Insurance Evaluate the various types of life insurance policies.

LIFE INSURANCE TERMS Dependent A person that relies on another for financial support. (ex. Spouse, children)

LIFE INSURANCE TERMS Proceeds Money paid to the policyholder’s survivors.

LIFE INSURANCE TERMS Beneficiary The person named in the policy who receives the proceeds.

LIFE INSURANCE TERMS Renewable Policy A policy which the policyholder may renew for one or more terms without proving he is a good risk.

LIFE INSURANCE TERMS Cash Value The amount of money received if a policyholder decides to give up the policy before his death.

LIFE INSURANCE TERMS Face Value The amount of insurance coverage originally purchased which will be paid upon the policyholder’s death.

LIFE INSURANCE TERMS Insurable Interest A financial interest in or benefit from the continued life of a person.

TYPES OF LIFE INSURANCE Term Life Insurance Provides financial protection for a survivor of the policyholder for a specific period (term) of time.

TYPES OF LIFE INSURANCE Whole Life Insurance Provides death benefits and savings until the policyholder dies.

TYPES OF LIFE INSURANCE Variable Life Insurance Provides death benefits and savings, but allows the policyholder to determine how to invest the cash value.

TYPES OF LIFE INSURANCE Universal Life Insurance Divides the premium three ways: death benefits, insurance company expenses, and investments or savings that earn a high interest rate.

FACTORS WHICH DETERMINE THE COST OF DIFFERENT TYPES OF LIFE INSURANCE The Type of Life Insurance Purchased The Age of The Insured The Insured’s Health Gender (sex) of the Insured Face Amount of The Policy The Company Selected to Provide the Insurance

Term Insurance Whole Life Permanent Insurance Variable Life Universal Life Ordinary LifeLimited Life Premiu m Begins low but increases gradually High but usually stays constant Higher than ordinary but constant Fixed and regular Varies at the discretion of the policyholder Paymen t Period Specified number of years ( 5, 10, 15) Life of the insured Specified number of years (20-30) Specified Period Cash Value None Some cash value More cash value than Ordinary Life, but less than variable Varied with the rise or fall in value of investment account Varies with the interest rate paid on the cash value Death Benefit Fixed Always exceeds cash value Can vary at discretion of policyholder Purpos es Protection for a specified period of time Protection for life; some cash value for policyholder Life insurance plus an opportunity to select different cash investments option Life insurance with a fairly high rate of return on cash value