Life Insurance Basics

Lesson One: Life Insurance: Purpose, Functions, and Providers

• Why do people buy life insurance?
• Transferring economic loss
• The risk of premature death
• The life insurance industry
• The financial services industry
• Insurance providers

Lesson Two: Life Company Operations

• Line units Actuarial, Investments, Marketing, Underwriting, Reinsurance, Customer Service, Claim Administration
• Staff units Accounting, Information Systems, Legal, Human Resources

Lesson Three: Product Development and Distribution

• Product development
• Idea generation and screening
• Comprehensive business analysis
• Technical design
• Implementation
• Product introduction
• Sales monitoring and review
• Distribution systems
• Agency distribution system
• Ordinary agency system
• Multiple-line agency system
• Home service distribution
• Brokerage distribution
• Group insurance sales
• Direct response system
• Location-selling system
• Worksite marketing
• Bank-sold insurance distribution system

Lesson Four: Pricing Life Insurance Products

• Review of basic insurance terms
• Key pricing factors
• Mortality rates
• Investment income
• Expenses
• Gross premium
• Reserves
• Net amount at risk

Lesson Five: Life Insurance Products

• Term insurance
• Types of term insurance
• Term insurance: Renewability and convertibility
• Traditional whole life permanent insurance
• Policy reserves and cash value
• Premium-payment schedules
• Other types of permanent life insurance
• Modified whole life insurance
• Joint whole life insurance
• Universal life insurance
• Interest-sensitive whole life insurance
• Variable life insurance
• Variable universal life insurance
• Supplementary benefit riders
• Guaranteed insurability rider

Lesson Six: The Insurance Policy

• The application
• Insurable interest
• The policy’s face page
• Policy provisions
• Incontestability
• Grace period
• Nonforfeiture options
• Policy loans
• Misstatement of age
• Reinstatement
• Settlement options
• Group life insurance