Warm-up  Who do you know that has life insurance?  Has anyone named you their beneficiary?

Life Insurance By: Katie Roark, Amanda Martin, Dan Alley, Glen Johnson, Marcus Beckert

Policies  A life insurance policy is a contractual agreement between an insurance company and the person who purchases the insurance (the insured)  Your policy changes when you choose to change it so when you get married or divorced you can choose to add or remove a person.  Major elements of a life insurance policy  Name of the insured  Amount of coverage, also called the face value or death benefit policy  Premium amount: cost of the insurance  Name of beneficiary

 Expected death percentage  (Effects the cost of insurance)

Beneficiary  A beneficiary is the person that receives the money.  To have an insurable interest in the life of another person you must receive some type of financial benefit from that persons continued life.  A beneficiary is usually a spouse or child.

Two main types of life insurance policies  Protection policies – designed to provide a benefit in the event of specified event, typically a lump sum payment. A common form of this design is term insurance.  Investment policies – where the main objective is to facilitate the growth of capital by regular or single premiums. Common forms (in the US) are whole life, universal life and variable life policies.

Term Life Insurance  Term life insurance is a low cost insurance that is valid only for the stated period of time.  The least expensive form of life insurance.  By paying a slightly higher premium, a person can buy renewable term insurance.

Permanent Life Insurance  A permanent life insurance is a form of life insurance such as whole life where the policy is for the life of the insured.  This feature is just like term insurance.  The longer you keep your policy the higher cash value it will be.

Group Life Insurance  A Group Life Insurance is an policy that covers a group of people.  Its cheaper to pay for group insurance then a single policy.  Most group insurance offers term insurance not permanent insurance.

Spotlight Company  State Farm was founded in 1922 by retired farmer George J. Mecherle as a mutual automobile insurance company owned by its policyholders. The firm originally specialized in auto insurance for farmers.  The company later expanded its services into other types of insurance, such as homeowners and life insurance, in addition to banking and financial services  "Like a good neighbor, State Farm is there"

Review Questions  1. what is beneficiary  2. what is term life insurance  3. what is group Life Insurance  4. what is permanent life insurance