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7 Cards in this Set
- Front
- Back
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Term Insurance
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The most basic type of LI which covers for a set period of time and issues DB to beneficiary tax free
-No CV -Premiums increase as client gets older as the client becomes more 'riskier" to insure -Can be converted to Perm LI in most cases Suitability: ST LIF needs,typ 20 yrs or less, or for LT needs but need inexpensive coverage |
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Permanent Insurance
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LI that provides coverage over entire lifetime with DB being paid to beneficiary TF. Perm LI may have an investment component and build CV
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Whole Life
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PI
-GUARANTEED minimum CV, premium and DB, as long as premiums are paid on itme. - Highest premium bc of guarantees and is LEAST flexible |
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Current Assumtion Universal Life
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(UL)
-More flexible than WL as DB and amnt and timing of premiums can change. -Interest rate sensitive bc the CV is invested in FIXED INCOME inv select by the insurance company. Suitability: Wants flexibility on the premium, CV and DB. Wants potential for CV growth from fixed income investments |
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Guaranteed Universal Life
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(No-Lapse UL)
-DB guranteed -Less flexible than UL since DB and premium are guaranteed. -Not designed to build CV Suitability: Wants DB guaranteed,not concerned w/ accumulating CV, often used in wealth transfer and estate planning scenarios. |
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Variable Universal Life
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(VUL)
-Flexible premium, DB & CV -CV invested in variable sub accounts selected by FA & client -More risky as CV is tied to market -Lower cost per thousand bc projections are more volatile than WL or UL. -Premiums are level but inc or dec depending on market performance Suitability:Want flexibile premiums,CV & DB. Equity risk tolerant. Underperforming ROR assumptions can lead to a higher cost than illustrated. |
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Survivorship (Second to Die)
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-Covers 2 individuals
-Pay DB on following 2nd death of the 2 ind -Provides funds sufficient to cover the costs of settling and estate. -Less costly than two individual policies. Suitability:When insuring two lives when liquidity is needed after 2nd death. Often purchased in the ownership of a trust to remove the proceeds from the insureds taxable estate.At least one of the buyers must be insurable. |
