1. Objective 4.02 Insurance Law
Life Insurance
Objective 4.02 Insurance Law

2. A person born today has a life expectancy 10 years longer than you do!
Life insurance protects the standard of living of the survivors
You still depend on your parents to help you get through life:
College
Car
Allowance
Clothes and STUFF

3. Life Insurance
Provides income to dependents or other named beneficiaries in the event of the insured person’s death.
Face value- the amount of protection stated in the policy
Example: Marla buys a $100,000 face value life insurance policy. Marla dies. Marla’ s beneficiaries will get $100,000 in proceeds.

4. Life Insurance Beneficiaries
The policyholder names a beneficiary
Can be an individual or business
Beneficiary receives proceeds from a life insurance claim.
Proceeds is the money paid to a survivor by a life insurance policy.
Contingent beneficiaries named in the policy are second in line if the beneficiary is deceased.

5. Life Insurance Beneficiaries
What is a beneficiary in a life insurance policy?
What happen if the beneficiary dies before or at the same time as the insured?
Contingent Beneficiary
What is a contingent beneficiary?
If there are (3) contingent beneficiaries, how are the proceeds from an insured’s policy distributed if the primary beneficiary is deceased?
Collecting Death Benefits
How does a beneficiary collect any death benefits?
What document must a beneficiary have in order to claim any death benefits for any insurance or other death benefits?

6. Life Insurance Advantages
Face amount is paid as proceeds to beneficiary
Proceeds are NOT taxable by income, estate or inheritance tax laws.
Proceeds are paid direct to beneficiaries.
Proceeds avoid probate.

7. Life insurance protects survivors against financial loss associated with death.
Two basic types:
Term
Permanent

8. Term Life Insurance Term life is temporary insurance.
Only pays if insured dies during policy period
Purchased for a specific term (one year or multiple years)
Usually renewable for another term
Least expensive premium for most coverage
Pure insurance, no savings add up

9. Increasing Term Insurance
What is increasing term insurance?
What is the benefit of this type of policy initially but not a benefit as the insured gets older?

10. Decreasing Term Insurance
What is decreasing term insurance?
How does this policy work for the insured?
Why would a person purchase a decreasing term policy?

11. Level Term Insurance What is level term insurance?
What are the advantages and disadvantages of this type of insurance?

12. Permanent - Whole Life Insurance
Permanent insurance for lifetime of insured.
Fixed Premium payments
Excess premium creates savings called cash value.
Cash value can be:
Withdrawn by policyholder as loan
Used to buy more paid up insurance
Used to pay current premium

13. Permanent – Universal Life Insurance
A bit greater flexibility compared to Whole Life
Contribution to “cash value” or investment portion of account can vary
Choices of options as to where to invest.
whhttp:// to invest

14. Permanent – Variable Life Insurance
Variable Universal Life Insurance
Life insurance that builds a cash value.
Cash value can be invested in a wide variety of accounts – investment “varies”
WORKSHEET:
Life Insurance Decisions

15. Life Insurance Optional Rider Coverage
Dependent Children
What is a rider?
What type of coverage does a rider provide for children?
Spouse Rider
What type of coverage does a rider provide for a spouse?
Guaranteed Insurability
What is guaranteed insurability?
What are the advantages of guaranteed insurability?

16. Accidental Death & Dismemberment
What does accidental death mean to you?
What does accidental dismemberment mean to you?
How is this coverage different than a traditional life insurance policy?

17. Other Types of Life Insurance Supplemental Information
Limited pay life - stop paying after a specified # of years without lapse
Endowment - lump sum paid in advance

18. Cost Factors for Life Insurance
Type of insurance
Age of insured
Health of insured
Gender (sex) of insured
Face amount – Dollar amount of coverage provided by the life policy
Company
WORKSHEET:
Life Insurance Puzzle
WORKSHEET
Life Insurance Terms – Fill-in Blanks
WORKSHEET
Life Insurance Terms – Fill-in Blanks