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Writing Sample Insurance Products 3-2013

Writing Sample Insurance Products 3-2013

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Published by Alfonso K. Ajello
White paper describing various types of insurance products.
White paper describing various types of insurance products.

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Categories:Types, Brochures
Published by: Alfonso K. Ajello on Mar 20, 2013
Copyright:Attribution Non-commercial


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By Alfonso K. AjelloWriting SampleSolutions to Meet Everyday Needs
Level Premium Term Insurance
When an individual knows exactly how long they will need a life insurancebenefit, level premium term life insurance may be a suitable alternative. Levelpremium term insurance provides a specified death benefit and level annualpremium for a fixed period of time.An individual can choose to insure their life for 5, 10, 15, 20, 25, 30 years.Premiums are guaranteed to remain level throughout the initial level termperiod. One of the advantages of level premium term life is that it is a low costalternative when compared to permanent life insurance. However, levelpremium term life polices do not accumulate cash value.At the end of the guaranteed level term period, the policy will generally switchto annual renewable term life with premiums increasing each year according theage of the insured. It is important for the policy owner to be aware of the expirydate of the level term period. In many instances an individual will choose toextend the level term benefit with a new level premium term policy or, if eligible, convert the policy to a permanent plan of insurance.
Whole Life Insurance
Whole life insurance is a permanent form of life insurance that offersinsurance protection in the form of a death benefit, as well as “living benefits”in the form of cash value.Advantages of whole life insurance include guaranteed death benefit,contractually guaranteed cash value, and accumulation of non-guaranteedcash values such as dividends for participating polices. This “living benefit“builds within the policy on a tax deferred basis and can be used for a variety of different applications including offsetting premium costs, increasing the faceamount, retirement funding, college funding, estate planning, emergencies, orwhatever the policy owner needs it for.Whole life insurance is more costly than level premium term life , and it is forthis reason that many choose term life insurance instead. Insuranceprofessionals argue that whole life is a valuable asset to have in ones portfoliodue to the guarantees provided, and the buildup of tax deferred cash value .
Universal Life (UL)
Sometimes called flexible premium life insurance, universal life offers apermanent life insurance benefit on a term life chassis. Universal life featuresthelow-cost protection of term life insuranceand a cash accumulation fund,which is invested to provide cash value buildup.Universal life polices can provide more flexibility than whole life polices. A policyowner can set up a universal life to provide specific cash value at apredetermined future point in time, or choose the length of time a policy shouldremain in effect. For instance, a policy owner can tailor a policy to provide$100,000 cash value at age 65, or tailor a policy to provide the death benefitthey need to age 90, or whatever age they choose based upon theircircumstances.The cash accumulation account is usually credited an interest rate determinedby the insurance company based upon their investment experience. Mostpolicies receive this crediting rate with a minimum rate that the company willabide by regardless of their investment experience.
Variable Universal Life (VUL)
A variable universal life works similar to a universal life except that the cashaccumulation account is tied to investments that the policy owner chooses. Thepolicy owner has the freedom to select between many different types of investments or “sub-accounts," which function similar to the mutual fundschoices one might encounter in their 401k plan. These sub accounts can provideaccess to many different alternatives such as fixed accounts, money markets,growth, income, bond, international, and global fund classes. A VUL policyoffers the possibility of an increased rate of return over a universal life orpermanent insurance policy, but exposes the policy owner to greater investmentrisk.Universal life polices put the investment risk on the insuring company. Avariableuniversal life puts the investment risk on the policy owner. It is important for apolicy owner to asses their risk tolerance as they decide which product is rightfor them.

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