What is life insurance What is its purpose quizlet?
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Mathematics with Business Applications6th EditionMcGraw-Hill Education 3,760 solutions Business Math17th EditionMary Hansen 3,684 solutions , premium payments are fixed. Part of the premium is placed into a separate account, which is invested in a stock, bond, or money market fund. The death benefit is guaranteed, but the cash value of the benefit can vary considerably according to the ups and downs of the stock market. Your death benefit can also increase if the earnings of that separate fund increase. Variable insurance products do not guarantee contract cash values, and it is the policy owner who assumes the investment risk. to either interest rates or minimum cash values. What these products do offer is the potential to realize investment gains that exceed those available with traditional life insurance policies. This is done by allowing policyowners to direct the investment ofthe funds that back their variable contracts through separate account options. By placing their policy values into separate accounts, policy owners can participate directly in the account's investment performance, which will earn a variable (as opposed to a fixed) return. Functioning variable insurance products are considered securities contracts as well as insurance contracts. Therefore, they fall under the regulatory arm of both state offices of insurance regulation and the Securities and Exchange Commission (SEC). To sell variable insurance products, an individual must hold a life insurance license and a Financial Industry Regulatory Authority (FINRA) registered representative's license (FINRA was formerly known as the National Associationof Securities Dealers, or NASD) mind that while these policies involve investment management and offer the potential for investment gains, they are primarily life insurance policies, not investment contracts. The primary purpose of these plans, like any life insurance plan, is to provide financial protection in the event of the insured's death. When buying life insurance, it is smart to ____. a. buy a standard policy that pays benefits equal to your current income for as long as dependents need support b. buy as much coverage as you can afford, at as young an age as possible, to take advantage of the lower premiums for younger policyholders c. shop until you find the type and amount of coverage you need with the options you find important d. take whatever is offered by your employer's group plan What is life insurance and what is its purpose?Life Insurance Overview. The primary purpose of life insurance is to provide a financial benefit to dependants upon premature death of an insured person. The policy pays a specified amount called a “death benefit” to the named beneficiary, when the insured dies.
What is the purpose of life insurance quizlet?What is the purpose of life insurance? The purpose of life insurance is to make sure anyone who depends on the deceased for money is protected (nonworking spouse or child).
What is life insurance simple definition?Life Insurance can be defined as a contract between an insurance policy holder and an insurance company, where the insurer promises to pay a sum of money in exchange for a premium, upon the death of an insured person or after a set period.
What is the purpose of insurance in simple words?Insurance is a contract in which an insurer indemnifies another against losses from specific contingencies or perils. It helps to protect the insured person or their family against financial loss. There are many types of insurance policies. Life, health, homeowners, and auto are the most common forms of insurance.
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