Policies Flashcards
Attained age
the insured’s age at the time the policy is renewed or replaced
Cash value
a policy’s savings element or living benefit
Deferred
withheld or postponed until a specified time or event in the future
Endow
to have the cash value of a whole life policy reach the contractual face amount
Face amount
the amount of benefit stated in the life insurance policy
Fixed life insurance products
contracts that offer guaranteed minimum or fixed benefits
Lapse
policy termination due to nonpayment of premium
Level premium
the premium that does not change throughout the life of a policy
Nonforfeiture values
benefits in a life insurance policy that the policyowner cannot lose even ifthe policy is surrendered or lapses
Policy maturity
in life policies, the time when the face value is paid out
Securities
financial instruments that may trade for value (for example, stocks, bonds, options)
Variable
life insurance products
contracts in which the cash values accumulate based upon a specific portfolio of stocks without guarantees of performance
Has no Cash Value, and provides the greatest amount of coverage for the lowest premium
Term Life
Temporary protection because it only provides coverage for a specific period of time
Term Life insurance
_________ provides what is know as pure death protection
Term Life
3 basic types of term coverage
level
increasing
decreasing
In all types of term life coverage, the premium is
Level
Upon selling, renewing , or converting a term policy, the premium is figured at the ____
Attained Age
Level term insurance
death benefit does not change
Level Premium term
level death benefit and level premium
Term life with a level premium and a decreasing death benefit each year
Decreasing Term
renewable provision
allows policyowner the right to renew coverage at the expiration date without evidence of insurability
Convertable provision
provides the right to convert the policy to a permanent policy without the evidence of insurability.
______________ is a general term used to refer to various forms of lifeinsurance policies that build cash value and remain in effect for the entire life ofthe insured (or until age 100) as long as the premium is paid
Permanent
life insurance
The most commontype of permanent insurance is
Whole Life
Build cash value (living benefits)
Whole life policies
Can you borrow against cash value in a whole life policy
yes
Key charateristics of \_\_\_\_\_\_\_\_\_\_\_\_\_\_ are Level premium Level Death benefit cash value living benefits
Whole life insurance
___________ does not usually accumulate until the third policy year
cash value
The 3 basic forms of whole life insurance are
straight whole life
limited-pay
single premium
__________ premiums for coverage will be completely paid-up well before age 100
limited - pay whole life
The policy is completelypaid-up after one premium and generates immediate cash.
Single premium whole life (SPWL)
allow the policyowner to pay more or less than the planned premium
Flexible premium
provide the policyowner with thebest of both worlds (term and permanent coverage).
canassume the form of either term insurance or permanent insurance
Adjustable life
With an adjustable life policy the policy owner can
Increase or decrease the premium or the premium-paying period;
Increase or decrease the face amount;
or
Change the period of protection
converting
from term to whole life or vice versa
With an adjustable life policy you will need ______________ to increase death benefit or lower premium
proof of insurability
__________________ insurance is also known by the generic name of
flexible premium adjustable life
. That implies that the policy owner has the flexibility to increase the amount of premium paid into the policy and to later decrease it again
Universal life
flexible premium
interest-sensitive
has a contract interest rate
Universal life
Universal life has 2 components
Insurance - always annually renewable term insurance
Cash account
provides the policy owner with flexible premiums and an adjustable death benefit
the policy owner rather than the insurer decides where the net premiums (cash value) will be invested
the cash values are not guaranteed, and the death benefit is not fixed
The cash value and/or death benefit may increase or decrease over the life of the policy depending on the investment performance of the underlying sub-account
Variable universal life
a single policy that is designed to insure two or more lives
can be in the form of term insurance or permanent insurance
Premium would be less than for 2 individuals
The death benefit is paid upon the
first death only
Joint Life
pays on thelast death
rather than upon the first death
Survivorship life
any life insurance written on the lifeof a minor
Juvenile Life
Group life insurance is usually written as___insurance
It is usually written as
annually renewable term
insurance
two distinguishing features of group life insurance are
Evidence of insurability is usually not required (unless an applicant is enrolling forcoverage outside the normal enrollment period)
Participants (insureds) under the plan do not receive a policy because they donot own or control the policy
each insured participant under the group plan is issued a
certificate ofinsurance
The actual policy, or
masterpolicy/contract
, is issued to
the sponsor of the group, which is often an employer
Group life insurance cost are based on
the average age of the group and the ratio of men to women
special type of coverage written to insure the life of thedebtor and pay off the balance of a loan in the event of the death of the debtor
usually written as
decreasing term insurance
may be written asan individual policy or as a group plan
Credit
insurance
