BU353 Chapter Notes - Chapter 13: Life Insurance, Term Life Insurance, Endowment Policy
Document Summary
Chapter 13: individual life insurance products & annuities. A life insurance policy is a legal agreement that pays an amount of cash, referred to as the death benefit, upon the death of an insured life. If life insurance is deemed to be needed, the next step is to determine whether the need for protection is of a temporary or permanent nature. Short-term debts, such as car payments or student loans, are of a temporary nature. For most types of life insurance, the death benefit equals the policy"s face amount, which is the stated amount of coverage purchased by the policyholder. However, for some policies the death benefit equals the face amount plus the cash value. There are two broad types of life insurance products: temporary and permanent. Term insurance provides temporary protection and is well suited to those who have a temporary need. Lifelong needs are best managed by purchasing one of the various permanent life insurance policies.
