Types of Life Policies
Adjustable life
An adjustable life policy can assume the form of either term insurance or permanent insurance
Permanent life insurance
a general term 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 (or until age 100) as long as the premium is paid
Universal life insurance
implies that the policyowner has the flexibility to increase the amount of premium going paid into the policy and to later decrease it again
flexible premium adjustable life
implies that the policyowner has the flexibility to increase the amount of premium going paid into the policy and to later decrease it again
Single Premium Whole Life
is designed to provide a level death benefit to the insured's age 100 for a one-time, lump-sum payment.
Level term insurance
is the most common type of temporary protection purchased
Increasing term
level premiums and a death benefit that increases each year over the duration of the policy term
Whole life insurance
provides lifetime protection, and includes a savings element (or cash value)
renewable
provision allows the policyowner the right to renew the coverage at the expiration date without evidence of insurability
Return of premium
an increasing term insurance policy that pays an additional death benefit to the beneficiary equal to the amount of the premiums paid
minimum premium
the amount needed to keep the policy in force for the current year
Annually renewable term
The death benefit remains level (in that sense, it's a level insurance), and the policy may be guaranteed to be renewable each year without proof of insurability, but the premium increases annually according to the attained age, as the probability of death increases.
limited-pay whole life
limited-pay whole life is designed so that the premiums for coverage will be completely paid-up well before age 100
Decreasing term
policies featuring a level premium and a death benefit that decreases each year over the duration of the policy term
convertible
provision provides the policyowner with the right to convert the policy to a permanent insurance policy without evidence of insurability.
Term insurance
s temporary protection because it only provides coverage for a specific period of time
pure life insurance
s temporary protection because it only provides coverage for a specific period of time
target premium
a 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
Straight Life
also referred to as Continuous Premium Whole Life) is the basic whole life policy. The policyowner pays the premium from the time the policy is issued until the insured's death or age 100 (whichever occurs first). Straight life will have the lowest annual premium.