Podcast
Questions and Answers
What is the purpose of life insurance?
What is the purpose of life insurance?
Who typically receives the death benefit from a life insurance policy?
Who typically receives the death benefit from a life insurance policy?
What is the main difference between Term Life Insurance and Permanent Life Insurance?
What is the main difference between Term Life Insurance and Permanent Life Insurance?
Who needs life insurance?
Who needs life insurance?
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What is a consideration when determining how much life insurance you need?
What is a consideration when determining how much life insurance you need?
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Why might a company not honor a life insurance policy?
Why might a company not honor a life insurance policy?
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What is a key feature of variable life insurance?
What is a key feature of variable life insurance?
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Who is guaranteed life insurance typically suitable for?
Who is guaranteed life insurance typically suitable for?
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What is a factor that affects the cost of a life insurance policy?
What is a factor that affects the cost of a life insurance policy?
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What is the consequence of lying about risk factors on a life insurance application?
What is the consequence of lying about risk factors on a life insurance application?
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What is the main difference between variable life insurance and other types of life insurance?
What is the main difference between variable life insurance and other types of life insurance?
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Why is it important to shop for a life insurance policy when you're younger?
Why is it important to shop for a life insurance policy when you're younger?
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What is the main difference between Term Life Insurance and Permanent Life Insurance?
What is the main difference between Term Life Insurance and Permanent Life Insurance?
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What is the primary benefit of Term Life Insurance?
What is the primary benefit of Term Life Insurance?
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Who may consider purchasing Term Life Insurance?
Who may consider purchasing Term Life Insurance?
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What is Group Life Insurance typically a type of?
What is Group Life Insurance typically a type of?
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What happens to Group Life Insurance coverage if you quit your job?
What happens to Group Life Insurance coverage if you quit your job?
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Why is shopping for another policy on your own a good idea if you have Group Life Insurance?
Why is shopping for another policy on your own a good idea if you have Group Life Insurance?
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Study Notes
Term Life Insurance
- Lasts for a defined period of time (10, 20, or 30 years) specified at purchase
- Pays beneficiaries a fixed amount if death occurs during the covered period
- No payment is made if the policyholder outlives the term
- Popular due to large payouts at a lower cost than permanent life insurance
- Often chosen by young people with mortgages or young children
Group Life Insurance
- Provided by employers as a benefit to employees
- A type of term life insurance with low coverage amounts
- Coverage ceases when the employee leaves the company
- Policyholders may need to purchase additional coverage to meet their needs
Permanent Life Insurance
- Covers the policyholder until death, as long as premiums are paid
- Includes variable life and whole life insurance
Variable Life Insurance
- A permanent life insurance policy with premiums invested in chosen assets
- Fixed premium, but payout may vary based on investment performance
Guaranteed Life Insurance
- Suitable for older people or those with health issues
- No health questions asked, but premiums are higher and payouts are lower
- A good option for those who delayed buying a policy and now face higher prices
How Life Insurance Works
- A contract between the policyholder and the insurance company
- Policyholder pays premiums, and the company pays beneficiaries upon death
- Beneficiaries are typically family members
- Most companies do not honor policies if the policyholder commits suicide
Who Needs Life Insurance
- Anyone with dependents who rely on their income
- Provides financial support for dependents in the event of the policyholder's death
Determining Life Insurance Needs
- Consider funeral costs, mortgage/rent, schooling, bills, and lifestyle
- Aim to cover expenses and maintain dependents' lifestyle
Factors Affecting Life Insurance Cost
- Age
- Health issues
- Activity interests (hazardous vs. low-risk)
- Tobacco use
- Lying about these factors can void the policy
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Description
Test your knowledge of life insurance contracts, including how they work and the benefits they provide to beneficiaries. Learn about the exchange of regular payments for a death benefit and more!
