lifeins ch 4 - LIFE INSURANCES POLICIES Your client wants...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
LIFE INSURANCES POLICIES Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client? Limited pay whole life insurance Premium payments will cease at her age 65, but coverage will continue to her death or age 100. Which of the following distinguishes a Group Life Policy from an Individual Life Insurance Policy? Reduced adverse selection . In order to reduce adverse selection, a Group Life Policy requires a minimum number of participants in the group, depending on who pays the premium. If the insured lives to age 100, the policy endows (matures) and the face amount is paid to the insured at that time. If the insured and the policyowner are two different people, the face amount still goes to the insured. STRAIGHT LIFE POLICY Annual Renewable Term policies' premiums are adjusted each year to the insured's attained age; however, the policy may be guaranteed renewable. Death benefits remain level, and as with any term policy, there are no cash values. A decreasing term policy's face amount decreases as the amount of debt is reduced. An individual has just borrowed $10,000 from his bank on a 5-year note. The note is due in installments. What type of life insurance policy would be best suited to this situation? Typically, the owner of an adjustable life policy has the following privileges; increasing or decreasing the premium; changing the premium-paying period; increasing or decreasing the face amount of coverage; or changing the period of protection. The policyowner of an Adjustable Life policy can increase premium payments and Have a limited pay policy. All other factors being equal, the least expensive first year premium payment is found in Annual Renewable Term Annual renewable term is the purest form of term insurance. The death benefit remains level and the policy may be guaranteed to be renewable each year but the premium increases annually as the probability of
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/22/2010 for the course LIFE INSUR 245 taught by Professor Knowles during the Spring '10 term at El Centro College.

Page1 / 3

lifeins ch 4 - LIFE INSURANCES POLICIES Your client wants...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online