Types of insurance policies life

Life insurance immediately creates an estate upon the death of the insured. Which of the following policies characterized by a guaranteed minimum death benefit.

Variable life

A life policy that contains a monthly mortality charge as well as self-directed investment choices is called a

Variable universal life policy

Limited Pay Life

Whole life insurance where the insured is covered for his entire life but premiums are paid for a limited time. As a premium payment. Shortens, cash values increase faster and the fixed premiums are higher.

Whole life insurance policies are contractually guaranteed to provide each of the following, except

partial withdrawal features beyond a surrender charge period

An element of a variable life policy A fixed level premium Insure assumes the investment risk No investment risk to the policy owner Rate of return to guaranteed

A fixed level premium

Single premium whole life

An immediate nonforfeiture value is created An immediate cash value is created The large part of the premium is used to set up the policies reserve

The combination of whole life and decreasing term insurance is referred to as family income policy

Decreasing

A father who dies within three years after purchasing A life insurance policy on his infant daughter can have the policy premiums waived under which provision?

Payor provision

Whole life insurance

Provides both living and death benefits. Provides permanent life insurance protection for the insured's entire life. It also provides living benefits such as cash value and policy loans.

Graded whole life

Under a typical graded premium life insurance policy, the premium increases yearly for a stated number of years, then remains level.

Which of the following actions require a Policyowner to provide proof of insurability in an adjustable life policy?

increase face amount

S, age 40, he's looking to buy a life insurance policy that will allow for increases or decreases in coverage as his needs change. The policy best suited for S would be

Universal life

The investment gains from a Universal Life Policy usually go toward

cash value

MEC (Modified Endowment Contract)

A policy that is overfunded, according to IRS tables.The 7 pay test is a limitation on the total amount you can pay into your policy in the first seven years of its existence.

Joint life policy

A policy that covers two or more people. The age of the insured are "averaged" and a single premium is charged. It uses permanent insurance (as opposed to term) and pays a death benefit when one of the insured dies. The survivors then have the option of purchasing an individual policy without evidence of insurability. The premium for a joint life policy is less than the premium for a separate multiple policies. One policy covers two. Think joint accounts with a bank. One account, two people. A variation of the joint life policy is the joint and survivor policy, or a survivorship life policy (it can also be known as a "second to die" policy). This plan also covers two lives, but the benefit is paid upon the death of the last surviving insured. Compared to the combined premium for separate life insurance policies on two individuals, the premium for a survivorship life policy is lower.

Whole life

Insurance that provides death benefits for the entire life of the insured. It also provides living benefits in the form of cash values. Immature is at age 100 normally has a level premium.

Family income policies

Whole life and decreasing term insurance (begins date of purchase). Provide monthly income to a beneficiary if death occurs during a specified period after date of purchase. If the insured dies after the specified period, only the base values paid to the beneficiary since the decreasing term insurance expired. Income typically decreases overtime because the household shrinks. They use decreasing term instead of level. With decreasing term, the benefit begins to decrease as soon as the policy begins.

A company that owns a life insurance policy on one of his key employees may do all of the following except Borrow against cash value Change the beneficiary Cancel policy Change the policies interest rate

Change the policies interest rate

Equity Index Universal Life insurance (EIUL)

A permanent life insurance policy that allows policyholders to tie accumulation values to a stock market index, like the S&P 500. Indexed universal life insurance policies typically contain a minimum guaranteed fixed interest rate component along with the indexed account option. Indexed policies give policyholders the security of fixed universal life insurance with the growth potential of a variable policy linked to indexed returns. Potential extra interest based on the investments of the company's general account.

All of these insurance products require an agent to have proper FINRA securities registration in order to sell them except for Variable life Modified whole life Universal variable life Variable annuity

Modified Whole Life

Interest sensitive whole life

Interest sensitive life insurance is a type of whole life insurance where the cash value can increase beyond the stated guarantee if economic conditions warrant. This is also called current assumption whole life insurance. It also gives the insured the opportunity to either increase the face amount or use the extra cash value to lower future premiums. Premiums can vary to reflect the insurers changing assumptions with regard to its death, investment, and expense factors.

Adjustable life policies

Are distinguished by their flexibility that comes from combining term and whole life insurance into a single plan. The policy owner determines how much face amount protection is needed and how much premium the policy owner wants to pay Adjustable life insurance allows you to vary your coverage as your needs change without requiring evidence of insurability No new policy needs to be issued when changes are desired Adjustable life has all the usual features of level premium cash value life insurance

Family maintenance policy

Whole life and level term (begins date of death.) Provides income to a beneficiary for a selective period of time if the insured dies during that period. At the end of the income paying period The beneficiary also receives the entire face amount of the policy. Even insured dies after the end of the selected period, The beneficiary receives only the face value of the policy. Maintenance "maintains" the family using level term. This means the family will receive a benefit for so many years after the insured's death.

Variable Whole Life Insurance

Created to help offset the effects of inflation on death benefits. Permanent life insurance with many of the same characteristics of traditional whole life insurance. the main difference is the manner in which the policies values are invested. The policy values are invested in the insurers separate accounts which house common stock, bond, money market, and other securities investment options. The basic characteristics of a variable life policy are; fixed premiums, a guaranteed minimum death benefit which fluctuates over the minimum, and cash values which fluctuate and are not guaranteed.

Family plan policies

These are designed to insure all family members under one policy. Usually the family head is covered by permanent (whole life) Insurance in the spouse/children are included on the same policy as level term life riders (family term riders). The term coverage on the spouse and children are normally convertible to permanent coverage without evidence of insurability.

Juvenile Insurance

Life insurance which is written on the lives of a minor is called juvenile insurance. The adult applicant is usually the premium payor as well, until the child comes of age and is able to take over the payments. A payor provision is typically attached to a juvenile policy. It provides that, in the deaths or disability of the adult premium payor, the premiums will be waived until the child reaches a specified age.

Modified whole life

Low premiums in the early years and jumps to a higher premium in the later years and remains fixed there after. Premiums increase just once.

All the statements about equity index life insurance are correct except Cash value has a minimum rate of accumulation If the gain on the index goes beyond the policies minimum rate of return, the cash value will mirror that of the index The premiums can be lowered or raised, based on investment performance Tied to an equity index such as the S&P 500

The premiums can be lowered raised based on investment performance

Credit life insurance

Designed to cover the life of a debtor and pay the amount due on a loan if the debtor dies before the loan is repaid. It is normally issued in an amount not to exceed the outstanding loan balance and is usually paid entirely by the borrower. A decreasing term policy is most often used.

Multiple protection policies

Pays a benefit of double and triple the face amount if death occurs during a specified period. If death occurs after the period has expired, only the policy face amount is paid. The period May be for a specified number of years 10, 15 or 20 years or to a specified age such as 65. These policies are combinations of permanent insurance and level term insurance.

Variable Universal Life

Type of life insurance that builds cash value. Combines all the characteristics of a universal life and variable life. The cash value can be invested in a wide variety of separate accounts, similar to mutual funds, and the choice of which of the available separate accounts to use is entirely up to the contract owner. The variable component in the name refers to the ability to invest in separate accounts whose values vary (stock and/bonds). The universal component in the name refers to the flexibility the owner has in making premium payments. This provides the policy owner with flexible premiums, adjustable death benefits, guaranteed minimum death benefit and gives the insured growth potential for higher returns, but also potential for loss. Evidence of insurability can be required for an individual covered by a variable universal life policy when the death benefit is increased.

Universal life

Variation of whole life insurance, characterized by considerable flexibility. Changes may be made with relative ease by the policy owner with these flexible premium policies. Investment gains go towards cash value. Unlike whole life universal life allows it Policyowner's to determine the amount and frequency of premium payments which will adjust The policy face amount Basic characteristics of a universal life policy are: flexible premiums, flexible benefits, no minimum death benefit, and cash value withdrawals Cash value accumulations are subject to a minimum interest guarantee Any surrender charges of a universal policy must be disclosed

A policy that will yield greater gains then bonds But will protect the principal with minimum level of risk

Equity index insurance