Chp 4 Life Assurance - Policy Types

Question 1

Whole of Life - Features

Answer 1

Flexible/ mix life cover & investment/ Level cover affects surrender value/ premiums may cease at certain age/ other benefits + increasable/ underlying investment funds

Question 2

WOL - Premiums

Answer 2

Intial premiums set based on assumed investment return
Allocated as units & cancelled on monthly basis to pay premiums
Reviewed every 10 years
Can choose to increase premiums or reduced level of cover
Can let policy burn out

Question 3

WOL - benefit characteristics

Answer 3

Max cover plan - Lvl premium fixed for certain period then revised premiums are likely to increase
Standard cover - premium lvl set for life so long as investment return covers
Guaranteed cover - no investment - guaranteed for life & premiums

Question 4

Funeral plans

Answer 4

low premiums & simplified underwriting

Question 5

Assurance bonds are…

Answer 5

investment purposes single premium non qualifying whole of life - no specific maturity age. Nominal life cover - 101%

Question 6

Types of assurance bond

Answer 6

Standard unit linked/ WOL/ guaranteed income bond/ guaranteed growth bond

Question 7

Term assurance

Answer 7

Pays out cash lump sum on death