Name:



Name: ___________

Hour: ___________

Life Insurance Notes

What is Life Insurance?

← When a person buys ____________________________, he or she is making a contract with the company issuing the policy.

← He/she agrees to pay a certain amount of money – _______________________ – periodically.

← In return, the company agrees to pay a ____________________, or a stated sum of money upon his or her death, to his or her beneficiary.

← A ____________________ is a person named to receive the benefits from an insurance policy.

Purpose of Life Insurance?

← Buying life insurance can help you protect _______________________________ from ______________________ caused by your death.

← Those people could include a ___________, ______________, an ___________ ____________, or a _________________________________.

← Lessons learned:

▪ Video Link – Brittney Lacombe

▪ Video Link – Ebony and Shana Blanchard

Some Ways Life Insurance is Used

The Principle of Life Insurance

← None of us know how long we have!

← However, insurance companies can make some pretty educated guesses based on ______________________.

← They look at your ________________ and your _________________________ and do an analysis. Then they offer you a policy with a premium. The younger and healthier you are the ____________________________________________!

← For example, life insurance will be more expensive for a 65-year-old woman than for a 25-year-old woman.

Life Expectancy

← Life expectancy is ______________________! If history is any guide, you will live longer than your ancestors lived!

← In 1900, the life expectancy of an American male was ________ years (M) and _________ years (F). By the year 2000, those numbers were ________ (M) and ________ (F).

Do You Need Life Insurance?

← Before you buy life insurance, you will have to decide whether you need it at all. WHAT IS THE TEST?

← Generally, if your death would cause _____________________________, or financial suffering, for somebody, then _________________________________!

← Households with _______________, generally, have the greatest need for life insurance.

← Single people who live alone or with their parents, however, usually __________ __________________________________ unless they have a great deal of debt or want to provide for their parents, a friend, other relatives, or a charity. Oftentimes, having a small policy just to cover _______________________ is enough.

← REALLY THINK ABOUT ____________________! Who depends on me financially? If the answer is _________________, _______________________!

← Tracy Basden -- (her father died when she was a senior in high school, leaving her to raise her younger brother on her own.)

← Looking back, Tracy sometimes thinks of how things might have been different if her father had more life insurance. “I could have grieved,” she reflects. “Life insurance leaves you with the comfort to not have to worry so much about money. It’s one of those bills you have to pay. It should be right up there with your mortgage or rent.” 

Types of Life Insurance Policies

← Temporary Insurance – Term Life

▪ _________________________ – insurance that provides protection against loss of life for only a specified term, or period of time.

▪ Term insurance only pays if __________________________________ _______________________. (For example: 1 year, 5 years, 20 years)

▪ Example: “I have kids so I want term life for the next twenty years in case something happens to me while I’m raising them.”

▪ If you stop paying the premiums, __________________________.

▪ Term life is often the best value. It’s ____________________! Premiums for younger people (20’s and 30’s) are less expensive than those for whole life insurance.

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Permanent Insurance – Whole Life

← More _________________ even though it’s is a bit _______________________!

← _____________________________ is a __________________ policy for which you pay a specified premium __________________________________________.

← The insurance company pays your __________________ a stated sum when you die.

← The earlier you commit and buy the policy ______________________________! The amount of your premium depends mostly on _________________________ _________________________!

← Whole life can also be an _____________________. Part of each premium you pay is set aside in a _________________________. When and if you cancel the policy, you are entitled to the _______________________________. This is known as the ______________________.

← This is another reason these plans are more popular!

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Other Types of Life Insurance

← _____________________ – variation of term insurance.

▪ Usually offered by __________________________.

▪ Covers a large group under a single policy.

▪ The people in the group _____________________________ to get coverage.

← ______________________ – ___________________!

▪ In the event you pass away, these types of policies pay off things like __________________ or _______________ for your family that is left behind.

▪ Usually ____________________________! A decreasing term insurance is usually cheaper!

Key Provisions in a Life Insurance Policy

← Why should you consider adding provisions to your policy?

▪ Always study the __________________, or _____________________, in your policy and be sure to update the necessary information as changes in your life occur.

← The following are common provisions:

▪ _____________________________ – you decide who receives the benefits. Make sure they are up to date!

▪ _____________________________ – says that the insurer cannot cancel the policy if it has been in force for the specified period (usually two years). An important protection!

← ___________________________ – usually 28-31 days. Allows you to pay a bit late without a lapse in coverage. After the grace period, the policy lapses. It’s really important to know if your policy has a grace period or not!

← __________________________ – if your policy lapses, know how to get it reactivated! There is a time limit to get it back and you usually have to pay overdue premiums and interest.

← ___________________________ – know what your policy says about these payouts in the event of suicide. It can range from full payment to zero payment depending on the policy.

Riders to Life Insurance Policies

← An insurance company can change a policy by adding a rider to it.

← A _________________ is a document attached to a policy that changes its terms by adding or excluding specified conditions or altering its benefits.

▪ Examples:

▪ ____________________________________ – if you become disabled the premium is waived.

▪ ____________________________________ – pays twice the value of the policy if the insured is killed in an accident. Experts often counsel against this saying it isn’t worth the cost.

▪ _____________________________________ – IMPORTANT to consider. Allows you to add more insurance without new medical exams!

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Decreasing Term –

Conversion Term –

Multiyear Level Term –

Renewable Term –

Types of Term Life Policies

Universal Life

Adjustable Life Policy –

Variable Life Policy –

Limited Payment Policy –

Types of Whole Life Policies

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