Want the straight and narrow on insurance terms. Browse the questions for their description
What is a premium payment?
The monthly, quarterly, semi-annual, annual, or one-time amount you pay in exchange for insurance coverage.
What is face amount?
In a life insurance policy the amount stated as payable at the death of the insured or at the maturity of the contract. KSKJLife's policies mature at age 121. It is generally shown on the first page of the policy. Also called death benefit.
What is death benefit?
The amount of money paid or due to be paid when a person insured under a life insurance policy dies. This amount does not include adjustments for outstanding policy, dividends, paid-up additions, or late premium payments. This amount is guaranteed as long as you pay the premium when it comes due.
What is cash value?
In a permanent life insurance policy, the amount of money, before adjustment for policy loans or late payments, that the policy owner will receive if the policyowner allows the policy to lapse or cancels the coverage and surrenders the policy to the insurance company.
What is a participating program?
A type of life insurance plan that pays dividends. The dividends can be paid in cash, left on deposit and receive interest, or to purchase additional insurance.
What is a lapse? How can I avoid it?
The termination of an insurance policy because premiums were not paid when they came due. Typically, KSKJLife's premiums allow for a 60 day grace period before your insurance lapses. If you have cash value in your policy, you can loan money from the cash value to pay your premium.
What is a automatic premium loan?
An automatic loan against any cash value you have built up in the policy that pays for your insurance premium if you cannot pay it when it comes due.
What is permanent life insurance?
Life insurance that provides life-time protection against economic loss caused by death of the person insured. Your premiums will never increase and your death benefit amount will never decrease as long you pay your premium. Permanent isnurance also has cash value as one of its beneficial features.
What is a Paid-up Additions Rider?
Additional life insurance purchased with excess premium.
How much life insurance do I need?
So, how much life insurance do you need? Well, the answer isn't really how much life insurance you need... it's how much investment capital your family will need at the time of your death. Their need for capital -- on a gross basis -- is really a function of two variables:
- How much will be needed at death to meet immediate obligations;
- How much future income is needed to sustain the household.The first category is fairly easy to estimate. It's the sum of final expenses (including uncovered medical costs, funeral expenses and final estate-settlement costs) and other lump-sum obligations (such as outstanding debts, mortgage balance, and college costs).
The second variable involves calculating the cash-flow needs of your survivors. By answering a few simple questions, you can get an idea of the amount life insurance you will need.is a bit trickier. It involves calculating the "present value" of future needed cash-flow streams.