Key Concepts
Decreasing Term - Face value slowly decreases in scheduled steps from the date the policy comes into force to the date the policy expires, while the premium remains level.
Endowment Policies - Contract providing for payment of the face amount at the end of a fixed period, at a specified age of the insured, or at the insured's death before the end of the stated period.
Graded Premium Whole Life - Provides lower than normal premium rates during the first few policy years, with premiums increasing gradually each year. After the preliminary period, premiums level off and remain constant.
Group Insurance - Insurance coverage for a group of persons, usually employees of a company, under one master contract.
Increasing Term - Death benefit increases periodically over the policy's term.
Indexed Whole Life - Policy whose death benefit increases according to the rate of inflation, usually tied to the CPI.
Industrial Insurance - Provides modest benefits on a relatively short benefit period. Premiums are collected on a weekly or monthly basis by an agent calling at insured's homes.
Level Term - Face value remains unchanged from the date the policy comes into force to the date the policy expires.
Limited Pay Whole Life - Characterized by premium payments only being made for a specified or limited number of years.
Modified Endowment (MEC) - A life insurance policy under which the amount a policyowner pays in during the first years exceeds the sum of net level premiums that would have been payable to provide paid-up future benefits in seven years.
Modified Whole Life - Whole life insurance with premiums payable during the first few years, usually five years, only slightly larger than the rate for term insurance. Afterwards, the premium is higher for the remainder of life than the premium for ordinary life at the original age of issue, but lower than the rate at the attained age at the time of charge.
Ordinary Insurance - Life insurance of commercial companies not issued on the weekly premium basis; amount of protection is usually $1,000 or more.
Single-Premium Whole Life - Whole life insurance for which the entire premiums is paid in one sum at the beginning of the contract period.
Whole Life - Permanent level insurance protection for the "whole of life," from policy issue to the death of the insured. Characterized by level premiums, level benefits and cash values.
Familiarize yourself with the Key Concepts in the Florida study manual, Units 5 and 6.
