Podcast
Questions and Answers
What is a characteristic of Term Life Insurance?
What is a characteristic of Term Life Insurance?
Which type of life insurance allows adjustments to premium payments, death benefit, and investment options?
Which type of life insurance allows adjustments to premium payments, death benefit, and investment options?
What is a feature of Variable Life Insurance?
What is a feature of Variable Life Insurance?
What is a characteristic of Whole Life Insurance?
What is a characteristic of Whole Life Insurance?
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What is the purpose of a Waiver of Premium Rider?
What is the purpose of a Waiver of Premium Rider?
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Which type of life insurance combines a death benefit with a savings component?
Which type of life insurance combines a death benefit with a savings component?
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What is a feature of Policy Riders?
What is a feature of Policy Riders?
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Which type of life insurance is often used for estate planning, business succession, or guaranteed income?
Which type of life insurance is often used for estate planning, business succession, or guaranteed income?
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What is the purpose of an Accidental Death Benefit Rider?
What is the purpose of an Accidental Death Benefit Rider?
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Which type of life insurance is generally less expensive than permanent life insurance?
Which type of life insurance is generally less expensive than permanent life insurance?
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Study Notes
Types of Life Insurance
Term Life Insurance
- Provides coverage for a specific period (e.g., 10, 20, or 30 years)
- Pays a death benefit only if the policyholder dies within the term
- No cash value component
- Generally less expensive than permanent life insurance
- Often used to cover temporary financial obligations (e.g., mortgage, car loan)
Universal Life Insurance
- A flexible premium policy that combines a death benefit with a savings component
- Allows adjustments to premium payments, death benefit, and investment options
- Cash value grows tax-deferred and can be borrowed against or used to pay premiums
- May include a guaranteed minimum interest rate
- Often used for estate planning, retirement, or business needs
Variable Life Insurance
- A type of permanent life insurance that allows investments in various assets (e.g., mutual funds, stocks)
- Cash value can fluctuate based on investment performance
- Offers a range of investment options, but may come with higher fees and risks
- Often used by those seeking potential long-term growth and flexibility
Whole Life Insurance
- A type of permanent life insurance that provides lifetime coverage
- Cash value grows at a fixed rate, and the policyholder can borrow against it
- Premiums are typically level and guaranteed
- Often used for estate planning, business succession, or guaranteed income
Policy Riders
- Additional features that can be added to a life insurance policy
- Examples:
- Accidental Death Benefit Rider: pays an additional death benefit if the policyholder dies in an accident
- Waiver of Premium Rider: waives premium payments if the policyholder becomes disabled
- Long-Term Care Rider: provides funds for long-term care expenses
- Guaranteed Insurability Rider: allows the policyholder to purchase additional coverage without evidence of insurability
Types of Life Insurance
Term Life Insurance
- Provides coverage for a specific period (e.g., 10, 20, or 30 years)
- Pays death benefit only if policyholder dies within the term
- No cash value component
- Generally less expensive than permanent life insurance
- Often used to cover temporary financial obligations (e.g., mortgage, car loan)
Universal Life Insurance
- Combines death benefit with a savings component
- Allows adjustments to premium payments, death benefit, and investment options
- Cash value grows tax-deferred and can be borrowed against or used to pay premiums
- May include a guaranteed minimum interest rate
- Often used for estate planning, retirement, or business needs
Variable Life Insurance
- Combines death benefit with investments in various assets (e.g., mutual funds, stocks)
- Cash value can fluctuate based on investment performance
- Offers range of investment options, but may come with higher fees and risks
- Often used by those seeking potential long-term growth and flexibility
Whole Life Insurance
- Provides lifetime coverage
- Cash value grows at a fixed rate, and policyholder can borrow against it
- Premiums are typically level and guaranteed
- Often used for estate planning, business succession, or guaranteed income
Policy Riders
- Additional features that can be added to a life insurance policy
- Examples:
- Accidental Death Benefit Rider: pays additional death benefit if policyholder dies in an accident
- Waiver of Premium Rider: waives premium payments if policyholder becomes disabled
- Long-Term Care Rider: provides funds for long-term care expenses
- Guaranteed Insurability Rider: allows policyholder to purchase additional coverage without evidence of insurability
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Description
Learn about the different types of life insurance, including term life insurance and universal life insurance, their features, and benefits.
