LIFE INSURANCE POLICY TYPES

What is Accidental Death and Dismemberment Insurance (AD&D)?

A form of insurance that provides benefits for accidental death or loss of limbs or senses.

What does Accidental Death Benefit (ADB) provide?

It provides a lump-sum payment for loss of life due to an accident.

What is an Additional Premium in Universal Life Policies?

An additional payment into the policy above the target premium, limited by tax laws.

What is Attained Age in life insurance policy?

The age the insured has reached as of a given date, based on the nearest or last birthday.

What is Adjustable Life Insurance?

A policy that combines whole life and term insurance, allowing premium adjustments.

Define Cash Surrender Value.

The cash amount available upon surrender of a policy before or after it matures.

What is Cash Value in whole life insurance?

The equity portion that increases with each premium payment and is tax-deferred.

What is Credit Insurance?

Insurance designed to pay off a loan if the insured dies or becomes disabled before repayment.

What is Convertible Term Life Insurance?

Temporary insurance allowing the exchange of an existing policy for other offered policies.

What characterizes Decreasing Term Insurance?

A type of insurance with a reducing face amount each year while the cost remains constant.

What is an Endowment Contract?

A contract paying a face amount after a specified time, specific age, or upon death.

What does Evidence of Insurability mean?

Establishing that an applicant meets health requirements for insurance.

What is Extended Term Insurance?

A non-forfeiture option providing same face amount coverage for a specified period.

Define Face Amount in life insurance.

The death benefit of a life insurance policy.

What is a Family Income Policy?

A policy combining whole life with a decreasing term rider to provide income to beneficiaries.

What does Family Maintenance Policy provide?

Monthly income for a stated period after the insured's death, plus a lump sum of whole life coverage.

What is a Family Policy?

A policy covering an entire family, with a whole life insurance for the primary insured.

What represents a Guideline Premium in universal life policies?

The maximum premium that can be paid while still qualifying as life insurance.

What are Indexed Contracts?

Contracts allowing policyholders to share in the growth of an indexed investment.

What is Increasing Term Life Insurance?

Term life insurance that provides an increasing face amount over time.

What characterizes Industrial Life Insurance?

Monthly premium payments with a face amount not exceeding a stated amount.

What is Joint Life Insurance?

A policy that covers two or more persons and pays out when the first insured dies.

What is Joint Life Survivor Insurance?

A policy covering two or more persons that ends when the last insured dies.

Define Juvenile Life Insurance.

A life insurance policy owned by an adult written on the lives of children.

What does Level Premium imply?

A premium that remains constant throughout the life of a policy.

What is Life Insurance?

Insurance that creates an estate upon death or at the end of a predetermined period.

What is Limited Pay Life Insurance?

A plan with premiums payable for a specified number of years, remaining in effect for life.

What is a Maturity Date?

The date a life insurance policy becomes payable due to death or reaching a specified age.

Define Maturity Value.

The amount paid under a whole life contract if the insured reaches age specified by the mortality table.

What is a Modified Endowment Contract (MEC)?

A whole life policy where early premiums exceed a specified sum, treated as a short-term investment.

What characterizes a Modified Life Policy?

A whole life plan with lower initial premiums that increase after an introductory period.

Define Mortgage Redemption Plan.

Another term for decreasing term life insurance policy used to pay off a debt.

What is a Mutual Insurance Company?

An insurance company owned by policyholders that may pay dividends.

What are Non-Forfeiture Values?

Benefits available if a policy is surrendered, including cash, extended term, or reduced paid-up insurance.

What is Non-Medical Life Insurance?

Insurance issued without requiring a medical examination from the applicant.

Define Non-Participating Insurance.

Insurance issued by a stock insurer that does not pay dividends to policyholders.

What is Ordinary Life Insurance?

An insurance policy issued by commercial insurers with face values of $1,000 or more.

What does Paid-Up Insurance mean?

Life insurance on which future premiums are not required after a specific payment period.

What is Participating Insurance?

Insurance that allows policyholders to share in the insurer's divisible surplus through dividends.

Define Permanent Life Insurance.

Life insurance designed to last throughout the life of the insured.

What are Policy Proceeds?

The amount paid as a benefit in cases of death, surrender, or maturity.

What is a Policy Term?

The duration for which a life insurance policy remains in effect.

What is Renewable Term Life Insurance?

Temporary insurance that can be renewed without insurability evidence at the end of the term.

Define Single-Premium Insurance.

Insurance paid by one large premium covering costs for life.

What is Straight Life Insurance?

Whole life insurance providing coverage for the insured's entire life with premiums until death.

What characterizes a Stock Insurance Company?

An insurance company owned by stockholders who share in the divisible surplus.

What does Target Premium represent?

The suggested premium in universal life policies, not guaranteeing policy maintenance.

What is Term Life Insurance?

Temporary life insurance designed for a limited number of years with no cash value.

Define Universal Life Insurance.

Adjustable life insurance with adjustable premiums and coverage.

What is Variable Life Insurance?

Life insurance whose face value or duration varies based on underlying securities.

What is Variable Universal Life Insurance?

Insurance combining flexible premiums of universal life with variable life components.

What is Whole Life Insurance?

Insurance designed to last for a person's entire life, paying a benefit upon death.