Ins 3 Flashcards
Insureds age at time policy is issued or renewed
Attained age
Policy’s Savings element or living benefit
Cash value
Amount of benefit stated in life ins policy
Face amount
Withheld or postponed until a specified time or event in future
Deferred
Cash value of whole life policy reaches contractual face amount
Endow
Premium that doesn’t change throughout the life of a policy
Level premium
Converting net worth to a cash flow
Liquidation of estate
Benefits in a life ins policy that the policy owner cannot lose even if policy is surrendered or lapses
Nonfortfeiture values
In life policies time when the face value is paid out
Policy maturity
Financial instruments that may trade for value
Stocks bonds options
Securities
Three basic types of term coverage based on how the face amount/death benefit changes during policy term
Level
Decreasing
Increasing
Regarding length of coverage all life ins policies fall into two categories:
Temporary and permanent protection
it only provides coverage for a specific period of time
Aka pure life insurance
Term insurance
Provide greatest amount of coverage for lowest premium compared to any other form of protection
Usuall maximum age not covered or cannot be renewed
Term insurance
Regardless Of type of term ins
Premium is level throughout term of policy
Only the amount of the death benefit may fluctuate
Depending on the type of term insurance
Upon selling renewing converting term policy Premium is figured
At attained age at time of transaction
The most common type of temporary protection purchased
Level term insurance
Purest form of term insurance
Annually renewable term art
Death benefit remains level and policy may be guaranteed to be renewable each year without proof of insurability but premium increases annually according to the attained age as probability of death increases
Art annually renewable term
Feature level premium and features benefit that decreases each year over duration of policy term
Decreased term policies
Used to insure payment of mortgage or other debts If insured dies prematurely
Decreasing term
Decreasing term policy is usually
Convertible however not renewable since benefit is 0 at end of term
An increasing term policy that pays an additional benefit to beneficiary equal to amount of premiums paid
Return of premium rop
In rop, Return Of premium is paid if death occurs within specified period of time or
If the insured outlived the policy term
Annually renewable term is
Form of level ins that offers the most ins at the lowest cost
Which policy component decreases in decreasing term ins
Face amount
Death benefit remains level but premium increases each year with insureds attained age
Annually renewable term
Least expensive first year premium found in
Annually renewable term
Twenty year term policy is
level death benefit for twenty years
Will pay benefit if insured dies during 20 year premium paying period and nothing if dies after
Level term
Term policies do not develop
Cash values
regarding decreasing term policy it is not true that
Payable premium steadily declined throughout the duration of contract
Premiums remain level with a decreasing term policy and
Only the face amount decreases
Man purchased 100000 annually renewable term life policy to provide additional protection until kids done college. Discovered that
Policy requires a premium increase each renewal
Borrowed 10000 on five year installment loan w monthly payments
Which life policy would be best
Decreasing Bc face amount Decreases
Face amount decreases with
Decreasing term
Level death benefit
Increase annually with age of insured
Annual renewable policies
