https://quizlet.com › 193751325 › life-insurance-basics-flash-cards features level annual premiums and a death benefit that increases each year over the duration of the policy term. A waiver of premium rider is an optional benefit on many term life insurance policies, and may also be available on permanent forms of insurance coverage. Whole Life Insurance. As long as the insured keeps paying their monthly premium, this type of policy does not expire. Level annual Premium for the life of the insured. Which of the following statements is correct regarding this change, An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. Provides a low face amount in the early years and then increases, usually by 5 times the amount when the insured reaches an age specified in the policy. C) The face value of the policy is paid to the insured at age 100. The policy also contains renewability and convertibility options. In fact, the policy owner may even skip paying a premium and the policy will not lapse as long as there is sufficient cash value at the time to compensate for the nonpayment of premium, Adjustable life policies allow for increases or decreases in the face amount or premium, so long as the premium is sufficient to pay for the mortality. Start studying Ch. Permanent life … C Jumping … The premium rates are actually equivalent to a standard whole life policy. A settlement option is exercised when an immediate annuity is purchased with the face amount at death or with the cash value at surrender. After they applied for group life insurance, they were rejected. premium that can be increased or decreased as the policy owner chooses, so long as there is enough value in the policy to fund the death benefit. When you buy a term life insurance plan, you invest in the financial security for your family in your absence. This type of permanent life policy earns a cash value and provides more flexibility than universal life because it allows you to invest a portion of the premiums in bonds, money market mutual funds, or stocks. Level-premium insurance is a type of term life insurance for which the premiums remain the same throughout the duration of the contract. What must he provide to accomplish this. M purchases a $70,000 Life Insurance Policy with premium payments of $550 a year for the first 5 years. Modified whole life policies … The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. (normally 21). If a total disability occurs, the remaining premium charges will … The type of policy that M has purchased is "Modified Premium Life". When the breadwinner that is insured by a Family Policy dies, what rights are provided to other family memmbers that are covered under the policy? This traditional life insurance is sometimes also known as whole life insurance or cash value insurance. Unlike term life insurance that you buy in increments of time (normally … The waiver of premium rider will provide a benefit only if the insured person becomes totally disabled. A straight life insurance policy is a type of permanent insurance that provides a guaranteed death benefit and has fixed premiums. provides an increase in the death benefit each year. It's important to understand how cash surrender works before you sign up for any form of life insurance. How will the insurer handle this situation? All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy, An individual purchased a $100,000 Joint Life policy on himself and his wife. In other words, the cumulative peremiums paid during the first seven years of a policy must NOT exceed the total amount of net level premiums that would be required to pay the policy up using guaranteed mortaility costs and interest. The policy endows when the insured turns `00. Policy provisions in an insurance contract can include such details as coverage periods, exclusions, riders, start dates, and other important information. This is one of the most popular life insurance riders. What type of premium does a straight life policy have? The coverage is usually structured to provide a death benefit equal to the amoung of the premium paid on a permananent life insurance policy or to provide a death benefit equal to the cash value accumulation in a permanenet policy: however is can be written as a stand-along policy for the individual that has a need for increasing amounts of insurance. provides permanent life insurance for the breadwinner and term riders for other family members. Previously, she worked in marketing and business development for travel and tech. What type of insurance would be the most affordable and still provide a death benefit should one of them die, To sell variable life insurance policies, an agent must receive all of the following EXCEPT, The death benefit can be increased by providing evidence of insurability, The policyowner of an adjustable life policy wants to increase the death benefit. It loses the benefits of a standard life contract. Adjustable Life with a large death benefit and minimal premiums C An Ordinary Straight Whole Life policy with a Level Term rider to age 65 D Indeterminate Premium Whole Life . Q is dissatisfied and returns the policy February 13. When the insured renews the policy in 5 years, what will happen to the premium, Which policy component decreases in decreasing term insurance, Those who have been insured under the plan for at least 5 years, Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated, Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured, Which of the following would be the beneficiary in credit life insurance, Which type of life insurance policy generates immediate cash value, Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit, When an employee terminates coverage under a group insurance policy, coverage continues in force, Premiums are determined by the age, sex and occupation of each individual certificate holder, All of the following are characteristics of group life insurance EXCEPT, What is the purpose of establishing the target premium for a universal life policy. Q applied for life insurance and submitted the initial premium on January 1. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. She's previously written for Jetty and LegalZoom. Variable Life Insurance is based on what kind of premium? Interest rates will afftect the amount of the cash value. Most life insurance companies offer several modes of premium, most commonly annual, semi-annual, quarterly, or monthly. Universal life (UL) insurance is permanent life insurance with an investment savings component. Her writing on insurance and finance has appeared on MSN, The Financial Gym, and end-of-life planning service Cake. Cash values are generated by investments. Policyowner has the flexibility to create the amount of premium going into the policy and later decrease it again. The owner of an Adjustable Life Policy has the following priviledges: increasing or decreasing the premium, changing the premium0paying period, increasing or decreasing the face amount of coverage, or changing the period of production. She has researched and written extensively about life insurance since 2019, with specialties in life insurance companies, policy types, and end-of-life planning. This terminology denotes that premiums for the plan will be level, meaning they will not increase or decrease during the life of the policy. This policy has a cash value that increases while she continues to make payments. Policy was returned within the free-look period, premium will be fully refunded 2 Which of these factors do NOT … The premiums are flexible, but not necessarily as low as term life insurance. Unfortunately, the price usually remains about the same, so most people opt for level term. With a straight life policy, a portion of your premium pays for the insurance and the rest accumulates tax deferred in a cash value account. Her writing on insurance and finance has appeared on MSN, The Financial Gym, and end-of-life planning service Cake. What would be the right policy for this client, All other factors being equal, the least expensive first-year premium payment is found in, The insured may choose to convert to term or permanent individual coverage, An employee is insured under her employer's group life plan. Both types of policies typically feature guaranteed premiums, meaning you pay the same premium for the duration of the policy. The distinguishing feature of this policy is that it generates immediate cash value, due to the lump-sum payment maade by the insurer. These policies tend (though not always) to have much higher premiums than UL, relative to the face value of the policy. Previously, she worked in marketing and business development for travel and tech. 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