Make the purchase of whole life insurance more

make the purchase of whole life insurance more attractive for individuals who,
for example, are just starting out and have limited financial resources, but will
be able to afford the higher premiums in the future as their income grows.
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Graded-premium whole life is somewhat similar to modified life in that
premiums start out relatively low and then level off at a point in the future. A
graded premium whole life policy typically starts with a premium that is
approximately 50% or lower than the premium of a straight life policy. The
premium then gradually increases each year for a period of usually 5 or 10
years, and then remains level thereafter.
Modified Life and Graded-Premium Life policies are useful as a compromise
between straight life and convertible term insurance since the premium is less
than straight life in the early years, but some cash value is being accumulated.
The actual premiums paid over the life of the contract for a modified or graded
premium policy are actually the same as paying for a straight life policy to age
100.
Indeterminate Premium
Indeterminate premium whole life policies have the premium rate that may
vary from year to year. These policies specify two premium rates: a guaranteed
level premium stated in the contract (maximum premium), and a
nonguaranteed lower premium rate that the policyowner actually pays for a set
period of time. After the initial period (usually 2-3 years), the insurer establishes
a new rate which could be raised, kept the same or lowered, based on the
company’s expected mortality, expense and investments. The premium,
however, can never be higher than the guaranteed maximum.
C. Special Coverages
II.B.4. Be able to identify each of the following special coverages and
when they are appropriate:
a. Mortgage redemption;
b. Family protection, family policy, family rider;
c. Policies linked to indexes;
d. Juvenile policies (including Jumping Juvenile and Payor Rider);
e. Return of premium;
f. Joint life and survivorship policies.
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1. Mortgage Redemption
A mortgage redemption provision insures borrowers for an amount equal to
their mortgages. If the borrower/insured dies, the insurer assumes
responsibility for paying the outstanding loan balance to the insured's creditor.
2. Family Protection, Family Policy, Family Rider
A family protection or family policy combines whole life with term insurance
to cover family members in a single policy, providing coverage on every member
of a family. The family policy typically provides whole life insurance on the
breadwinner of the family and convertible term insurance on the other family
members. The spouse has the opportunity to convert his or her term coverage
to permanent coverage up until age 65. Children are automatically covered
after birth for a specified period of time, usually 30 or 31 days. To continue