Type answer for the following questions: 1. Life Insurance - Identify two uses and two characteristics of term, whole life, universal life, and variable universal life insurance. Explain when you...

Type answer for the following questions:
1. Life Insurance - Identify two uses and two characteristics of term, whole life, universal life, and variable universal life insurance. Explain when you might have a need for life insurance. What type of policy would you choose and why?
Solution:
Whole life insurance may be kept in force for the insured's entire lifetime, and thus is one of the forms of permanent insurance. Universal life contracts offer more flexible premium payment options than do most other forms of life insurance. The minimum initial premium required to activate the policy is specified by the insurer, but the policy-owner usually decides the timing and size of subsequent premiums. In a form of whole life insurance known as variable life insurance, the death benefit and cash value fluctuate with the investment performance of one or more portfolios of securities. From among these choices provided by insurers, policyholders can designate the types of investments that they want supporting their policies.
Life insurance is needed when an individual is the main member who earns and there are many dependent people, at time the need of life insurance is required.
    Cash Value Life Insurance
     
    Whole Life
    Universal Life
    Variable Life
    
    Death benefit
    Death benefit is equal to the face
    Policyholder chooses
    Guaranteed minimum
    
    
    amount and is usually level
    between a level death
    death benefit plus a
    
    
    over entire life; if policyholder
    benefit that equals face
    death benefit that
    
    
    survives to age 100, then
    amount or a death benefit
    varies with cash value
    
    
    receives death benefit; can
    that equals face amount
    
    
    purchase more coverage using
    plus cash value
     
    
    
    policyholder dividends
     
     
    
    Typical premium
    Single premium; level
    First year required premium
    Same as whole life
    
    schedules
    premium over fixed number
    but flexible thereafter;
    
    
     
    of years or until death or
    sometimes subject to
    
    
     
    surrender
    minimum and maximum
    
    
    Lapse or surrender
    Fail to make scheduled
    Cash value is less than cost
    Fail to make scheduled
    
    
    premium payment, or cash
    of coverage for the period
    premium payment or
    
    
    value minus loan value equals
     
    cash value minus loan
    
    
    zero
     
    value equals zero
    
    Cash value
    Yes, follows a fixed schedule
    Yes, varies over time
    Yes, varies over time
    
    
    
    depending on premium
    depending on
    
    
    
    payments, charges, and
    investment returns
    
    
    
    credited interest
     
    
    Return on savings
    Implicit in fixed cash value
    Varies with interest rates,
    Varies with returns on
    
    accumulation
    schedule
    usually short term rates
    investments chosen
    
     
     
     
    by policyholder
    
    Flexibility
    Limited flexibility; can borrow
    Flexible premium and death
    Same as whole life
    
    
    against cash value
    benefits; often can borrow
    
    
    
     
    against cash value
    
    
    Risk borne by
    Amount of dividends with
    Credited interest rate
    Investment returns;
    
    policyholder
    participating policies; insurer
    charges; mortality
    insurer insolvency risk
    
     
    insolvency risk
    charges; insurer insolvency
    
     
     
    risk
     
    
    Percentage of face
    22.80%
    19.90%
    0.90%
    
    amount of coverage
    
    
    
    
    sold in US in 2000
    
    
    
    
    Percentage of policies
    58.90%
    13.00%
    0.60%
    
    sold in US in 2000
    
    
    
    
Estimate the cost for a $100,000 term (age 25), whole life policy (age 25), universal life (age 25), and variable universal life (age 25). In addition, if you have a life insurance policy, then list the type of policy you have protecting the exposure, name of the company, premium payment, amount of coverage.
If a person dies, what sources could be available to provide income to the family?
Solution:
With whole life policies, the schedule of cash values over time is fixed at the time the policy is purchased. Under modern variations of cash value life insurance (universal life and variable life), however, the separation of the death protection and savings accumulation are made more transparent to the policyholder. Also, instead of having a fixed schedule of cash values, the cash values can vary (depending on the type of policy) with current interest rates, the return earned on the insurer's entire asset portfolio, or the return on specific portfolios of investments, such as stock mutual funds. As a result, universal and variable life often is called investment sensitive contracts.
If the person dies in the whole life policy, fixed amount of the insurance is paid to the nominee whereas in other forms along with the insurance amount they get the return as well which is invested in the stocks.
2.​Health Insurance - Complete A or B.
A.​List the type of policy you have protecting the exposure,
name of the company, premium payment - employer/employee, deductibles, co-payments, stop-loss, and limits of coverage.
Explain a Health Maintenance Organization (HMO), a
Preferred Provider Organization (PPO), a Point of
Service (POS) Plan, a High Deductible plan and a Health Savings
Account.
B.​Identify the amounts for the underlined terms for Ball State's Health Insurance Program.
List the following: Premiums (single and family, employer/employee payments), deductibles (single and family), co-payments, and out of pocket maximum. Also explain a Health Maintenance Organization, Preferred Provider Organization, a Point of Service Plan, a High Deductible plan and a Health Savings Account.
Solution:
MEDICAL:
     
          Low Deductible
         High Deductible
Wellness
         High Deductible
HSA Qualified
       Single
    $600
     $1,100
    $2000
      EE+Child
     $1500
     $2,750
    $5000
       Family
               $1500
    $2,750
     $5000
DENTAL:
(No PPO Network for Dental Coverage)
$60 Single/$150 EE+CH/$150 Family
PRESCRIPTIONS:
(No PPO Network for Prescription Drugs)
          High Deductible HSA Qualified
     All Other Plans
          Included in medical deductible
          Eliminated Jan. 1, 2011
Premiums: 
     
                  PPO
                     PPO 
                        PPO 
    
         Low Deductible
     High Deductible Wellness
     High Deductible HSA Qualified
    Single 12 Month
    280.00
     140.08
     92.25
    Single 12 Mo w/TF Discount
    230.00
    90.08
    42.25
    Single 10 Month
    336.00
    168.10
     110.70
    Single 10 Mo w/TF Discount
    276.00
    108.10
    50.70
    EE+Ch 12 Month
    486.92
    221.17
    130.17
    EE+Ch 12 Mo w/TF Discount 
    436.92
    171.17
    80.17
    EE+Ch 10 Month
    584.30
    265.40
    156.20
    EE+Ch 10 Mo w/TF Discount
    524.30
    205.40
    96.20
    Family 12 Month
    646.92
    283.83
    159.58
    Family 12 Mo w/TF Discount
    596.92
    233.83
    109.58
    Family 10 Month
    776.30
    340.60
    191.50
    Family 10 Mo w/TF Discount
    716.30
    280.60
    131.50
3....