OGs Flashcards
T or F: Whole Life Insurance has an end date.
False
T or F: Participating Whole Life Policies have dividend options.
True
T or F: Participating WL policies have lower premiums than non-participating policies.
False
T or F: A Term 100 does not have a cash value.
True
T or F: “Automatic Premium Loans” are a dividend option.
False. “Automatic Premium Loan” is a Non-forfeiture Benefit
NAAR
Net Amount At Risk
NAAR = Death Benefit - Investment Account
(UL Policies)
YRT vs. LCOI
Yearly Renewable Term
Level Cost of Insurance
(UL Policies)
Four Types of Universal Investment Funds
Daily Interest Account
Guaranteed Investment Account
Indexed Fund
Mutual Fund
MTAR
Maximum Tax Actuarial Reserve
(Test to find UL policies w. low coverage and high investments)
Evaluating Risks of Death
Probability:
-Age
-Gender
-Personal + Family Health History
-Lifestyle Risks
(smoking, drinking, avocations)
3 Investment Phases
Accumulation
Protection
Distribution
4 Ways to Earn
(Cashflow Quadrant)
-Employee (Has job, income based on poisition)
-Self-Employed (Owns job ex. Dentist, Doctor, Lawyer, Hairstylist)
-Business Owner (Owns a system, unlimited income potential)
-Investor (Has money working for them, enjoys complete freedom and lives the dream).
Overcoming Objections
“I can’t afford Life Insurance”
“I’m on your side, let’s see if we can figure this out”.
Inquire about things they spend money on (cell phone, car insurance..) important things, like their family’s protection
“Can you come up with $3-4 a day? That’s the approximate cost”
Rule of 72
72 / Rate of Return = number of years it takes for investment to double
Mortgage Life vs. Term Policy
A B
Buy 2 get 1 Buy 2 get 2
Dec Cov Level Cov
Bank Ben Family Ben
Post UW Pre UW
Not Port Portable
3 Fundamental Accounts
Short term Savings
Emergency Fund (3-6 mo)
Long term Wealth Building
WL Investments vs. Seperate Investments
A B
No $ 2yr $ + %
1-4% No Cap
Loan 6-8% No Loan
Bank Ben Family Ben
3 Types of Permanent Insurance
Whole Life
Universal Life
Term 100
Term Life Options
Renewable - Renew for another term w/o evidence of insurability unless it is re-entry renewal
Convertible - Allow to convert to a permanent policy; no evidence of insurability
Commonly used by banks to protect a mortgage.
Decreasing Term Insurance
(Mortgage Life)
Two Main Features of Whole Life Policy
Death Benefit
Cash Value
(Policy pays out one, not both).
Two Types of Whole Life Insurance
Participating (Pay more for dividend options)
Non-participating
Whole Life Non-Forfeiture Benefits
Policy lapses from missed premium payments
Use Cash Value for:
-Cash Surrender Value
-Automatic Premium Loan
-Reduced Paid Up insurance
-Extended Term Insurance
Participating Whole Life Dividend Options (Using Surplus)
Cash
Premium Reduction
Paid-up Additions
Accumulation
Term Insurance
Avocations Definition
High-risk sports or activities
ACB
Adjusted Cost Basis
ACB=Cumulative premiums-NCPI-Dividends paid
NCPI
Net Cost of Pure Insurance
Maximum CPP Death Benefit
$2500 Fully Taxable
