TYPES OF INDIVIDUAL LIFE INSURANCE Flashcards
What type of whole life insurance policy generates immediate cash value?
Single premium whole life
What type of premium is charged on a straight life policy?
A level premium for the life of the insured
What type of life insurance policy offers pure death protection?
Term
When does an adjustable life policy accumulate cash value?
When the premiums paid are more than the cost of the policy
What policy component must decrease in decreasing term insurance?
Face amount
How is the premium determined in a joint life insurance policy?
The premium is based on the average age of the insureds
What type of life insurance policy provides permanent protection?
Whole life
Regarding taxation, how does the cash value of a universal life policy accumulate?
Tax deferred
Universal life policies have two types of interest rates. What are they?
Guaranteed and current
What are the living benefits of whole life insurance?
Loan values
What type of policy is typically issued without proof of insurability from the insured
Group policy
Between adjustable life and universal life policies, which one provides more flexibility to the policyowner?
Universal life
In term policies, what happens to the premium throughout the term of the policy?
The premium remains level
The policyowner of a whole life insurance policy is also the insured. What age must the insured attain in order to receive the policy’s face amount?
Age 100
Who is entitled to the cash values in a life insurance policy?
The policyowner
What is the major difference between the most common types of whole life policies: Straight Life, Limited Payment and Single Premium?
Premium payment mode
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid for what time period?
For 20 years or until the insured’s death, whichever occurs first
In what type of life insurance policies can the policyowner skip premium payments without the policy lapsing
Universal life
Whole life policies provide protection until the insured reaches what age?
Age 100
What type of life insurance policy is Life Paid-up at Age 65?
Limited-pay Whole Life