What are the main features of whole life insurance quizlet?

What whole life insurance means?

Whole life insurance is a type of permanent life insurance, which means the insured person is covered for the duration of their life as long as premiums are paid on time.

What is the difference between life insurance and whole life insurance?

Term life is “pure” insurance, whereas whole life adds a cash value component that you can tap during your lifetime. Term coverage only protects you for a limited number of years, while whole life provides lifelong protection—if you can keep up with the premium payments.

Which policy feature makes a universal life policy different from a whole life policy quizlet?

The policy feature that makes universal life different from whole life insurance policies is its flexible premium schedule. Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index.

What kind of premium does a whole life policy have?

Whole life insurance policies have a fixed premium, meaning you need to pay the same amount each year. Whole life insurance also provides steady, fixed growth on your cash value.

What are the types of whole life insurance?

What are the two components of whole life insurance?

These types of life insurance policies are both typically comprised of two parts: a savings or investment portion and an insurance portion.

Which one is the most positive feature of whole life insurance for a person who wants a more structured way to save?

Of the following, which one is the most positive feature of whole life insurance for a person who wants a more structured way to save? It builds cash value.

What are four types of whole life policies?

Whole life insurance has several variations, including limited payment, modified, single-premium, and variable whole life. Different types offer alternative payment options or investment methods.

What are the 3 main types of life insurance?

Whole life insurance, universal life insurance, and term life insurance are three main types of life insurance.

What means whole life?

Definition of whole-life

: of, relating to, or being life insurance with a fixed premium for the life of the policyholder and a cash value that can be redeemed on sale of the policy or can be the basis of low-interest loans.

What happens to cash value in whole life policy at death?

Insurers will absorb the cash value of your whole life insurance policy after you die, and your beneficiaries will receive the death benefit. The policyholder can only use the cash value while they are alive.

What happens when a whole life policy is paid up?

A paid-up life insurance is a life insurance policy that is paid in full, remains in force, and you don't have to pay any more premiums. It stays in-force until the insured's death or if you terminate the policy. Paid-up life insurance is only an option for certain whole life insurance policies.

Does whole life insurance have cash value?

Cash-value life insurance, also known as permanent life insurance, includes a death benefit in addition to cash value accumulation. While variable life, whole life, and universal life insurance all have built-in cash value, term life does not.

Which policy features makes a universal life policy different from a whole life policy?

The policy feature that makes universal life different from whole life insurance policies is its flexible premium schedule. A Modified Endowment Contract (MEC) can be described as a life insurance contract that has accumulated cash values higher than the IRS allows.

How frequently does the premium for a whole life policy change during the insured's life quizlet?

Most make a redetermination every five years. Once the insurer identifies the new premium, it stays fixed until the next redetermination. While they share many of the same policy features, there are some notable differences between interest-sensitive whole life insurance and current assumption whole life insurance.

What is the primary feature of a viatical settlement?

So, What Is the Primary Feature of a Viatical Settlement? Essentially, it is the prepayment of a death benefit at a reduced rate. However, it is important to note that the cash settlement is provided in exchange for the sale and transfer of the ownership rights of the life insurance policy.

Why Whole life insurance is better than term?

Whole life provides many benefits compared to a term life policy: it is permanent, it has a cash value investment component, and it provides more ways to protect your family's finances over the long term.

What's the difference between term life and whole life?

Two of the most common types of life insurance are term life vs. whole life. Both term life and whole life provide a death benefit for the beneficiaries you choose, but whole life is a type of permanent policy with a savings component, while term life is only in force for the period of time that you choose.

What are the disadvantages of whole life insurance?

Who is whole life insurance best for?

If you're a high net worth individual who has made all the allowable contributions to your tax-advantaged accounts like 401(k) plans or individual retirement accounts, you could use a whole life insurance policy to top up your tax-deferred savings.