Type of Insurance Policies

Joint Survivor or Last Survivor Life Policies

Cover the lives of two individuals and saves on premium costs by averaging the ages of the two insureds Only pay the death benefit upon the death of the last insured person.

Whole Life - Limited Pay

Coverage remains on a limited-pay life policy until age 100 or death Premium payments are limited to a certain period, the insurance protection extends until the insured's death, or to age 100

Face Amount Plus Cash Value Policy

Contract that promises to pay at the insured's death the face amount of the policy plus a sum equal to the policy's cash value.

Convertible Term

A provision that allows policyowners to convert their term insurance into permanent policies without showing proof of insurability Provides temporary coverage that may be changed to permanent coverage The most important factor to consider when determining whether to convert term insurance is the premium cost.

Target Premium

A suggested premium used in Universal Life policies Does not guarantee there will be adequate funds to maintain the policy May give an indication of what will be needed to maintain the policy.

Term Life Insurance

Allows the greatest amount of coverage for a limited period of time, it has a TERMination date Term insurance is an inexpensive type of insurance, an attractive option for large policies, is the cheapest type of pure life insurance It provides a pure death protection, it only pays a death benefit if the insured dies during the policy term.

Level Term

Also called level premium level term, has a level face amount and level premiums Premiums tend to be higher than annual renewable term because they are level throughout the policy period. However, the premiums will increase at each renewal.

Adjustable Life Policy

As financial needs and objectives change, the policyowner can make adjustments to the premium and/or face amount Combines whole life and term life into a single plan Owner is usually looking for a policy offering flexible premiums

Equity Index Universal Life Insurance

Combines most of the features, benefits and security of traditional life insurance with the potential of earned interest based on the upward movement of an equity index Allows policyholders to link accumulation values to an outside equity index Characterized by a guaranteed minimum interest rate, tax deferral of interest accumulations, and policy loan access.

Endowment Policy

Contract providing for payment of the face amount at the end of a fixed period, at a specified age of the insured, or at the insured's death before the end of the stated period

Joint Life Policy

Covers the lives of 2 individuals and save on premium cost by averaging the ages of the two insureds Pay the face amount after the first person covered on the policy dies

Non-Medical Life Insurance

Does not require a medical exam and tends to be more expensive than medically underwritten policies Insurer will average out everyone's risk and charge accordingly

Universal Life Insurance Policy

Incorporates flexible premiums and an adjustable death benefit Investment gains usually go toward the cash value Use gains to fund the cash value and give the policyowner options for flexible premiums and adjustable death benefits

Industrial Life Insurance

Issues very small face amounts, such as $1,000 Premiums are paid weekly and collected by debit agents Designed for burial coverage.

Ordinary Life Insurance

Life insurance of commercial companies not issued on the weekly premium basis Made up of several types of individual life insurance: temporary (term), permanent (whole).

Family Income Policies

Pay an income beginning at the insured's death and continues for a period specified from the date of policy issue

Family Maintenance Policy

Pays a monthly income from the date of death of the insured to the end of the preselected period Payment of the face amount of the policy is payable at the end of such preselected period

Whole Life - Modified Endowment Contract

Policy that exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract Does not meet the 7-pay test and is considered over-funded Designed to discourage premium schedules that would result in a paid-up policy before the end of a seven-year period

Whole Life - Modified

Policy where the premium stays fixed for the first 5 years, and then increases in year 6 and stays level for the remainder of the policy Has all of the same features of any other whole life except the insurance company cuts you a break on premium for the first few years

Variable Universal Whole Life

Policyowner controls the investment of cash values and selects the timing and amount of premium payments Policy owner can control the timing and amount of premium payments, as well as the investment of cash values

Whole Life - Straight Life

Premiums are payable throughout the insured's lifetime, and coverage continues until the insured's death Provides fixed premiums, a level death benefit, and cash value

Whole Life Insurance

Provides death benefits for the entire life of the insured Provides living benefits in the form of cash values The only difference in types of whole life is how the policy is paid

Variable Life Insurance Policies

Require a producer to have FINRA and National Association of Securities Dealers (NASD) securities registration prior to selling any variable policy contract Policies usually have a fixed level premium, but the cash value and death benefits of a Variable Life policy can fluctuate according to the performance of its underlying investment portfolio Policyowner is assuming all of the investment risk and the rate of return is not guaranteed

Annual Renewable Term

Term coverage that provides a level face amount that renews annually Guaranteed renewable annually without proof of insurability.

Renewable Term

Term insurance that guarantees the insured the right to continue term coverage after expiration of the initial policy period without having to prove insurability All term insurance has a final TERMination date

Decreasing Term

Term life insurance that provides an annually decreasing face amount over time with level premiums A decreasing term policy is a type of life policy which has a death benefit that adjusts periodically and is written for a specific period of time.

Increasing Term

Term life insurance that provides an increasing face amount over time Based on specific amounts or a percentage of the original face amount.

Cash Value

The equity amount or "savings" accumulation in a whole life policy

Term Rider

Type of life insurance product which covers children under their parent's policy A term rider is always level term This is cheaper than every family member getting their own policy.

Credit Policies

Typically purchased using a decreasing term life insurance policy, with the term matched to the length of the loan period and the decreasing insurance amount matched to the declining loan balance. Designed to cover the life of a debtor and pay the amount due if the debtor dies before the loan is repaid, credit policies Can only be purchased for up to the amount of the debt or loan outstanding.

Investor (or stranger) Originate Life Insurance Policy

When the insured dies, the policyowner (investor) benefits Investor purchases a policy on the life of someone else to profit upon that person's death These policies are illegal

Group Life Insurance

Written for members of a group, such as a place of employment. Coverage is provided to the members of that group under one master contract, group is underwritten as a whole, not on each individual member Benefits of group life coverage is usually there is no evidence of insurability required.

Juvenile Insurance

Written on the lives of children who are within specified age limits and generally under parental control