Life Insurance And Annuities Flashcards
What does period certain mean?
A set number of years payments are RECEIVED
Universal Life (x5)
- Variable premium
- Cash value NOT guaranteed
- Death benefit NOT guaranteed for all types (e.g. Traditional Universal)
- Less expensive
- Annually renewable term death protection
Whole or Straight Life INSURANCE (x4)
- Fixed premium
- Guaranteed cash value that grows
- Guaranteed death benefit
- More expensive
Universal Life - Option A (x2)
- Level death benefit
- Cash value is accessible only to the policyowner while they are alive
Universal Life - Option B (x2)
- Increasing death benefit
- Both the face value and cash value are paid to the beneficiary upon the death of the insured
Term Life (x3)
- Pure death benefit; no cash value
- No benefit to policy owner
- Level premium for the full term
Variable annuity (x2)
- Separate account
- Annuitant assumes the risks on investment
Fixed annuity
- Insurer’s general account
- Insurer assumes the risks on investment
Immediate
Starts paying within a year
Deferred
Starts paying no sooner than after one year
Joint
Pays out on first death
Survivorship
Pays out on last death
Face amount
Death benefit
Cash value
Savings that can withdrawn or borrowed against
What is adjustable on an adjustable life insurance policy (x3)?
- Premium
- Death benefit
- Coverage period (sometimes)
The death protection component of Universal Life Insurance is always:
Annually renewable term
Convertibility option of term life insurance (x3)
- Most term policies include a convertibility option
- Upon conversion, the premium will be based on attained age
- Evidence of insurability is not required
Pure or Straight Life ANNUITY pay-out (x3)
- Guaranteed income for the life of the annuitant
- No cash value
- No death benefit
What must the policyowner of an Adjustable Life Insurance policy provide to increase the death benefit?
Evidence of insurability
With Variable Life Insurance, who benefits from the cash value?
Only the policyowner. Upon the death of the insured, only the death benefit is paid to the beneficiary.
What is another name for interest-sensitive whole life insurance?
Current assumption whole life insurance
What is the annuity period?
It is the same as the annuitization or pay-out phase
A Return of Premium term life policy is written as what type of term coverage?
Increasing
What are the three ways cash value is treated in Return of Premium Term Life Insurance?
- Cash value returned to insured if they outlive the term
- Cash value returned to beneficiary if insured dies during term
- Cash value lost if insured dies after term
With the Life with Guaranteed Minimum annuity settlement option, what happens to the principle amount if the annuitant dies?
The beneficiary is refunded the remainder of the principle
What is an annuity certain (x2)?
- It is a short-term annuity which limits the amount paid out to a certain fixed period or until a certain fixed amount is liquidated
- There is no life contingency (i.e. death benefit).
What happens if an annuitant dies before an annuity with the fixed installment option is exhausted?
The beneficiary receives the remainder.
**Annuities (including fixed installment options) do NOT have a life contingency (i.e. death benefit)
What happens if the annuitant dies while the annuity is still in the accumulation stage?
The beneficiary will receive the greater of the money paid into the annuity or the cash value
What is a key distinction between variable whole life and variable universal life products?
Variable whole life has a guaranteed death benefit
What characteristic makes whole life permanent protection?
Coverage until death or age 100
What does “level” refer to in level term insurance?
Face amount
