What is a flexible life insurance policy?

What is the most common type of life insurance?

Whole life insurance is the most common type of permanent insurance policy. In addition to providing cash benefits to your beneficiaries upon your death, the coverage comes with guaranteed cash value during the life of the policy.

What is a disadvantage to a credit life insurance policy?

Credit life insurance also lacks flexibility for the death payout. A payout goes directly to the lender. Since your family doesn't receive the money, they don't have the option to use the funds for other purposes that might be more urgent.

What are 4 types of whole life policies?

What are the 4 types of life insurance?

What is flexible premium adjustable life policy?

Adjustable life insurance is a hybrid policy that combines characteristics from term life and whole life insurance. ... Also known as flexible premium adjustable life insurance, the policy has a cash value component that grows with the insurer's financial performance but has a guaranteed minimum interest rate.

What test defines an MEC?

The seven-pay test helps the IRS determine whether your life insurance policy will be converted into an MEC. It compares the total premiums you paid in the first seven years of the policy with what you'd need to pay it in full. If your payments exceed what's needed, your policy becomes recognized as an MEC.

At what point are death proceeds paid in a joint life insurance policy?

At what point are death proceeds pain in a joint life insurance policy? A joint life policy cover two or more lives and provides for the payment of the proceeds at the death of the first among those insured, at which time the policy terminates.

What type of life policy has a death benefit that adjusts periodically?

A decreasing term policy has a death benefit that adjusts periodically and is written for a specific period of time.

What if my life insurance beneficiary dies before me?

But if your primary beneficiary dies before you do, then the death benefit would be paid to any contingent beneficiaries that you named on your application. If there are no contingent beneficiaries, then the death benefit will most likely be paid directly into your estate.

Which one of the following types of life insurance has premiums that will never increase?

Whole life insurance is the most common type of permanent life insurance. Whole life insurance offers certainty. Your premiums will never change, and your cash value growth is guaranteed (it may grow at a higher rate, but never less than the guaranteed rate).

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

Permanent life insurance is an umbrella term for life insurance policies that do not expire. Typically, permanent life insurance combines a death benefit with a savings portion. ... Whole life insurance offers coverage for the full lifetime of the insured, and its savings can grow at a guaranteed rate.

What type of insurance would you recommend for someone who wants to insure the life of a debtor in connection to a specific loan?

Credit life insurance is insurance on the life of a debtor in connection with a specific loan or other credit transaction.

What type of policy would offer a 40 year old?

What type of policy would offer a 40-year old the quickest accumulation of cash value? In this situation, a 20-pay Life policy offers the quickest accumulation of cash value. Whole life provides the insured with a cash value as well as a level face amount.

What type of insurance policy is most commonly used in credit life insurance?

Credit life insurance and credit disability insurance are the most commonly offered forms of coverage. They also may go by different names. For example, a credit life insurance policy might be called "credit card payment protection insurance," "mortgage protection insurance" or "auto loan protection insurance."

What is better term or whole life?

Term life coverage is often the most affordable life insurance because it's temporary and has no cash value. Whole life insurance premiums are much higher because the coverage lasts your lifetime, and the policy grows cash value.

Can I have 2 life insurance policies?

The short answer is yes. You can have more than one life insurance policy, and you don't have to get them from the same company. ... Because buying multiple policies can help you make sure you have enough coverage to meet the needs of your loved ones, for as long as they need protection, at a price you can afford.

What type of life insurance builds 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.

What kind of life insurance is best for me?

For most people, term life insurance is sufficient, and it's the cheapest type of coverage. It lasts a set period of time and provides a guaranteed payout if you die during that term. If you're interested in lifelong coverage, a permanent policy such as whole life insurance might be a good fit.

What is the least expensive form of life insurance?

Term life insurance is typically the cheapest form of life insurance because it has no cash value and only covers you for a specific number of years. Once a term life insurance policy ends, you will no longer have coverage, and if you pass away after the term ends, your beneficiary won't receive a payout.