Chapter 11 Vocab (Notes) Flashcards
Premature Death
defined as the death of a family head with outstanding unfulfilled financial obligation
Human Life Value
the present value of the family’s share of the deceased breadwinner’s future earnings
Readjustment Period
one to two year period immediately following the breadwinner’s death during which time the family should receive approximately the same amount of income it received while the breadwinner was alive
Dependency Period
period of time following the readjustment period during which the surviving spouse’s children are under 18 and therefore, dependent on the parent
Blackout Period
The period during which Social Security benefits are not paid to a surviving spouse - between the time the youngest child reaches age 16 and the surviving spouse’s 60th birthday
Term Insurance
provides temporary protection
Cash Value Life Insurance
has a savings component and builds cash values
Convertible
the policy can be exchanged for a cash value policy without evidence of insurability
Attained Age Method
premium charged for the new policy is based on the insured’s attained age at the time of conversion
Original Age Method
premium for new policy is based on the insured’s original age when the term insurance was first purchased
Yearly Renewable Term Insurance
Issued for one year
Term to Age 65 Policy
provides protection to age 65 at which time the policy expires
Decreasing Term Life Insurance policy
the face value declines each year
Re Entry Term Life Insurance policy
renewal premiums based on select mortality rates if the insured can periodically demonstrate acceptable evidence of insurability
Return of Premiums Term Insurance
a product that returns the premiums at the end of the term period provided the insurance is still in force
