Life Insurance - Whole of Life Flashcards
When does the sum assured get paid out on a Whole of Life policy?
On the death of the life assured, whenever it happens
Is a WOL policy a permanent or non-permanent policy??
A permanent policy
Are the premiums for a WOL policy cheaper or more expensive than those for a term assurance plan, and why?
More expensive because a claim is certain
With a unit-linked WOL plan, what do the premiums buy?
Units in a special unitised fund run by the life office
How does the fund value of a unit-linked WOL policy affect the sum assured payable on death?
The value of the units will fluctuate and if this total fund value overtakes the sum assured, then the higher amount will be payable on death
Which age group are Funeral Plans often marketed to?
Over 50’s
What are the 2 main advantages of Funeral plans?
- Low premiums
- Simplified or no underwriting
Do Funeral Plans offer high or low sum assured’s?
Low sum assured
How long is the period on Funeral Plans where the full sum insured is only payable on accidental death?
24 months (or 12 months for some plans)
With a Funeral Plan, where the full sum insured isn’t payable in the first 24 months, what will the beneficiary receive?
Return of premiums
Do Funeral Plans have any exclusions?
No, after the 24 months, the full sum insured is payable regardless of the reason for death
What is the main purpose of a Funeral Plan?
To provide cover to pay for an individual’s funeral on their death
Is an investment bond designed primarily for investment purposes or protection purposes?
Investment purposes
How are most bonds written?
Single premium, non-qualifying, WOL contracts
What is the nominal percentage of life cover that investment bonds usually provide?
101% of the bid value of the units held at the point of death
