life insurance riders and up
income payment option where a payee receives income payments for life and payments are guaranteed to be made for a specified period. If the payee lives beyond the guarantee period, payments will continue until he or she dies.
life income with period certain
income payment option where the beneficiary receives income payments for life but is guaranteed the payments will be made for at least a specified term
life income with period certain
this kind of annuity guarantee both the annuity principle and a specified rate of interest to be credited to the contract
fixed annuity
pay out options for variable annuities
fixed or variable option
what are the two types of annuity settlement options without a life contingency
fixed period option fixed amount option
how are variable annuity contract charges fees paid?
from premium payment and subaccount deductions
rider guarantees that the policyowner can buy additional permanent life insurance on the insured's life without proving insurability.
guaranteed insurability rider
guarantees a minimum life income regardless of the contracts accumulated value of the time of annuitization in a variable annuity
guaranteed minimum income benefit
first system developed for determining how much life insurance is necessary based on the economic value of human life
human life value approach
the two types of fixed annuities
index annuity and market-value-adjusted annuity (MVA)
annuity that allows the owner to participate in the stock market while guaranteeing a minimum rate of return for the duration of the contract
indexed annuity
benefit settlement option where the insurer holds the policy proceeds until a future date and instead pays out the interest that those policies earn. at the end of the interest paying period the proceeds the insurer held are paid out.
interest-only option
if someone has an indexed annuity and the equity market index decreases in value then what happens to the annuity
it will remain level or possibly grow slightly
is like a viatical settlement but does not require the insured to be terminally ill instead the only qualification is the insured must be at least 65
life settlement
this provision is included in some deferred annuities that allows a charge-free withdrawal if the diagnosed with a terminal illness.
medical bailout provision
most common way to determine the proper amount of life insurance today
needs approach
Do policy loans have a repayment schedule?
no
do long-term care riders require hospital time before payment
no
is a policy loan a nonforfeiture option?
no, it does not involve the surrender of a policy
after a defered annuity has started can the owner change the payout option
no, the owner can only choose the payout option before the starting date
type of policy that does not pay dividends
non-participating policy
Combination dividend options involve or 5th dividend
one year term
another term for fifth dividend option
one year term
Under which dividend option, the dividend buys additional paid-up insurance of the same type as the base policy.
paid-up additions option
type of policy that pays dividends
participating policy
a guaranteed insurability writer is available only for what type of life insurance policies
permanent life
this dividend option uses dividends for the next premium
premium reduction option
purpose of no-lapse guarantee rider
prevent a variable universal life policy from lapsing if policy cash values decrease below minimum.
most disability income benefit writers include this to waive policy premiums
provision for a waiver of premium
insurance option where a lapsed policies cash value is applied as a net single premium to buy a paid-up policy of the same type as the lapse policy
reduced paid-up insurance
this account provides beneficiaries with a checkbook they can use to draw funds from the interest bearing account. Acts like a checking account
retained assets account
this rider ensures that a term life insurance policys premiums will be returned if the insured is still alive at the end of the term
return of premium rider
the maximum amount of time an insurer has to pay cash surrender values when a life insurance policy is canceled
six months
in this type of insurance premiums and the death benefit are split between the employer and the key employee or executive
split-dollar life insurance
annuity that pays income for a lifetime regardless of how long you live but once you die no further payments are made to anyone
straight life income (or pure life)
life income settlement policy proceeds are made for the life of the payee. The payments stop upon his or her death.
straight life income settlement
what is the only universal life non-forfeiture option
surrendering the policy for its cash value
how are the funds in a viatical settlement tax
tax-free at the federal level and taxable at the state level
A return of premium rider is generally available only with:
term life insurance policies
if a policy owner decides not to buy an additional life insurance policy under the rider on an option date then.
that option is lost
if the policyowner decides not to buy an additional life insurance policy under the rider on an option date
that option is lost. It has no effect on future option dates.
the name of the period during which premium funds are paid into an annuity contract
the accumulation period
who chooses the payment period in a fixed period life insurance settlement option
the policy owner or beneficiary
during the waiting period of a disability waiver of premium Rider who pays the premiums
the policy owner pays the premiums then gets reimbursed if they are still disabled
a fixed deffered annuitys death benefit is equal to
the sum of premiums paid plus the credited interest earnings minus any withdrawals
if someone partially surrenders and adjustable life insurance policy what happens to the premiums?
they premiums go down because the death benefit went down
most basic life insurance settlement options
those with a life contingency and those without a life contingency
for a waiver of premium rider what disability is usually required
total disability meaning the insured has been disabled for 6 months.
in a long-term care rider what percent of the face amount can be used for long-term care expenses
up to 75%
name of the insured in a viatical settlement
viator
this was put in place so insurers can make sure the disability is permanent before beginning payments for a disability income benefit rider
waiting period of 3 to 6 months
if someone becomes disabled this rider waves the cost of insurance from being deductive in a universal life insurance policy
waiver of monthly deductions rider
employer pays some or all of the premiums on a life insurance policy owned by an executive. the executive must include the employers premium payment as income. This plan is called?
executive bonus plan
in the other insured term rider a person can buy term life insurance to cover the life of a spouse or another adult and the coverage ends before the primary insured reaches
70
in a cross purchase buy sell agreement what is the number of policies needed to fund
(number of owners x (number of owners- 1))
what is the maximum percent of cash value can someone take on a variable life insurance plan.
75 to 90 percent
nonforfeiture option that allows the insurer to apply cash values of a lapsed policy to buy a term insurance policy. the term insurance is bought in an amount equal to the face amount of the lapsed policy.
extended term option
annuity that guarantees a minimum rate of interest credited to the accountunt
fixed annuity
for most variable annuities the death benefit equals
-the contracts accumulated value at the time of death or -the premiums paid (whichever is greater)
Under traditional whole life insurance plans, policy loans can be as high as what percent of the cash value?
100%
how long from now must someone be expected to die to qualify for an accelerated benefit rider
24 months
life insurance loans normally become available after the policy has been enforced how many years?
3
The typical guaranteed insurability rider lets policyowners buy a specified amount of additional insurance on select policy anniversaries until a specified maximum age. The anniversaries are usually at which interval?
3 year
in a viatical settlement about how much is the policy owner paid
50% to 80% of the policies face amount
Under a disability waiver of premium rider, an insured most commonly must be totally disabled for how long before the waiver begins?
6 months
during a surrender charge period what happens to the surrendering charge
It Decreases
rider permit the release of some of the policy's death benefit to help pay for care, in amounts far greater than the policy's cash value, while the insured is alive.
Living Benefit
information about a person's income assets and liabilities, financial goals and objectives, expenses, and risk tolerance are collected to determine the proper amount of life insurance in this type of approach.
Needs Approach
ways to obtain a life insurance policy's cash value if the policy is lapsed or surrendered
Nonforfeiture options
income option that generally offers the largest income
Straight Life income settlement option
what must someone be diagnosed with to be eligible for a long-term care Rider
chronically ill or a cognitive reason
type of rider that is meant to fight inflation and is tied to the consumer Price index.
cost of living rider
are dividends normally taxed?
dividends are not normally taxed
withdrawals reduce the death benefit dollar-for-dollar in this life insurance policy
Universal life
the death benefit amount under a children's term Rider may be limited to a specified amount and or
a small percentage of the base policies face amount
the extended term option is not available where the original policy was issued on
a substandard (rated) basis
in universal Life policies what are the two ways a disability waiver can take the form of
a waiver of stipulated premium Rider a waiver of the cost of insurance
rider that pays out part or all of the policies face value while the insured is still living.
accelerated benefit rider
dividend option where the dividends are held in the insurance companies general account where they earn interest. the policy owner came withdraw the accumulated dividends and interest at any time.
accumulate at interest option
how is growth in a variable annuity measured during the accumulation period
accumulation units
when an annuity owner makes premium deposits for subaccounts what are these funds used to buy
accumulation units
when are policy loans normally available
after the policy has been enforced for a specified time. normally three years.
which annuities accumulate on a tax-deferred basis.
all annuities accumulate on a tax deferred basis.
how many children can be covered under a single children's term Rider
all of the policy owners children
name of the period during which funds are paid out of an annuity contract in the form of periodic income payments
annuity payout period
who can be a viatical settlement provider
any person or entity license to do so
what must accelerated benefit funds be used for
anything the beneficiary wants to use them for
the purchase rate in a variable annuity is based on
assumed interest rate (AIR)
if a whole life insurance policy issued on a standard basis does not choose a non-forfeiture option what will the insurer do
automatically apply the extended term option
this provision is included in some deferred annuities that allows a charge free withdrawal if the interest rate credited to the accumulated value drops below a specified level
bailout provision
to become eligible for payments under a long-term care rider for a medical reason the insured must
be unable to perform at least two activities of daily living for at least 90 days
policy non-forfeiture option where the insurance company pays the cash value in a lump sum
cash surrender option
nonforfeiture options give a life insurance policyowner ways to receive the policies
cash value
to qualify for long-term care Rider benefits for a cognitive reason the insured must be
certified by a physician within the last 12 months that they are at risk without supervision
what is the difference between -waiver of premium Rider and -automatic premium loan provision
waiver of premium Rider requires the insured to be totally disabled automatic premium loan provision prevents the policy from lapsing.
the policy's premiums are waived if the insured becomes totally disabled for a period stated in the rider.
waiver of premium rider
If a child converts coverage to a permanent policy in a childrens term rider, can the new policy's face amount can be greater than the term rider coverage?
yes
can a company keep the life insurance it carries on its employees even if they are no longer employed there
yes
is interest earned on dividends taxable
yes
