Chapter 4 - Life Assurance Flashcards
What are the 3 types of Life Assurance available to customers?
- Whole of Life
- Term Assurance
- Endowment
Page 83
What use is an Investment Element on a Life Assurance policy?
‘Reserves’ are built up which can help avoid the need for premium increases.
Page 83
What is a Non-profit WOL Life Assurance policy?
- Fixed sum assured
- Fixed premiums
Page 84
What is a With-profits WOL Life Assurance policy?
2 types of bonus:
Annual and Terminal
Annual: Awarded taking each years Life Office profits into account. They are expressed as a percentage.
Terminal: Based on profits over the period the policy has been held for.
Payment on death is full sum assured + bonuses
Page 84
What is an MVR?
Market Value Reducer
Discretionary Charge to protect existing policy holders.
Page 84
What is a Low-cost WOL Life Assurance policy?
Hybrid Plan
Basic Sum Assured + Profits
Guaranteed Sum Assured
Cheaper than a full with-profit policy
Page 84
Standard Cover vs Maximum Cover vs Guaranteed Cover?
Standard Cover: Higher premiums at the start but premiums shouldn’t increase. Small investment element.
Maximum Cover: Reviewable premiums. Client pays lower premiums at the start but premiums will likely increase at review.
Guaranteed Cover: Surrender value but no real investment value
Page 97
What are the different types of Term Assurance?
- Level
- Renewable
- Convertible
- Decreasing
- Increasing
- Term 100
- Return of Premium
- FIB
- Unit Linked
Page 86-88
What are the 3 levels of non-disclosure?
- Reasonable
- Careless
- Deliberate or Reckless
Page 106-107
What are the Natural and Level premium systems?
Page 110
Advantages and Disadvantages of using a Trust?
Page 115
What is Equity of Redemption?
Page 117
What are the rules of Joint Tenancy and Tenancy in Common?
Page 118
What are the 4 types of assignment?
- Absolute
- Mortgage
- Operation
- Trustees
Page 118
