policy types

Life Insurance Purpose

Transfers the risk of premature death from one party to another.

Immediate Estate

Created instantly upon the establishment of a life insurance contract.

Standard Policies

Unlike property and casualty, life insurance has no standard policies.

Term Life Insurance

Provides pure, temporary protection with the maximum coverage at the lowest initial premium.

Level Term Life Insurance

Provides a fixed amount of protection for a specified period before expiring.

Increasing Term Life Insurance

Features a death benefit that increases at periodic intervals over the term.

Decreasing Term Life Insurance

Provides a death benefit amount that gradually decreases over the protection term.

Credit Life Insurance

Covers a debtor's life, with a maximum benefit equal to the loan value.

Conversion Option

Allows exchanging a term policy for permanent insurance without proving insurability.

Interim Term Insurance

Convertible term written for immediate protection when permanent insurance is initially unaffordable.

Renewal Option

Allows renewing a term policy before expiration without evidence of insurability.

ART / YRT

Annually renewable term providing one-year coverage renewable yearly without medical underwriting.

Term Life Disadvantage

Terminates without paying a death claim if the insured outlives the policy.

Whole Life Insurance

Permanent insurance providing a death benefit regardless of when death occurs.

Whole Life Maturity Age

Designed to mature when the insured reaches the age of 100.

Ordinary Whole Life

Basic whole life form where premiums are payable for the insured's entire life.

Single Premium Whole Life

Most expensive initial whole life policy, creating immediate non-forfeiture cash value.

Modified Whole Life

Features lower introductory premiums for a set period before jumping to a higher rate.

Graded Premium Whole Life

Starts with low early-year premiums that increase annually before becoming fixed.

Indexed Whole Life Insurance

Offers a face amount that increases with the Consumer Price Index without insurability proof.

Adjustable Life Insurance

Combines term and permanent insurance into a single flexible plan.

Universal Life Insurance

Permanent term-like policy featuring cash value, flexible premiums, and adjustable death benefits.

Universal Life Option A

Death benefit equals cash value plus remaining pure decreasing term insurance.

Universal Life Option B

Death benefit equals face amount plus increasing cash values.

Variable Life Insurance

Permanent policy with fixed premiums and cash values invested in separate securities accounts.

Universal Variable Life

Hybrid policy combining flexible premiums and death benefits with investment control.

Family Plan Policy

Designed to insure all members of a family under a single policy.

Joint Life Policy

Covers two or more lives and pays a benefit upon the first death.

Last-to-Die Policy

Covers two or more lives and pays a benefit upon the final insured's death.

Endowment Policy

Features rapid cash value growth, maturing at a specified date before age 100.

Modified Endowment Contract (MEC)

Overfunded life insurance policy that failed the IRS 7-pay test.

Industrial Life Insurance

Small issue amounts with weekly or monthly premium collections.

STOLI

Stranger-owned life insurance purchased solely to sell to a third party without insurable interest.

Non-Medical Life Insurance

Does not require a medical exam and tends to be more expensive.

Participating Life Policy

A policy that distributes dividend payments from the insurance company.