1. Other Types:
1.1. Interest Sensitive
1.1.1. Whole Life with Current Interest Rates
1.2. Indexed Life
1.3. Combination Plans
1.3.1. Joint Life
1.3.1.1. Premium: based on joint average age of insured
1.3.1.2. "First to Die"
1.3.1.3. Common for Husbands/ Wives, Mortgage protection, Buy-Sell
1.3.2. Survivorship Life
1.3.2.1. Premium: based on joint average of the insured
1.3.2.2. "Second to die"/ Last survivor
1.3.2.3. Used to offset estate tax
2. Annuities
2.1. Characteristics:
2.1.1. Purpose:
2.1.1.1. Accumulation of $
2.1.1.2. Liquidation of an estate
2.1.1.3. Protects a person against outliving their money
2.1.1.4. Ret
2.1.2. Parties
2.1.2.1. Annuitant
2.1.2.2. Beneficiary
2.1.2.3. Owner
2.1.3. Annuity Income Amount
2.1.3.1. Mortality tables
2.1.3.1.1. Shorter life expectancy= higher DB
2.1.3.1.2. Longer life expectancy= Lower DB
2.1.3.2. Based on:
2.1.3.2.1. premium amount / cv accumulated
2.1.3.2.2. pmt frequency
2.1.3.2.3. interest rate
2.1.3.2.4. annuitants age/ gender
2.1.4. Periods
2.1.4.1. Accumulation (Pay-in)
2.1.4.2. Annuitization (Pay-out)
2.1.4.2.1. Annuitization date: Trigger 4 benefits
2.1.4.2.2. Annuitant Death: Payments Stop
2.2. Classifications
2.2.1. Premium Payment Options
2.2.1.1. Single
2.2.1.2. Periodic
2.2.1.2.1. Flexible or Level
2.2.2. How Premiums are invested
2.2.2.1. Fixed
2.2.2.1.1. Interest Rate:
2.2.2.1.2. Premium PMT
2.2.2.1.3. Income PMT:
2.2.2.1.4. Life Insurance License
2.2.2.1.5. Eroded over time by inflation
2.2.2.2. Variable
2.2.2.2.1. Interest Rate
2.2.2.2.2. Premium PMT
2.2.2.2.3. Income PMT
2.2.2.2.4. Life Insurance and Securities License
2.2.2.2.5. Hedges against inflation
2.2.2.3. Indexed Annuities
2.2.2.3.1. Interest Rate
2.2.2.3.2. Fixed annuity that invests aggressively to aim for higher returns
2.2.3. Types of Income Payments
2.2.3.1. Immediate
2.2.3.1.1. purchased with a single premium
2.2.3.1.2. start w/in 1 year from date of purchase
2.2.3.2. Deferred
2.2.3.2.1. purchased with either premium
2.2.3.2.2. benefits start after 1 year from date of purchase
2.2.3.2.3. Longer deferral= more flexibility for premium payment
2.2.4. How lives are covered
2.2.4.1. Single Life
2.2.4.2. Multiple Life: Joint/ Joint and Survivor
2.2.5. Disposing of Proceeds
2.2.5.1. Straight Life
2.2.5.2. Guaranteed Minimum
2.2.5.3. Cash
2.2.5.4. Fixed Period
3. Term Life
3.1. Characteristics
3.1.1. Pure Protection
3.1.2. Temporary (Lasts for a specific term)
3.1.3. No Cash Value/ Living Benefits
3.1.4. Greatest amount of coverage for lowest premium
3.2. Features
3.2.1. Renewable
3.2.2. Convertible
3.2.3. Level Premiums
3.2.3.1. Figured at Attained Age
3.2.4. Fluctuating Amount of Death Benefit
3.3. Types
3.3.1. Level Premium Term
3.3.1.1. "Level"= Level death benefit
3.3.2. Annually Renewable Term
3.3.2.1. Level Death Benefit
3.3.2.2. Premiums Increase Annually
3.3.2.2.1. attained age
3.3.2.3. Guaranteed Renewable
3.3.2.4. Short-term insurance needs
3.3.3. Decreasing Term
3.3.3.1. Annual Decreasing Death Benefit
3.3.3.2. Coverage gradually decreases at predetermined times
3.3.3.2.1. used for debt pay down
3.3.3.3. Usually Convertible, Not usually renewable
3.3.4. Return of Premium (ROP)
3.3.4.1. Increasing DB
3.3.4.2. Guaranteed return of premium
3.3.4.2.1. paid if death occurs within a specified time period/ outlives term
3.3.4.3. Higher premiums (25%+)
3.3.4.3.1. Deductible, Not taxed
3.3.4.4. usually used as a Rider
4. Whole Life
4.1. Characteristics
4.1.1. Permanent (Lifetime) Protection
4.1.2. Guaranteed Elements endow at age 100
4.1.2.1. Level Premium
4.1.2.1.1. Figured at Issue Age
4.1.2.1.2. Higher than term premiums
4.1.2.1.3. Allocated to 2 accounts
4.1.2.2. Death Benefit
4.1.2.2.1. Remains level for life
4.1.2.3. Living Benefits
4.1.2.3.1. Cash (Nonforfeiture) Value
4.1.2.3.2. Policy Loans
4.1.2.3.3. Nonforfeiture Values
4.1.3. Cash value and other living benefits
4.1.3.1. the longer a policy is in force, the greater the cash values
4.2. Level Premium Types:
4.2.1. Ordinary (Straight) Life
4.2.1.1. Basic policy
4.2.1.1.1. premiums paid until death or age 100
4.2.1.2. Level DB
4.2.1.3. Lowest Annual Premium of Whole Life
4.2.2. Limited-Pay Life
4.2.2.1. shorter premium paying period
4.2.2.1.1. Types:
4.2.2.2. Coverage in effect to age 100
4.2.2.3. Faster CV accumulation
4.2.2.4. Good for those who don't want to pay premiums past certain age (retirement)
4.2.3. Single Premium
4.2.3.1. Lump sum premium pmt
4.2.3.2. Level DB
4.2.3.3. Immediate CV accumulation
4.3. Flexible Premium Types:
4.3.1. Adjustable Life
4.3.1.1. Form: Can be Term or Whole life, can convert from one to another
4.3.1.2. Death Benefit
4.3.1.2.1. Set by policyowner with proof of insurability
4.3.1.2.2. Flexible
4.3.1.3. Flexible Premium (adjusted by PO)
4.3.1.4. Cash Value:
4.3.1.4.1. if Premiums Paid > Cost of Policy
4.3.1.4.2. Fixed Rate of Return
4.3.1.4.3. General Account
4.3.1.4.4. Policy Loans: Can borrow CV
4.3.1.5. good for those with uncertain incomes
4.3.2. Universal Life
4.3.2.1. Form: Permanent Insurance with annual renewable term component
4.3.2.2. Flexible Premiums
4.3.2.2.1. Minimum Premium
4.3.2.2.2. Target Premium
4.3.2.2.3. Missing premium
4.3.2.3. Flexible Death Benefit
4.3.2.3.1. Option A: Level DB
4.3.2.3.2. Option B: Increasing DB
4.3.2.3.3. set by PO with proof of insurability
4.3.2.4. Cash Value
4.3.2.4.1. CV must be sufficient enough to cover monthly premium payments
4.3.2.4.2. Partial surrender (withdrawal) of CV
4.3.2.4.3. Guaranteed at a minimum level
4.3.2.4.4. General account
4.3.3. Variable Life
4.3.3.1. Permanent Insurance/ Security
4.3.3.2. Premium
4.3.3.2.1. Fixed (if Whole)
4.3.3.2.2. Flexible (if Universal)
4.3.3.3. Death Benefit
4.3.3.3.1. Can increase or decrease to a stated minimum
4.3.3.3.2. Not guaranteed
4.3.3.4. Cash Value
4.3.3.4.1. Not Gauranteed
4.3.3.4.2. Separate account for Assets
4.3.3.5. Regulated by
4.3.3.5.1. State and Fed govt: SEC and FINRA
4.3.3.5.2. Insurance Department
4.3.3.6. Agents must
4.3.3.6.1. be registered with FINRA
4.3.3.6.2. Licensed by state to sell life insurance
4.3.3.6.3. Securities license