Types of Life Policies

The form of life annuity which pays benefits throughout the lifetime of the annuitant and also guarentees payment for a minimum number of years is called

life income with period cetrain.

An agent selling variable annuities must be registered with

FINRA and has to hold securities license in addition to a life agent's license in order to sell variable annuities

Which universal life option has a graduall increasing cash value and a level death benefit

Option A - death beenfit remains level while cash value graduatlly increases. the death benefit will increase at a later date in order to maintain a gap between the cash value and the death benefit befor ethe policy matures.

Face amount

amount of benefit stated in the life insurance policy

Under the 20-ay life policy, all of the premiums necessary to cause the policy to endow

at the insured's age 100 are paid during the first 20 years. however if insured dies beofore all of the planned premiums are paid, the beneficiary will recieve the face amount as a death benefit

The annuitant dies while the annuity is still in the accumulation stage.

beneficiery benefits from annuity; either the amount paid into the plan or the cash value, whichever is greater

Nonforefeiture values

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

Endow

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

Liquidation of estate

convertin new worth into cash flow

Decreasing term policy

death beenfit 0 at end of policy term. contrac tpaus only in the event of death during the term. no cash value. Face aount steadily declines throughtout the duration of the contract. Premium remains level

securities

financial instruments that may trade for value like stocks, bonds, options

Under which installments option does the annuitant select the amount of each payment and the insureer determines how long they will pay benefits

fixed amount. - annuitant selects the amount of each payment and insurer determines how kong they wil pay benefits. Option pays a specific amount until the funds are exhausted. no life contingenices

Under a 20-pay whole life policiy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid

for 20 years or until death, whichever occurs first

Annueally renewable term policies provide a level death benefit for a premium that

increases annually.

Attained age

insured age at the time the policy is issued or renewed.

A return of premium term life policy is written as what type of term coverage

is an increasing term insurance policy that pays an additional death beenfit to the beneficiary equal to the amount of the premiums paid. "INCREASING"

policy maturity

time when face value it paid out

Deferred

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

Who bears all of the investment risk in a fixed annuity?

Insurance company Fixed annuities guarentees a minimum amount of interest to be credited to the purchase payment. Income payments do not vary from one payment to the next. Insurance company can afford to make guarentees because money of fixed annuity is placed in the general acct of insurance company - part of the investment portfolio.

Your client wants both protection and savings from th einsurance and is willing to pay premiums until retirement at age 65. What would be the right policy for this client

Limited pay whole life. Premium payments will cease at age 65 but coverage continue to her death or age 100

What is the purpose of establishing the target premium for a universal life policy

To keep the policy in force. Target premium is recommended amount that should be paid on a poliy in order to cover the cost of insurance protectin and to keep th epolicy in force throughout its lifetime.

Accumulation period is the period of time over which the annuity owner makes payments into an annuity. this is the period of time during which

payments ear interest and grow tax deferred

Cash value

policy saving element or living benefit

Insurers selling variable products invest their customers money in a

seperate account which is similar to a mutual fund. since there is no guarenteed rate of return, customers mus tbear the investment risk.