Whole Life Policies Answer- – Ordinary (Straight) Life
- Limited-pay Life
- Single-Premium Life
- Adjustable Life
Interest/Market-Sensitive Policies Answer- – Universal Life - Variable Whole Life
- Variable Universal Life
- Interest-sensitive Whole Life
- Equity-Indexed Life
Term Life Policies Answer- – level term life - Decreasing Life
- Return of premium policy
- Annually renewable policy
- Increasing term policy
Combination Plans Answer- – Joint Life (first to die) - Survivor Ship Life (second to die)
Individual Policy characteristics Answer- – individual is issued the policy, selects the
plan - individual applies
- More expensive
- More restrictive
Group Policy Characteristics Answer- – Master policy-owner is issued for the group - Group selects plans to pick from
- Eligible employees apply
- Less expensive
- Less restrictive
Permanent Life Insurance Answer- – whole life insurance - effective for entire life, up to age 100
- permanent protection
- cash value
Term Life Insurance Answer- – Effective for temporary period of time - no cash value
Participating Life Insurance Policies Answer- – pay dividends to policyholders - ex: Mutual Insurance companies
Ways of policyholders receiving dividends from participating life insurance policies
Answer- — In cash - Accumulate interest
- Purchase more coverage
- Use to reduce future premium prices
- Pay up the entire policy
- Purchase 1-year term insurance
Nonparticipating Life Insurance Policies Answer- – Pay dividends to shareholders
(not policyholders) - ex: stock companies
Fixed Life Insurance Answer- – Earn constant rate of interest - Guarantee minimum of benefits
Variable Life Insurance Answer- – Earn fluctuating rate of interest - Do not guarantee certain cash value
Whole Life Insurance Characteristics Answer- – Provide protection for insured’s
entire life - Provides living benefits
- Provides cash value (value of policy) that is non-forfeiture value that policy owner is
guaranteed
Ordinary (straight) life policy Answer- – basic whole life policy - Level cash value
- Level premiums over
- Value and payments into policy stay the same throughout
- Cash value is a
nonforfeiture value
and is guaranteed
Limited-Pay Whole Life Policies Answer- – Insured is covered for his entire life - Premiums are paid for a limited time
- Face amount and premiums stay the same
- Cash value is a
nonforfeiture value
and is guaranteed
Single Premium Whole Life Policy Answer- – premium is paid upfront in one whole
lump-sum - Coverage is for entire life
- Cash (face) value is the same throughout
- Cash value is a
nonforfeiture value
and is guaranteed
Adjustable Life Answer- – mix of whole and term life insurance - Premiums can be changed
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