Life and Health Insurance Policies Question and Answers

LIFE AND HEALTH INSURANCE POLICIES QUESTION AND ANSWERS 3 basic types of coverage for life insurance ordinary, industrial, group Ordinary Life Insurance Individual life insurance that includes many types of temporary and permanent insurance protection plans -Premiums are normally paid monthly, quarterly, semiannually, or annually - "Principal type of life insurance" that includes insurance such as whole, term, universal, and variable life coverage as well as endowment policies Industrial Life Insurance Characterized by comparatively small issue amounts (ex 1,000) with premiums collected on a weekly or monthly basis -Provides insurance coverage to industrial workers or people who are unable to afford insurance for bigger amounts -Quite often marketed and purchased as burial insurance Group Insurance Is written for employer, employee groups, associations, unions, and creditors to provider coverage for a number of individuals under one contract -Underwriting based on the group not the indivual Term Life Insurance Provides low-cost insurance protection for a specified period (term) and pays a benefit only if the insured dies during that period -NO CASH VALUE -Bought $50k 20yr plan Dies before 20yrs ==>gets $50k Dies after 20yrs ==>gets nothing -Term life provides the greatest amount of death benefit per dollar of initial cash outlay 3 Basic Forms of Term Life Level term Decreasing term Increasing term Level Term Insurance Provides policy with level (same as original) amount of protection over the entire term of the policy -Have level premiums