Classes of Life Insurance Policies

Permanent vs Term Life Insurance, Life Definitions
Insurance Licensing Definitions

Permanent versus Term

The two basic types of life insurance policies are term life insurance and permanent life insurance.

Permanent life insurance

Term life insurance

Participating versus Nonparticipating (Par vs . Non-par)

A mutual life insurer may issue policies on both a participating (sharing in the profits of the company) and nonparticipating basis, provided that the right or absence of participation is related to the premium charged. The policy must clearly state whether it is participating or nonparticipating.

Ordinary versus Industrial (Home Service)

Ordinary life insurance policies normally have larger face value amounts- more than $1,000, and have a variety of structures and benefits.

Industrial life policies are simple policies with benefits of $1,000 or less (but may be more) AND premiums that are collected at the insured's home on a weekly or monthly basis.

The name comes from the fact that they were originally sold to industrial workers who were paid weekly; they are also known as home service policies since the agent normally comes to the home to collect the premium. The agent's territory is called his debit. This method of marketing today represents less than 2% of life insurance in force in the U.S. Needs that Life Insurance can cover:

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