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26 Cards in this Set
- Front
- Back
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What two basic principles are involved in determining the product best suited to address a client's needs? |
1. Fact-finding to learn about the client's financial situation concerns and goals. 2. Educating the client about insurance as a financial tool |
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What are the three ways life insurance policies are sold or marketed to the public? |
1. Industrial life 2. group life 3. ordinary life |
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Industrial life covers what? |
Simple burial insurance |
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Group life covers what? |
Work: Master policy, goes to employer. Lower premium, no proof of insurability Employer groups, credit unions or associations. |
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Ordinary life covers what? |
Individuals |
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What are the three characteristics of term life insurance? |
1. Specific amount of time 2. No cash value, Pure insurance 3. Premiums based on age and increase with age |
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What are the three characteristics of whole life or permanent life insurance? |
1. Covers whole life (100 years) or at maturity 2. Has Equity or cash value 3. Premiums never change |
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Shortcut: term life = |
Temporary or pure protection, no cash value |
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Most companies offer two choices with regard to term premiums - what are they? |
1. Step rate 2. Level premium term |
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Premium that will be very low in the early years but will increase over time is called what? |
Step rate |
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Premium that is more expensive initially, but will remain constant over the life of the contract is called what? |
Level premium term |
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A level term or level face Term Policy means that the ______ stays the same for the covered period. |
Death benefit |
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Decreasing term or decreasing face Term Policy means that the _______ for the covered period will gradually _______, typically to 0 at the end of the term. |
Death benefit Decline |
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Shortcut: Level Term = |
Level death benefit |
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Shortcut: Decreasing Term = |
Decreasing death benefit |
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What are the two ways to extend a Term Policy? |
Renewable and convertible term options |
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Term extending option which allows the policyholder to renew the term for an additional term without evidence of insurability is called what? |
Renewable |
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Attained age = Original age = |
1. Present or current age 2. Age at which policy was purchased |
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Shortcut - option to renew and option to convert protect... |
Insured's insurability |
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Shortcut - return of Premium = |
Death benefit or % of premiums paid |
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Whole life shortcut - cash value = |
1. portion of Premium into "savings/equity account" owned by the policy owner 2. Policy owner's equity |
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Whole Life Shortcut - whole life summary = |
Permanent protection + cash value |
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Tax advantages shortcut - life insurance benefit is ______ to beneficiary regardless of amount or who the beneficiary is |
Tax free |
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Joint Life/Survivorship Life policies have _____ or more insureds, but pay _______ |
Two, one death benefit |
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Joint/Survivorship Shortcut shortcut Joint = Survivorship = |
1. 1st to die (J comes first) 2. 2nd to die (S comes second) |
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Modified endowment contract shortcut - money taken out of endowment or MEC subject to.... |
Tax & probably a 10% penalty |
