Other Types of Life Insurance pp SECTION

Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 11-4, Slide 2 of whole life insurance (p. 381) Insurance that offers financial protection throughout one’s lifetime and costs a specific amount, also known as permanent insurance. cash value (p. 381) Monetary value that a life insurance policy builds up, like a savings account, that can be cashed in or borrowed. Key Words to Know

Click to edit Master text styles Second level Third level Fourth level Fifth level 3 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 11-4, Slide 3 of limited payment policy (p. 381) Life insurance that is paid up after a specified number of years, or until the insured reaches a certain age, but offers lifetime protection. Key Words to Know

Click to edit Master text styles Second level Third level Fourth level Fifth level 4 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 11-4, Slide 4 of universal life insurance (p. 381) A combination of an insurance policy and a savings plan. It covers the insured for a lifetime, and any amount the insured pays over the minimum goes into an investment account that earns interest. Key Words to Know

Click to edit Master text styles Second level Third level Fourth level Fifth level 5 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 11-4, Slide 5 of Annual = Number of Units × Premium Premium Purchased per $1,000 Formula

Click to edit Master text styles Second level Third level Fourth level Fifth level 6 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 11-4, Slide 6 of Filly Cheeze is 25 years old. She wants to purchase a whole life policy valued at $125,000. What is her annual premium? Example 1

Click to edit Master text styles Second level Third level Fourth level Fifth level 7 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 11-4, Slide 7 of Find the number of units purchased. $125,000 ÷ $1,000 = 125 Example 1 Answer: Step 1

Click to edit Master text styles Second level Third level Fourth level Fifth level 8 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 11-4, Slide 8 of Find the premium per $1,000. (Refer to Figure 11.3, Annual Premiums per $1,000 of Life Insurance, on page 382 of your textbook.) Female, age 25 = $7.50 Example 1 Answer: Step 2

Click to edit Master text styles Second level Third level Fourth level Fifth level 9 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 11-4, Slide 9 of Find the annual premium. Number of Units Purchased × Premium per $1, × $7.50 = $ Example 1 Answer: Step 3

Click to edit Master text styles Second level Third level Fourth level Fifth level 10 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 11-4, Slide 10 of Refer to Figure 11.4 below. Suppose Fhilly Cheeze (from Example 1) wants to pay the $ annual premium monthly. What are her monthly payments? How much can she save in one year by paying the premium annually? Example 2

Click to edit Master text styles Second level Third level Fourth level Fifth level 11 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 11-4, Slide 11 of Figure 11.4

Click to edit Master text styles Second level Third level Fourth level Fifth level 12 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 11-4, Slide 12 of Find the monthly premium. Annual Premium × 8.5% $ × = $ or $79.69 Example 2 Answer: Step 1

Click to edit Master text styles Second level Third level Fourth level Fifth level 13 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 11-4, Slide 13 of Find out how much she can save. (12 × $79.69) – $ $ – $ = $18.78 Example 2 Answer: Step 2

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