Types of Life Insurance Polices
Universal Life Insurance
-Gives police owner the adjust the premium, cash value, death benefit - Police owner can increase and decrease the premium paid (Change in premium will effect the in force of policy) Note( if you renew policy your premium will be based on your age. Minimum Premium - Only Paying year to year (ART) Anual Renewable Term Target Premium- your are paying a set premium till age desired for coverage. ( Note eventually internal cost insurance is more then what your premium is. so it will eat up your Cash Value) Has two Types of Death Benefits: Level Death Benefit: Death Benefit must increase once Cash Value has surpassed face amount. Increasing Death Benefit: Death Benefit accumulates as same rate of Cash Value.
Equity Indexed whole life
-Policy gives policyowners the opportunity to decide the percentage of cash value that is invested in traditional fixed income securities. ( Invested in S&P500) -When there is an increase in the market, a given percentage of the gain is used to determine the interest credited to the policy. -When the market declines, the policy is credited with the minimum guaranteed interest rate or zero interest. -The policy typically guarantees the principal amount in the indexed account.
Adjustable Life Insurance
-combines term and whole life into a single plan -the policy can be converted from term to whole life or whole life to term -premiums and face amounts can be increased or decreased at the policyholder's request, subject to limitations as stated in the policy. Face amount increases may also be subject to proof of insurability -Changes do not have a retroactive effect on any policy provisions -depending on changes made, adjustable life can have cash value and other features of standard whole life -premium increases are added to the cash value of the policy
Joint and Survivor Policy
Covers two or more lives and if one person dies the other people covered by policy will continue paying until all have decided then policy will by out to beneficiary
Joint Life Policy
Covers two or more lives and provides for the payment of the proceeds at the death of the first among those insured, at which time the policy automatically terminates.
whole life insurance Aka:Permanent
Insurance that is kept in force for a person's entire life and pays a benefit upon the person's death, whenever that may be. Payment Method: A) Straight Life: amount of premium never changes (Takes 3 years to build cash value) B) Limited Pay: premium is pay for a shorter amount of time (So Premium is higher) Policy owner can diced how long they want to take to pay whole life insurance they can also set to be paid by retirement age 65 C) Single Payment whole life: Insurance is paid in full in first payment.
Term Life Insurance
Insurance that provides financial protection from losses resulting from a death during a definite period, or term. - has no cash value - has a age limit - policy owner must die during term (if not policy won't pay) - Premium is based on age attaned Level: Premium is set for amount of years and death benefit stays the same. Decreasing: Death Benefit Decreases as term goes on. Annually Rentable Term: Coverage for one Year and Premium is based on renewed age.
Variable Life Insurance (AKA Universal Variable Life)
requires minimum coverage and cash value is generated passed of investments life insurance in which the benefits are a function of the returns being generated on the investments selected by the policyholder funds are not in Principals Account but a Separate account. Principal is not responsable of losses.