Drop down option: Level Premium

Drop down options:

1. direct, unlimited, straight life

2. continous premium, limited payment, single premium

3. $10,000, $60,000, 120,000, 200,000, 140,000

4. but would forfeit, in addition to

5.$60,000, $200,000, $120,000, $140,000, $10,000

6. $60,000, $10,000, $35,000, 200,000, $120,000

7. Renewability provision, convertibility provision, nonforfeiture right

Kyoko is a 25-year-old female with limited financial resources and a four-year-old son. Ideally, she would like to purchase permanent insurance coverage, but her primary concern is making sure her son will be taken care of financially if she dies before he graduates from college. Given her current financial situation, she is interested in a term life insurance policy that will last 20 years. Kyoko goes to an insurance broker to purchase a policy and is shown the following two rate tables to help her choose between annual renewable and level premium term life insurance. 1 Yearly Rates on Term Life Insurance Policies Annual Renewable Term Life Rates Policy Year Age 25 Age 40 Age 60 $119 $139 $252 5 $147 $219 $562 15 $176 $507 $1,313 20 $259 $1,054 $2,989 Total Cost 5 Years: $625 $897 $2,100 Total Cost 15 Years: $2,135 $6,205 $11,987 Total Cost 20 years: $3,777 $8,287 $22,346 Level Premium Term Life Rates 5 Year Age 25 $102 15 Year $84 $84 20 Year $95 $95 35 $101 40 $119 $102 $113 50 $136 $167 $195 60 $245 $295 $394 1 $119 $139 $252 5 $147 $219 $562 15 $507 $1,054 $176 20 $259 Total Cost 5 Years: $625 Total Cost 15 Years: $2,135 Total Cost 20 Years: $3,777 $897 $1,313 $2,989 $2,100 $11,987 $22,346 $6,205 $8,287 Age Level Premium Term Life Rates 5 Year $102 15 Year 25 $84 35 $101 $84 20 Year $95 $95 $113 $195 $394 40 $119 $102 50 $136 $167 $295 60 $245 Given her age and desired policy term, she can purchase an annual renewable term life policy and pay $ in the first year and a total of over the course of the policy. Alternatively, she can purchase a level premium term life policy and pay a premium of year for a total of over the course of the policy. per This example is representative of why, in general, people today purchase term life insurance. Suppose you are a life insurance broker with a client who is interested in buying a whole life insurance policy. You explain to him the three major types of whole life insurance: continuous premium, also known as limited payment, and single premium. Your client is a 33- year-old man and a father of four who is looking for the policy that provides the most permanent death protection for a given number of premium dollars. Based on this information alone, you recommend that he purchase a whole life policy. Your client takes your advice but wants to understand more about the different features of his policy: specifically the relationship between the premiums he pays, the cash value of his plan, and the death benefits his beneficiaries would receive in the event of his passing. To help illustrate, you show him the following graph: ? Cash Value and Pure Death Protection in a Whole Life Policy 200 100 120 Death protection THOUSANDS OF DOLLARS 80 40 Cash value 200 160 120 Death protection THOUSANDS OF DOLLARS 20 40 Cash value 100 00 70 AGE OF INSURED The graph projects the cash value and death protection for a $200,000 whole life policy. If the client were to die at age 60, his beneficiaries would receive roughly in death protection the cash value. If instead, at age 50, the client were to cancel or borrow against the policy, he would be able to withdraw up to because of the associated with whole life insurance The right to withdraw the cash value of a plan at any time prior to the policyholder's death is due to which of the following? The convertibility provision The nonforfeiture right The cash conversion clause Each type of life insurance has its own benefits and drawbacks, and policyholder preferences and circumstances make certain features more important to some individuals than to others. The following table shows statements about life insurance policies. Indicate which policies address the concern or desire expressed by each statement. Check all that apply. Term life insurance Whole life insurance Universal life insurance I want a large amount of coverage but can only pay a small amount in the near future. I want to use my life insurance as a savings vehicle as well. If I decide to cancel my policy while I'm still alive, I want access to the cash value. I want flexibility in the amount I pay in premiums in each month. Kyoko is a 25-year-old female with limited financial resources and a four-year-old son. Ideally, she would like to purchase permanent insurance coverage, but her primary concern is making sure her son will be taken care of financially if she dies before he graduates from college. Given her current financial situation, she is interested in a term life insurance policy that will last 20 years. Kyoko goes to an insurance broker to purchase a policy and is shown the following two rate tables to help her choose between annual renewable and level premium term life insurance. 1 Yearly Rates on Term Life Insurance Policies Annual Renewable Term Life Rates Policy Year Age 25 Age 40 Age 60 $119 $139 $252 5 $147 $219 $562 15 $176 $507 $1,313 20 $259 $1,054 $2,989 Total Cost 5 Years: $625 $897 $2,100 Total Cost 15 Years: $2,135 $6,205 $11,987 Total Cost 20 years: $3,777 $8,287 $22,346 Level Premium Term Life Rates 5 Year Age 25 $102 15 Year $84 $84 20 Year $95 $95 35 $101 40 $119 $102 $113 50 $136 $167 $195 60 $245 $295 $394 1 $119 $139 $252 5 $147 $219 $562 15 $507 $1,054 $176 20 $259 Total Cost 5 Years: $625 Total Cost 15 Years: $2,135 Total Cost 20 Years: $3,777 $897 $1,313 $2,989 $2,100 $11,987 $22,346 $6,205 $8,287 Age Level Premium Term Life Rates 5 Year $102 15 Year 25 $84 35 $101 $84 20 Year $95 $95 $113 $195 $394 40 $119 $102 50 $136 $167 $295 60 $245 Given her age and desired policy term, she can purchase an annual renewable term life policy and pay $ in the first year and a total of over the course of the policy. Alternatively, she can purchase a level premium term life policy and pay a premium of year for a total of over the course of the policy. per This example is representative of why, in general, people today purchase term life insurance. Suppose you are a life insurance broker with a client who is interested in buying a whole life insurance policy. You explain to him the three major types of whole life insurance: continuous premium, also known as limited payment, and single premium. Your client is a 33- year-old man and a father of four who is looking for the policy that provides the most permanent death protection for a given number of premium dollars. Based on this information alone, you recommend that he purchase a whole life policy. Your client takes your advice but wants to understand more about the different features of his policy: specifically the relationship between the premiums he pays, the cash value of his plan, and the death benefits his beneficiaries would receive in the event of his passing. To help illustrate, you show him the following graph: ? Cash Value and Pure Death Protection in a Whole Life Policy 200 100 120 Death protection THOUSANDS OF DOLLARS 80 40 Cash value 200 160 120 Death protection THOUSANDS OF DOLLARS 20 40 Cash value 100 00 70 AGE OF INSURED The graph projects the cash value and death protection for a $200,000 whole life policy. If the client were to die at age 60, his beneficiaries would receive roughly in death protection the cash value. If instead, at age 50, the client were to cancel or borrow against the policy, he would be able to withdraw up to because of the associated with whole life insurance The right to withdraw the cash value of a plan at any time prior to the policyholder's death is due to which of the following? The convertibility provision The nonforfeiture right The cash conversion clause Each type of life insurance has its own benefits and drawbacks, and policyholder preferences and circumstances make certain features more important to some individuals than to others. The following table shows statements about life insurance policies. Indicate which policies address the concern or desire expressed by each statement. Check all that apply. Term life insurance Whole life insurance Universal life insurance I want a large amount of coverage but can only pay a small amount in the near future. I want to use my life insurance as a savings vehicle as well. If I decide to cancel my policy while I'm still alive, I want access to the cash value. I want flexibility in the amount I pay in premiums in each month