Types of Life Insurance

Term Life

temporary life insurance provided for a specific period of time. Also known as pure life insurance.

Level Term Insurance

is the most common type of temporary protection. Level refers to the death benefit that does not change throughout the life of the policy.

Decreasing Term Policies

feature a level premium and a death benefit that decreases each year. These policies are primarily used when the amount of protection needs to decrease over a period of time.

What is the most common use for a decreasing term policy?

Insure the payment of a mortgage

Increasing Term Policies

feature level premiums and a death benefit that increases each year

Renewable

allows the policy owner the right to renew the coverage at the expiration date without evidence of insurability, and the premiums will be based only on the insured’s current attained age

Convertible

allows the policy owner the right to convert the coverage to a permanent whole life insurance policy without evidence of insurability

Whole Life Insurance

also called permanent life insurance, these policies that remain in effect to age 100 as long as the premium is paid, and also has cash value

What are the 3 basic types of term coverage

level, increasing, and decreasing

What are the characteristics of a whole life insurance policy?

Level premiums, level death benefit, and cash value

Living Benefits

With a whole life policy, a policy owner can borrow against the cash value while the policy is in effect, or can receive the cash value when the policy is surrendered

What are the 3 basic types of whole life insurance?

straight whole life, limited pay whole life, and single premium whole life

Straight Whole Life

also called continuous premium whole life, is a basic whole life policy where the policy owner pays a fixed premium for the time the policy is issued until the insured’s death or age 100

Limited Pay Whole Life

designed so that the premiums for the coverage will be completely paid up well before age 100

Single Premium Whole Life

a onetime lump sum payment is made, which will provide a level death benefit to the insured at age 100