Life Insurance Summary

GENERAL CONCEPTS OF LIFE INSURANCE

  • Life insurance transfers risk of premature death.
  • Creates an immediate estate.
  • No standard policies unlike property insurance.

TEMPORARY LIFE INSURANCE PRODUCTS

  • Term Life Insurance:

    • Pure, temporary protection.
    • Most coverage at lowest premium.
    • No cash value.
    • Protects against financial loss from early death.

  • Decreasing Term Life Insurance:

    • Death benefit decreases over term.
    • Includes mortgage redemption insurance.

  • Credit Life Insurance:

    • Covers debt repayment if debtor dies.

  • Level Term Life Insurance:

    • Fixed death benefit for specified period.

  • Renewal Option:

    • Renew without evidence of insurability.

  • Step-Up Premium:

    • Premium increases steadily.

  • Annual Renewable Term (ART):

    • One year coverage; renewable without proof.

  • Increasing Term Life Insurance:

    • Death benefit increases at intervals.

  • Interim Term Life Insurance:

    • Temporary coverage; premiums based on original age.

  • Advantages of Term Insurance:

    • Less expensive; protects insurability; substantial coverage.

  • Disadvantages of Term Insurance:

    • Coverage ends when term expires; no cash value; may lead to cancellations due to rising premiums.

PERMANENT LIFE INSURANCE PRODUCTS

  • Whole Life Insurance:

    • Death benefit payable upon death; fixed premiums.
    • Tax-deferred cash value; matures at age 100.

  • Types of Whole Life Policies:

    • Ordinary, Limited Payment, Single-Premium, Modified, Graded Premium, Indexed.

ALTERNATIVE NONTRADITIONAL LIFE INSURANCE PRODUCTS

  • Adjustable Life Insurance:

    • Combines flexibility and permanent insurance.

  • Universal Life Insurance:

    • Flexible premiums, adjustable death benefits.
    • Tax-deferred cash value; surrenderable for cash value.

  • Indexed Universal Life Insurance:

    • Combines traditional features with equity index growth potential.

SEC REGULATED LIFE INSURANCE POLICIES

  • Variable Life Insurance:

    • Death benefit and cash value vary based on investment performance; separate account.

  • Variable Universal Life:

    • Flexible premiums; combines investment features with permanent insurance.