Chapter 4 Flashcards
What is Accidental Death and Dismemberment Insurance (AD&D)?
AD&D is a form of insurance that provides benefits in the event of accidental death, loss of sight, speech, hearing, or loss of use of limbs.
What does the Accidental Death Benefit (ADB) provide?
The ADB provides a lump sum payment for loss of life due to an accident that was the direct cause of death.
What is an Additional Premium in Universal Life Policies?
This provision allows additional premiums to be paid into the policy account above the target premium, subject to current tax laws.
What is Attained Age?
Attained Age is the age that a person or an insured has reached as of a given date, based on the nearest or last birthday.
What is Adjustable Life Insurance?
Adjustable Life Insurance is a policy that combines permanent, whole life, and temporary term life into a single plan with flexible premiums.
What is Cash Surrender Value?
Cash Surrender Value is the amount available in cash upon the surrender of a policy before or after it matures.
What is Cash Value in a whole life policy?
Cash Value is the equity portion of a whole life policy that increases with each premium payment and is tax-deferred.
What is Credit Insurance?
Credit Insurance is designed to pay the balance of a loan if the insured dies or becomes permanently disabled before repayment.
What is Convertible Term Life Insurance?
Convertible Term Life Insurance allows the policy owner to exchange an existing policy for other policies offered by the insurance company.
What is Decreasing Term Insurance?
Decreasing Term Insurance is characterized by a reducing face amount each year while the cost of coverage remains constant.
What is an Endowment Contract?
An Endowment Contract pays a face amount after a fixed time period, at a specific age, or upon the death of the insured.
What is Evidence of Insurability?
Evidence of Insurability involves an applicant establishing they meet the insurance company’s health requirements.
What is Extended Term Insurance?
Extended Term Insurance is a non-forfeiture option that continues the same face amount of coverage for a specified period after surrender.
What is Face Amount in life insurance?
Face Amount is another name for the death benefit of a life insurance policy.
What is a Family Income Policy?
A Family Income Policy combines a whole life policy with a decreasing term rider to provide a death benefit and monthly income payments.
What is a Family Maintenance Policy?
A Family Maintenance Policy combines whole life insurance and a level term rider to provide monthly income during a stated period after death.
What is a Family Policy?
A Family Policy covers an entire family, with whole life insurance for the primary insured and term insurance for the rest.
What is a Guideline Premium?
Guideline Premium is the maximum premium that can be paid into universal life policies to qualify as life insurance under federal tax laws.
What are Indexed Contracts?
Indexed Contracts allow policy holders to share in a percentage of the growth of an indexed investment, with guaranteed principles.
What is Increasing Term Life Insurance?
Increasing Term Life Insurance provides an increasing face amount over time based on specific amounts or a percentage of the original amount.
What is Industrial Life Insurance?
Industrial Life Insurance has premiums paid monthly or more often, with face amounts not exceeding a stated amount.
What is Joint Life Insurance?
Joint Life Insurance covers two or more persons and pays a death benefit when the first insured dies.
What is Joint Life Survivor Insurance?
Joint Life Survivor Insurance covers two or more persons and pays a death benefit when the last insured dies.
What is Juvenile Life Insurance?
Juvenile Life Insurance is owned by an adult and written on the lives of children.
What is Level Premium?
Level Premium is a premium that remains constant throughout the life of a policy.
What is Life Insurance?
Life Insurance creates an immediate and guaranteed estate upon the death of an insured or at the end of a predetermined period.
What is Limited Pay Life Insurance?
Limited Pay Life Insurance requires premiums to be paid for a specified number of years, after which the policy remains in effect for life.
What is Maturity Date?
Maturity Date is when a life insurance policy becomes payable due to the death of the insured or reaching a specified age.
What is Maturity Value?
Maturity Value is the amount paid under a whole life insurance contract if the insured reaches the age of the mortality table.
What is a Modified Endowment Contract (MEC)?
A MEC is a whole life insurance policy where early premiums exceed the sum required for the first seven years, viewed as a short-term investment.
What is a Modified Life Policy?
A Modified Life Policy has lower premiums during the initial years, which then increase and remain level for the life of the contract.
What is a Mortgage Redemption Plan?
A Mortgage Redemption Plan is another name for a decreasing term life insurance policy used to provide funds for a survivor to pay off a debt.
What is a Mutual Insurance Company?
A Mutual Insurance Company is owned and controlled by its policyholders and issues participating policies that may pay dividends.
What are Non-Forfeiture Values?
Non-Forfeiture Values are benefits required by law to be available if a policy is surrendered, ensuring the owner does not lose their investment.
What is Non-Medical Life Insurance?
Non-Medical Life Insurance is issued without a medical examination, relying on the applicant’s answers regarding their health.
What is Non-Participating Insurance?
Non-Participating Insurance is issued by a stock insurer and does not pay dividends to policyholders.
What is Ordinary Life Insurance?
Ordinary Life Insurance is issued by commercial insurers with face values of $1,000 or multiples thereof.
What is Paid-Up Insurance?
Paid-Up Insurance is life insurance on which future premium payments are not required after a specified number of payments.
What is Participating Insurance?
Participating Insurance entitles the policyholder to share in the divisible surplus of the insurer through dividends.
What is Permanent Life Insurance?
Permanent Life Insurance is designed to last throughout the life of the insured, characterized by level premiums and cash value.
What are Policy Proceeds?
Policy Proceeds refer to the amount paid as a death, surrender, or maturity benefit, including face value and any earned dividends.
What is Policy Term?
Policy Term is the time for which a policy remains in existence, typically expressed in years.
What is Renewable Term Life Insurance?
Renewable Term Life Insurance can be renewed at the end of the policy term without evidence of insurability.
What is Single-Premium Insurance?
Single-Premium Insurance involves the payment of one premium that covers the cost of a life or annuity contract for life.
What is Straight Life Insurance?
Straight Life Insurance provides coverage for the entire life of the insured, with premiums payable until death.
What is a Stock Insurance Company?
A Stock Insurance Company is owned by its stockholders who share in its divisible surplus, typically issuing non-participating policies.
What is Target Premium?
Target Premium is the suggested premium used in universal life insurance policies, indicating what may be needed to maintain the policy.
What is Term Life Insurance?
Term Life Insurance is temporary life insurance designed to afford coverage for a limited number of years, with no cash value.
What is Universal Life Insurance?
Universal Life Insurance is adjustable life insurance where premiums and coverage can be adjusted, with annual financial reports provided.
What is Variable Life Insurance?
Variable Life Insurance is life insurance whose face value or duration varies depending on the value of underlying securities.
What is Variable Universal Life Insurance?
Variable Universal Life Insurance combines flexible premium features of universal life with variable life components based on investment results.
What is Whole Life Insurance?
Whole Life Insurance is designed to be kept in force for a person’s entire life and pays a benefit upon the person’s death.
