Life insurance exam terms and
definitions
Whole Life insurance - -Also call straight life insurance. Level premiums paid
to age 100
- Adjustable Life insurance - -Can adjust the policy's face amount, premium,
and length of protection without ever having to complete a new
application/policy
- Interest Sensitive Whole Life - -Premiums vary to reflect the insurer's
changing assumptions with regard to death investment and expense factors
- Family Maintenance Policy - -Whole life policy with a level term rider.
Maintain family after the insured dies. Ex: monthly income for 10 years after
death of insured, plus lump sum
- Family Income Policy - -Whole life with decreasing term rider. Ex: 20 year
FIP, insured dies 6 years into policy, term pays out monthly income for 14
remaining years, then whole death benefit lump sum is paid at the end
- Family Policy - -One package that includes coverage for everybody in the
immediate family
- Modified Life Policy - -Whole Life Insurance with reduced premiums during
the initial 3-5 years, then a higher, level premium for the remainder of the
insured's life
- Graded Premium Whole Life - -premiums start off lower than straight level,
then gradually increases year by year for 5-10 years then levels out
- Adjustable Life Insurance - -Able to adjust:
Premium Amount
Face Amount
Period of Protection
Premium payment period
- Variable Life Insurance - -cash values are invested directly in a securities
product such as stocks, bonds, or mutual funds. Held in a company's
separate account
- Annual Renewable Term (ART) - -Level death benefit. Premiums go up
each year based on the insured's age
definitions
Whole Life insurance - -Also call straight life insurance. Level premiums paid
to age 100
- Adjustable Life insurance - -Can adjust the policy's face amount, premium,
and length of protection without ever having to complete a new
application/policy
- Interest Sensitive Whole Life - -Premiums vary to reflect the insurer's
changing assumptions with regard to death investment and expense factors
- Family Maintenance Policy - -Whole life policy with a level term rider.
Maintain family after the insured dies. Ex: monthly income for 10 years after
death of insured, plus lump sum
- Family Income Policy - -Whole life with decreasing term rider. Ex: 20 year
FIP, insured dies 6 years into policy, term pays out monthly income for 14
remaining years, then whole death benefit lump sum is paid at the end
- Family Policy - -One package that includes coverage for everybody in the
immediate family
- Modified Life Policy - -Whole Life Insurance with reduced premiums during
the initial 3-5 years, then a higher, level premium for the remainder of the
insured's life
- Graded Premium Whole Life - -premiums start off lower than straight level,
then gradually increases year by year for 5-10 years then levels out
- Adjustable Life Insurance - -Able to adjust:
Premium Amount
Face Amount
Period of Protection
Premium payment period
- Variable Life Insurance - -cash values are invested directly in a securities
product such as stocks, bonds, or mutual funds. Held in a company's
separate account
- Annual Renewable Term (ART) - -Level death benefit. Premiums go up
each year based on the insured's age
