Term
| Medical Savings Accounts allow up to how many employees? |
|
Definition
|
|
Term
Tax deductible premium?
Employer buys group term life for employees
True/False? |
|
Definition
True
group life is tax deductible as it is considered a business expense
|
|
|
Term
Are premiums paid for life insurance tax deductible?
|
|
Definition
| In general, no. Group term life purchased by employer is exception. |
|
|
Term
| What is Cash option on life insurance? |
|
Definition
Dividend check to insured
|
|
|
Term
Life Insurance
Accelerated benefits
Taxed to terminally ill insured? |
|
Definition
| No, they are tax free for terminally ill (up to a limit for chronically ill) |
|
|
Term
| Is mental illness covered by basic medical expense coverage? |
|
Definition
No.
coverage for: nonsurgical services
emergency accident benefits
Maternity benefits
mental/nervous disorders
hospice care
home health care
outpatient care
nurses expenses |
|
|
Term
Cheapest insurance
No cash value or other living benefits
if canceled or expired, nothing paid
If insured dies, death benefit is paid to beneficiary
What type of Life insurance?
|
|
Definition
|
|
Term
| 3 basic types of Term coverage: |
|
Definition
Level
Increasing
Decreasing |
|
|
Term
| In Term Life, what is Level Term |
|
Definition
Most common type
Death benefit does not change throughout the life of the policy
Level pay, stated payout.
At the end of term, ph can renew but premium based on their age at renewal. |
|
|
Term
| In Term Life, what is Increasing Term? |
|
Definition
Level premiums
Death benefit increases each year
Commonly used with:
refund of premium riders
cost of living rider
Return of premium riders |
|
|
Term
| In Term Life, what is decreasing Term? |
|
Definition
Level premium
Decreasing death benefit
Commonly used to pay a mortgage or debt as the debt will be decreasing over time as payments are made.
Usually convertible but not renewable at end of term |
|
|
Term
| What is an Annually renewable Term (ART) Life? |
|
Definition
death benefit remains level (level term policy)
Guaranteed renewable each year without proof of insurability (but premium increases w/age) |
|
|
Term
Term Life
What is Return of Premium (ROP) rider |
|
Definition
increasing term insurance
Returns all premium to insured if alive at end of term
(insurer invest premium and gains interest during the term) |
|
|
Term
Term Life
What is the Renewable provision? |
|
Definition
Policyowner has the right to renew w/out evidence of insurability
Renewal premium based on age at renewal |
|
|
Term
Term Life
What is convertible provision |
|
Definition
| owner can convert from term to permanent w/out evidence of insurability |
|
|
Term
Whole Life
What age is used to endow? |
|
Definition
(aka permanant life)
100
Cash value created = face value at age 100
Calculated as if ph will pay premium until age 100
|
|
|
Term
| Are whole life premiums higher or lower than term life?(typically) |
|
Definition
|
|
Term
| What are 4 key elements of Whole Life? |
|
Definition
Level Premium (level based on age at issuance)
Death Benefit (level)
Cash Value (credited regularly, guaranteed interest rate)
Living Benefits (ph can borrow against cash value)
|
|
|
Term
| What is Living Benefits characteristic in Whole Life? |
|
Definition
PH can borrow against the cash value of the policy or cash out
Usually start accumulating 3rd year
Grows Tax deferred
|
|
|
Term
| What are the 3 types of Whole Life policies? |
|
Definition
Straight
Limited Pay
Single premium |
|
|
Term
Whole Life
What is a Straight Life?
(aka ordinary or continuous premium Whole Life) |
|
Definition
premium paid to 100 or death
Cash value increases
Lowest annual premium of whole life policies since paying longer |
|
|
Term
Whole Life
What is Limited payment? |
|
Definition
Premiums paid up before 100
EX: 20-pay (premium paid for 20 years)
LP-65 - Life paid - usually paid by age 65
Shorter payment term, cash value continues to increase |
|
|
Term
Whole Life
What is a Single Premium Whole Life (SPWL)? |
|
Definition
One time, lump sum payment
pays death benefit to age 100
Cash value immediately and increases over time
|
|
|
Term
What is interest sensitive whole life?
(aka current assumption life) |
|
Definition
Guaranteed death benefit to age 100
initial premium based on interest, expense and risk assumptions. If values change, premium is adjusted.
Can add greater cash value or shorter premium payment period depending on interest results
|
|
|
Term
What is a modified life whole term policy? |
|
Definition
Lower premium first 3-5 years
Then higher level premium |
|
|
Term
What is graded premium whole life? |
|
Definition
First 5-10 years, pay 50% of premium
Then higher premium after (level)
Overall, premium is the same as straight life at the end, just lower in beginning and higher after to equal out. |
|
|
Term
| What is Indeterminate premium whole life? |
|
Definition
Has 2 premiums
1) level/maximum premium
2) Fluctuating - based on results (mortality rates, expense, investment). Paid for a set period of time
premium will never exceed maximum premium amount set |
|
|
Term
Life
Mortgage redemption provision/coverage? |
|
Definition
Insures for an amount equal to ph mortgage.
If ph dies, insurer pays balance of loan |
|
|
Term
Life
Family Maintenance policy? |
|
Definition
Combines whole life with level term
Based on family income
specified period of time
If insured dies, $ to pay monthly bills
Contains permanant life paid on death
|
|
|
Term
Life
Family policy characteristics?
|
|
Definition
Combines whole and term
covers family members in a single policy
Whole insurance on breadwinner + convertible term on other family members
Spouse can convert to permanant up to age 65
newborns covered for 30-31 days after birth and can be added (can also convert from term to perm at age 21, w?no evidence of insurability) |
|
|
Term
Life
Family income policy characteristics?
|
|
Definition
Decreasing term and whole life on the breadwinner
Provided family with monthly income if BW dies for the remainder of the income period, then pays whole life coverage to beneficiary.
If BW dies after stated income period, only whole life is paid
Family term rider = spouse term + childrens term |
|
|
Term
|
Definition
single policy
Insures 2+
Term or perm
Lower premium then separate policies
Premium based on joint average age
Death benefit paid on first death only
Also common for buy-sell agreements |
|
|
Term
| What is survivorship Life? |
|
Definition
aka "second to die" or "Last survivor"
premium based on average age of insureds
Pays on last death (lower premium then joint) |
|
|
Term
| What is a Jumping Juvenile life policy? |
|
Definition
written on a minor
face amount increases a set amount at age 21
Premium stays the same |
|
|
Term
Life
What is the Payor Rider
(primarily used with juvenile policies) |
|
Definition
| if payer becomes disabled for 6 months or dies, the insurere will waive the premium until the minor reaches the set age (often 21) |
|
|
Term
Whole Life
Return of premium rider benefits? |
|
Definition
death prior to set age:
Pays original face amount + premiums paid: to beneficiary
usually expires at age 60 or specified age |
|
|
Term
|
Definition
|
|
