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What are the three types of life insurance
Group, ordinary, and industrial
What are the three types of ordinary life insurance
- W-Whole LIfe
Annual Renewable Term Life Insurnace
Cheapest - no cash value - usually expires at age 65 - price goes up as you age.
Level Premium Term
premium stays the same for a set period of time and then goes up. No underwriting
Term insurance re-entry option
give she insured the opportunity to pass a physical in order to qualify for a lower permium when term expires
Premium stays the same, coverage decreases. Used often to cover a mortgage
On Level and Decreasing Term- converts to whole life without a physical. Premium based on age at time of conversion. Face amount of policy stays the same.
What kind of insurance is perminant and has cash value?
How many years must a whole life policy be in effect before it has cash value
When does a whole life policy pay out
at death or at age 100
how can the cash value of a whole life policy decrease?
by the owner taking out a loan on it.
What is a Continuous Premium or Straight Life Policy?
A whole life policy that can never be canceled by the insurance company. Pays out at death or at age 100
What is the difference between Straight Life/Continuous Premium and Limited Payment and Single Premium?
Limited Payment has a shorter payout term. the premiums are higher and then the payments stop but the coverage continues. Payout is still at age 100 or at death.
Single Premium requires the insured to pay the entire premium up front. and has immediate cash value.
Premiums are higher on these types of policies.
What is LP65?
Life Paid UP at 65. But the benefit continues till age 100 or at death.
What is Modified Premium?
The premium stays low for a period of time and then takes one big jump.
What is Graded Premium Whole Life?
The premium increases over time until it reaches a maximum and then stays there.
What is an Endowment Policy?
It matures at a set time, say at age 65. Most expensive type of policy. It can be written for any length of time or to mature at any age.
What is an Economatic policy?
An Enhanced Ordinary Life policy where the insurer buys say $75,000 of ordinary life and $25,000 of decreasing term. The dividends paid by the mutual insurer go towards the whole life policy until eventually the whole life policy is paid up.
What is Adjustable Whole Life?
The policy holder can easily increase or decrease the premium or cash value of the policy as they choose without underwriting.
What is Universal Life?
Has a flexible premium, Also the insured can increase the death benefit of the policy but that may trigger underwriting. they can also decrease the death benefit.
These are interest sensative policies. Min guaranteed interest of 4%. Excess interest is market driven.
What is Universal Life Option A?
if the value of the policy equals the cash value BEFORE the insured reaches age 95 the policy is automatically increased.
What Is Universal LIfe Option B?
Has a policy face value plus cash value. So a $100,000 policy with an additional $25,000 of cash value would pay out $125,000 at the death of the insured.
What is a Joint Life (First-to-Die) policy?
Ben and Jerry example (whole life policy)
What is a Last Survivor Policy?
Used to pay death taxes. Is paid out when the last person dies so that heirs don't have to pay the taxes.
What is a "jumping Juvenile" policy
The policy increases in amount at a set age, usually age 21 while the premium remains level.
What is a Juvenie Endowment
Written at birth to pay for college usually.
In a group policy, who recieves the "master policy"
The insured. The owner of the company.
What is a contributory group life insurance policy?
The employees pay part. Must have 75% participation
In group life, what is a non-contributory group?
The owner of the policy pays all expenses but all employees MUST enroll.
What is "Facility of Payment " as it refers to a group policy?
If there is no designated beneficiary, the person willing to pay for the medical bills and costs associated with the death of the insred, they get the money.
What is Credit LIfe Insurance
Covers a dept. Is Decreasing Term insurance.
Is Universal life a whole life policy or a term life policy?
What is a "split Dollar Plan" in regards to group incurance
the employer and the employee share the cost
A product with a flexible premium, guaranteed minimum rate of return, tax deferred earnings and tax free death benefits is:
What are the three types of ordinary life
- Whole, Endowment, Term
Who recieves a certificate of insurance?
The person who is covered. The policy is given to the owner of the policy, not the insured if they are different people
Statements made by an applicant for a life insurance policy that the
applicant says are true to the best of his or her knowledge are referred
- This is the definition of a representation. A warranty is a guarantee
- of truth, such as a statement that the insured has a burglar alarm
- in their house and it is being monitored.
What are the three grace periods
- 28 - industrial
- 30 - all others
- 31 - Group
What is a "waiver of Premium" rider
will waive the insureds premium after a six month waiting period if the insured becomes totally disabled.
What is a Collateral Assignment used for
It protects the insured's business or personal credit.
- Collateral Assignments, in which the insured pledges his policy to the
- bank as collateral for a bank loan, are very common. When the loan is
- paid off, the Collateral Assignment drops off. A Collateral Assignment
- assures the bank that if the insured dies with the loan outstanding, the
- bank will be paid
How long must someone wait to commit suicide so their policy will pay full death benefits?
What is the Payor Provision (sometimes called Payor Waiver of Premium.
allows the premiums to be waived in the event of the death or disability of the person responsible for premium payments