3.0 Types of Policies and Riders

Learning Objectives

Upon completion of this chapter, you will be able to:

1. Define key life insurance terms, including endow, face amount, cash value, and rider
2. Compare and contrast the various forms of term life insurance
3. Identify and describe the core characteristics of whole life insurance
4. Outline the defining features of universal life insurance
5. Differentiate between variable life and universal life insurance products
6. Explain the purpose and function of common life insurance policy riders

Overview

This chapter introduces the major types of life insurance products, along with their features, structural characteristics, and practical uses. While life insurance policies vary widely in design, all policies fall into one of two broad categories: temporary (term) or permanent coverage. In addition, policies may be structured as fixed or variable, depending on how benefits and cash values are determined.

The chapter concludes with an examination of policy riders—optional provisions that modify, expand, or customize the base policy to better meet the policyowner's financial objectives.