Life Insurance Terms and Definitions, Quizzes of Credit and Risk Management

Download Life Insurance Terms and Definitions and more Quizzes Credit and Risk Management in PDF only on Docsity! TERM 1 Premature death DEFINITION 1 death of family head with outstanding unfilfilled financial obligationslost future earningsadditional expenses TERM 2 Human Life Value approach DEFINITION 2 the present value of the family's share of the deceased breadwinners future earnings TERM 3 Needs approach DEFINITION 3 amount depends on the financial needs that must be met if the family head should die TERM 4 estate clearance fund DEFINITION 4 money for burial expenses, uninsured medical bills, and taxes TERM 5 dependency period DEFINITION 5 time until the youngest child reaches 18 TERM 6 blackout period DEFINITION 6 from the time that social security survivor benefits terminate to the time the benefits are resumed TERM 7 term life insurance DEFINITION 7 provides temporary protection TERM 8 cash value life insurance DEFINITION 8 has a savings component and builds cash values TERM 9 Term insurance renewals DEFINITION 9 protection ends at end of each period if not renewedmost are renewable for additional periodspremiums increase after each renewal TERM 10 convertible policy DEFINITION 10 policy can be exchanged for cash value policy without evidence of insurability TERM 21 cash surrender values DEFINITION 21 overpays for insurance protection during the early years creating larege legal reserve and accumulatoin of cash values TERM 22 appropriateness of ordinary life policy DEFINITION 22 when lifetime protection is needed TERM 23 major limitation of ordinary life policy DEFINITION 23 some people are still underinsured after purchasing policya term policy with same premiums would allow much greater amount of protection TERM 24 limited payment of life insurance policy DEFINITION 24 insured has limited lifetime protectionpremiums are level and only paid for a certain period TERM 25 single premium whole life policy DEFINITION 25 provides lifetime protection with a single premium TERM 26 variable life insurance DEFINITION 26 fixed premium policy in which death benefits and cash values vary according to the investment experience of a separate account managerpremium is levelreserve is held in separate account and invested in stocks and shitcash surrender values not guaranteed, policy holders bears risk of poor investments TERM 27 universal life insurance DEFINITION 27 flexible premium policy that provides lifetime protection.you decide frequency and amount of payments, most have target premium TERM 28 flexibility of universal policy DEFINITION 28 cash withdrawls are permittedpolicy receives favorable income tax treatments TERM 29 limitations of universal life policy DEFINITION 29 insurers can advertise misleading rates of returnprojections are based on higher interest rates and are invalidinsurers can increase current mortality clause to recoup expenses TERM 30 variable universal life policy DEFINITION 30 variation of whole life insurancemost sold as investmentspolicy owner decides how premiums are investedhave relatively high expense charges TERM 31 industrial life insurance DEFINITION 31 was issued in small amounts and an agent of the company collected premiums in the insureds home TERM 32 credit life insurance DEFINITION 32 protection for installment sales ex a carpremiums incorporated into payment of item purchased TERM 33 group life insurance DEFINITION 33 life insurance to a group of people in a single master contract