Types of Life Policies Flashcards

Types of Life Policies

• Term Insurance: Provides temporary protection for a specified period; coverage ends after duration.

• Pure Life Insurance: Similar to term insurance, offers temporary protection without cash value accumulation.

• Renewable Provision: Allows policyholders to renew coverage at expiration without needing to prove insurability.

• Convertible Provision: Grants the policyholder the right to convert to a permanent insurance policy without evidence of insurability.

• Level Term Insurance: Most common form of temporary protection, features a fixed death benefit throughout the policy duration.

• Annually Renewable Term: Death benefit remains level; premiums increase annually based on the insured’s age.

• Decreasing Term Insurance: Offers a level premium with an annual decrease in death benefit over the policy term.

• Increasing Term Insurance: Provides level premiums but an increasing death benefit each year during the policy term.

• Return of Premium: A form of increasing term insurance that refunds total premiums paid if the insured does not pass away.

• Permanent Life Insurance: Covers various policies that build cash value, remaining effective for the insured's lifetime or until age 100.

• Whole Life Insurance: Offers lifetime protection with a savings component (cash value) that grows over time.

• Straight Life Insurance: Also known as Continuous Premium Whole Life; premiums are paid until death or age 100, offering the lowest annual cost.

• Limited-Pay Whole Life: Premiums are designed to be fully paid up before age 100, offering lifelong coverage.

• Single Premium Whole Life: Requires a one-time payment to provide coverage until age 100, offering a fixed death benefit.

• Adjustable Life Insurance: Can be structured as either term or permanent insurance, depending on policyholder need.

• Universal Life Insurance: Offers flexibility, allowing policyholders to adjust premium payments as needed over time.

• Flexible Premium Adjustable Life: Similar to universal life, it enables adjustments in premium amounts.

• Minimum Premium: The lowest amount required to keep the policy active for the current year.

• Target Premium: A suggested payment amount to cover insurance costs and maintain the policy over its lifetime.

Test your knowledge of various life insurance policies with these flashcards. Each card provides definitions of essential terms related to life insurance, such as term insurance and renewable options. Perfect for students or anyone wanting to learn about insurance concepts.