dying too soon

being injured
living too long

human economic value - individual was able to accumulate assets

annual income * years before retirement - HEV
360,000 * 33 = 11,880,000

face amount - money which given to the insured when he dies

actuary - person who makes assumptions and calculations with respect to the principal elements in a life
insurance premium
premiums (payment)

speculative risk - risk with possibility of gain or loss (example; gambling, business)
pure risk - no possibiliyt of gain (ex; death, disability and old age)

How life insurance works :

clean=up fund - funeral/ burial
-medical expenses
-estate tax payments
-loan payments
income continuation / future expenses
-educational expenses
-daily expenses
-capital to start a business
welfare fund - contritbutes to the welfare of the country by accumulating capital for
-investment and commerce
-partially relieving the community of the care dependents
-encouring provisions for the future

=========
single premium arrangement
premium paying period = one time payment

natural premium arrangement

gradually increasing premium as age increases

level premium - same amount each year

graduated - increases every year til the 5th year of and remain at the same level through the duration of
premium payment period
modified - payment only increases on the 5th year

fractiional - proportional share of annual premium

could be monthly, quarterly or semi-annually
annual premium * conversion or modal factor = modal premium desired

-------------------

Premium Receipt

1. Binding PR - effective immediately

2. Conditional PR
************************************
Module 2

1. Temporary plan
pure protection no savings
covered for limited period
low premium vs permanent
* used for temporary obligations like loans, increased need, temporary insurance solution

Renewable term plan - renew plan for another term

Convertible term plan - convert to a permanent one, providing more benefits.

Level term - premiums remain the same until a specified period

Decreasing term - commonly used for mortgage redemption or loans

2. Permanent Plan
offers protection
savings cashe values
cash values guaranteed
* receive maturity benefits, loan or cash surrender, start of end of 3rd policy year

whole life plan - permanent coverate up to age 100

limited pay life plan - shorter payment period. Payments can be made in 5 yrs, 10 yrs, 20 yrs, or up to age
65.

universal life plan - provides higher savings, payable within a limited time.
endowment plan = specified period only. Most expensive because savings are accumulated in a short
period of time to ensure cash value equals sum insured.

regular endowment = insured to receive the face amount at the specified period

limited endowment = policy provides for the completion of premium payments before the time of
endowment

anticipated endowment = cash benefits can be expected before the policy matures

special anticpated endowment - 20% of the sum insured on the 10th and 15th year

surplus
****************************
Module 3

Rider – supplementary contracts, can be inforced at age 60 of insured

Types of riders:
Total disability and permanent disability
Term Rider
Familiy income rider = decreasing term
Guaranteed insurability rider – allowed to purchase addtnal coverage

Module 4

Underwriting – to prevent anti selection,

2 types: home office (distributors) and feld

Underwriting factors:
Physical Factors – age, build, family hx, physical condition, personal medical hx
Occupational Factors -
Financial
Morals – ex: infedelity of spouse, alcoholism, drug addiction and gambling
Avocation (hobbies) ex moutain climbing, diving, sky diving, motorized racing
Residence and travel
Module 5
ARTICLE 739

PRIMARY
SECONDARY OR CONTINGENT
ESTATE
Module 6: Policy Provisions
Module 7:Other types of insurance

Module 8: Investements in Insurance

Common stock – right to vote
Preferred stock – no voting right upon liquidation

Bonds = a promise on the part of its issuer to repay

Module 9
Pd612
1. Placement
2. Layering
3. Integration
 Market Conduct Guidelines
3 Major Parts: Insurance Profession, Clients, Company
Secure Consent
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