Term Life Definition.com - Explaining and Defining Life Insurance.

Glossary - Life Insurance Terms



|A|
Accelerated Benefits - Life insurance benefits that become available because of a long-term, catastrophic or terminal illness.

Accidental Death Benefit - A provision added to a life insurance policy for payment of an additional benefit in case of death as a result of an accident.

Actuary - A professional individual responsible for reviewing the technical and financial aspects of an insurance policy, such as setting the premium rates and assessing risks.

Annuity - A contract that provides a series of payments, usually at regular intervals, for the duration of life.

Annual Premium - The Annual Premium is one of the four modes of premium you can select to pay your policy. Many of the insurance companies will give you a discount for paying your policy annually.


Annuity - Payment of a fixed sum of money to a specified person at regular intervals

Applicant - The person or business that applies for an insurance policy.

ART (Annually Renewable Term) - This is a term policy where the premium increases a little bit every year and the coverage stays the same.

Attained age conversion - The conversion of a term life insurance policy to a permanent life insurance policy at a premium rate that is based on the insured's age at the time the coverage is converted.

|B|
Beneficiary - This is the entity that life insurance proceeds are passed to when an insured dies. This can be a person, trust, or estate.


Bequest - An old legal term for a will provision leaving personal property to a specified person or organization. Also known as a "gift".

Binding premium receipt - A type of premium receipt that provides a potential insured with temporary insurance coverage from the time the applicant receives the receipt until the insurer declines the application or issues and delivers a policy.

Buy-sell agreement - An agreement in which one party agrees to purchase a second party's financial interest in a business following the second party's death and the second party agrees to direct their estate to sell that interest to the purchasing party.

|C|
Cash Value -
The amount available in cash given to an individual who surrenders their policy prior to death or maturity.

Cash Surrender Value - The amount of money you can receive if you surrender your life insurance policy or annuity. If there is a policy loan, the cash surrender value is the difference between the cash value printed in the policy and the loan value to pay the premiums.

Claim - A request for payment under the terms of an insurance policy.

Conditional Receipt - This allows you to bind your life insurance coverage by submitting your first two months premiums with your life insurance application and medical exam.

Contestability Period - In most cases the life insurance company has two years to find any material misrepresentations in a contract.

Contingent Beneficiary - This is the entity that a life insurance benefit would pay to if the primary beneficiary deceased before the insured.

Continuous-premium whole life policy - An insurance policy for which premiums are payable throughout the term or life of the policy. Also known as a straight life insurance policy.

Convertible Term Insurance - Term insurance that could be covered into a permanent life insurance policy without evidence of insurability.

Conversion privilege - A term life insurance policy provision that allows the policyowner to change (convert) the policy to a permanent plan of insurance without providing evidence of insurability of the insured.

|D|
Death Taxes - Taxes levied on the property of a person who died. Federal death taxes are called "Estate Taxes." State death taxes (if any) go by various names, including "inheritance tax."

Decreasing term life insurance policy - A term life insurance policy that provides a death benefit that decreases over the term of coverage.

Deferred Anuity - A series of payments that will begin at a later or future date.

Dividend - A return of part of the premium on participating insurance that is based on the insurer's investment, mortality, and expense experience. Dividends are not guaranteed..

|E|

Electronic funds transfer (EFT) method - An automatic premium payment technique whereby the policyowner authorizes their bank to withdraw funds from their account to pay each renewal premium.

Evidence of Insurability - This is proof that you are an acceptable risk. You have to meet the standards of the insurer regarding age, health, occupation and such other standards as the insurer feels necessary to be eligable for coverage.

|F|

Face Amount - The amount stated on the face of the policy that will be paid in case of death. It does not include additional amounts payable under accidental death or other special provisions, or acquired through the application of policy dividends.

Final Beneficiaries - People or institutions designated to receive life estate trust property outright upon the death of the life beneficiary.

|G|

Generation Skipping Trust - Estate Tax savings trust where the principal left in trust is for grandchildren, with one's children only to receive the income from the trust.

Gift Taxes - Taxes levied by governments on gifts made during a person's lifetime.

Grace period - A specified length of time within which a renewal premium may be paid.

Group Life Insurance - A life insurance policy that is offered to a group of people under a master policy and which does not require medical examinations. It is usually issued to an employer for its employees or to members of an association.

Guaranteed Insurability - It provides the policyholder with an option to purchase additional insurance in the future without evidence of insurability.

|H|
Heirs
- Persons who are entitled by law to inherit one's estate if you don't leave a will or other device to pass property at your death.

|I|
Individual Retirement Account (IRA) -
An account by an individual who allows deductions to be taken from their income and creates earnings on contributions to accumulate tax-deferred until retirement.

Initial premium - The first premium that is paid for an insurance policy and that is part of the consideration the policyowner gives for the policy.

Insurability - Acceptability to the company of an applicant for insurance.

Insured or Insured Life - The person on whose life the policy is issued.


Insured age - Premiums can be charged by: a) Age nearest birthday and b) Actual Age .

Irrevocable beneficiary - A life insurance policy beneficiary whose designation as beneficiary may not be cancelled by the policyowner unless the beneficiary consents.  

Irrevocable Trust - A type of trust that once established cannot be changed.

About Us | Link Directory | Got Links? Directory | Privacy Policy | Contact Us | ©2005 Term Life Definition.com