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Related Flashcards
Cards In This Set
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What is Insurable Interest?
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When the applicant faces the possibilty of losing money or something of value in the event of loss.
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What are the three factors that may determine insurable interest for the policy owner?
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1. Insuring his/her own life
2. Insuring the life of a family member
3. Insuring the life of a business partner, key employee or someone who has a financial obligation to them
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How can you create an immediate estate?
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By purchasing life insurance
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What is liquidity in a life insurance policy?
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When the policies cash values can be borrowed against at any time and used for immediate needs.
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What calculates an individuals life value by looking at the insured wages, inflation, the number of years to retirement and the time value of money?
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The Human Value Life Approach
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What is based on the predicted needs of a family after the premature death of the insured?
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The Needs Approach
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What are the four categories on the type of information that needs to be gathered for the Needs Approach?
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1. Debt
2. Income
3. Mortgage
4. Expenses
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What are Lump Sum Needs
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The cost of final medical expenses of the insured, funeral expenses and day to day expenses of maintaining the family.
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What is Debt Cancellation
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Insurance may be used to create a fund to pay off debts of the insured.
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What is the Social Security "black out period"?
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The time during which the surviving spouse and/or children do not receive any social security survivor benefits.
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When does the Social Security "black out period" begin?
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When the youngest child reaches the age of 16 years.
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When does the Social Security "black out period" end?
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When the surviving spouse quallifies for retirement benefits, as early as age 60.
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What is a Buy-Sell Agreement?
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A legal contract that determines what will be done with a business i the event that an owner dies or becomes disabled.
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What is Key Person Insurance?
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Insurance on an employee that if premature death occurs, the company would suffer a financial loss. Key Person insurnce would lessen this risk.
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In Key Person Insurance the employee is the insured and the business is what?
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The applicant, the policy owner, the premium payer and the beneficiary.
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