Life Insurance Sales Illustrations
Life insurance illustrations provide prospective clients with detailed projections that help them understand how their policy may perform over time. Illustrations must clearly distinguish between guaranteed and non-guaranteed values, provide multiple scenarios based on different assumptions, and comply with industry regulations – understanding these requirements will allow you to.
Policy illustrations can be complex even for professionals. With up to 20 pages of complex text that must adhere to regulatory guidelines, policy illustrations make it easier for consumers to comprehend their life insurance options and make informed decisions that meet their financial goals.
Numerous reputable life insurance professionals advise their prospective clients to disregard non-guaranteed numbers as “icing on the cake,” but many fail to heed this advice, leading them to purchase policies which do not fulfill their financial goals.
At a good BGA, they understand the intricacies of life insurance illustrations and can ensure they are prepared and presented correctly to their clients. Furthermore, they can offer insight into how different policy features and riders impact illustrated values as well as in-force illustration updates to existing clients to make sure their policies continue meeting financial goals and objectives.
Policy Wordings
Policy wordings are at the core of what insurance does. They represent its promise: that insureds receive financial protection against accidents, natural disasters, crimes or other harm in exchange for their premium payments. This promise serves both insureds and insurers in maintaining stable and efficient insurance markets.
Wordings form the basis of all insurance products sold and agreements entered into with customers and brokers, reflecting each insurer’s individual voice while responding to powerful market forces while remaining clear and effective for end-users.
These contracts also serve as an essential tool in risk management. By outlining coverage and exclusions clearly, insurers can more accurately evaluate and price risks they take on while incentivizing clients to take proactive measures against those that cannot be economically transferred through insurance.
Wordings section of a policy contains general terms and conditions, definitions and other provisions that apply to all policies as a whole. Furthermore, specific wordings that relate to specific coverage (called addendums ), for instance during the coronavirus pandemic extra terms were added to policies in order to exclude claims related to infection by coronavirus. Some wordings will contain both statutory conditions as imposed by law upon all insurers as well as section conditions that specifically pertain to individual covers or subcovers.
Policy Riders
Riders in life insurance allow policy holders to tailor coverage specifically to their unique situation, providing extra protection that may help meet financial needs for your family or protect against unexpected expenses.
Riders are sometimes included with some policies but can differ depending on your insurer, product and state of residence. To determine what riders may be available with your policy you can refer to its specifications or speak to a life insurance professional.
Accidental Death and Dismemberment (AD&D) riders provide an additional death benefit in case an insured is involved in an accident that results in injury coverage, making this an essential feature of life insurance policies for individuals involved in dangerous jobs or hobbies.
An accelerated death benefit rider can also provide financial benefits while living, should someone be diagnosed with terminal illness and live longer than expected. The money provided through such policies may be used for improving quality of life or paying medical and funeral expenses.
Many riders exist to provide policyholders with greater options and flexibility, such as guaranteed insurability riders that enable them to purchase additional insurance at predetermined intervals without being subject to medical exams or answering health-related questions. Others offer return of premium riders that give back part of the amount spent in premiums over time – often tax-free!
Final Expense Insurance
Final expense insurance (or burial insurance) is a form of whole life insurance policy, unlike term life policies which will expire at a set date and pay out benefits only With final expense policies offering cash values that you can borrow against or use to offset future premium payments (although borrowing against your death benefit will reduce what your loved ones will receive when borrowing against it), final expense policies offer another layer of security to your loved ones after your passing.
Final expense insurance provides a lump sum payout designed to bridge the gap between family income and costly end-of-life expenses, such as funeral costs, debts and loan balances, medical or hospital bills, or any other unpaid obligations left after death of an insured individual. According to one recent survey, final expense policies tend to be purchased by middle and lower income families who struggle to make ends meet.
Final expense insurance provides several key advantages. First of all, it is typically available to people of various health conditions – even those with chronic or underlying diseases – and often requires no medical exam; additionally it’s often more cost effective than traditional whole life policies and has greater coverage options with guaranteed never increasing premium payments.