Insurance Policy
Face amount
Amount listed on first page, amount paid
Universal Life
Answer to high interest rates, universal life prducts with high interest rates
WL Advantage (Nonforfeiture Value)
Cash value belongs to the policyowner
WL Advantage Policy Loans
Cash value can be loaned to the policyowner (loan does not have to be repaid until the policyowner elects to
Interim Term
Cover the period of time before permanent protection is to begin. (Converts no later than 11 months), premium based on application
Increasing term
Death benefit increases over the life of policy and premium remains level
Decreasing term
Face value decreased down to zero at date of expiration. Usually used to cover balance of mortgage.
WL Advantage
Guaranteed Cash Value, not first couple of years, but until age 100 when cash value is policy's face amount;
Term insurance
Guaranteed death benefit only
Adjustable Live (WL) Changes
Higher benefit, proof of insurability
Level term
Level death benefit and level premium
Reentry option, reissue
Option for lower premium rate after evidence of insurabilility
Original Age
Original term policy was purchased
Disadvantages to term
Over a long time, becomes very expensive, temporary protection for a limited period of time, pure death protection only, not renewable beyond a certain ages such as 65 or 70
Single Premium Whole Life
Paid with only one premium ( will pay less than if stretched)
Limited Payment Whole Life
Pay for entire policy in shorter time (broken down) into any desired number of installments.20, 30, paid age 65
Advantages and Uses of Whole Life
Permanent insurance, covers death, dying and burial. Level of premium known, forced savings, Builds Cash Value/supplemental to retirement income
Continuous Premium Whole Life (Straight life Insurance)
Policy is stretch premium payments over the whole life of insured to age of 100,
Universal life
Premium flexibilty and term
Disadvantages of Whole Life Insurance
Premium paying period may be longer than insured's income-producing years, does not provide as much protection per premium dollar as term.
WL- Level Face Amount
Premium remain level, face amount of policy does not change
Attained age
Present Age
Variable Life Insurance (VLI) whole life policy (WL)
Protects from erosion of their insurance dollars due to inflation. Hedge against inflation,establishes separate accounts. Transfer policy funds among accounts and investments
Long-term care (LTC) insurance
Reimbursed health and social service expenses incurred in a nursing facility.
Renewable term
Renewed at end, without evidence of insurability
Economatic Whole Life
Term rider that uses dividends to purchase additional paid-up insurance. 70K whole life 30K term
Step-rate premiums
Term, up for renewal, age of insured goes up, premium goes up
Univeral Life Guaranteed Interest
Usually about 4%, excess interest earned by the insurer
Adjustable Life (WL)
adjust policy's face amount, premium, and length of protection with out having to complete a new application
Variable Life Death Benefits (WL)
can also change
Universal Life benefit
can increase without buying another policy, change in death benefit does not require the issue of a new policy.
Universal Life Sales Charges
charge (load) deducted from each premium, sales, admin fees, rest goes to cash account
Advantages to term
cost low, decreasing can cover decreasing debts, term is flexible, add additional insurance as a rider
Permanent insurance
death benefit plus cash accoumulation
Variable Life Cash Values (WL)
determined on daily basis, guaranteed death benefit, but no guarantee of cash value.
Current Interest (Universal Life)
equal to guaranteed interest plus excess interest
Converible Term
exchange temporary protection fr permeanent protection without evidence of insurability. Used to convert to some whole life policy
Universal Life Premium Requirements
flexibility of premium payments. Sufficient cash value, can pay premiums in whatever amounts at whatever times.
Current Assumption Whole Life (interest sensiitive whole life)
flexible premium payments tied to current interest rate fluctuations
Universal life offers
flexible premium, adjustable benefit life insurance contract that accumulates cash value.
Universal Life Death Benefits Option 1
level death benefit equal to policy amount, same concept as whole life
Inteterminate Premium Whole Life
nonparticipating contracts that were developed to compete with participating policies. These policies dual premium concept, max premium and discounts that may reduce premiums
(Whole Life) Level Premiums
pay more at first, less later
Universal Life Cash Value Adjustments
pay the cost of desired insurance coverage., credit to the cash value account of interest at the current rate.
Indeterminate premium trm
premium fluctuate dependendant on insurer's mortality tables
Term
premiums are level
Whole Life Insurance
provide protection for the whole life of the insured
Universal Life Death Benefits Option 2
provides increasing death benefit, plus the cash amount. higher expense for cost of the death protection over the life of the policy and less of premium will be deposited in the cash account
Back-endsales load
service charges for withdrawals from the policy and coverage charges
variable or variable universal life
term, plus premium and investment flexibilty
Premium flexibitly and term
universal life