Life Insurance And Annuity Contracts

This website has enumerated many common characteristics of life insurance. However, because there are no standard contracts, each company’s contracts differ to some extent from those of other companies. While contracts do vary, a degree of standardization is achieved by requiring the inclusion of certain provisions in all contracts and the prohibition of other provisions. The primary differences lie in:

(1) the inclusion or noninclusion of permitted provisions and wording used in such provisions

(2) the manner in which the pure protection and investment elements are combined.

In general, all life insurance contracts can be thought of as some combination of four basic types of life insurance: term, whole life, endowment, and annuity.1 If these basic contracts are understood, more complex contracts can be dissected and can be examined more easily.