Unit 8 Flashcards
The risk of dying calculated by a table
Mortality Risk
A person, estate, or business entity designated to receive the proceeds of a life insurance of a life insurance policy upon the death of the policy holder.
Beneficiary
Process of determining the potential impact of your death on others
Life insurance needs analysis
Multiply your income by 5 to 10 to figure out how much you may need in life insurance
Income multiple method
Provides protection for a specific period of time. Is not an investment product.
Term life insurance
If you die during the contract period, your beneficiary receives how much you paid for the contract
Face Value
The right to renew the policy without additional proof of insurability
Guaranteed Renewability
Fixed rate for a period of years
Level-premium term insurance
Giving you the right to convert to permanent life insurance without additional proof of insurability
Convertible
Premium remains same, coverage changes over time
Decreasing-term life insurance
Provides and investment component along with its protection component. Doesn’t need to be renewed
Permanent life insurance
Extra cash invested in policy which eventually offsets death protection costs at old age
Cash value
Provides death protection for a persons entire life
Whole life insurance
Premiums are payable over whole life
Ordinary life insurance
Paid for a specific time, after which the policy is still in force
Limited payment life insurance
One time payment
Single premium life insurance
Type of permanent life insurance that attempts to address the shortcomings of whole life insurance. Promise death protection and a savings component. When insurance companies earn greater they expected returns on its investment portfolio, policyholders share some of that benefit
Universal life insurance
Both of these products allow policy holders to decide how to invest their cash in a policy
Variable life insurance and variable universal life insurance
Policies issued by a mutual company
Participating policies
Typically one month. If you don’t pay that don’t matter
Grace period
Claude that prevents providers from violating coverage due to misstatement by the insured after an amount of time
Incontestable clause
An insurance option that allows the insured to waive premium payments under certain conditions, such as permanent disability
Waiver of premium
Allows terminally I’ll policyholder to receive a portion of their life insurance proceeds before their death
Accelerated benefits
A life insurance contract provision by which the face value is doubled in the case of an accidental death
Accidental death benefit
Term used broadly to describe all supportive medical, personal, and social services
Long term care (LTC)
Financial product that pays health-care expenses associated with incapacity
LTC Insurance
