Life Insurance Policies – Chapter Recap Flashcards

• Pure protection

• Coverage for a specific term

• No cash value

What are the general characteristics of Term Life Insurance?

• Level premium

• Level death benefit

What are the features of Level Premium Term Insurance?

• Renews every year

• Requires no proof of insurability

• Premiums increase with attained age

What is Annually Renewable Term (ART)?

Premiums increase each year because of the insured's attained age.

What happens to premiums in Annually Renewable Term Insurance?

The death benefit decreases over time.

What happens to coverage in Decreasing Term Insurance?
Best used: Declining financial obligations (like a mortgage).

The death benefit increases each year.

What happens to coverage in Increasing Term Insurance?

• Permanent protection

• Guaranteed death benefit

• Guaranteed premium

• Guaranteed cash value

• Level premiums

• Cash value builds over time

What are the general characteristics of Whole Life Insurance?

• Premiums paid for life (or to age 100)

• Level death benefit

What is Straight Life (Continuous Premium)?

Premiums are paid for a limited number of years or until a certain age, but coverage lasts for life.

What is Limited Pay Whole Life?

One lump-sum premium buys permanent coverage for life.

What is Single Premium Whole Life?

A policy that allows the owner to adjust:

• Premium

• Face amount

• Premium-paying period

• Length of protection

What is Adjustable Life Insurance?

✅ Yes.

Can Adjustable Life convert between Term and Whole Life?

Only if premiums paid exceed the cost of insurance.

When does Adjustable Life build cash value?

Annually Renewable Term (ART)

What type of insurance protection is included in Universal Life?

• Option A: Level death benefit

• Option B: Increasing death benefit

What are Universal Life's two death benefit options?

Partial surrender (cash withdrawal)

What withdrawals are allowed in Universal Life?

Separating:

• Insurance cost

• Interest

• Expenses

This provides flexibility.

What is "unbundling" in Universal Life?

Fixed premium

What premium does Variable Life have?

Guaranteed minimum death benefit

What is guaranteed in Variable Life?

❌ No.

Is Variable Life cash value guaranteed?

Separate Account

Where are Variable Life investments held?

• State Life Insurance License

• FINRA Registration

• Securities License

What licenses are required to sell Variable Life Insurance?

Covers two people.
Pays the death benefit at the first death.

What is Joint Life Insurance?

Covers two people.
Pays the death benefit at the last death.

What is Survivorship (Second-to-Die) Life Insurance?

Based on the joint average age of the insureds.

How are premiums determined for Joint Life and Survivorship Life?

The sponsoring organization (usually the employer).

Who receives the Master Contract in Group Life Insurance?

Certificate of Insurance

What do employees receive under Group Life Insurance?

Group underwriting

How is Group Life Insurance underwritten?

Proof of insurability

What is required if someone enrolls in Group Life after the open enrollment period?

31 days

How long does someone have to convert Group Life coverage after leaving the group?

• ✅ Same face amount

• ❌ Higher premium (based on attained age)

When converting Group Life to an Individual policy, what stays the same and what changes?

All Term Life policies

Which policies have NO cash value?

• Whole Life

• Adjustable Life

• Universal Life

• Variable Life

Which policies build cash value?

Variable Life

Which policy has fixed premiums but variable cash value?

Universal Life

Which policy has flexible premiums and uses annually renewable term insurance?

Adjustable Life

Which policy lets you change the premium, face amount, and coverage period?

Whole Life

Which policy has guaranteed cash value?

Variable Life

Which policy has separate accounts?

Joint Life

Which policy pays at the first death?

Survivorship Life

Which policy pays at the second (last) death?