Life Insurance Information

Life Insurance Information

  • 1.  Why sell Life Insurance?

    Would your clients be financially secure if they were to pass away today?

    • Life insurance is a necessity in order to make sure that your client’s family will be financially secure for the rest of their lives.

    • Life insurance may also be able to help with your client’s children’s college education.

    • Life insurance can help your client put a down payment on a house.

    • Life insurance can help ensure a smooth and secure transition if your client is in business with a passing partner.
  • 2.  Who should buy Life Insurance?

    The amount of life insurance you need depends on your personal and financial circumstances.
    Life insurance should be purchased by anyone with the following:

    • Children

    • A spouse

    • A dependent family member or loved one

    • Business or estate planning needs

    • Retirement savings and pension plans that are not enough for you and you family to live on due to an increase in cost of living
  • 3.  Life Insurance Glossary of Terms

    Beneficiary- The person(s) named in the policy to receive the life insurance proceeds upon the death of the insured.

    Cash (Surrender) Value- The amount that is available in cash for loans and that may be available for withdrawals. Accessing Cash Surrender Value may reduce the death benefit and may increase the risk of lapse.
    Convertible Term Insurance- Term insurance that can be exchanged (converted), at the option of the policy owner and without evidence of insurability, for a permanent insurance policy.

    Dividend- A return of part of the premium on participating insurance that is based on the insurer’s investment, mortality and expense experience. Dividends are not guaranteed.

    Face Amount- The amount stated on the face of the policy that will be paid in case of death. It does not include additional amounts payable under accidental death or other special provisions, or acquired through the application of policy dividends.

    Insurability- Acceptability to the company of an applicant for insurance.
    Insured or Insured Life- The person on whose life the policy is issued.

    Level Premium (Life Insurance)- Life insurance for which the premium remains the same from year to year. The premium is normally more than the actual cost of protection during the earlier years of the policy and less than the actual cost in the later years. The building of a reserve is a natural result of level premiums. The payments in the early years, together with the interest that is to be earned, serves to balance out the underpayment of the later years.
    Loan (Policy Loan)- A loan made by a life insurance company from its general funds to a policy owner on the security of the cash value of a policy. Generally, loans may reduce the policy’s death benefit and cash value.

    Paid-up Insurance- Insurance that will remain in force with no need to pay additional premiums.
    Participating Policy- A life insurance policy that is eligible for the payment of dividends by the insurer (see also Dividend.)
    Permanent (Life Insurance)- Any form of life insurance except term; generally insurance that builds up a cash value, such as whole life.
    Policy Owner- The person who owns a life insurance policy. This is usually the insured person, but it may also be a relative of the insured, a partnership or a corporation.
    Premiums- Payments to the insurance company to buy a policy and to keep it in force.

    Renewable Term Insurance- Term insurance that can be renewed at the end of the term, at the option of the policy owner and without evidence of insurability, for a limited number of successive terms. The rates generally increase at each renewal as the age of the insured increases.

    Term Insurance- Life insurance that does not build up cash value and where the premium normally increases, as the insured gets older.

    Universal Life Insurance- A flexible premium life insurance policy under which the policy owner may change the death benefit from time to time (with satisfactory evidence of insurability for increases) and vary the amount or timing of premium payments. Premiums (less expense charges) are credited to a policy account from which mortality charges are deducted and to which interest is credited at rates, which may change from time to time.

    Whole Life Insurance- A basic type of permanent life insurance that can provide lifetime protection at a level premium. Premiums must generally be paid for as long as the policy is in force.