Lecture 6 - Life Insurance and Financial Planning PDF
Document Details
Uploaded by GodlikeObsidian4271
University of Rajshahi
Tags
Summary
This document appears to be a lecture on life insurance. It covers different types of insurance policies such as term insurance and whole life insurance, as well as important clauses, definitions, and financial aspects of different insurance policies. The lecture also explains some fundamental concepts, like the valuation and savings approach.
Full Transcript
Okay, I'll convert the provided document into a structured Markdown format. Here's the conversion: ### Financial Safeguard * Third, because of insufficient income, some families will experience a substantial reduction in their standard of living. * Finally, survivors face certain noneConomic...
Okay, I'll convert the provided document into a structured Markdown format. Here's the conversion: ### Financial Safeguard * Third, because of insufficient income, some families will experience a substantial reduction in their standard of living. * Finally, survivors face certain noneConomic costs such as intense grief, loss of parental role model, and counseling children. One exception, however, is that the policy may have a fixed-income account, which may guarantee a minimum interest rate on the account value. **IV. Current assumption whole life insurance** is a nonparticipating whole life policy in which the premiums and/or policy values are based on the insurer's current mortality, investment, and expense experience. Finally, consumers find that policies regulated under federal securities laws, as well as state insurance regulation, provide more complete disclosure than policies not federally regulated. * *Return of premium term insurance* is a product that returns the premiums at the end of the term period, provided the insurance is still in force. * *Decreasing term insurance* is a form of term insurance where the face amount gradually declines each year. eventually reach prohibitive levels. * Second, term Insurance is inappropriate if you want to save money for a specific need. **Double Endowment** covers that if the life assured dies during the endowment period, the basic sum assured is payable and if he survives to the end of the term, double of the sum assured is paid. The image contains three connected rectangles, each with a double-headed arrow going through them. Writing is visible on each arrow. Writing is visible on each arrow. From right to left: * Flexible premium over time. * Combination of (a) & (b) * Vary with returns on stock and bond funds Chosen by policyholder. Lenders. difference between the cash surrender value and the sum of all premiums less policyholder dividends. 1. Using a reasonable discount rate, determine the present value of the family's share of earnings for the period determined in Step 3. The image shows six circles that are labeled. From left to right, the labels shown are. * Estate Clearance fund * During the re-adjustment period * During the dependency period. * To the surviving spouse. * Special needs * Retirement needs. * **Interim stable Clause** This means the contract's validity cannot be questioned for any reason of the insured for two years. * **Suicide Clause** Almost universally, suicide during stipulated period after inception of the contract is excluded. * **War Clause** During times of war, or when war appears imminent, Insurance Companies usually insert a clause in their policies that provides for a return of Premium Plus interest rather than Circumstances. * It starts from point and estimates yearly; 3.**Mean Reserve**: Arithmetic average of initial and terminal reserve during year It is used for valuation purposes. cost of surrender) 4. **Saving Approach**: $SV=$ (Sum assured + accumulated value of future expenses + future bonus) – (accumulated value of future premiums +expense incurred in surrendering)
