Accelerated
Benefits Rider:
An adjustment (rider) to a life insurance policy that allows
for the early payment of some portion of the policy's face
amount should the insured suffer from a terminal illness or
injury.
Accidental
Death Benefit Rider: An adjustment (rider) to a life
insurance policy that provides for payment of an additional
cash benefit when death occurs by accidental means. This amount
depends on the value of the policy.
Accidental
Death Insurance: An Insurance poicy that provides
payment if the insured's death occurs as a results from an
accident.
Agent:
An authorized representative of an insurance company.
Annually
Renewable Term: Term insurance that provides coverage
for one year and allows the policy owner to renew his or her
coverage each year.
Assignment
Assignment: The transfer of ownership of a Life Insurance
policy from one person to another.
Attained Age: Your current age. Your attained
age is a factors life insurance companies use to determine
premiums.
Backdating:
Making the effective date of a policy earlier than the date
of application. Backdating is often used to make the age of
the applicant lower than it actually was at the time of application
so that he/she can get a lower premium. State laws often set
limits to this.
Beneficiary:
The designated person set to receive the death benefit if
the insured should die.
Binder:
A temporary insurance policy that expires at the end of a
specific time period or when a permanent policy is written.
A binder is given to an applicant for insurance during the
time it takes the an insurance company to complete the policy
paperwork.
Cash
Benefits: The Money that is paid to the policy holder
upon settlement of a covered claim.
Cash
Value: The equity amount or "savings" accumulation
in a whole life insurance policy.
Conditional
Receipt: Given to policy owners when they pay a premium
at the time of the application. These receipts bind the insurance
company, provided your policy is approved, but are subject
to any other conditions stated on the receipt.
*Contestable
Clause: A provision in an insurance policy setting
forth the conditions or time period under which the insurance
company may contest or void the policy. After this time has
lapsed, typically two years, the policy cannot be contested.
Example: Suicide.
Contingent
Beneficiary: Person or persons designated to receive
the value of an insurance policy in case the original beneficiary
is not alive.
*Coverage:
Coverage is just another term for Insurance. It can be used
to mean either the dollar amounts of insurance purchased ($500,000
of liability coverage), or the type of loss covered (coverage
for theft).
Convertible
Term: A policy that may be changed to another form
by contractual provision and without evidence of insurability.
Most term policies are convertible into permanent insurance.
Cross-Purchase
Plan: An agreement that provides that upon a business
owner's death, surviving owners will purchase the deceased's
interest, often with funds from life insurance.
Death
Benefit:
The amount of money paid to the beneficiary when the insured
person dies.
Decreasing
Term Insurance: Term life insurance on which the
face value slowly decreases in scheduled steps from the date
the policy comes into force to the date the policy expires,
while the premium remains level. The intervals between decreases
are usually monthly or annually.
Double
Indemnity: Payment of twice the basic benefit in
the event of loss resulting from specified causes or under
specified circumstances.
