Wednesday Class Flashcards
Different Term Life Insurances
- Level Term
- Annual Renewable
- Decreasing Term (mortgage redemption/protection, credit life insurance)
Term Insurance
- No Cash value
- only covered for a specific amount of time
Level Term
pure protection, lasting for a specific term. coverage and premium stay the same during term
Annual Renewable
Policy renews every year without proof of insurability. Premiums increase due to age
Decreasing Term
used only for debt protection. Coverage decreases as your debt decreases
Whole Life Insurance
- Has cash value
- covered you until death or age 100
Different Whole Life Insurances
- Straight Life (ordinary)
- Limited pay whole life
- Single premium
Straight Life (ordinary)
level death benefits, level premium.
cash value will equal the face amount at age 100
Limited Pay Life Insurance
premium is payed until a certain age or time period
paid up at 65 = finished paying premiums, coverage is still whole life
20yr-pay life: how long you want to pay
Limited Pay Whole Life Cash Value
will grow faster than straight life
Single Premium
premium paid in a lump sum and coverage continues to age 100
fastest way for cash value to grow
Flexible Premium Policies
- things can change in policy, effecting premiums
- has cash value
Adjustable Life Insurance (3)
Coverage, Premium and type of olán can change.
Insured can change 2
Insurer can change 1
Universal Life Insurance
Uses Annual Renewable Term
- is interest sensitive
- coverage and premium can change
- two death benefit options (A&B)
- can make partial surrenders or withdrawal
- mortality charge deducted each month from cash value for cost of insurance and expenses
Death Benefit Option A
only gets paid the greater value between the cash value and the coverage
Death Benefit Option B
gets “B” for both the cash value and coverage, costs more
Specialized Policies
- Joint Life
- Survivorship Life
- Group Life
Joint Life
- First to Die
-Two or more insured on the same policy - Policy only pays death benefit when the First insured dies
Survivorship Life
- Second to die
- Two or more insured on the same policy
- Policy is only pays the death benefit when the LAST insured dies
Group Life
- master contract goes to sponsor (usually employer)
- certificate of insurance goes to member
- usually for employee groups
- underwritten as a group (8 min)
- ratings, previous group claims, and experience determine premium
- individual policy = higher premium due to age
Different Group Life Insurances
- Contributory Group Life
- Noncontributory Group Life
Contributory Group Life
when the employee is paying premium
Noncontributory Group Life
owner pays to premium
