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35 Cards in this Set
- Front
- Back
- 3rd side (hint)
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3 basic types of term based on face amount |
Level Increasing Decreasing |
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Level Term Insurance |
The most common type of term insurance. The death benefit don't change throughout the life of the policy. |
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Level Premium Term |
Term insurance that Provides a level death benefit and a level premium |
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Annual Renewal Term |
Purest form of insurance. (Term) |
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Decreasing Term |
Term insurance where Premium stay the same but the death benefit decrease every year.
Commonly used to insure the payment of a mortgage or other debts. |
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Increasing Term |
Term insurance where Premium stays the same and death benefit increases every year. |
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Permanent (whole) life insurance |
Is a general term used to refer to various forms of life insurance policies that build up cash value. Remains in effect for whole life or 100 years old. |
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Whole Life Insurance Characteristics |
1. Level Premium (same) 2. Death Benefit (guaranteed and level) 3. Cash Value (is scheduled to equal the death benefit when matures[age 100]) 4. Living benefits: is the cash value that can be used. Also called the nonforfeiture value. Don't accumulate until 3rd policy yr. |
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Straight Life (Traditional level ) (Ordinary Life) (Continuous) |
-Whole life insurance where premium & Death Benefit is level. -Cash Value accumulates over time. -Has the lowest annual premium of the whole life policies. |
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Limited Pay Whole Life |
Whole life insurance Designed so that premiums can be paid before 100. The annual premiums are higher than other whole life policies. Level Premium and death benefit. |
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Single Premium |
Whole life that has: One Premium Death Benefit level. Cash Value accumulates immediately |
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Modified Life (whole life) |
Whole life insurance that Charge lower premium in first 3-5 years then increase and remain at that higher level. The increased rate will be higher than straight whole life premium. -Level death benefit |
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Graded Premium Whole life |
Similar to modified life. Starts with premium that is 50% less than straight life premium. Then over 5-10 years the premiums increase then levels off. Death Benefit is level |
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Interest Sensitive Whole Life (current consumption life) |
Whole life insurance with a Level death benefit. Premiums and cash value are impacted by interest rates. |
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Indexed Whole Life (equity index whole life ) |
Whole life insurance in which -Interest rates is based upon an index (like S&P500) -Cash Value is based upon the index -Death benefit increases every year to keep up with inflation |
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Universal Life |
A whole life policy in which the insurance component is annual renewable term and the cash value is allowed to have a partial surrender |
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The two options of Universal Life |
Option A:Level Death Benefit Option B: Increasing Death Benefit |
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IRS Corridor States that |
The cash value cannot be more than the face amount of the policy. |
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Universal Life Characteristics |
ART insurance inside the policy Flexible Premium Flexible Face Amount Cash Value minimum guarantee |
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Variable Life Features |
-Permanent Insurance -Fixed or Flexible Premium -Face Amount has guaranteed minimum -Cash Value not guaranteed |
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Are variable contracts insurance policies? |
No. It's a security |
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Group life insurance |
Issued to the sponsoring organization and covers the lives of more than one individual member of that group. |
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Who owns the group life policy? |
The company. Not the individual. The individual get a certificate of insurance. |
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Group Life to Individual Policy |
Employee can convert to an individual policy (usually whole) without proving insurability at a standard rate based on their age. |
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What kind of insurance policy can a group life insured convert to? |
Whole life |
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Credit life Insurance |
Written as a decreasing term to pay off debt. Cannot payout more than the balance of the debt. |
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Who is the beneficiary in a credit insurance policy? |
The creditor |
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Who is the owner of the credit life policy |
The creditor |
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Under a 20-pay whole life policy, in order for death benefit to pay, the premiums gotta be paid for... |
20 years or until death, whichever is sooner. |
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What type of policy would have an IRS required corridor or gap btw the cash value and death benefit? |
Universal Life Option A |
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How many days do the employee still have group coverage after they leave the job? |
31 days. If they die during that time frame, they get the full group benefit. |
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In order to sell variable life insurance you have to have |
Securities License Life Insurance license FINRA registration |
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Which term insurance has the lowest premium with all factors being equal? |
Annual Renewable Term |
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In universal life, The insurer must send a report to the policyowner regarding the policy's value every |
Year |
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Option A universal has |
The death benefir remains level while the cash value gradually increases. The death will imcrease at a later date in order to fulfill irs corridor. |
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