Lines of Insurance
Generally, the Life license allows authority to transact insurance products providing coverage on human lives including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income. The list below contains samples of some of the insurance products that can be transacted with this license:
Life Insurance - Designed to protect against the risk caused by someone's death. Death exposes a family or a business to certain financial risks such as burial expenses, paying off debts, loss of family income and business profits. Life insurance products include, but are not limited to:
- Insurable Interest - A life insurance policy on someone else's life.
- Permanent Life - A type of life insurance that includes both a death benefit and a cash value component.
- Temporary Life - This product provides death protection for a stated time period or term.
- Group Life - Life insurance provided for members of a group. It is most often issued to a group of employees but may be issued to any group provided it is not formed for the purpose of buying insurance. The cost is lower than individual policies because administrative expenses per life are decreased, there are certain tax advantages, and measures taken against adverse selection are effective.
- Universal Life - This product is a flexible-premium, adjustable benefit life insurance policy that accumulates account value. The flexibility of this policy allows the insured to change the amount of insurance as the needs for insurance change.
- Credit Life - A policy that can pay off or reduce the balance of a loan or accumulated debt in the event of the insured's death.
Annuity - Designed to protect against the risk of living too long; that is, outliving one's financial resources and income during retirement. By definition, an annuity is guaranteed income for the life of an annuitant. Annuity products include, but are not limited to:
- Life Annuity- A contract that provides a stated income for life, payable annually or more frequently.
- Fixed Annuity - An annuity which pays a fixed, set rate of interest, which could change periodically, on the money invested in the annuity.
- Deferred Annuity - An annuity, commencing more than one year from the payment of a lump sum, or from the commencement of periodic payments, to the insurer.
- Retirement Annuity - A deferred annuity, the premiums, less loading, for which are accumulated at interest, the accumulation being used to purchase an annuity at a specified age; prior to that age, the annuitant is entitled to a cash surrender value, and in case of death the surrender value is paid to his beneficiary.
- Variable Annuity- An annuity contract in which the amount of the periodic benefit varies, usually in relation to security market values, a cost-of-living index, or some other variable factor in contrast to a fixed or guaranteed return annuity. The Life agent must have registration with the Financial Industry Regulatory Authority (FINRA) to transact in California.
- Equity-Indexed Annuity - This type of annuity is sort of a hybrid between a fixed annuity and a variable annuity. When purchased, the insurer agrees to pay a return on your account that is tied to a stock market index. The insurer typically guarantees to pay no less than a certain return in a given period if the return on that stock market index falls below a minimum percentage.
Funeral and Burial - Specific life insurance policies or annuities having an initial face amount of twenty thousand dollars ($20,000) or less that are designated by the purchaser for the payment of funeral and burial expenses.