AAEC 2104 Lecture Notes - Lecture 21: Whole Life Insurance, Term Life Insurance, Savings Account
30 Apr 2018
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Finance Notes 4-30-18
Types of Life Insurance
2 main types
- Term Insurance – cheap, good for students, no investment decisions
- Permanent or Cash-Value insurance – as long as you pay premiums you’re
covered for life
Whole Life Insurance
- Provides a death benefit when the insured:
o Dies
o Turns 100 or reaches maximum stated age
- Death benefit: face value
- Constant premiums – set by insurance company
- Premium has 2 parts
o Cost of the insurance
o Contribution to the savings account
- Insurance company invests cash value
Variable Universal Life Insurance
- Policyholder can increase/decrease premium
- Policyholder determines how cash value is invested
o Menu of mutual funds
find more resources at oneclass.com
find more resources at oneclass.com
