Chapter 6 - Life Insurance Products

Question 1

Pure endowment and endowment assurance

Answer 1

Pure endowment - benefit on survival to date, savings vehicle

Endowment assurance - death benefits, savings as well

Question 2

Whole life assurance

Answer 2

Benefit on death of life

Question 3

Term assurance

Answer 3

Death benefit within term

Question 4

Convertible or renewable terms assurance

Answer 4

Convert to endowment or whole life.

Renew term assurance contract without additional underwriting

Question 5

Immediate annuity

Answer 5

Single premium, annuity stream commences immediately

Question 6

Deferred annuity

Answer 6

Time between purchase and payments start.

Question 7

Income drawdown

Answer 7

Leave pension invested, draw income each year

Question 8

Investment bond

Answer 8

Single premium, invested whole life.
Surrender penalties
Guarantee offered on death

Question 9

Income protection insurance

Answer 9

Long term sickness or incapacity to work

Question 10

Critical illness insurance

Answer 10

Cash sum on diagnosis

Question 11

Key person cover

Answer 11

Lump sum on death key individual in business

Question 12

Long term care insurance

Answer 12

Financial security against risk needing home or nursing home care as elderly person

Question 13

Investment types

Answer 13

Without profit
With profit
Unit linked
Index linked