichever is greater.

expenses in fixed annuity vs. variable annuity

fixed annuity: guaranteed variable annuity: guaranteed

income payment in fixed annuity vs. variable annuity

fixed annuity: guaranteed variable annuity: no guarantee

converting a person's net worth into a cash flow

liquidation of an estate

the policy owner can borrow against the cash value while the policy is in effect, or can receive the cash value when the policy is surrendered.

living benefits

in annuities, longer life expectancy=

lower benefit

the annuity income amount is based upon the following:

-the amount of premium paid or cash value accumulated -the frequency of the payment -the interest rate -the annuitant's age and gender

universal life partial withdrawal (partial surrender)

-there may be a charge for each withdrawal and there are usually limits to how much and how often withdrawals may be made. -at withdrawal, interest earned on withdrawn cash may be subject to taxation, depending on the plan.

reasons annuities are purchased

-to provide or supplement college income -to fund or help fund a college education -for any situation that requires a steady stream of income at some point in the future

To sell variable life insurance policies, an agent must receive:

1. A securities license 2. A life insurance license 3. FINRA registration

joint whole life functions similarly to an individual who life policy except for 2 major exceptions

1. the premium is based on a joint average age between the ages of the insureds 2. the death benefit is paid upon the first death only

Definition of Annuity

A contract used to accumulate funds that are to be distributed at a specified time in the future as a periodic payment of accumulated funds

What are the two components of a universal life policy?

Insurance and cash account A universal policy has two components: an insurance component and a cash account. The insurance component of a universal life policy is always annual renewable term insurance. The cash account accumulates on a tax deferred basis each year and earns either the guaranteed contract rate or the current rate, whichever is higher.

does term insurance have cash value?

NO

Limited Pay Whole Life

Premium payments will cease at her age 65, but coverage will continue to her death or age 100

Which is called a "second-to-die" policy?

Survivorship life Survivorship life (also known as "second-to-die" or "last survivor" policy) is much the same as joint life in that it insures two or more lives for a premium that is based on joint age.

The policy owner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

The death benefit can be increased by providing evidence of insurability The policy owner (insured) would need to prove insurability for the amount of increase.

The insurance component of a universal life policy is always

annually renewable term insurance

the cash value of a whole life policy has reached the contractural face amount

endow

the premium that does not change throughout the life of a policy

level premium

major difference between survivorship life policy vs. joint life policy

survivorship life pays on the last death rather than upon the first death

what does endowing at age 100 mean?

the cash value created by the accumulation of premium is scheduled to equal the face amount of the policy at age 100

what does a return of premium policy offer?

the pure protection of a term policy, but if the insured remains healthy and is still active once the term limit expires, the insurance company guarantees a return of premium. (however, since the amount returned equals the amount paid in premium, the returned premiums are not taxable)

-ordinary whole life/straight life/continuous premium whole life -limited pay whole life -single premium whole life

three basic forms of whole life

The main difference between immediate and deferred annuities

when the income payments begin The main difference between immediate and deferred annuities is when the income payments begin. Immediate annuities will begin payments within the first year, while deferred annuities will not begin payments until sometime after the first year.

What is a Straight life policy?

*It has the lowest annual premium of the 3 types of whole life policies *The face value of the policy is paid to the insured at age 100 *It develops cash value by the end of the third policy year **Straight Life policies charge a level annual premium throughout the insured's lifetime and provide a level, guaranteed benefit.

Renewable provision

*allows the policy owner the right to renew the coverage at the expiration date without evidence of insurability

An insured purchased a 10 year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10 year term?

The insured may renew the policy for another 10 years, but at a higher premium rate.

-KEY FEATURES-can be term or whole life, can convert from one to the other -PREMIUM-can be increased or decreased by policyowners -FACE AMOUNT-flexible, set by policy owner with proof of insurability -CASH VALUE-fixed rate of return, general amount -POLICY LOANS-can borrow cash value

adjustable life

what does an annuity protect against?

an annuity protects against individuals outliving their money

-renews each year without proof of insurability -premiums increase due to attained age

annually renewable term

where are the assets in variable life?

because the insurance company is not sustaining the investment risk of the contract, the underlying assets of the contract can not be kept in the insurance company's general account. assets must be held in separate account that invests in stocks, bonds, and other securities investment options.

annuities are not life insurance but rather a vehicle for

vehicles for the accumulation of money and the liquidation of an estate

An individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?

Immediate Annuity An annuity purchased with a single lump-sum payment, with a 25-year fixed-period distribution will be most suitable for this arrangement

the premium for whole life policies is based on the issue age; therefore, it remains the same throughout the life of the policy

level premium

In a survivorship life policy, when does the insurer pay the death benefit?

Upon the last death

age relationship with term insurance

there is usually a maximum age above which coverage will not be offered or at which coverage cannot be renewed

the most common type of temporary protection purchase

level term insurance

pure life insurance

term insurance

well suited for those insureds who do not want to be paying premiums beyond a certain point in time (EX. an individual may need some protection after retirement, but does not want to be paying premiums at that time. Can be purchased during the person's working years to accomplish that objective)

limited pay policies

The premium of a survivorship life policy compared with that of a joint life policy would be

lower

20-pay life whereby coverage is completely paid for in 20 years and life paid up at 65 (LP-65) whereby the coverage is completely paid up for by the insured's age 65

more common versions of limited pay whole life

Another term for the accumulation period of an annuity

pay-in period

a retirement plan that meets IRS guidelines for receiving favorable tax treatment

qualified plan

allows the policy owner to renew the coverage at the expiration date without evidence of insurability the premium for the new term policy will be based on the insured's __________________________

renewable provision current age

Equity Indexed annuities

seek higher returns Equity Indexed Annuities are not securities, but they invest on a relatively aggressive basis to aim for higher returns. Like a fixed annuity, the Equity Indexed Annuity has a guaranteed minimum interest rate.

greatest amount of coverage for the lowest premium compared to any other form of protection

term

-if the insured dies during this term, the policy pays the death benefit to the beneficiary -if the policy is canceled or expires prior to the insured's death, nothing is payable at the end of the term -there is no cash value or other living benefits

term insurance pure death protection

how does return of premium work?

the return of premium is paid if the death occurs within a specified period of time or if the insured outlives the policy term

2 types when income annuity payments begin

-immediate -deferred

3 kinds of term death benefit

-level -increasing -decreasing

3 types of term coverage

-level -increasing -decreasing

universal life 2 death benefit options to policy owner

-level death benefit -increasing death benefit

2 types of annuity premium payment options

-single premium -periodic payments

2 types of annuity benefit payment options

-straight life -guaranteed minimum

income payments from a deferred annuity begin sometime after

1 year from the date of purchase

-whole life policy that provides guaranteed death benefit to age 100 -insurer sets the initial premium based on current assumptions about risk, interest and expense -policy provides for a minimum guaranteed rate of interest

Interest-Sensitive Whole Life (Current Assumption Life)

-be registered with FINRA -be licensed by the state to sell life insurance -have received securities license

agents selling variable life insurance products must

the insurance component of a universal life policy is always

annually renewable term insurance

insured (must be a natural person); annuity issued on annuitants life

annuitant

owner pays into the Annuity and the annuity pays to the

annuitant

the person who receives benefits or payments from the annuity, whose life expectancy is taken into consideration, and for whom the annuity is written

annuitant

how are annuities classified?

annuities can be classified according to: 1. how premiums are paid into the annuity 2. how premiums are invested 3. when and how the benefits are paid out

payments made to the annuitant from the annuity

annuitization (may-out)

the time when the annuity benefit payouts begin (trigger for benefits)

annuitization date

a variable annuity is considered a security and is regulated by the SEC & state insurance requirements

annuity license requirements

the person who received annuity assets (either the amount paid into the annuity or the cash value, whichever is greater) if the annuitant dies during the accumulation period, or to whom the balance of the annuity benefits is paid out

beneficiary

will receive any amount contributed ti annuity (plus any gain) if annuitant dies during accumulation period

beneficiary

provides the policy owner with the right to convert the policy into a permanent insurance policy, without evidence of insurability premium will be based on __________________________

convertible provision insured's attained age at the time of conversion

withheld or postponed until a specified time or event in the future

deferred

(annuity type of income payment) purchased with either lump sum or periodic payments; benefits start sometime after 1 year from the date of purchase

deferred income payment

what happens to funds during the accumulation period?

during the accumulation period, funds are paid INTO the annuity

what happens to funds during the annuity period?

during the annuity period, funds are paid OUT to the annuitant

(type of annuity) guaranteed, fixed payment amount, premiums in general account

fixed annuities

underlying investment in fixed annuity vs. variable annuity

fixed annuity: general account (safe/conservative) variable annuity: separate account (equities, no guarantee)

interest rate in fixed annuity vs. variable annuity

fixed annuity: guaranteed by insurer variable annuity: no guarantee

licenses needed in fixed annuity vs. variable annuity

fixed annuity: life insurance variable annuity: life insurance PLUS securities

how annuity premiums are invested

fixed vs. variable

-type of whole life insurance -flexible premium

flexible premium whole life insurance general characteristics

-pure protection -lasts for specific term -no cash value

general characteristics of term life

an annuity purchased with a single, lump sum payment and provides income payments that start within one year from the date of purchase

immediate annuity (typically, an immediate annuity will make the first payment as early as 1 month from the purchase date)

(annuity type of income payment) purchased with a single premium; income payments start within 12 months from the date of purchase

immediate income payments

annuity income payments begin

immediate vs. deferred

(type of annuity) interest rate tied to an index; earn higher rate than fixed annuities, not as risky as variable annuities or mutual funds

indexed annuities

fixed annuities that invest on a relatively aggressive basis to aim for higher returns

indexed annuity (or equity indexed)

-insurance that the cash value is dependent upon the performance of the equity index although there is a guaranteed minimum interest rate -policy's face amount increases annually to keep pace with inflation without requiring evidence of insurability -classified depending on whether the policy owner or the insurer assumes the inflation risk

indexed whole life (equity whole life)

in an annuity~ issuing insurance company does not guarantee a minimum interest rate

interest rate

is joint life term or permanent

joint life policies can be in the form of term insurance or permanent insurance

a single policy that is designed to insure two or more lives

joint life policy

which is first to die and which is second to die?

joint life=first to die survivorship life=second to die

-level premium -death benefit -cash value -living benefits

key characteristics of whole life insurance

what kind of death benefit does whole life have?

level

with fixed annuities, the annuitant knows the exact amount of each payment received from the annuity during the annuity period.

level benefit payment amount

Level death benefit and level premium

level premium term

the amount needed to keep the policy in force for the current year. makes the policy perform as an annually renewable term product.

minimum premium

used for annuities & indicate the number of individuals within a specified group (ex. male, females, smokers, nonsmokers) starting at a certain age, who are expected to be alive at a succeeding age

mortality tables

in an annuity who has all of the rights, such as naming the beneficiary and surrendering the annuity?

owner the owner of an annuity may be a corporation, trust, or other legal entity

who bears the investment risk in variable contracts?

policy owner

universal life paying premiums?

policy owner can even skip paying premium and policy will not lapse as long as there is sufficient cash value at the time to cover monthly deductions for cost of insurance if cash value is too small, the policy will expire

how are premium rates on a joint life policy determined

premium rates on a joint life policy are determined by averaging the ages of both insureds

annuity premium payment methods

single premium vs. periodic

designed to provide a level death benefit to the insured's age 100 for a one-time, lump sum payment

single premium whole life

premiums paid in one lump sum; coverage continues to age 100

single premium whole life

would take on the form of a court settlement arising from a civil lawsuit or it may take on the form of the income that is provided to the winner of a state lottery

structured settlement

annuities are also known for providing

structured settlements

-premium is based on the joint average age of the insured -death benefit upon the last death

survivorship life

-much the same as joint life in that it insures two or more lives for a premium that is based on a joint age -pays on the second death

survivorship life (second to die)

recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime

target premium

what types of life insurance have level premiums?

term & whole life

-liquidating a principal sum, regardless of how it was accumulated

the basic function of an annuity

how does adjustable life work?

the insured typically determines how much coverage is needed and the affordable amount of premium. the insurer will then determine the appropriate type of insurance to meet the insured's needs as the insured's needs change, the policy owner can make adjustments to the policy

the payments that the annuitant makes into the variable annuity are invested in the insurer's separate account, not their general account. the separate account is not part of the insurance company's investment portfolio, and is not subject to the restrictions that are applicable to the insurer's own general account

underlying investment

-KEY FEATURES-permanent insurance with renewable term protection component -PREMIUM-flexible; minimum or target -FACE AMOUNT-flexible; set by policy owner with proof of insurability -CASH VALUE-guranteed at a minimum level; general account -POLICY LOANS-can borrow cash value

universal life

-an insurance component in the form of annually renewable term -2 death benefit options: Option A- level death benefit & Option B- increasing death benefit -can make partial surrender/cash withdrawal

universal life

common purpose of survivorship life policy

used to offset the liability of the estate tax upon the death of the last insured

serves as a hedge against inflation and is variable for the standpoint that the annuitant may receive different rates or return on the funds that are paid into the annuity

variable annuity

-KEY FEATURES-permanent insurance -PREMIUM-fixed (if whole life); flexible (if universal life) -FACE AMOUNT-can increase or decrease to a stated minimum -CASH VALUE-not guaranteed; separate account -POLICY LOANS-can borrow cash value

variable life

-fixed premium, minimum death benefit -cash value and the actual amount of death benefit are not guaranteed -assets inn separate accounts -agents must be dually licensed in insurance and in securities

variable life

-fixed premiums -guranteed minimum death benefit -cash value of policy is not guaranteed and fluctuates with the performance of the portfolio in which the premiums have been invested by the insurer

variable life

fixed, premium investment based product

variable life insurance (variable whole life insurance)

-provides policyowner with flexible premiums and an adjustable death benefit (like universal life) -policy owner RATHER THAN insurer decides where the cash value will be invested (like variable life) -cash values are not guaranteed and death benefit is not fixed (like variable life)

variable universal life

provides lifetime protection and includes a savings element (or cash value)

whole life insurance

does the indexed annuity have a guaranteed minimum interest rate?

yes, like a fixed annuity