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75 Cards in this Set

  • Front
  • Back
Insurance that provides coverage for the term of years specified in contract
Term Insurance
Term insurance provides only for the element of protection referred to as
Pure death protection
Three types of term coverage
term insurance policy that provides coverage, with level premium and level death benefit, for the number of years equal to the average life expectancy of the insured
Life expectancy contract
a term policy that provides a level of death benefit for a premium that increase each year with age
annually renewable term
a term insurance policy with premiums and death benefits to age 65
term -to-65 contract
term policy that features a level premium and a death benefit that decreases each year
Decreasing term
the living benefit of whole life insurance
cash value
those values in a life insurance policy that the owner does not loss even if they cease to pay premium
nonforfeiture values
7 types of whole life insurance
--continuous premuim
(straight life)
--limited payment
--single premuim
--enchanced ordinary life
--graded premuim
--modified life
--current assumption

enhanced ordinary life
when does whole life develop cash value
end of third policy year
the whole life insurance that charges a level premium for lifetime of insured and level death benefit.
Continuous premium (straight
is like straight whole life but is designed so that the premiums for coverage will be completely paid up in a set number of years
limited-pay whole life
EX, lp-65
whole life insurance that is designed to provide a level death benefit for a lump sum payment
single premium
which whole life policy generates immediate cash value due to size of payment
single premium
a whole life insurance that combines whole life and term by using dividends from a participating policy to purchase single paid up insurance to replace the term
enhanced ordinary life
Whole life insurance where the premiums start out low and gradually increase each year for a period of time
graded premium whole life
whole life insurance policy that charges a lower premium for the first five year years and then a higher level premium for the remainder of the policy
modified life
which 2 policies are useful as a compromise between straight life and convertible term insurance since the premium is less than straight life in early years, but some cash value is accumulating
Modified life and graded premium life
Interst sensitive whole life
current assumption
a policy that can assume the form of either term insurance or permanent insurance
adjustable life
a combination of flexible premium and adjustable life insurance policy
Universal life
(is also interest sensitive policy)
a nonguaranteed interest rate
current (market rate)
lower guaranteed rate of interest
policy that has two components consisting of an insurance component and a cash account
universal life
gap maintained between the cash value and death benefit in a universal life policy
the dathe benefit inclused the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increase
universal life option B
the policy's cash value is dependent upon the performance of the equity index
equity indexed universal life
a universal life policy where the cash values and death benefits are not guaranteed
variable universal life
must have life and securities license to sell this policy
variable universal life
a single policy that is based on a joint average age and designed to insure two or more lives and pays on the first death
joint life (first-to-die)
a single policy that is based on a joint average age and designed to insure two or more and pays on the last death
Survivorship life (second-to-die)
a policy that the face amount increase at a predetermined age, often age 21, but the premium remains the same
jumping juvenile
type of insurance where as evidence of insurability is not required and participants do not receive a policy
group insurance
participants under a group plan are issued what as evidence that they have coverage
certificate of insurance
the actual policy that is issued for group insurance is called
master policy
in addition to employers, group sponsors aslo include
creditor-debtor groups
multiple-employer trusts
what is the minimum for group insurance plans
10 persons
each participant in a group completes a short application that idenitifies
the insured and beneficiary
a characteristic of group insurance that allows a member who has been terminated from employment the right to convert to an individual whole life policy without proving insurability
conversion to individual policy
a special type of coverage written to pay off the balance of a loan in the evnet of the death of the debtor
credit life insurance
(decreasing term)
the individual who has all the ownership reights, including the responsibility of paying the policy premiums
the transfer of ownership rights of a life insurance policy from one person to another
two types of assignment
this type of assignment involves transferring all rights of ownership to another person or entity
EX. Viatile
This type of assignment involves a transfer of partial rights to another person, usually done in order to secure a loan
collateral assignment
what constitutes an entire contract
copy of application
a provision in a life insurance policy that permits the policyowner to exchange a policy for another type of policy form permitted by the company
this provision allows the policyowner 10 days from receipt to look over policy and cancel. 20 day replacement, 45 day intercompany replacement
right to examine
the manner or frequency that the policyowner pays the policy premium
the period of time after the premium due date that the policyowner has to pay the premium before the policy lapses (usually 30 days)
grace period
the provision that allow the policyowner an opportunity to reinstate a policy that has lapsed, subject to proving insurability
reinstatement provision
clause that prevents an insurer from denying a claim due to statements in an application after the policy has been in force for 2 years
policy provisions, which exclude certain types of risks
name 4 types of exlusions
h--hazardous occupations or hobbies
in Pa how long must a person have an insurance policy in affect to pay out on suicide
2 years
the person or interest to whom the policy proceeds will be paid at death
if there is no beneficiary on policy who is paid
the estate of the policyowner
person who will receive insurance benefits
primay beneficiaries
person who receives insurance if primary beneficiary is dead
contingent or secondary beneficaries
person after primary and contingent who will receive insurance benefits
a policyowner may without beneficiary's consent or knowledge change the name of the beneficary on policy
revocable beneficary
a policyowner must get the consent of the beneficiary in writing to change the name of the beneficiary , borrow from cash value or assign the policy without the beneficiary's agreement
irrevocable beneficiary
this las will assume that the primary beneficary dies first in a common diaster
uniform simultaneous death law
this clause, when included in a life insurance policy, prevents the beneficiary's reckless spending of benefits by requiring the benefits be paid in a fixed period or payment
spendthrift clause
5 Settlement options used to pay death benefits
--cash payment
--interest only
--fixed period installments
--fixed amount installments
--life income
lump sum payment of death benefits
cash payment
the insurance company retains the policy proceeds and pays interest on the proceeds to the beneficiary at regular intervals
interest only
death benefits are paid out at a specified period of years
fixed-period installment
death benefits are paid out at a specified amount in
fixed-amount installment
death benefits that provides the recipient with an income that they can not out live
life income
a method a death benefit payments that is a modified life income that guarantees an income for two recipients for as long as they live
life income joint and survivor
ex. joint and 2/3 survivor
what has loan value in a policy
cash value
6 payments of dividends options
--cash payment
--reduction of premium payment
--accumulation at interest
--one-year term option
--paid-up additions
--paid up insurance
AD&D stands for
accidental death and dismemberment rider