Questions and Answers
What is a single premium policy?
A policy under which only one premium payment is required
What is the term for a fixed amount added to the premium of a given policy, regardless of policy size?
Policy fee
What information must an agent know to calculate the required premiums for a given policy?
Face amount desired, age, and choice of plan
How is the annual premium adjusted to calculate premiums for other modes of premium payment?
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In a life insurance contract, who is the applicant-owner?
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What is the convertible feature of a term insurance policy?
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What happens when a policyholder dies within two years of buying a life insurance policy due to an accident?
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When explaining dividends, what information must be supplied?
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Who are the two primary parties involved in a life insurance contract?
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What is the fundamental advantage of using insurance as a means of meeting economic losses?
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How does life insurance contribute to the welfare and progress of a country?
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What is the term for the number of years that a person at a given age is expected to live on average?
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Which type of insurance plan offers protection and savings?
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What type of insurance policy would provide maximum protection possible for a person with moderate means?
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What type of insurance policy would entitle the policyholder to receive dividends yearly?
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Which type of insurance policy provides the longest protection?
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Study Notes
Life Insurance Concepts
- A single premium policy requires only one premium payment.
- A fixed amount added to the premium of a policy, regardless of policy size, is known as a policy fee.
- To calculate premiums, an agent must know the applicant's age, choice of plan, and face amount desired.
Policy Features
- A convertible feature of a term insurance policy allows the policy to be changed to a permanent insurance policy without evidence of insurability.
- A life insurance contract involves the insurance company, insured, and applicant-owner.
Dividends and Premium Computation
- When explaining dividends, the anticipated dividends and relation to the cost of the policy must be supplied.
- Part of the premium paid by a policyholder is invested by the insurance company, and this factor is known as investment or interest in premium computation.
Parties Involved and Benefits
- The parties involved in a life insurance contract are the insurance company, insured, applicant-owner, and beneficiary.
- Life Insurance contributes directly to the welfare and progress of the country by accumulating capital, partially relieving the community of the care of dependents, and encouraging provisions for the future.
Insurance Terminology
- Life expectancy refers to the number of years that persons at a given age will live on average, as shown by the mortality table.
- A participating plan is an insurance plan that offers protection and savings, and is suitable for policyholders who want to receive dividends yearly.
- Term insurance provides maximum protection possible for a man with moderate means.
Types of Insurance Plans
- A 20-year endowment policy provides protection and savings for a specified period.
- Whole life insurance provides protection for the entire life of the policyholder.
- Ordinary life insurance and limited pay life insurance are other types of insurance plans available.
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Description
Test your understanding of insurance policy concepts, including single premium policies, premium additions, and required knowledge for calculating premiums.
