Term, whole, universal and variable life, riders, nonforfeiture options and policy provisions.
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- What is term life insurance?
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Provides death benefit for a specified period, typically 10 to 30 years, with no cash value.- Name the three main types of term policies
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Level term, decreasing term, and increasing term.- What happens at the end of a term life policy?
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Coverage expires and no value is returned to the policyholder.- What is renewable term insurance?
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Allows renewal of coverage without medical underwriting, usually at a higher premium.- What is convertible term insurance?
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Allows conversion to a permanent policy without medical exam, within specified timeframe.- What is whole life insurance?
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Permanent coverage lasting the insured's entire lifetime with a guaranteed cash value component.- What are the three components of whole life premiums?
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Cost of insurance, expense charges, and cash value buildup.- How are whole life dividends commonly used?
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To reduce premiums, purchase paid-up additional coverage, or taken as cash.- What is the cash surrender value of a whole life policy?
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The amount a policyholder receives if they cancel the policy before death.- What is universal life insurance?
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Permanent coverage with flexible premiums and adjustable death benefits backed by a cash value account.- How does universal life differ from whole life?
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Universal life has transparent cost breakdowns and flexible premium and death benefit options.- What are the two main parts of a universal life policy?
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The death benefit and the cash value account, which earns interest credited to the policy.- What happens if a universal life policy's cash value falls to zero?
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The policy lapses unless the policyholder pays premiums to rebuild the cash value account.- What is variable life insurance?
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Permanent policy where death benefit and cash value fluctuate based on the performance of investments chosen by the policyholder.- What is a separate account in variable life insurance?
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An investment account within the policy holding funds in stocks, bonds, or money market instruments separate from the insurer's general account.
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