Life Insurance

The ____________ Option guarantees payments for the life of the beneficiary, however there is no guarantee that the beneficiary will receive all of the death benefit. The amount of the payments is based upon the value of the contract and the life expectancy of the recipient.

Life Income

Using the _________ Option, the installment payments are guaranteed for as long as the recipient lives, irrespective of the date of death.

Life Income

The policy owner has options as to how to exercise nonforfeiture values by choosing one of the following:

1. cash surrender value 2. reduced paid-up insurance 3. extended term option

The value for which a policy owner can surrender a policy for at a time when coverage is no longer needed or affordable.

Cash Surrender Value

The ________ option guarantees an income for two or more recipients for as long as they live.

Life Income Joint and Survivor

The ______ Option pays a fixed, specified amount in installments until the proceeds (principal & interest) are exhausted.

Fixed Amount

Unlike the fixed period option in which the length of income period determines the amount of each installment, under the _________Option, the size of each installment will determine how long the benefits will be received.

Fixed Amount

When using the _______ Option, the recipient selects a specified fixed dollar amount to be paid until it is gone.

Fixed Amount

When using the ___________ Option, if the beneficiary dies before the proceeds are exhausted, installments will continue to be paid to a contingent beneficiary until all proceeds have been paid out.

Fixed Amount

The _________ Option does not guarantee income for the life of the beneficiary, however, it does guarantee that the entire principal will be distributed.

Fixed-period (also called period certain)

Under the _____ Option, a specified period of years is selected, and equal installments are paid to the recipient.

Fixed-period (also called period certain)

Under the _______ Option, both the principal and interest are liquidated together over the selected period of time.

Fixed-period (also called period certain)

Under the ________ Option, the payments will continue for the specified period even if the recipient dies before the end of that period. In that event, the payments would continue to a beneficiary.

Fixed-period (also called period certain)

With the _______ Option, the insurer usually guarantees a certain rate of interest and will often pay interest in excess of the guaranteed rate.

Interest Only

The ___________ Option provides the recipient with an income that he or she cannot outlive.

Life Income

The ____________ option is commonly selected by the policy owner who wants to protect two beneficiaries, such as elderly parents.

Life Income Joint and Survivor

Upon receipt of the _________, if the cash value exceeds premiums paid, the excess is taxable as ordinary income.

cash surrender value

The _______ clause is designed to protect life insurance policy proceeds that have not yet been paid to a named beneficiary from the claims of the creditors of the beneficiary or policy owner.

spendthrift

The __________ clause, when included in a life insurance policy, prevents the beneficiary's reckless spending of benefits by requiring that the benefits be paid in a fixed period or fixed amount installments.

spendthrift

Under a _______ clause, the beneficiary does not have the right to select a different settlement option and is not allowed to assign or borrow any of the proceeds.

spendthrift

Under the ___________ option, most commonly the reduced option is written as "joint and 1/2 survivor" or "joint and 2/3 survivor", in which the surviving beneficiary receives 1/2 or 2/3 of what was received when both beneficiaries were alive.

Life Income Joint and Survivor

_______are methods used to pay death benefits to a beneficiary upon the insured's death, or to pay the endowment benefit if the insured lives to the endowment date.

Settlement options

Once the __________ option is selected, the insured is no longer covered.

cash surrender

Because permanent life insurance polices have cash values, there are certain guarantees that are built into the policy that cannot be forfeited by the policy owner. The guarantees (know as _______) are required by state law to be included in the policy.

nonforfeiture values

Under the ________ Option, the size of each installment is determined by the amount of principal, guaranteed interest, and the length of the period selected. The longer the period selected, the smaller each installment will be.

Fixed-period (also called period certain)

With the __________ Option, the insurance company retains the policy proceeds and pays interest on the proceeds to the recipient (beneficiary) at regular intervals (monthly, quarterly, annually).

Interest Only

Under the ____________ Option, the amount of each installment paid is based on the recipients life expectancy and the amount of principal. If the beneficiary lives for a very long time, payments may exceed the total principal. However if the beneficiary dies shortly after he or she begins receiving installments, the balance of the principal is forfeited.

Life Income

The ________ option is a modification of the life income option in that it guarantees an income for two or more recipients that none of the recipients can outlive.

Life Income Joint and Survivor

Under the ___________ option, although it is possible for the surviving recipient(s) to receive payments in the same amount as the first recipient to die, most contracts provide that the surviving recipient will receive a reduced payment after the first recipient dies.

Life Income Joint and Survivor

The __________ Option can provide a single beneficiary income for the rest of his/her life. Upon the death of the beneficiary, the payments stop.

Single Life

The ______ option is considered to be a temporary option since the proceeds are retained by the insurer, until some point in time when the proceeds are paid out in a lump sum or paid under one of the other settlement options.

interest only

The ________ Option can also be used if the policy owner desires someone other than the primary beneficiary to receive the principal. For example, the policy owner may specify that interest only will be paid annually to the surviving spouse, with the principal to be paid to their children when they reach legal age.

interest only

When the beneficiary is allowed to select a settlement option, the _______ option is sometimes used as a temporary option if the beneficiary requires some time in deciding which settlement option to select.

interest only

Under the _______ distribution, there is no interest accumulation.

lump sum

Upon the death of the insured, or endowment, the contract is designed to pay the proceeds in cash, called a ________, unless the recipient chooses an optional mode of settlement.

lump sum

As a rule, payments of the principal face amount after the insured's death are _________ as income, but any accumulated interest is taxable.

not

Once selected the the policy owner, the ______ cannot be changed by the beneficiary.

settlement option

The policy owner may select a _________ on policy application, and may also change that option at any time during the life of the insured.

settlement option