Ugh Flashcards
Upon death or endowment contract designed to pay proceeds in cash called
Lump sum
If no selection made proceeds are automatically paid to benefit Ty in
Single cash payment and not taxable as income (payments of principal face amount)
Provides recipients with income cannot outlive
Straight life aka life income option
Installment payments guaranteed as long as recipient lives irrespective of dat3e of death
Straight life
Because beneficiary may not live long enough to rec all proceeds in this option insurers make options available to guarantee partial guarantee of some or all proceeds paid out
Life income option aka straight life
Recipient is provided with best of both worlds in terms of a lifetime income and guaranteed installment period
Life income with period certain option
Life income with 10 years certain option would provide recipient with income for as long as they live
If recipient dies shortly after stating to rec payments payments will be continued to a
Beneficiary for remainder of 10 year period (smaller than the life income only option)
Guarantees income for two or more recipients for as long as they live
Life income joint and survivor
Lijs
Surviving recipient will receive reduced payment after
First recipient dies
Guarantees an income for life of all beneficiaries
Life income joint and survivor
Lijs
Most commonly used written as joint and 1/2 survivor or joint and 2/3 survivor
Life income joint and survivor
Company retains policy proceeds and pays interest on proceeds to recipient at regular intervals
Interest only option
Insurer usually guarantees a certain rate of interest and will often pay interest in excess of guaranteed rate in this option
Interest only option
Considered to be a temporary option since the proceeds are retained by insurer until later point when proceeds ar repaid out in lump sum or paid Under one of the other settlement options
Interest only option
Fixed period installments option aka
Period certain
