Unit 6 Cram Sheet: Settlement Options and Cash Value Access

Flashcards covering key concepts related to settlement options and cash value access in insurance policies.

Interest Only

Interest is paid on the death benefit while the death benefit is paid at a later date.

Fixed Period

Death benefit plus guaranteed interest is paid over a set amount of time; if interest earnings are greater than the guaranteed rate, the final payment will be larger.

Fixed Amount

A fixed amount is paid, where interest earnings affect how long the payments can be made.

Life Income

Payments are made to the beneficiary based on life expectancy, guaranteed for life, and stop upon the death of the beneficiary.

Life Income—Period Certain

Life income paid to the beneficiary, guaranteed for a minimum amount of time, and paid to someone else if the beneficiary dies before the end of the guaranteed period.

Life Income—Refund

Beneficiary receives an income for life with a guarantee that payments will total at least the death benefit, with the balance going to someone else if the beneficiary does not live long enough.

Joint and Survivor

Income is paid to two beneficiaries for life, with payments to the survivor remaining the same or being reduced upon the death of one.

Automatic Premium Loan

A provision that prevents lapse of a policy by charging interest on a loan taken to pay for premiums.

Non-Forfeiture Options

Choices available to a policyowner if no premiums are paid, including surrendering policy for cash, reduced paid-up insurance, or extended term insurance.

Dividend Options—CARPPO

Cash, Accumulate at interest, Reduce next premium amount, Paid up additions, Paid up policy, One year term insurance.