Briefly explain the basic characteristics of ordinary life policies.Please answer each of the following and all parts of your answers must be in your own words. Any plagiarism will result in a grade of zero for all students involved.

Briefly explain the basic characteristics of ordinary life policies.Please answer each of the following and all parts of your answers must be in your own words. Any plagiarism will result in a grade of zero for all students involved.

Please use your own words even if you are using the textbook for answers and provide a citation for all of your answers.

a. Briefly explain the basic characteristics of ordinary life policies.
b. Why does an ordinary life insurance policy develop a legal reserve?
c. Explain the situations that justify the purchase of ordinary life insurance.
d. What is the major limitation of ordinary life insurance?

All states have nonforfeiture laws that require the payment of a cash-surrender value when a cash-value policy is surrendered. Briefly explain the following nonforfeiture options that are found in a typical life insurance policy.
Cash-value option
Reduced paid-up insurance
Extended term insurance

Explain three basic characteristics and one limitation of each of the following:
whole life insurance
term life insurance
Universal life insurance.
Variable life insurance

Richard, age 45, is married with two children in high school. He estimates that his average annual earnings over the next 20 years will be $60,000. He estimates that one-third of his average annual earnings will be used to pay taxes, insurance premiums, and the costs of self-maintenance. The remainder will be used to support his family. Richard wants to calculate his human life value and believes a 6 percent discount rate is appropriate. The present value of $1 payable for 20 years at a discount rate of 6 percent if $11.47. Calculate Richard’s human life value.

Briefly explain the following life insurance contractual provisions.
Suicide clause
Grace period
Reinstatement clause
Waiver-of-premium provision
Guaranteed purchase option

James, age 32, purchased a $300,000 five-year renewable and convertible term insurance policy. In answering the health questions, James told the agent that he had not visited a doctor within the last five years. However, he had visited the doctor two months earlier. The doctor told James that he had a severe heart problem. James did not reveal this information to the agent when he applied for life insurance. James died three years after the policy was purchased. At that time, the life insurer discovered the heart ailment. Explain the extent of the insurer’s obligation, if any, with respect to payment of the death claim.

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