Types of Life Policies

Adjustable life

An adjustable life policy can assume the form of either term insurance or permanent insurance

Return of premium

an increasing term insurance policy that pays an additional death benefit to the beneficiary equal to the amount of the premiums paid

Universal life insurance

implies that the policyowner has the flexibility to increase the amount of premium going paid into the policy and to later decrease it again

Annually renewable term

The death benefit remains level (in that sense, it's a level insurance), and the policy may be guaranteed to be renewable each year without proof of insurability, but the premium increases annually according to the attained age, as the probability of death increases.

Single Premium Whole Life

is designed to provide a level death benefit to the insured's age 100 for a one-time, lump-sum payment.

Permanent life insurance

a general term used to refer to various forms of life insurance policies that build cash value and remain in effect for the entire life of the insured (or until age 100) as long as the premium is paid

target premium

a recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime

Straight Life

also referred to as Continuous Premium Whole Life) is the basic whole life policy. The policyowner pays the premium from the time the policy is issued until the insured's death or age 100 (whichever occurs first). Straight life will have the lowest annual premium.

flexible premium adjustable life

implies that the policyowner has the flexibility to increase the amount of premium going paid into the policy and to later decrease it again

Level term insurance

is the most common type of temporary protection purchased

Increasing term

level premiums and a death benefit that increases each year over the duration of the policy term

limited-pay whole life

limited-pay whole life is designed so that the premiums for coverage will be completely paid-up well before age 100

Decreasing term

policies featuring a level premium and a death benefit that decreases each year over the duration of the policy term

Whole life insurance

provides lifetime protection, and includes a savings element (or cash value)

renewable

provision allows the policyowner the right to renew the coverage at the expiration date without evidence of insurability

convertible

provision provides the policyowner with the right to convert the policy to a permanent insurance policy without evidence of insurability.

Term insurance

s temporary protection because it only provides coverage for a specific period of time

pure life insurance

s temporary protection because it only provides coverage for a specific period of time

minimum premium

the amount needed to keep the policy in force for the current year