Chapter 4: Life Insurance and Whole Life Flashcards
Three main types of life insurance?
Ordinary
Industrial
Group
Term, Whole, Universal, Variable, and Other interest sensitive life insurance plans, are all types of ______ life insurance
ordinary
_______ life emcompasses home service insurance, issued in small face amounts such as 1,000 or $5,000
Industrial
_____ life insurance is written for members of an entity, such as employer/employee, Association, Union, or Creditor/Debtor
Group - underwritten as a whole group, not based on individual
“Pure death protection” refers to term life insurance and means what?
No living benefits such as cash accrual and policy loans
At what age can term life policies no longer be renewed?
75
_____ life insurance is appropriate for a person wanting to insure a short or long term debt, such as a car loan or mortgage
Term
______ life insurance is appropriate for young families or professionals who require large coverage amounts but don’t have the financial means to support permanent insurance options
Term
When term life insurance policies are renewed, is the premium based on the original insured’s age or their attained age?
Attained age
Level Terms Insurance provides a level ____ _____ throughout the policy period
Face Amount (Level Term= Level Benefits)
Two types of level term insurance?
______ _______ term and _____ ______ term
Annual renewable
Level Premium
Annual Renewable term (ART) also called Yearly (YRT) provides a _____ face amount with an _____ premium. ART policies do NOT require proof of insurability each year
Level
Increasing
Level Premium Term (also called Level Premium Level Term) provides a ______ face amount with _____ premiums during the policy term
Level
Level
Three main types of term life insurance? All words referring to the “benefit”, as the premium is typically level…
Level
Increasing
Decreasing
Term policies with increasing premiums are called ___ - ____ beccause the initial premium literally increases to a higher amount eaach time the policy is renewed
Step-Rate
____ to ____ policies cover the insured to age 65, with level premiums throughout the term, and the insured has the option of converting to a cash value policy before reaching a certain age
Term to 65
_______ _____ insurance provides a face amount that decreases to zero over the policy period, with level premiums
Decreasing Term, good for mortgage protection
_______ ______ insurance provides an increasing face amount with level premiums
Increasing Term, not very common
_____ _____ also referred to as ______ permits the policyowner to renew a term life policy at the end of the period by providing EOI, which serves to lower the premium
Reentry Term, Reissue (as if a new applicant)
_______ ______ policies have premiums that fluctuate between the current rate and the maximum rate, specified in the policy. These account for the insurers actual mortality expense and investment experience
Indeterminate premium (lower premium in early years)
______ ____ coverage provides instantaneous coverage and is intended for people who plan on purchasing permament life insurance coverage within a year.
Interim Term - typically offered to convert to permanent coverage at a specified date in the future
A new kind of policy called the _____ of _____ term policy, where premiums are generally higher than conventional policies, and are returned to the insured if no death benefit has been paid and are not taxable.
Return of Premium
______ ______ ______ is where the number of years that the term policy will be in force is determined by the average life expectancy for the insured’s age and sex classification
Life Expectancy Contract
TF: Convertible Term coverage allows term life policyowners to convert their term insurance into permanent policies, which will require Proof of Insurability
False - no POI is required
TF: Most convertible term policies use attained age upon conversion
True
