Life Insurance Policies-4 Flashcards
Types of life insurance policies
Industrial life
Group life
Ordinary life
Industrial life
Issues very small face amounts
Premiums paid weekly
Group life
Written for members of a group, such as a place of employment
Provided under one master contract
Ordinary life
Made up several types of individual life insurance such as temporary and permanent
Term life insurance
Gives you the greatest amount of coverage for a limited period of time
Level term also called
Level premium level term
Level term
Has a level face amount and level premiums
Premiums tend to be higher
Decreasing term
Provides an annually decreasing face amount over time with level premiums
usually used for mortgage protection
Credit policies
Typically purchased using a decreasing term life insurance policy
Increasing term
Provides an increasing face amount over time based on specific amounts
Convertible term
A policy has a provision that allows policy owners to convert their term insurance into permanent policies without showing proof or insurability
Renewable term
Guarantees the insured the right to continue term coverage after expiration of the initial policy period without having to prove insurability
Annual renewable term
Provides a level face amount that renews annually
Term-Rider
Type of life insurance product which covers children under their parents policy
Whole life
Provides death benefits for the entire life of the insured
Whole life insurance
Provides both living and death benefits
Advantages of whole life insurance:
- Covers the entire life of the insured
- Living benefits-cash value and policy loans
- Fixed premiums
Drawbacks of whole life insurance
- Protection is more expensive because of living benefits
- Premium paying period may extend beyond the income-earning years
5 Types of whole life insurance include
- straight whole life
- limited pay whole life
- single premium whole life
- Modified whole life
- graded whole life
Straight life
With a level face amount and fixed premiums payable over the insureds entire life
Limited pay whole life
Where the insured is covered for his entire life, but premiums are paid for a limited time; pay a little at first then a lot later
Single premium whole life
Allows the insured to pay the entire premium in one lump sum
Modified whole life
Low premium in the early years and jumps to a higher premium in the later years and remains fixed thereafter
Graded whole life
Premium increases yearly for a stated number of years then remains level
