Page 143 - The Informed Fed--Hearn Wealth Management

that is less than the full amount of the death benefit. The buyer becomes
the new owner and/or beneficiary of the life insurance policy, pays all

future premiums, and collects the entire death benefit when the insured
dies. Some states regulate the purchase as a security while others may
regulate it as insurance.

Waiver of Premium: A Waiver of Premium rider on an insurance policy

sets for conditions under which premium payments are not required to
be made for a time. The most popular waiver of premium rider is the
disability waiver under which the owner of the policy (also called the

policyholder) is not required to make premium payments during a period
of total disability.

Whole Life Insurance: A traditional whole life insurance policy
provides both a death benefit and a cash value component. The policy is
designed to remain in force for a lifetime. Premiums stay level and the

death benefit is guaranteed. Over time, the cash value of the policy grows
and helps keep the premium level. Although the premiums start out

significantly higher than that of a comparable term life policy, over time
the level premium eventually is overtaken by the ever-increasing
premium of a term policy.

Will: The most basic and necessary of estate planning tools. A Will is a

their estate. A Will ensures that the right people receive the right assets
at the right time. If an individual dies without a Will they are said to have
died intestate.

Yield: The yield on an investment is the total proceeds paid from the

investment and is calculated as a percentage of the amount invested.

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