Health and Life insurance Assignment.

FIN 3660 Module 3

Chapters 7 and 8 Name:_____________________________

Please be sure to cite sources for your answers, even if they come from the textbook or PowerPoints. All answers should be in your own words.

1. Define and briefly discuss the following, including a situation in which this type of life insurance would be best:

1. Variable life Insurance

2. Variable adjustable life insurance

3. Variable universal life insurance

1. Explain how the cash value of a variable life policy differs from that of a whole life policy.

1. List information included in the prospectus disclosure for variable life insurance policies and explain each provision.

1. Describe variable universal life insurance and explain how it is different from a. universal life and b. variable life.

1. The surrender value may be taken in one of three forms. List and explain the three forms.

1. What is the effect of the premium loan clause? What are the advantages and disadvantages?

1. Define settlement options. Death benefits can be paid out in many ways. List and explain 5 of these options.

1. Joanna is the beneficiary of her mother’s life insurance policy. Under a settlement option, the policy provides that Joanna has a cumulative right to withdraw $4,000 each year in addition to periodic contractual payments. During the next 5 years, Joanna exercises the right of withdrawal according to the following pattern: year one, a $1,500 withdrawal, year two, no withdrawal, year three, a $2,000 withdrawal, year four, no withdrawal and year five, a $2,500 withdrawal. Ignoring other sums that can be withdrawn pursuant to the terms of agreement, what is the maximum amount Joanna can withdraw under the cumulative right of withdrawal in year six?