Term & Universal Life

Table of Contents

Chapter 1: Defining Life Insurance		6
	Basic Concepts	6
	How Much is Enough?	7
	Calculating Expenses	8
	Another calculating method	10
	An Emergency Fund	11
	Child-Care Expenses	11
	Educational Fund	11
	Debt Repayment	12
	Coming to a Conclusion	12
	Insurance Companies Measure Risk	13
	What Type of Life Insurance is Appropriate?	14
	What Will the Insurance Cost?	15
	Term Insurance	16
	Reentry Level Term	18
	Level Decreasing Term Insurance	19
	Permanent Insurance	20
	Universal Life Insurance Policies	23
	Universal Life Evolution	24
	How Do Universal Life Policies Compare to Traditional Plans?	26
Chapter 2: The Life Insurance Contract		29
	Defining the Contract	30
	Policy Application	30
	Policy Ownership	31
	Preventing Money Laundering Activities	32
	Terrorism Produces Insurer Risk	32
	Legal Requirements Adopted	33
	Broker-Dealer Requirements	35
	AML Program Requirements	36
	Employee training can be in several formats	37
	Know Your Customer (KYC)	39
	Compliance	39
	Suspicious Activity Reports Filing Requirements	40
	A Change in Thinking	40
	Three stages of money laundering	41
	A Global Problem	42
	Covered Products	43
	Nine Identified ML Methods	45
	Money Laundering Indicators Not Unique to Insurance Products	47
	Policyholder Characteristics and Behaviors	48
	A Known Criminal or Criminal Associate or Relative	50
	Erratic or Abnormal Use of Policies	50
	High Premiums Compared to Verifiable Income	51
	Lack of Concern for Charges or Costs	51
	Undue Interest in Payout Options	51
	Change of Beneficiary	52
	Insurance on Assets that Appear Inconsistent with Income	52
	Early or Suspicious Claims	52
	Product Characteristics and Maintenance	54
	Customer Due Diligence (CDD)	55
	In Conclusion	57
Chapter 3: Policy Features and Provisions		59
	Premiums / Policy Options	59
	Nonforfeiture Options	59
	Dividend Options	60
	Settlement Options	61
	State Required Provisions	62
	Incontestability	63
	Misstatements in the Application	64
	Deferment Clause	64
	Loan Values	64
	Grace Periods and Reinstatement	65
	Allowed Policy Provisions	66
	Suicide / Aviation	66
	War	67
	General Provisions	67
	Deduction of Indebtedness and Premium Refund	67
	Change of Beneficiary	67
	Assignment	68
	Beneficiary Designations	68
	Policy Payments	70
	Cash Values	70
	Dividends / Proceeds	71
	Special Clauses	72
Chapter 4: Contract Use		74
	Group Insurance Principles	74
	Eligible Groups	74
	Single Employer Groups	74
	Multiple Employer Trusts (METS)	75
	Unions, Associations, and Other Groups	75
	Creditor-Debtor Groups	75
	Underwriting Advantages	76
	Keeping Current with Business Needs	77
	The Informed Consumer	78
	Providing a Quote	78
	The Contract Participants	80
	The Insurer	80
	The Insured	81
	Insurance Contract	81
	Underwriting and Rating	82
	Finance	82
	A Public Interest	83
	Key Person Insurance	83
	Buy-and-Sell Agreements	84
	The Key Person Principle	85
	Insurable Interest for Life Insurance	86
	Health Insurance on Key Employees and Owners	87
	The Small Company’s Exposure	89
	Loss of the Small Business Owner	89
	Planning Ahead for Death or Disability	93
	Insuring Entities	94
	Private and Government Insurance	94
	Private Insurers	94
	Life Insurance	95
	Property and Liability Insurance	95
	Government Insurance	96
	Voluntary Government Insurance	96
	Compulsory Government Insurance	96
	Mutual Companies	97
	Assessment Mutuals	98
	Non-assessable Mutuals	100
	Conversions	100
	Reciprocal or Inter-Insurer Associations	101
	Stock and Mutual Underwriting	102
	Factory Mutuals	102
	Superior Agents and Brokers	104

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