Unit 4: Term Life Insurance and Other Plans Flashcards
term insurance
designed to provide life insurance protection for a limited time
level term policy
amount of insurance protection remains constant for the period of years stipulated in the policy-the entire term of the policy
decreasing term policy
amount of insurance protection is reduced each year from the date of issue
convertible term
- convert from term to permanent
- without proof of insurability
- present age, attained age
- some life insurance companies place a time limit on the conversion privilege
renewable term
- no proof of insurability
- at attained age
- limited time
renewable and convertible privileges:
They are not automatically a part of every term policy. They must be specifically included in the contract that is, the original policy.
interim term insurance
When a person wants immediate protection but does not wish to start permanent protection immediately, he is often able to purchase term life insurance to cover the period of time, or interim, between now and the time permanent protection is to begin (because it covers this period of time)
interim term is written on a
convertible basis: That is, they provide the insured with temporary term protection that will con vert automatically at some future date, usually no later than 11 months. The premium for the interim term is based on the age at application. The premium for the permanent coverage is also based on attained age when permanent protection begins.
use for term insurance
maximum coverage at minimum cost
family plans
combination of permanent and term
under family policy term insurance coverage is…
provided without additional premium for children born or adopted after the policy is issued
permanent portion is normally paid…
in a lump sum
family income policies
- coverage is provided by combining decreasing term insurance with a permanent policy
- from the date of policy issue not from the date of the insured’s death
family maintenance policy
coverage is provided by combining level term insurance with a permanent policy
family maintenance policy provides
income for a stated number of years from the date of death of the insured, provided the insured died before a predetermined time
2 key notes of a family maintenance policy
- can be a level term policy or a permanent policy with a level term insurance rider
- month income generated as long as death occurs prior to stipulated age
jumping juvenile policy
purchased by parent for a child:
-age jump to 21
-50,000 to 250,000
-automatically jumps with no increase in premium and no evidence of insurability required
industrial life insurance
used to meet the insurance needs of persons with limited means or who are unable to manage premium payments at monthly intervals or longer.
Industrial life insurance provides permanent life insurance with the follow ing characteristics.
The face amount of the policy is usually for $1,000 or less.
The premium is small and collected monthly or even weekly.
The premium is collected by the agent, often in person from the policyowner.
home service companies
Companies that sell industrial insurance are sometimes called combination or debit companies
debit
To make collection of premiums for its industrial policies more convenient, a home service company may assign a group of policyowners to one of its agents for in-person collections. These groupings are normally made on a geographic basis, such as the southwest section of town, and may include owners of other kinds of policies offered by the company.
monthly debit ordinary
blend of industrial and ordinary (whole life) insurance
