Table 26. Life and Annuities Products
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Term Life |
Insures a life for a specified period of time. If the insured dies during the term, a benefit is paid. If the policy is not renewed and the insured dies after the term, no benefit is paid. |
Whole Life |
Often referred to as permanent insurance because it provides a death benefit and a savings feature. The insurance accumulates a cash value, and the policy owner can generally borrow up to 95% of the cash value of the policy. |
Variable Life |
A form of whole life insurance in which the face amount and the cash value fluctuate according to the investment performance of a separate account fund. The policy holder can choose how a portion of the premium is invested. |
Universal Life |
An insurance policy characterized by flexible premiums and cash values. Universal Life policies do not allow the policy holder to choose how premiums are invested. |
Fixed Annuity |
A form of annuity in which the rate of interest on the annuity account value is guaranteed (fixed) for a specific period. |
Variable Annuity |
A form of annuity in which the rate of return on the account value fluctuates according to the investment performance of a separate account fund. The annuity owner can choose how to invest a portion of the premium. |
Endowment and Annuity |
A policy that allows you to accumulate funds that will be payable in a lump sum at a future date. The money accumulates tax-free. If the insured dies before the pay-off date, the full face value of the policy is paid to the beneficiaries. |