Term
| Two primary characteristics distinguish cash value life insurance products from Term Life Insurance Products - what are they? |
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Definition
1. Cash value offers lifetime coverage
2. Cash Value offers a savings element |
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Term
| The size of a policy's cash value at any given time depends on a number of factors -what are those factors? |
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Definition
| The face amount of the policy, the length of time the policy has been in force, and the length of the policy's premium payment period. |
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Term
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Definition
| The policyowner has the right to receive policy's cash value to use as collateral for a loan from another financial institution or just take the cash. If the insured dies before a policy loan is repaid, the unpaid amt. of the loan plus any interest outstanding is subtracted from the policy benfit. |
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Term
| Whole life policies are classified as either 1. Continuous-premium policies or Limited -payment policies - how do these differ? |
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Definition
Continuous -premium policies premiums are payable only until the death of the insured. The premiums are lower for continuous premium policies than with Limited.
Limited Payment policies premiums are payable only for a specific number of years or until the insured reaches a specified age. If the insured dies, of course, it would end too. Cash value builds more rapidly under Limited. |
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Term
| What is meant by a Paid-Up-Policy? |
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Definition
| A policy requires no further premium payment but continues to provide coverage . Ex. Paid up at age 65 - means at the time the insured turns 65 - no further payments are required but coverage continues. |
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Term
| How are the terms Modified-Premium Whole Life Policies and Grated Premium Policies? |
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Definition
Modified Premiums Whole Life Policy's annual premium changes after a specified initial period. Its face value remains level throughout the life of the policy. The advantage is a person can buy a larger face value with this policy because it is more affordable but the cash value builds slower.
Graded has three or more levels of annual premium amt's, increasing at specified points in time, such as every three years. Face amt. remains level too. |
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Term
| What does the term MODIFIED COVERAGE mean in a Whole Life policy? |
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Definition
| This provies that the amount of insurance will decrease by specific percentages or amounts either when the insured reaches certain states ages or at the end of stated time periods. This has a lower annual premium. The older the insured is when the face amt. is at its lowest level. |
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Term
| What is important about LAST SURVIVOR LIFE INSURANCE? |
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Definition
| This is only payable after both people insured by the policy have died. This is primarily helpful to provide funds to pay estate taxes that may be levied after their deaths. |
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Term
| What is important to know about Family Policies? |
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Definition
| Applicant for the insurance policy must provide evidence that all family members are insurable. One policy is issued, all children born to or adopted are automatically covered without additional premiums. |
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Term
| What is the MONTHLY DEBIT ORDINARY POLICY? |
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Definition
| It is a whole life ins. policy marketed under the home distribution system and is paid for my monthly premiums. It is sold by commissioned sales agents that sell within a certain geographic area. |
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Term
| Another form of cash value insurance is the UNIVERSAL LIFE product - what makes this different than normal Whole Life policies? |
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Definition
| Universal policies have flexible premiums, flexible face amounts, and flexible death benefit amounts and has unbundling price factors. The policyowner determines the premium amount. |
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Term
| Universal Life Policies have Flexible Features - one is known as OPTION A and one is known as OPTION B - how do these differ? |
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Definition
Option A's death benefit is level - the death benefit is equal to face amount.
Option B - the death amount at any given time is equal to the policy's face amount plus the amount of the policy's cash value. After one year, a policyowner can request an increase but has to show evidence of the insured's continued insurability. |
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Term
| What is an INDETERMINATE PREMIUM LIFE INSURANCE POLICY? |
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Definition
| It is a type of Nonparticipating whole life policy that specified two premium rates. The lower rate is charged in the beginning for a stated period of time then it increases based on the actual mortality, interest and expense experiences. |
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Term
| How does Variable Life Insurance differ from Variable Universal Life Ins.? |
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Definition
Variable is a form of cash value life insurance in which premiums are fixed, but the face amt. and other values may vary.
Variable Universal can still choose the prem. amt. and face amt.but also provides death benefit and investment flexibility. Both do not guarantee investment earnings or cash values. |
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Term
| What is Endowment Insurance |
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Definition
| This specifies a benefit amount whether the insured lives to the end of the term of coverage or dies during the term. This policy has a MATURITY DATE and this date is used to know when face amt. can be paid to the policyowner. |
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