Slide MGT312 Slide08

Life Insurance
Chapter 12

Financial Needs
• Final-expense needs (upon death).
• Income-replacement needs.
• Readjustment-period needs.
• Debt-repayment needs.
• College expense needs.

Strategies to Meet Financial
Needs

• Government benefits.
• Existing assets.
• Life insurance.

Life Insurance Estimation
• Multiple-of-earnings approach
(multiplication of income by some
number).

• Needs-based approach (multifactor).

Term-Life Insurance (only
payable upon death)

• Guaranteed renewable term insurance.

• Guaranteed level-premium term insurance .
• Decreasing term insurance.
• Convertible term insurance (to cash-value).
• Group term life insurance.
• Credit (debt) term life insurance.

Cash-Value (Permanent)
Insurance: Fixed Return

• Whole life insurance.

• Limited-pay whole life insurance (until
certain age only).

• Adjustable life insurance.
• Modified life insurance (lower premium in
early years).
• Endowment life insurance.