[Music] hello and welcome everyone to our second segment of module three for life insurance so today we're going to be continuing on um in the first one we look at some key terms so now with the next upcoming three modules we'll be looking at each type of life insurance individually so in this segment we'll be looking at term life insurance and in the next segments we introduce a permanent Insurance uh product so a whole life in one segment and then also UL um in the upcoming segments so when we're looking at term insurance now just as a name States this is um for a specific term right so this is different than the typical Insurance products that people might think of so it has a specific time you can set it if you want it to be for two years five years ten years Etc based on the need of the individual they can kind of say Okay I want I need this insurance only for this time and or we can say until a certain age they can say okay uh not necessarily for five ten years I want it until age 60 or 65 right so they can uh specify either the number of years they would like the coverage for or until a certain age so that's um one of the ways that terms and they would have to choose that term um as well when they're choosing this type of policy and why this is important because the premium is going to be highly based on the term that you've selected so if you selected a shorter term then your premium will be cheaper now term insurance is already the cheapest type of insurance especially if the person is younger um because the risk of death at that point is less so the insurance company is going to charge you based on how much risk are they taking for you so if you choose a policy for someone who is younger and they only want the policy for 10 years and they're like you know 25 30 years old right now then it will be a very cheap premium because they've specified a small term and they're already young so that insurance company feels we're not really taking on much risk so the premium will be cheaper versus if they were to get that term for 30 years 40 years um premium starts to go up right so the premium is going to be based on how much time is the insurance company insuring you and then the premium will be based on that all right on the side here I have some general things a little bit closer so you guys can see it so on the side here we have some general things which apply to all policies just reminders we talked about it in the previous segment but just quick reminders um because it does apply to all so one of the things is attained age attained age is something that the insurance company uh uses to figure out how old you are now generally um the price is not going to change dramatically if you're uh you know 22 versus 23 but the insurance company has age brackets right so let's say from uh 20 to 29 is one age bracket and then 30 to 39 is another age bracket so that's where if you're on the cusp of a bracket and you're just kind of maybe hitting into another bracket the premium can be very different costs can go up right so uh cost is usually going up every year but it might be a few dollars versus uh maybe a little bit more depending on how old you are so attain to age is important and there usually is a question on the exam for a page as well so just uh you know make sure you guys do kind of look over this in your notes but we will go over it now as well just to refresh your memory so a teenage it can be based on your last birthday so if you are uh let's say the person is 25 now they turned 24 um 10 months ago so even though it was they're almost going to be 26 but the insurance company says it the chain date is going to be on your last birthday so what however old you were on your last birthday it can be on your next birthday right so the upcoming birthday so even though your birthday might be 10 months away if they say it's going to be based on your next birthday so that's what it's going to be based on or the most common one we see is nearest birthday so is it uh you know let's say your last birthday just passed three months ago and you're 25 right now and your next birthday obviously is going to come up in a little bit longer so they'll go with 25 versus if you know if uh your birthday is coming in the next two months then they then you'll they'll make you a little bit older right so that will change depending on um how they sort of say that so just as a quick example let's say Tom uh bought his policy on August 12 2019. so we'll write this as just as an example so policy was bought on August 12 2019 and his birthday is November 1st 1985. so now if we were to use these numbers and if we go by his last birthday when he bought the policy he's going to be considered to be 33 years old if we go by his next birthday he'll be 34 years old and if we go by his nearest he will be 34 years old okay so just a quick example to show you how I attained age will work so it's based on when you buy the policy and what are they basing it on your next nearest or um last birthday right so that will change accordingly and this applies for all policies how they get attained age and the other reminder um is the two-year contestability period so that again also applies for all policies that you have a two-year contestability period and two years for the suicide provision as well that if the person commits suicide in those two years um no benefit is going to be picked all right so continuing on so this is reminders for all and now continuing on with term [Music]