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Chap 4: Life Insurance - Coggle Diagram
Chap 4: Life Insurance
Term Insurance
Characteristics
Fixed Premium
Lowest premium
Policy lapses if premium not paid
within grace period
TPD benefit
Only non-participating basis
No cash value and no policy loans
Level
Eg. Key Person Insurance
Increasing
Decreasing
Mortgage Decreasing
Characteristics
Joint-life, first-to-die
Premium is usually level & ceases
few years before policy expires
Continuing coverage
Convertible option
ATtained Age conversion
Right to convert from term insurance to
permanent insurance without
evidence of insurability
Conversion conditions
Discouraging anti-selection
Higher premiums for convertible TI
Preventing conversions past
certain age
Face value due to conversion may be limited to
percentage of original face value
Renewable Option
Right to renew policy without
evidence of insurability
Increased premiums
Yearly Renewable Term insurance
Discouraging anti-selection
Preventing renewals past a certain age
limit number of renewals
Whole Life Insurance
Ordinary
Non-Forfeiture Options
Limited
Endowment Insurance
Cash value
builds up quickly
Policy loans possible
Anticipated Endowment
provides cash payments to policy
owners at specific intervals
Suitability
Policy Anniversary
Date on which coverage under
the policy became effective
Whole Life Insurance
Features
Savings element in the form
of surrender value