Unit 6 - Life insurance Policy Options Flashcards
Interest Only
Interest is paid on the death benefit; death benefit paid at a later date
Fixed Period
Death benefit guaranteed + interest paid over a set amount of time.
With a fixed period settlement, interest earnings are greater than the guaranteed rate
Amount of final payment will be larger
Fixed amount
A fixed amount is paid; interest earnings affect how long payments can be made
Life income (AKA straight life)
Settlement option where life income is given to beneficiary but payments stop upon death
Life income - period certain
Settlement where life income is paid to beneficiary for a minimum amount of time - paid to someone else if beneficiary dies
Life income - refund
Pays beneficiary an income for life and pays someone else balance if beneficiary doesn’t live long enough
Joint and survivor
Pays two beneficiaries income for life / if one dies, payment may stay the same or be reduced
Taking a loan from life policy while alive
Death benefits reduced; Interest is charged
CARPPRO
Dividend options -
Cash
Accumulate at Interest
Reduce next premium amount
Paid up addition
Paid up policy
One year term insurance
Reduced paid-up insurance
Use cash values to buy new single premium policy. Less insurance than old policy but immediate cash value
Extended term
Cash values buy a single premium term insurance
Same amount of insurance as old policy
Limited term of time
