The goal of life insurance is to provide a measure of financial security for your family after you die. A life insurance policy will help them meet the financial needs that your income would have normally covered. Life insurance can be purchased on an individual or group basis. Most group life insurance is purchased through an employer group and is usually term coverage that
is renewed yearly. Show
Assessing Your Needs Before purchasing a life insurance policy, you should consider your financial situation and the standard of living you want to maintain for your dependents or survivors. For example, who will be responsible for your funeral costs and final medical bills? Would your family have to relocate? Will there be adequate funds for future or ongoing expenses such as daycare, mortgage payments, or college? You should reevaluate your life insurance policies annually or whenever you experience a major life event such as marriage, divorce, the birth or adoption of a child, or purchase of a major item such as a house or business. Following are examples of factors you may want to consider at various stages of your life:
Types of Life Insurance Policies There are two basic types of life insurance policies:
Term Life InsuranceTerm life insurance is coverage you buy for a specific time period, such as 1, 5, 10, or 20 years, or up to age 60 - 65. Term life insurance has five key features:
Whole Life Insurance
Whole Life Policies with Investment Features
Mandatory Provisions All types of individual life insurance policies sold in Illinois must contain the following provisions:
Which of the following policies is characterized by a flexible premium and death benefit and allows the policy owner?Universal life, a form of permanent life insurance provides policyholders with flexibility on paying premiums, a cash savings component, and a death benefit. Premium costs may change with interest rates and as the policyholder grows older.
Which type of life insurance offers flexible premiums a flexible death benefit?What is universal life insurance? Universal life insurance policies offer flexible premiums that may allow you to adjust how much you'll pay each year by accessing some of the policy's cash value (though you will need to pay the minimum premium amount or the policy will lapse).
What is a flexible premium life insurance policy?Flexible premium life insurance is a permanent life insurance policy where policyholders can adjust payments to meet their needs. As a permanent life insurance policy, flexible premium life insurance builds a cash value over time. You can borrow money against your death benefits.
Which of the following types of policies allows for a flexible premium and a variable investment Componet?Variable universal life (VUL) is a type of permanent life insurance policy with a built-in savings component that allows for the investment of the cash value. Like standard universal life insurance, the premium is flexible. VUL insurance has investment subaccounts that allow for the investment of the cash value.
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