Life Insurance Policy Types Flashcards
This is a form of insurance that provides benefits in the event of accidental deaths; the accidental loss of sight, speech, or hearing; loss of use of limbs, or loss of a member(s), such as the loss of an arm or leg.
Accidental Death and Dismemberment Insurance (AD&D)
This provides a lump sum payment for loss of life due to an accident that was the direct cause of death. The cause of death must be accidental for a benefit to be payable under the policy.
Accidental death benefit (ADB)
This provision is used in universal life policies (ULP). These provisions can be paid into the policy account in an amount above the targeted premium. Current tax laws limit the amount of excess cash value that can be accumulated in a life insurance policy. The insurance company may not accept the ______________ if it nears this limit without increasing the limit of life insurance.
Additional premium
This is the age that a person or an insured has reached as of a given date. For life insurance purposes, the age is based on either the nearest birthday or the last birthday, depending on the practices of the insurance company involved. This is also referred to as current age.
Attained age
This is a type of policy that combines permanent, whole life, and temporary term life into a single plan that provides the policy owner with the flexibility to adjust premiums throughout the life of the policy
Adjustable life insurance
This is the amount that’s available in cash upon the surrender of a policy by the owner before or after the policy matures (as a death claim or otherwise)
Cash surrender value
This is the equity portion of a whole life policy that increases with each subsequent premium payment. The insurer pays interest on the ______________, which is tax deferred. In a whole life policy, _______________ is designed to equal the policies death benefit at age 100.
Cash value
This is insurance that is designed to pay the balance of a loan if the insured dies or becomes permanently disabled before the loan has been repaid in full. This is sold by a lender or finance company.
Credit insurance
This is temporary life insurance that provides the policy owner with the right to exchange an existing policy for other policies that are offered by the same insurance company. This conversion may be the conversion of individual term insurance to an individual permanent plan that a company sells or the conversion of group disability, life, or health to an individual plan
Convertible term life insurance
This is a type of temporary or pure protection that’s characterized by a REDUCING FACE AMOUNT each year and the cost of this coverage remains constant. This may be referred to as mortgage redemption or mortgage protection insurance since it’s primarily used in conjunction with a debt or loan
Decreasing term insurance
This contract pays a face amount after a fixed time period at a specific age, or upon the death of the insured if it occurs before the end of the period.
Endowment contract
This involves an insurance applicant, establishing the fact that they meet the insurance companies health requirements. Statements of good health, attending physician statements, health, history, and the applicants current health can all be used as _____________________
Evidence of insurability
This is a non-forfeiture option that is available when a policy is surrendered, and the same face amount of the policy is continued in force for a specified additional period; however, the coverage has changed from permanent to level term protection. This is the non-forfeiture option that provides the policy owner with the highest face amount of coverage
Extended term insurance
This is another name for the death benefit of a life insurance policy
Face amount
This is a policy that combines a whole life policy with a decreasing term writer to provide a death benefit together with monthly income payments to the beneficiary. Monthly income payments are made only from the date of death until the maturity date of the contract. Thereafter, the lump sum part of the whole life coverage is paid
Family income policy
This is a type of policy that combines whole life insurance and a level term writer. It provides for the payment of a monthly income during a stated period of years once the insured dies. The monthly income is payable from the date of death to the end of the pre-selected period. The payment of the face amount of the policy is payable at the end of the preselected period.
Family maintenance policy
This is a policy that covers an entire family. Whole life insurance covers the primary insured (i.e. the breadwinner) with varying amounts of level term insurance on the remainder of the family.
Family policy
This represents the maximum premium that can be paid into universal life policies, and still have the benefit qualify as life insurance under federal tax laws. If this is paid regularly, there may be little margin for any additional premium payments into a universal life insurance policy account.
Guideline premium
These are contracts in which the policyholder can share in a percentage of the growth of an indexed investment (e.g. A mutual font tied to the standard and pours index). The principle (benefit) is guaranteed, and in many cases, a minimum interest is guaranteed. These products are not considered securities.
Index contracts
This is a type of insurance that provides an increasing face amount overtime based on specific amounts or a percentage of the original face amount
Increasing term life insurance
