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7 Cards in this Set

  • Front
  • Back
Term Insurance
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
Permanent Insurance
LI that provides coverage over entire lifetime with DB being paid to beneficiary TF. Perm LI may have an investment component and build CV
Whole Life
-GUARANTEED minimum CV, premium and DB, as long as premiums are paid on itme.
- Highest premium bc of guarantees and is LEAST flexible
Current Assumtion Universal Life
-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
Guaranteed Universal Life
(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.
Variable Universal Life
-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.
Survivorship (Second to Die)
-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.