Insurance Policies

Credit Life Insurance

Credit life insurance is a special form of decreasing term. Unlike the standard decreasing term policy, credit life automatically names the creditor as the beneficiary. The policy cannot be written for more than the outstanding debt, since that is the limit of the creditor's insurable interest. Once the loan is paid, the policy ends.

Variable Universal Life

-Allows flexible premiums and adjustable death benefits -No General Account -Entire Cash Value held in separate account -Non-guaranteed Death Benefit -Loans and Partial withdrawals from separate account (75-90%)

Mortality Expense

-Deducted monthly from the policies cash value -Determined annually, based on insureds age

General Account(guaranteed values)

-Fixed Interest Rate -Cash Value= Guaranteed min Death Benefit -Loans available but will decrease face amount

Universal Life

-Insurance protection and a savings element (cash value) that grows on a tax-deferred basis -"unbundled policy" -Adjustable Face Amount -Mortality Charges -Expense Charges -Interest -Flexible Premiums -Cash Accumulation is held in insurers GENERAL ACCOUNT -Loans or Partial withdrawals allowed -Death benefits OPTION's A and B

Separate Account(non-guaranteed values)

-Invested in debt or equities securities -Cash Values will fluctuate due to market conditions -Guaranteed min Death Benefit -No guarantee on Cash Value

Traditional Whole Life

-Not Renewable/Convertible -Permanent Insurance -Matures at Age 100 or when Cash Value=Face Amount -If insured lives past age 100 Insurer pays face amount to insured -Has LEVEL PREMIUM and FACE AMOUNT -The owner can borrow against the policy

Ordinary Whole Life

-Not Renewable/Convertible -Protection to age 100 -Cash Value to age 100 -Fixed level premiums -Payment structure: 1.Continuous 2.Limited(30-pay, 20-pay) 3.Single Lump Sum

Adjustable Life

-Permanent -Features of Whole/Term Life Insurance -Best for fluctuating incomes -Can manipulate: period of protection, premium, face amount, length of premium -CAN ONLY BE EXCERSIZED ON POLICIES ANNIVERSARY DATE!!!!

Term Life Insurance

-Renewable/Convertable -Pure Insurance -Pure Death Benefit -Temporary Life Insurance for a SPECIFIC PERIOD OF TIME -Premium is LEVEL for stated Term -Face Amount is only paid if the insured dies during the specified term -Coverage Can be written separately or with a Rider -used to cover loans, or business or personal obligations

Guaranteed Universal Life

-Universal Life with a No-Lapse Guarantee -As long as the minimum required premiums are paid, the policy is guaranteed not to lapse -Minimal Cash Value Growth

Flexible Premium

-when Premiums can be increased, decreased, or even skipped as long as their are funds to cover those deductions

Variable Life

-whole life policy with certain benefits that will vary based on market conditions -Fixed Premium -Cash Value split between the General and Separate Account -Loan available from either account (75-90%)

Family Income

A Family Income policy combines whole life insurance with a Decreasing Term rider. The length of the rider is based on the number of years until the youngest child is no longer a dependent, such as age 21. If the insured dies while the rider is in force, the death benefit of the rider is paid in equal monthly installments (including interest) for the remaining number of years the rider would have been in effect. This benefit is in addition to the face amount of the whole life policy. If the insured is still living at the end of the decreasing term, the rider drops and the premium decreases.

Family Maintenance

A Family Maintenance policy combines whole life insurance with a Level Term rider. If the insured dies while the rider is in force, the death benefit of the rider is paid in equal monthly installments (including interest) for the full number of years for which the rider was issued. This benefit is in addition to the face amount of the whole life policy. If the insured is still living at the end of the level term, the rider drops and the premium decreases.

Family Plan

A Family Plan, or Protection Plan, provides a base policy of whole life insurance on the primary insured and the spouse and children are covered by level term riders. The spouse's coverage is written to a specified age, such as 65, and is usually convertible to a whole life policy any time prior to expiration without proof of insurability.

Jumping Juvenile

Juvenile insurance is any policy written on the life of a minor. A common form of juvenile insurance is a "Jumping Juvenile" policy. This policy provides an automatic increase in the face amount at a given age (usually age 21 or 25) without evidence of insurability. The premium remains level for the life of the policy, and the usual increase in the face amount is 5 times the issue amount.

Death Benefit Option A

Pays the face amount of the policy and provides a level death benefit. As the cash value increases, the company's risk decreases. If the cash value increases to the point it equals the death benefit, the death benefit will automatically become the greater of the cash value or face amount of insurance. This minimum separation between the cash value and the death benefit is called the "risk corridor." This corridor of insurance is automatic and does not require insurability. This prevents the policy from maturing too early.

Death Benefit Option B

Pays the face amount stated in the contract which is level term, plus any cash values accumulated over the years. This provides for an increasing death benefit. The mortality charge for Option B is greater than Option A.

Limited Payment

Premium payments are for a specified time (Ex: 20-Pay Life or 30-Pay Life) or to a specified age ( Ex: Life Paid up at 65). The face amount (death benefit) remains level and cash value continues to earn interest and mature at age 100. While the annual premium is higher than Straight Life, it is paid for a shorter period of time and will have a lower total premium outlay.

Decreasing

The death benefit decreases, but premiums remain level for the policy term. Often such policies are sold as mortgage protection with the amount of insurance decreasing as the balance of the mortgage decreases. If the insured dies, the proceeds of the policy can be used to pay off the mortgage. The premiums paid for decreasing term are lower than the premiums payable for level term since the benefit decreases throughout the term of the policy.

Increasing

The death benefit increases over the life of the policy while the premiums remain level. This type of term is normally written as a rider for the return of premium on a term policy over a set number of years.

Single Premium

The entire premium is paid in a lump sum at the time of purchase and creates immediate cash value. The face amount (death benefit) remains level and cash value continues to earn interest and mature at age 100. This policy has the lowest total premium outlay for the life of the policy.

Annually Renewable Term

The simplest form of term life insurance is for one year. The death benefit remains level and the premiums increase yearly as the policy renews up to a specified age. While it initially is very inexpensive compared to other types of life insurance, over time it can become cost prohibitive. The death benefit is paid by the insurer if the insured dies while the policy is in force.

Return of Premium

This policy provides for a full refund of premiums if the insured is still living at the end of the term. These policies charge a higher premium than level term insurance. The additional premium paid for this benefit provides a nonforfeiture value which will offer a nominal return of premiums paid if the policy is not held to the end of term.

Mortgage Redemption

When credit life insurance is used to protect against the unpaid balance of a mortgage, it is referred to as Mortgage Protection or Mortgage Redemption Insurance. In this case, the amount of protection decreases along with the balance of the mortgage.

Joint Life (first to die)

a whole life policy that is written to cover 2 or more lives. The death benefit is paid upon the first insured to die and the policy terminates. Premiums are based upon a joint issue age which is obtained by an average of both insureds' ages resulting in a lower premium than two separate policies. This policy is designed to provide income protection for the surviving spouse when both have earned income.

Joint Life (last to die)

a whole life policy that is written to cover 2 or more lives. The death benefit is paid upon the first insured to die and the policy terminates. Premiums are based upon a joint issue age which is obtained by an average of both insureds' ages resulting in a lower premium than two separate policies. This policy is designed to provide income protection for the surviving spouse when both have earned income.

Straight Life or Continuous Payment

he premium is level and payable to age 100 or death of the insured, whichever comes first. The face amount remains level throughout the life of the policy. This policy has the highest total premium outlay

Policies Linked to Indexes

life insurance policies offer the potential for increasing death benefits that are linked to the Consumer Price Index. These policies provide benefits that automatically increase to keep pace with inflation and are designed to avoid being under insured.

Guaranteed level premium

the policy premium is guaranteed to be level throughout the term of the policy

Non-guaranteed level premium

the premium can be increased to a new premium level for the remainder of the term

Indeterminate Premium Level

the premium may fluctuate between the current charge and a maximum rate stated in the policy based on the insurer's mortality, expenses, and investment returns