3.5 - Specialized Policies Flashcards
Juvenile - (Specialized Policies)
Juvenile insurance is any policy written on the life of a minor. A popular type is commonly called “Jumping Juvenile” because it automatically increases the face amount at a given age (usually age 21 to 25) without evidence of insurability. The premium remains level for the life of the policy, and the usual increase in the face amount is 5 times the issue amount.
It protects the insured’s future insurability, and a parent is normally the premium payor.
A “jumping juvenile” policy will normally increase the face amount of insurance by a factor of five with no change in premium at the next anniversary after the child turns anywhere from age 21 to 25 (depends on the policy). Ownership of the policy also changes at that time to the child, who is now an adult.
Joint Life (First to Die) - (Specialized Policies)
Joint Life is a whole life policy that is written to cover 2 or more lives. The death benefit is paid when the first insured dies. Once payment is made, the policy no longer exists. Premiums are based upon a joint issue age, which is obtained by an average of both insureds’ ages resulting in a lower premium than two separate policies.
This policy provides income protection for spouses when both have earned income.
Joint Survivorship Life (Last to Die) - (Specialized Policies)
This whole life policy is written to cover 2 or more lives, and the death benefit is not paid until the last insured dies. Premiums are based upon a joint issue age, which is obtained by an average of both insureds’ ages, resulting in a lower premium than two separate policies. This policy is often purchased to provide a lump sum benefit to pay estate taxes once the second spouse dies.
Married couples worried about estate taxes would be best served in most cases by a Last-to-Die, or Survivorship, policy
Return of Premium Term - (Specialized Policies)
This term policy is written for a specified number of years (20-30 years). If the insured is still living at the end of the term, the policy will provide a refund of all the premiums paid into the policy. Typically these policies have a higher premium than level term insurance.
