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75 Cards in this Set
- Front
- Back
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Insurance that provides coverage for the term of years specified in contract
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Term Insurance
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Term insurance provides only for the element of protection referred to as
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Pure death protection
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Three types of term coverage
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level
increasing decreasing |
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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
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Life expectancy contract
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a term policy that provides a level of death benefit for a premium that increase each year with age
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annually renewable term
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a term insurance policy with premiums and death benefits to age 65
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term -to-65 contract
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term policy that features a level premium and a death benefit that decreases each year
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Decreasing term
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the living benefit of whole life insurance
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cash value
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those values in a life insurance policy that the owner does not loss even if they cease to pay premium
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nonforfeiture values
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7 types of whole life insurance
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--continuous premuim
(straight life) --limited payment --single premuim --enchanced ordinary life (ecomomatic) --graded premuim --modified life --current assumption (econ enhanced ordinary life |
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when does whole life develop cash value
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end of third policy year
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the whole life insurance that charges a level premium for lifetime of insured and level death benefit.
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Continuous premium (straight
life) |
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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
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limited-pay whole life
EX, lp-65 |
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whole life insurance that is designed to provide a level death benefit for a lump sum payment
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single premium
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which whole life policy generates immediate cash value due to size of payment
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single premium
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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
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enhanced ordinary life
(economatic) |
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Whole life insurance where the premiums start out low and gradually increase each year for a period of time
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graded premium whole life
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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
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modified life
Mod-5 |
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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
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Modified life and graded premium life
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Interst sensitive whole life
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current assumption
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a policy that can assume the form of either term insurance or permanent insurance
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adjustable life
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a combination of flexible premium and adjustable life insurance policy
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Universal life
(is also interest sensitive policy) |
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a nonguaranteed interest rate
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current (market rate)
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lower guaranteed rate of interest
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contract
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policy that has two components consisting of an insurance component and a cash account
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universal life
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gap maintained between the cash value and death benefit in a universal life policy
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corridor
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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
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universal life option B
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the policy's cash value is dependent upon the performance of the equity index
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equity indexed universal life
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a universal life policy where the cash values and death benefits are not guaranteed
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variable universal life
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must have life and securities license to sell this policy
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variable universal life
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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
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joint life (first-to-die)
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a single policy that is based on a joint average age and designed to insure two or more and pays on the last death
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Survivorship life (second-to-die)
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a policy that the face amount increase at a predetermined age, often age 21, but the premium remains the same
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jumping juvenile
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type of insurance where as evidence of insurability is not required and participants do not receive a policy
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group insurance
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participants under a group plan are issued what as evidence that they have coverage
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certificate of insurance
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the actual policy that is issued for group insurance is called
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master policy
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in addition to employers, group sponsors aslo include
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unions
creditor-debtor groups multiple-employer trusts (METs) |
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what is the minimum for group insurance plans
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10 persons
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each participant in a group completes a short application that idenitifies
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the insured and beneficiary
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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
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conversion to individual policy
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a special type of coverage written to pay off the balance of a loan in the evnet of the death of the debtor
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credit life insurance
(decreasing term) |
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the individual who has all the ownership reights, including the responsibility of paying the policy premiums
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policyowner
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the transfer of ownership rights of a life insurance policy from one person to another
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assignment
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two types of assignment
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--absolute
--collateral |
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this type of assignment involves transferring all rights of ownership to another person or entity
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absolute
EX. Viatile |
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This type of assignment involves a transfer of partial rights to another person, usually done in order to secure a loan
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collateral assignment
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what constitutes an entire contract
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policy
copy of application riders ammendments |
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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
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modifications
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this provision allows the policyowner 10 days from receipt to look over policy and cancel. 20 day replacement, 45 day intercompany replacement
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right to examine
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the manner or frequency that the policyowner pays the policy premium
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mode
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the period of time after the premium due date that the policyowner has to pay the premium before the policy lapses (usually 30 days)
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grace period
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the provision that allow the policyowner an opportunity to reinstate a policy that has lapsed, subject to proving insurability
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reinstatement provision
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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
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incontestability
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policy provisions, which exclude certain types of risks
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exclusions
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name 4 types of exlusions
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w--WAR
a--aviation s--suicide h--hazardous occupations or hobbies |
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in Pa how long must a person have an insurance policy in affect to pay out on suicide
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2 years
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the person or interest to whom the policy proceeds will be paid at death
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beneficiary
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if there is no beneficiary on policy who is paid
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the estate of the policyowner
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person who will receive insurance benefits
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primay beneficiaries
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person who receives insurance if primary beneficiary is dead
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contingent or secondary beneficaries
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person after primary and contingent who will receive insurance benefits
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tertiary
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a policyowner may without beneficiary's consent or knowledge change the name of the beneficary on policy
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revocable beneficary
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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
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irrevocable beneficiary
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this las will assume that the primary beneficary dies first in a common diaster
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uniform simultaneous death law
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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
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spendthrift clause
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5 Settlement options used to pay death benefits
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--cash payment
--interest only --fixed period installments --fixed amount installments --life income |
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lump sum payment of death benefits
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cash payment
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the insurance company retains the policy proceeds and pays interest on the proceeds to the beneficiary at regular intervals
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interest only
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death benefits are paid out at a specified period of years
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fixed-period installment
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death benefits are paid out at a specified amount in
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fixed-amount installment
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death benefits that provides the recipient with an income that they can not out live
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life income
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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
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life income joint and survivor
ex. joint and 2/3 survivor |
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what has loan value in a policy
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cash value
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6 payments of dividends options
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--cash payment
--reduction of premium payment --accumulation at interest --one-year term option --paid-up additions --paid up insurance |
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AD&D stands for
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accidental death and dismemberment rider
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