A universal policy has two components:
an insurance component and a cash account
. The insurance component (or the death protection) of a universal life policy is always annual renewable term insurance.
What are universal policies?
Universal life insurance typically
guarantees a rate up to a certain age
, such as 100 or 105. If you live past that age, you can still keep the policy in force but will have to pay a substantial rate increase. A universal life policy will expire if you stop paying the premiums and the cash value becomes depleted.
What are the 2 components of a universal policy?
Universal life insurance has two components:
death benefit coverage and an accumulating cash value
. When you pay your monthly premium, it’s split between the two parts of your policy, with a portion going to each.
Modified life
is a permanent policy, but in the early years, the premiums are similar to that of a term policy; in later years, the premiums are increased to build cash values and cause the policy to endow.
The premiums for survivorship life insurance are
lower than they would be for two comparable single-life policies
because more than one person is insured on one policy. Which of the following is the main appeal of joint life insurance compared to two separate policies?
There are two parts to a universal life premium payment:
a cost of insurance component (or COI) and a cash value component
. Depending on the insurance policy, there’s an upper and lower limit to how much the total premium amount can be.
What is the difference between universal life and whole life?
Whole life and universal life insurance are
both types of permanent life insurance
. Whole life insurance offers consistent premiums and guaranteed cash value accumulation, while a universal policy provides flexible premiums and death benefits. You can borrow against the cash value of a whole or universal policy.
Can you cash out a universal life insurance policy?
Final Word – Can You Cash In Universal Life Insurance? Cash-value life insurance policies like universal and whole life insurance accumulate cash in the policy. With universal life insurance,
you are able to withdraw this cash
. Although cash can be withdrawn, it might not be the best idea.
What is a good amount for life insurance?
Most insurance companies say a reasonable amount for life insurance is
six to 10 times the amount of annual salary
. Another way to calculate the amount of life insurance needed is to multiply your annual salary by the number of years left until retirement.
Which policy feature makes a universal life policy?
Which policy feature makes a universal life policy different from a whole life policy?
A flexible premium schedule
“. The policy feature that makes universal life different from whole life insurance policies is its flexible premium schedule.
Which of the following is correct regarding credit life insurance quizlet?
The correct answer is:
Endowment contracts
endow only upon the insured’s death. Credit life insurance is issued on the life of the person who has the debt (debtor) and the creditor owns and is the beneficiary of the policy. You just studied 14 terms!
What characteristics are consistent with a straight life policy?
With a straight life policy,
a portion of your premium pays for the insurance and the rest accumulates tax deferred in a cash value account
. You may be able to borrow against the cash value, but any amount that you haven’t repaid when you die reduces the death benefit.
What is another name for interest sensitive whole life insurance quizlet?
Universal Life
is a type of Whole Life insurance and is sometimes referred to on the exam as “interest sensitive” whole life. Universal Life policies have a cash value with a minimum guaranteed interest rate and an excess current interest rate.
Which two terms are associated directly with the premium?
Level and flexible
. A level premium is one in which the premium payment never changes. A flexible premium is found in universal life policies where the insured changes their premium payment.
Which of the following is the best reason to purchase life insurance rather than annuities?
Based on those very simplistic explanations, the best reason for purchasing life insurance rather than annuities would be
to provide for your loved ones if you do not have much saved up
. … With life insurance, you gain an instant legacy. After that first premium is paid, should you die, your heirs have an instant estate.
What is the difference between a family maintenance policy and a family income policy?
What is the difference between a family income policy and a family maintenance policy? If you pass away, a family income policy pays the death benefit in installments for a set period of time. A family maintenance policy does the same, but also
pays a lump sum at the end of the policy term
.
