Life Insurance Sale, Meeting Consumer Needs Flashcards
prolonged
continuing for a long time or longer than usual; lengthy.
proceeds
The benefits payable from a claim on an insurance policy or annuity contract. The _______ are paid after claims are confirmed. ______
are paid to providers or directly to the insured, depending on the type of insurance.
The Importance of Life Insurance
Protects agents low coverage from Social Security and
Group Insurance.
Provides Financial Security
Individual Life Insurance
Less than half of America adult own a ?
Ongoing financial needs for an Insured
Prolonged Final illness
Insured potential financial need
■ Doctor and hospital bills from a final illness
■ Funeral expenses
■ Estate taxes
■ Paying off debts (mortgage, loans, credit cards)
■ Continuing income needs for family
■ Future need to pay for children’s education
■ Future need of retirement income for spouse
Potential cost for an Insured
■ Funeral expenses
■ Estate taxes
■ Paying off debts (mortgage, loans, credit cards)
Insurance Producer
someone who has the proper licensing to sell insurance within a particular state. The term “_____ ______” is interchangeable with “insurance agent” and “insurance representative.”
____ ______ sell insurance products on behalf of insurance companies. Because of this, they must possess a significant amount of knowledge in their particular insurance sub-field.
Capital Retention Approach
Capital Retention Approach A method used to estimate the amount of life insurance to own. Under this method, the insurance proceeds are retained and are not liquidated.
Capital
- Wealth in the form of money or assets, taken as a sign of the financial strength of an individual, organization, or nation, and assumed to be available for development or investment.
- Accounting: Money invested in a business to generate income.
- Economics: Factors of production that are used to create goods or services and are not themselves in the process.
Assets available for use in the production of further assets
The capital retention approach (capital conservation)
a method to determine the total amount of insurance proceeds the surviving spouse will need to receive and invest in order to take care of ongoing family needs. The income-producing assets are then available for distributionlater to the heirs. The amount of life insurance needed based on the capital ______ _____ can be determined by the following steps:- Prepare a personal balance sheet where all assets and liabilities will be listed. Also,the balance sheet should include all death benefits from life insurance and from othersources.- Determine the amount of income-producing capital. This step is performed bysubtracting the liabilities, cash needs, and non-income-producing assets from totalassets.- Determine the amount of additional capital needed (if any). This is the final step andinvolves a comparison of the income objective with other sources of income, such asSocial Security survivor benefits
heirs
one who inherits or is entitled to succeed to a hereditary rank, title, or office
breadwinner
a person who earns money to support a family
principal wage earner
net
free from all charges or deductions
final
last
goss
the entire amount of income before any deductions are
made
before any deductions (overall)
