Snapshot Questions Flashcards
1
No, policyowner owner must face possibility of losing $ or something of value in event of loss to purchase insurance
2
Your own life
A close blood relative, spouse, or adopted child
A business relationship or other financial obligation
3
When policy is sold, owner receives %’age of policy’s face value from one who purchases policy
New owner continues to maintain premium payments & will eventually collect entire death benefit
What does a viatical settlement allow?
One living w/ life threatening condition can sell existing life insurance policy & use proceeds when they’re most needed, b4 their death (they’re separate contracts in which insured sells death benefit 2 3rd party @ discounted rate)
What are the 6 personal uses of life insurance?
Survivor protection Estate creation Cash accumulation Liquidity Estate conservation Viatical settlements
Availability of cash to be insured
Liquidity; some policies offer cash values that can be borrowed @ any time & used for immediate needs
Example of product that provides cash accumulation?
Whole life policy that offers insured living benefits in form of cash values
How does estate conservation work?
Life insurance proceeds may be used to pay state inheritance taxes & federal estate taxes so that it’s not necessary to sell off assets from estate to pay these costs
Insureds who sell death benefit 2 3rd party?
Viators
Who represents that insureds/viators in a viatical settlement?
Viatical brokers
Who represents the providers in a viatical settlement?
Viatical producers
4
need
5
Loss of income in event of premature death of insured (agent uses probably future earnings, inflation, # of yrs to retirement & time value of $ to calculate one’s life value)
Needs approach is based upon what?
What does it attempt to identify/summarize?
Predicated needs of a family after premature death of insured; looks @ family’s income-expenditure equation
Attempts to identify allocation of income, unusual/non-regular expenditures, & additional expenses during readjustment & summarizes most critical prospective expenditures
Greatest benefit of graphic analysis of needs approach?
Helps ppl visualize amounts needed as a flow of income