Term
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Definition
| THE POSSIBILITY (UNCERTAINTY) THAT A LOSS MIGHT OCCUR. |
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Term
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Definition
| A CONDITION OR SITUATION THAT PRESENTS THE POSSIBILITY OF LOSS. |
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Term
| THERE ARE 3 TYPES OF HAZARDS |
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Definition
1) MORAL: DISHONESTY
2) MORALE: CARELES CLIENT
3) PHYSICAL: DANGEROUS OCCUPATION OR HOBBY
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Term
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Definition
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Term
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Definition
| ANY INJURY OR DAMAGE THAT THE INSURED SUFFERS BECAUSE OF A COVERED PERIL |
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Term
| MANAGING RISK BY AVOIDING |
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Definition
| A PERSON MIGHT STAY HOME RATHER THAN DRIVE SOMEWHERE |
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Term
| MANAGING RISK BY RETENTION |
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Definition
| WHEN A PERSON DECIDES TO ASSUME FINANCIAL RESPONSIBILITY FOR CERTAIN EVENTS |
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Term
| MANAGING RISK BY REDUCTION |
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Definition
| WHEN A PERSON PRACTICES LIVING A HEALTHIER LIFESTYLE, THEREBY REDUCING THE CHANCE OF MAJOR ILLNESS |
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Term
MANAGING RISK BY TRANSFER
( 2 WAYS)
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Definition
SUE THE NEGLIGENT PARTY THAT CAUSED THE INJURY
OR
USE OF INSURANCE
(SHARED AMONG A NUMBER OF INSUREDS) |
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Term
ELEMENTS OF INSURABLE RISK
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Definition
| EVALUATING RISKS FOR LOSS FREQUENCY ( PROBABILITY OF LOSS), SEVERITY, AND POTENTIAL DOLLAR LOSSES OVER TIME |
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Term
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Definition
| ALLOWS AN INSURANCE COMPANY TO PREDICT THE EXPECTED LOSSES OF A GROUP |
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Term
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Definition
A FORM OF INSURANCE BETWEEN INSURERS.
OCCURS WHEN THE ISNURER ( THE RE-INSURER) AGREES TO ACCEPT ALL OR A PORTION OF A RISK COVERED BY ANOTHER INSURER. |
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Term
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Definition
CONSISTS OF STOCKHOLDERS WHO OWN SHARES IN THE COMPANY.
THE INDIVIDUAL STOCKHOLDER PROVIDES CAPITAL FOR THE INSURER.
THEY SHARE IN ANY PROFITS AND LOSSES.
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Term
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Definition
| OWNERSHIP RESTS WITH THE POLICY HOLDERS. POLICY DIVIDENDS THAT ARE NEVER GUARANTEED AND ARE NOT TAXABLE. |
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Term
| NON-PROFIT SERVICE ORGANIZATION |
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Definition
| THEY ARE NOT INSURERS. THEY ARE ORGANIZATIONS PROVIDING PRE-PAID PLANS FOR HOSPITAL, MEDICAL AND SURGICAL EXPENSES. NO CASH BENEFITS TO THE SUBSCRIBER, INSTEAD THEY PAY THE PROVIDER OF SERVICES DIRECTLY. HMO'S!!! |
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Term
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Definition
| UNICORPORATED GROUPS OF PEOPLE PROVIDING INSURANCE FOR ONE ANOTEHR THROUGH INDIVIDUAL INDEMNITY AGREEMENTS. KNOWN AS SUBSCRIBERS. |
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Term
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Definition
LIFE INSURANCE CARRIERS THAT EXIST AS SOCIAL ORGANIZATIONS AND USUALLY ENGAGE IN CHARITABLE AND BENEVOLENT ACTIVITIES.
KNOWN AS POLICY HOLDERS. |
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Term
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Definition
| VOLUNTARY ASSOCIATION OF INDIVIDUALS OR GROUPS OF INDIVIDUALS WHO AGREE TO SHARE INSURANCE CONTRACTS BY PLEDGIN THEIR PERSONAL ASSETS AND FORMING INSURANCE. |
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Term
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Definition
| INSURING AGAINST PRODUCTS LIABILITY BY PERMITTING THEM TO ESTABLISH GROUP SELF-INSURANCE PROGRAMS OR GROUP CAPTIVE INSURERS. EXEMPT FROM STATE REGULATION AND GUARANTY FUND MEMBERSHIP. CAN'T WRITE WORKERS COMP. INSURANCE OR PERSONAL LINES INSURANCE. |
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Term
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Definition
| DIFFICULT TO PLACE A RISK IN THE NORMAL MARKETPLACE, SURPLUS LINES BROKERS ATTEMPT TO PLACE THE RISK WITH AN UNAUTHORIZED CARRIER IN ANOTHER STATE OR COUNTRY. |
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Term
| PRIVATE INSURERS VS. GOVERNMENT INSURERS |
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Definition
| PRIVATE INSURERS EXCLUDE CATASTROPHIC RISKS IN THEIR POLICIES AND GOVERNMENT INSURERS ACCEPT THOSE RISKS. ( MILITARY LIFE INSURANCE, FLOOD INSURANCE, CRIME INSURANCE, CROP INSURANCE AND INSURANCE ON MORTGAGE LOANS.) MEDICARE, PART OF SOCIAL SECURITY. |
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Term
| AUTHORIZED VS. UNAUTHORIZED INSURERS |
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Definition
ONCE AN INSURER RECEIVES THE LICENSE IT IS CONSIDERED ADMITTED AS A LEGAL INSURER IN THE STATE AS AUTHORIZED.
UNAUTHORIZED MUST CONDUCT BUSINESS THROUGH A LICENSED REPRESENTATIVE KNOWN AS A SURPLUS LINES BROKER. |
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Term
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Definition
| AN INSURER INCORPORTATED UNDER THE LAWS OF THE STATE IN WHICH IT CONDUCTS BUSINESS |
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Term
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Definition
| AN INSURER WHO CONDUCTS BUSINESS IN A STATE WHERE IT IS NOT A RESIDENT |
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Term
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Definition
| AN INSURER WHO IS INCORPORATED IN A COUNTRY OTHER THAN THE UNITED STATES |
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Term
FINANCIAL STATUS (INDEPENDENT RATING SERVICES)
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Definition
| TO DETERMINE THE FINANCIAL STRENGTH OF A PROSPECTIVE CARRIER PRODUCERS AND CLIENTS TURN TO INDEPENDENT RATING SERVICES LIKE BEST'S GUIDE, STANDARD AND POOR'S, AND MOODY'S |
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Term
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Definition
| INSURANCE COMPANIES MARKET THEIR PRODUCTS GENERALLY BY USING PRODUCERS TO SELL THEIR PRODUCTS OR BY SELLING DIRECTLY THROUGH MASS MARKETING. |
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Term
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Definition
| A PRODUCER IS A PERSON AUTHORIZED TO ACT ON BEHALF OF ANOTHER PERSON WHO IS CALLED THE PRINCIPAL |
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Term
| PRODUCER / INSURER RELATIONSHIP |
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Definition
| THE KNOWLEDGE OF THE PRODUCER IS ASSUMED TO BE THE KNOWLEDGE OF THE PRINCIPAL |
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Term
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Definition
| AN EXPLICIT, DEFINITE AGREEMENT. AUTHORITY THAT THE PRINCIPAL GIVES THE PRODUCER AS SET FORTH IN THEIR CONTRACT. |
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Term
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Definition
| NOT EXPRESSLY GRANTED UNDER AN AGENCY CONTRACT BUT IS ACTUAL AUTHORITY THAT THE PRODUCER HAS TO TRANSACT THE PRINCIPAL'S BUSINESS IN ACCORDANCE WITH GENERAL BUSINESS PRACTICES |
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Term
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Definition
| THE AUTHORITY A PRODUCER SEEMS TO HAVE BECAUSE OF CERTAIN ACTIONS TAKEN ON THEIR PART |
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Term
ELEMENTS OF A LEGAL CONTRACT:
CONSIDERATION
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Definition
| THE EXCHANGE OF SOMETHING OF VALUE BETWEEN THE PARTIES. IT DOES NOT NECESSARILY HAVE TO BE EQUAL |
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Term
ELEMENTS OF A LEGAL CONTRACT:
OFFER |
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Definition
| MUST BE CLEARLY COMMUNICATED. OFFER IS MADE BY THE CLIENT WHEN THEY COMPLETE AND SIGN THE APPLICATION AND WRITE OUT HTEIR CHECK FOR THE FIRST PREMIUM PAYMENT |
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Term
ELEMENTS OF A LEGAL CONTRACT:
ACCEPTANCE OF THE OFFER |
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Definition
| THIS IS DONE WHEN THE UNDERWRITER APPROVES OF THE APPLICATION AND ISSUES THE POLICY FOR DELIVERY |
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Term
ELEMENTS OF A LEGAL CONTRACT:
LEGAL PURPOSE AND LEGAL CAPACITY |
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Definition
| CONTRACTS FOR ILLEGAL PURPOSES ARE UNENFORCEABLE IN COURT AND ALL PARTIES TO A CONTRACT MUST BE COMPETENT TO CONTRACT ( THEY ARE OF AGE, SOUND MIND AND NOT UNDER THE INFLUENCE OF DRUGS OR ALCOHOL) |
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Term
DOCTRINE OF ADHESION
(A.K.A. THE DOCTRINE OF REASONABLE EXPECTATIONS) |
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Definition
| IF THE INSURANCE LANGUAGE IS VAGUE OR UNCLEAR, ANY AMBIGUITY WILL BE CONSIDERED IN FAVOR OF THE INSURED (SINCE THAT PERSON HAD NO CHANCE TO CHANGE IT WHEN THEY BOUGHT IT) |
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Term
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Definition
| PERSONAL CONTRACTS ARE ALEATORY IN THAT THE OUTCOME DEPENDS UPON CHANCE. DOES NOT NEED TO BE EQUAL |
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Term
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Definition
| THE CONTRACT INSURES THE PERSON WHO OWNS THE PROPERTY, NOT THE PROPERTY ITSELF |
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Term
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Definition
| ONLY ONE PARTY TO THE COTNRACT, THE INSURER MAKES AN ENFORCEABLE PROMISE TO PAY A COVERED CLAIM IF THE PREMIUM HAS BEEN PAID |
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Term
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Definition
| THEY CONTAIN CONDITIONS THAT APPLY TO BOTH THE INSURER AND THE INSURED. |
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Term
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Definition
| THE PURPOSE OF INSURANCE IS TO RESTORE THE INSURED FINANCIALLY. POLICIES WILL PAY THE AMOUNT OF THE CLAIME OR THE POLICY LIMIT, WHICHEVER IS LESS. NO PROFIT IS ALLOWED |
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Term
| DOCTRINE OF UTMOST GOOD FAITH |
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Definition
| TO TELL THE TRUTH TO THE BEST OF THE CLIENT'S KNOWLEDGE. APPLIES TO ALL PARTIES INVOLVED ( INSURER, INSURED AND PRODUCER) |
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Term
| REPRESENTATIONS / MISREPRESENTATIONS |
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Definition
TRUTH TO THE CLIENT'S BEST KNOWLEDGE
OR LYING ABOUT IT |
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Term
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Definition
ABSOLUTE GUARANTEE OF TRUTH
REQUIRED TO BE NOTARIZED |
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Term
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Definition
| DELIBERATE OMISSION OF A MATERIAL FACT |
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Term
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Definition
| A DELIBERATE ATTEMPT TO DECEIVE THE PRODUCER |
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Term
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Definition
WAIVER IS THE VOLUNTARY GIVING UP OF A KNOWN RIGHT.
ESTOPPEL IS THE PARTY WAIVING THOSE RIGHTS IS STOPPED FROM ASSERTING THAT RIGHT IN THE NEAR FUTURE |
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Term
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Definition
| BASED UPON A FAMILY SITUATION OR ECONOMICS. MUST PROVE AT THE TIME OF APPLICATION |
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Term
MAIN USE OF LIFE INSURANCE IS:
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Definition
| TO OFFER PROTECTION TO YOUR SURVIVORS IN THE EVENT OF YOUR DEATH |
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Term
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Definition
| YOU BUY A $1,000,000 LIFE INSURANCE POLICY AND THEN DIE, IT COULD BE SAID THAT YOU HAVE CREATED AN ESTATE THAT WILL NOW GO TO YOUR BENEFICIARY INCOME-TAX FREE AS LIFE INSURANCE PROCEEDS |
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Term
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Definition
| CASH VALUE LIFE INSURANCE. IF THE INSURED DIES, THE BENEFICIARY WILL GET THE FACE AMOUNT OF THE POLICY. IF THE CLIENT LIVES, THE ACCUMULATED CASH VALUE CAN BE BORROWED FROM THE INSURER |
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Term
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Definition
| CLIENT MAY ELECT TO SURRENDER THE POLICY OR ITS CASH VALUE FOR INSTANT LIQUIDITY |
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Term
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Definition
| CLIENT PURCHASES LIFE INSURANCE SIMPLY TO PAY ESTATE TAXES TO ENSURE THE ESTATE WILL PASS ON THEIR HEIRS INTACT WITHOUT FURTHER ESTATE TAX OBLIGATIONS |
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Term
| HUMAN LIFE VALUE APPROACH |
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Definition
| BASED ON THE EARNING POTENTIAL OF THE INSURED PROJECTED OVER A PERIOD OF FUTURE YEARS. PRODUCER CALCULATES WHAT A FAMILY WOULD LOSE IN INCOME BY THE DEATH OF THE PRINCIPAL WAGE EARNER. PRESENTS A PLAN THAT WOULD REIMBURSE THE LOSS |
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Term
|
Definition
| PRODUVER DETERMINES THE NEEDS OF THE INDIVIDUAL CLIENT AND PRESENTS A PLAN THAT WILL MEET THOSE NEEDS ( NEEDS INCLUDE: BURIAL EXPENSES, FAMILY MAINTENANCE, CHILDREN'S EDUCATION AND CONTINUING INCOME FOR THE SURVIVING SPOUSE) |
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Term
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Definition
| CROSS PURCHASE BUY/SELL AGREEMENTS HELP WITH THE ORDERLY CONTINUATION OF A BUSINESS IN THE EVENT THAT AN OWNER DIES PREMATURELY. THEY MAY BE USED IN ANY FORM OF BUSINESS, WHETHER IT IS A SOLE PROPRIETORSHIP, PARTERNSHIP OR CORPORATION. THE PREMIUMS ARE NOT TAX-DEDUCTIBLE AND NEITHER ARE THE PROCEEDS TAXED. |
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Term
| KEY PERSON LIFE INSURANCE |
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Definition
| PROTECTS A BUSINESS FROM THE LOSS OF ONE OF ITS MOST VALUABLE ASSETS- A KEY EMPLOYEE. |
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Term
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Definition
| USE OF LIFE INSURANCE PLANS TO FUND- DEFERRED COMPENSATION PLANS WHICH ENABLE HIGHLY PAID CORPORATE EMPLOYEES TO DEFER CURRENT INCOME SUCH AS AN EXECUTIVE BONUS AND HAVE IT PAID AT A LATER DATE WHEN THE EMPLOYEE MAY BE IN A LOWER TAX BRACKET |
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Term
|
Definition
| GROUP IS THE MOST INEXPENSIVE TYPE OF LIFE INSURANCE. SOLD TO EMPLOYER GROUPS ON A PAYROLL DEDUCTION PLAN, LOWERS THE COST OF ADMINISTRATION COMPARED TO INDIVIDUAL POLICIES. |
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Term
|
Definition
WHOLE LIFE IS PERMANENT LIFE INSURANCE. IT COVERS YOU UNTIL YOU DIE.
TERM IS TEMPORARY INSURANCE THAT IS USUALLY PURCHASED FOR A PARTICULAR TEMPORARY NEED. IT IS ONLY WRITTEN FOR A SPECIFIC PERIOD OF TIME, SAY 5, 10 OR 20 YEARS. |
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Term
| PARTICIPATING VS. NON-PARTICIPATING |
|
Definition
STOCK COMPANIES ISSUE NON-PARTICIPATING POLICIES. THE COMPANY PROFITS MAY BE RETURNED TO THE STOCKHOLDERS IN THE FORM OF DIVIDENDS.
MUTUAL COMPANIES OWNED BY POLICY HOLDERS, ISSUE PARTICIPATING POLICIES. IF THE BOARD OF DIRECTORS DECLARES A DIVIDEND IT WILL BE PAID TO THE POLICYHOLDERS. THE IRS HAS RULED THESE DIVIDENDS A RETURN OF PREMIUM ALREADY PAID SO THEY ARE NOT TAXABLE. DIVIDENDS ARE NOT GUARANTEED. |
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Term
| FIXED VS. VARIABLE LIFE AND ANNUITIES |
|
Definition
FIXED INSURANCE PRODUCTS SUCH AS TRADITIONAL WHOLE LIFE, HAVE FIXED GAURANTEED RATES OF RETURN. CASH VALUES ARE INVESTED IN THE INSURER'S GENERAL ACCOUNT SINCE THEY BEAR THE INVESTMENT RISK.
VARIABLE PRODUCTS DO NOT HAVE A GUARANTEED RATE OF RETURN NOR DO THEY HAVE A GUARANTED CASH VALUE. INVESTED IN THE INSURER'S SEPERATE ACCOUNT (LIKE A MUTUAL FUND) THE INSURED BEARS THE INVESTMENT RISK
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Term
| FACTORS IN PREMIUM DETERMINATION |
|
Definition
MORTALITY: COST OF DEATH
+
EXPENSES
-
INTEREST
=
GROSS ANNUAL PREMIUM |
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Term
|
Definition
INITIAL PARTICIPATING LIFE INSURANCE POLICY PREMIUM
-
POLICY DIVIDENDS WHEN THE INSURED APPLIES SUCH DIVIDENDS TO PAY PART OF THE POLICY PREMIUM |
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Term
|
Definition
MORATLITY
+
EXPENSES
-
INTEREST |
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Term
|
Definition
| THE FREQUENCY IN WHICH A PREMIUM IS PAID TO THE INSURER. MONTHLY, QUARTERLY, SEMI-ANNUALY OR ANNUALY |
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Term
| SOLICITATION AND ADVERTSING |
|
Definition
| STATE LAW PROHIBITS INSURERS AND PRODUCERS FROM ENGAGING IN UNTRUE, DECEPTIVE OR MISLEADING ADVERTISING IN CONNECTION WITH THE SOLICITATION OF LIFE INSURANCE. WHEN SOLICITY LIFE INSURANCE, PRODUCERS MAY NOT REFER TO THE LIFE AND DISABILITY INSURANCE GUARANTEE FUND |
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Term
|
Definition
| THE CLIENT MAY GET AN ILLUSTRATION FROM THE PRODUCER OR COMPANY THAT EXPLAINS HOW THE POLICY WORKS |
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Term
INTEREST-ADJUSTED NET COST METHOD
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|
Definition
| LIFE INSURANCE SURRENDER COST INDEX. USEFUL IF YOU CONSIDER THE LEVEL OF CASH VALUES TO BE OF PRIMARY IMPORTANCE. HELPS COMARE THE COSTS OF DIFFERENT POLICIES THAT YOU ARE CONSIDERING IF AT SOME FUTURE POINT IN TIME LIKE 10 OR 20 YEARS, YOU TAKE CASH SURRENDER. AN INTERET RATE IS USED TO REFLECT THE TIME VALUE OF THE ACCUMULATED CASH VALUES. |
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Term
| COMPARITIVE INTEREST RATE METHOD |
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Definition
| LIFE INSURANCE NET PAYMENT COST INDEX. USEFUL IF YOUR MAIN CONCERN IS THE BENEFITS THAT ARE TO BE PAID AT YOUR DEATH AND IF THE LEVEL OF CASH VALUE ACCUMULATED IS OF SECONDARY INSURANCE. HELPS EVALUATE THE RELATIVE PREMIUM COST OF THE DIFFERENT POLICIES YOU ARE CONSIDERING AT SOME FUTURE POINT SUCH AS 10 OR 20 YEARS IF YOU CONTINUE PAYING PREMIUMS AND DO NTO TAKE CASH SURRENDER. AN INTEREST RATE IS USED TO REFLECT THE TIME VALUE OF THE PREMIUMS PAID RATHER THAN THE ACCUMULATED CASH VALUES |
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Term
|
Definition
| NOT ILLEGAL TO REPLACE A CONTRACT |
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Term
|
Definition
| UNDER THE ENTIRE CONTRACT CLAUSE, THE APPLICATION IS USUALLY COMBINED WITH THE POLICY TO FORM A LEGALLY ENFORCEABLE CONTRACT. THE APPLICATION IS THE UNDERWRITER'S MAIN SOURCE OF UNDERWRITING INFORMATION AND IT WILL CONTAIN GENERAL INFORMATION ABOUT THE APPLICANT, MEDICAL INFORMATION AND PRODUCER STATEMENTS ABOUT THE APPLICANT |
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Term
|
Definition
| MOST COMPANIES ALLOW YOU TO BACKDATE COVERAGE UP TO SIX MONTHS IN ORDER TO HELP THE APPLICANT OBTAIN A YOUNGER ORIGINAL AGE. (THIS IS BECAUSE THE PREMIUM IS BASED UPON YOUR AGE) |
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Term
|
Definition
| ONCE THE POLICY IS REVIEWED BY THE INSURER, THE POLICY WILL BE DELIVERED TO THE APPLICANT. |
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Term
| EFFECTIVE DATE OF COVERAGE |
|
Definition
| THE DATE OF COVERAGE WILL START THE DAY THE POLICY IS DELIVERED OR MAILED |
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Term
|
Definition
| THE PREMIUM WILL EITHER BE COLLECTED AT TIME OF DELIVERY OR AT TIME OF APPLICATION DEPENDING ON THE SITUATION |
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Term
|
Definition
| UPON RECIEVING THE POLICY THAT IS ISSUED TO YOU, YOU MUST SING A STATEMENT OF GOOD HEALTH, ASCERTAINING THAT THEIR HEALTH HAS NOT CHANGED SINCE THE ORIGINAL APPLICATION WAS COMPLETED |
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Term
|
Definition
| CONDITIONAL RECEIPT IS GIVEN UPON DELIVERY OF THE POLICY THAT STATES THE BEGINNING OF YOUR COVERAGE |
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Term
| INFORMATION SOURCES AND REGULATION |
|
Definition
| COMPANY UNDERWRITERS RELY HEAVILY ON THE COMPLETED APPLICATION, THE PRODUCER'S REPORT WITHIN THE APPLICATION, INVESTIGATIVE CONSUMER REPORTS, MEDICAL QUESTIONNAIRES AND PHYSICAL EXAMS AND INFORMATION SUPPLIED BY THE MEDICAL INFORMATION BUREAU |
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Term
|
Definition
| THE AVERAGE RISK WITH NO SPECIAL HEALTH PROBLEMS AND NO DANGEROUS HOBBIES OR OCCUPATION. THE PRODUCER'S MANUAL CONTAINS STANDARD RATES FOR APPLICANTS BY AGE AND GENDER |
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Term
|
Definition
HIGH EXPOSURE RISK. COMPANIES HAVE SEVERAL METHODS OF DETERMINING WHAT THE SURCHARGED RATE SHOULD BE.
RATED-UP AGE- ASSUMES APPLICANT IS OLDER THAN THEY REALLY ARE.
FLAT ADDITIONAL PREMIUM- ADDED PREMIUM TO STANDARD RATE.
TABULAR RATING- EXACT SURCHARGE SHOULD BE FOR A CLIENT WITH A PARTICULAR IMPAIRMENT.
GRADED DEATH BENEFITS- CHARGES THE CLIENT A PREMIUM FOR $100,000 BUT ONLY WRITES THE POLICY FOR $75,000 INSTEAD. ( AFTER TIME THE COMPANY CAN INCREASE THE FACE AMOUNT TO $100,000) |
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Term
|
Definition
| SURCHARGES ARE BASED ON A PERCENTAGE TABLE THAT IS APPLIED TO THE STANDARD RATE. MOST CLIENTS ARE INSURABLE UNDER THIS. IF CLIENT IS TRULY PREFERRED, WHO DOESN'T SMOKE AND WHO KEEPS FIT BY REGULAR EXERCISE. MANY COMPANIES OFFER SPECIAL POLICIES WIHT LOWER RATES THAN THE STANDARD ONES. |
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Term
|
Definition
| POLICY IN WHICH THE FACE AMOUNT STAYS LEVEL, BUT AS THE INSURED GETS OLDER, THE PREMIUM INCREASES EACH YEAR. |
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Term
|
Definition
| BOTH THE PREMIUM AND THE FACE AMOUNT STAY LEVEL FOR A PERIOD OF TIME, SUCH AS 5, 10 OR EVEN 20 YEARS |
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|
Term
|
Definition
| A POLICY IN WHICH THE PREMIUM STAYS THE SAME EACH YEAR BUT THE AMOUNT OF COVERAGE DECREASES, USUALLY ON A STRAIGHT LINE BASIS. (MOST OF THESE POLICIES ARE WRITTEN TO PROTECT A MORTGAGE) |
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|
Term
CONTINUOUS PREMIUM (STRAIGHT LIFE)
|
|
Definition
| PREMIUM PAYMENTS ARE BASED UPON CLIENT'S (ORIGINAL) AGE AT ISSUE AND CAN NEVER BE CHANGED. WHOLE LIFE POLICIES MUST ACCUMULATE A CASH VALUE AFTER 3 YEARS IN FORCE. IT CAN NEVER BE CHANGED OR CANCELED BY THE INSURANCE COMPANY. |
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Term
| LIMITED PAYMENT AND SINGLE PREMIUM |
|
Definition
| EXACTLY LIKE ORDINARY OR STRAIGHT LIFE, EXCEPT THE PREMIUM IS PAID OVER A SHORTER PERIOD OF TIME. SINGLE PREMIUM REQUIRES THE CLIENT TO PAY THEIR ENTIRE PREMIUM (UP TO AGE 120) UP FRONT! IT HAS AN IMMEDIATE CASH VALUE. |
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Term
|
Definition
| ADJUSTABLE BENEFIT LIFE INSURANCE CONTRACT THAT ACCUMULATES CASH VALUES AND HAS A FLEXIBLE PREMIUM. THE POLICY HOLDER MAY INCREASE THE DEATH BENEFIT WIHTOUT BUYING ANOTHER POLICY ALTHOUGH THEY MAY HAVE TO PROVE INSURABILITY TO DO SO. THE CAN REDUCE THE DEATH BENEFIT AS WELL. |
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|
Term
JOINT LIFE
(FIRST TO DIE)
POLICIES |
|
Definition
| WHOLE LIFE INSURANCE CONTRACTS WRITTEN WITH TWO OR MORE PERSONS AS THE NAMED INSURED. INSURED AMOUNT IS PAYABLE ON THE DEATH OF THE FIRST INSURED TO DIE. |
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|
Term
SURVIVORSHIP
(SECOND TO DIE)
POLICIES |
|
Definition
| PAYS THE INSURED AMOUNT NOT TO THE BENEFICIARIES OF THE FIRST INSURED TO DIE, BUT THOSE OF THE LAST. (PROCEEDS ARE USUALLY TO PAY ESTATE TAXES) |
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Term
| CHARACTERISTICS OF GROUP PLANS |
|
Definition
- REQUIRE A MINIMUM OF AT LEAST 10 PEOPLE TO BE COVERED UNDER ONE MASTER CONTRACT
- COVERAGE IS USUALLY WRITTEN WITHOUT A PHYSICAL EXAMINATION REQUIREMENT
- THE MASTER POLICY IS ISSUED TO THE EMPLOYER
- CERTIFICATES OF INSURANCE ARE ISSUED TO THE EMPLOYEES (STATING AMOUNT AND DESIGNATED BENEFICIARY)
- BENEFIT EMPLOYEE AND DEPENDENTS
- PREMIUMS ARE BASED ON CLAIMS HISTORY OF THE GROUP KNOWN AS "EXPERIENCE RATINGS"
- CONTRIBUTORY AND NON-CONTRIBUTORY GROUPS
- CONTRIBUTORY- AT LEAST 75% HAS TO ENROLL
- NONCONTRIBUTORY- 100% HAVE TO ENROLL
- AMOUNTS OF COVERAGE ARE BASED ON SALARY AMOUNT, JOB TITLE OR TIME ON THE JOB.
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Term
|
Definition
- EMPLOYERS
- CREDITORS
- MET'S (SMALL COMPANIES IN THE SAME INDUSTRY)
- CREDIT UNIONS
- LABOR UNIONS
- ASSOCIATIONS
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|
Term
| GROUP UNDERWRITING REQUIREMENTS |
|
Definition
| A PROBATIONARY PERIOD MAY BE REQUIRED FOR NEW EMPLOYEES, FOLLOWED BY THE ENROLLMENT PERIOD. IF A NEW EMPLOYEE DOES NOT APPLY DURING OPEN ENROLLMENT PERIOD, THEY MAY BE REQUIRED TO PROVIDE EVIDENCE OF INSURABILITY IN ORDER TO ENROLL LATER ON. |
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|
Term
| GROUP STANDARD PROVISIONS |
|
Definition
- COVERAGE FOR DEPENDENTS IS AT DISCRETION OF EMPLOYER
- DEPENDENTS COVERAGE HAS THE SAME RIGHTS OF CONVERSION AS INSURED PERSON (31 DAYS)
- IF IT IS OTHER THAN TERM INSURANCE IT SHALL HAVE NON-FORFEITURE OPTIONS
- GROUP LIFE HAS A GRACE PERIOD OF 31 DAYS
- IT IS INCONTESTABLE AFTER 2 YEARS
- GROUP LIFE IS CONVERTIBLE TO ANY FORM OF INSURANCE EXCEPT TERM INSURANCE, WITHOUT A PHYSICAL EXAM WITHIN 31 DAYS OF TERMINATION OF EMPLOYMENT
- DEATH DURING THAT 31 DAYS IS COVERED
- GROUP ANNUITIES CONTAIN A GRACE PERIOD OF 30 DAYS AND ENTIRE CONTRACT CLAUSE, A MISTATEMENT OF AGE PROVISION AND NON-FORFEITURE BENEFITS
- FACILITY OF PAYMENT CLAUSE; IF THERE IS NO BENEFICIARY AT THE TIME THE INSURED DIES, THEI NSURER MAY MAKE PAYMENT TO ANYONE WHO APPEARS TO BE ENTITLED TO THE DEATH BENEFIT.
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|
|
Term
|
Definition
| THE POLICY HOLDER IS NOT REQUIRED TO BE THE INSURED. YOU OWN ALL THE RIGHTS OF THE POLICY |
|
|
Term
|
Definition
ABSOLUTE ASSIGNMENT: COMMON WHEN PURCHASED ON THE LIFE OF ANOTHER. YOU ARE THE POLICY HOLDER AND THE OTHER PERSON IS THE INSURED. YOU OWN ALL THE RIGHTS TO THE POLICY. (AT A LATER POINT YOU AN TRANSFER ALL THE RIGHTS TO THE INSURED) THEY THEN OWN THE RIGHTS OF THE POLICY.
COLLATERAL ASSIGNMENT: TEMPORARY TYPE OF ASSIGNMENT. YOU PLEDGE THE PROCEEDS OF YOUR LIFE INSURANCE POLICY TO THE BANK AS A COLLATERAL FOR A LOAN OR TO ENHANCE YOUR CREDIT STANDING. (THE BANK CANNOT MAKE ANY CHANGES TO YOUR POLICY) |
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|
Term
|
Definition
| ONLY THE ENTIRE CONTRACT IS ADMISSIBLE IN COURT UNDER THE RULES OF EVIDENCE. MOST COMPANIES ATTACH THE APPLIATION THE THE CONTRACT. (BY DOING SO, IT BECOMES PART OF THE ENTIRE CONTRACT) NOTHING ELSE CAN MODIFY THE CONTRACT AFTER IT IS ISSUED, UNLESS BOTH PARTIES MUTUALLY CONSENT. |
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|
Term
| RIGHT TO EXAMINE (FREE LOOK) |
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Definition
| THIS PROVISION ALLOWS THE CLIENT TO TAKE A SPECIFIED NUMBER OF DAYS TO EXAMINE A NEW LIFE INSURANCE CONTRACT, DURING WHICH THE CONTRACT MAY BE CANCELED WITH THE ENTIRE PREMIUM REFUND FREE LOOK PROVISIONS VARY FROM STATE AND CAN BE ANYWHERE BETWEEN 10-30 DAYS. THE FREE LOOK STARTS WHEN THE POLICY IS DELIVERED AND CAN BE CANCELED WITH NO REASON NEEDING TO BE GIVEN |
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Term
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Definition
| MODE: SIMPLY MEANS HOW YOU PAY YOUR PREMIUM. YOU CAN PAY IT; MONTHLY, QUARTERLY, SEMI-ANNUALLY, ANNUALLY. THE MORE OFTEN YOU PAY, THE HIGHER YOUR PREMIUM. IT IS ALWAYS CHEAPER TO PAY ANNUALLY IN ADVANCE |
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Term
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Definition
3 GRACE PERIODS TO REMEMBER!
28 DAYS - INDUSTRIAL LIFE
30 DAYS- ALL OTHER TYPES OF LIFE INSURANCE (INCLUDING ANNUITIES)
31 DAYS- GROUP LIFE |
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Term
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Definition
THE RIGHT TO APPLY FOR REINSTATEMENT OF LAPSED POLICIES IS BUILT INTO MOST LIFE INSURANCE POLICIES. (EVEN THOUGH YOUR RE-APPLY, THE INSURANCE COMPANY DOES NOT HAVE TO ACCEPT YOU) MOST COMPANIES ALLOW UP TO 3 YEARS FROM TIME YOUR POLICY LAPSED. TO BE ACCPETED YOU MUST:
TAKE A PHYSICAL EXAM
PAY ALL BACK PREMIUMS (AND INTEREST IN THOSE PREMIUMS)
COMPLETE A REINSTATEMENT APPLICATION
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Term
| ADVANTAGES OF REINSTATEMENT |
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Definition
YOU GET YOUR ORIGINAL POLICY BACK AND YOU WILL STILL BE PAYING FUTURE PREMIUMS BASED ON YOUR ORIGINAL AGE.
YOUR ORIGINAL POLICY MAY HAVE HAD LOAN INTEREST RATES MUCH LOWER THAN A NEW POLICY MAY CURRENTLY OFFER.
YOU CANNOT REINSTATE A POLICY AFTER TAKING A CASH SURRENDER |
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Term
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Definition
| AFTER 2 YEARS OF A POLICY, IT BECOMES INCONTESTABLE IN COURT. SO IF YOU HAD ANY FALSE ANSWERS ON YOUR APPLICATION, THE INSURANCE COMPANY CAN NO LONGER VOID THE POLICY OR BRING IT TO COURT AND THEY MUST PAY ALL CLAIMS. |
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Term
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Definition
| PROTECTS THE INSURANCE COMPANY FROM AN APPLICANT WHO LIES ABOUT THEIR AGE. IT IS NEVER GROUNDS FOR VOIDING A POLICY. HOWEVER, WHEN THE INSURANCE COMPANY FINDS OUT THEY HAVE THE RIGHT TO ADJUST YOUR FACE AMOUNT EITHER UP OR DOWN TO COINCIDE WITH WHAT IT SHOULD HAVE BEEN FOR YOUR REAL AGE. |
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Term
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Definition
| EXCLUSIONS CAN BE ADDED TO A LIFE INSURANCE POLICY IF THE APPLICANT HAS A DANGEROUS HOBBY, OR HAS A HEALTH CONDITION (SUCH AS A HISTORY OF HEART PROBLEMS) THAT THE COMPANY DOES NOT WANT TO COVER. THEY CAN ONLY BE ADDED AT THE TIME THE POLICY IS FIRST UNDERWRITTEN. SO IF THEY TAKE UP A DANGEROUS HOBBY AFTER THE POLICY IS ISSUED, IT IS COVERED. |
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Term
INDIVIDUALS
(DESIGNATION OPTIONS) |
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Definition
| OFTEN USED TO BENEFIT CHILDREN. UNDER PER CAPITA EACH CHILD SHARES EQUALLY IN THE DEATH BENEFIT. UNDER PER STIRPES EACH CHILD OR GRANDCHILD MOVES UP AS NECESSARY TO REPLACE BENEFICIARIES AHEAD OF THEM WHO HAVE DIED. |
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Term
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Definition
| OFTEN USED FOR CHILDREN . SHOULD BE USED WHEN YOU WANT A SPECIFIC GROUP TO SHARE THE PROCEEDS EQUALLY. ALL MY CHILDREN!!! |
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Term
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Definition
| IF YOU FAIL TO NAME SOMEONE, YOUR FINAL BENEFICIARY IS YOUR ESTATE |
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Term
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Definition
| A MINOR MAY BE NAMED AS A BENEFICIARY AS LONG AS A GUARDIAN IS APPOINTED TO RECIEVE THE FUNDS ON THEIR BEHALF |
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Term
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Definition
| EITHER INTER VIVOS (SET UP WHEN THE INSURED IS STILL ALIVE) OR TESTEMENTARY (CREATED UPON THE INSURED'S DEATH ACCORDING TO THEIR WILL) A TRUSTEE, OFTEN A BANK WILL ADMINISTER THE FUNDS WITH THE INSTRUCTIONS IN THE TRUST AGREEMENT |
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Term
SUCCESSION
(A LIFE INSURANCE POLICY CAN HAVE UP TO 3 CATEGORIES OF BENEFICIARIES) |
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Definition
PRIMARY BENEFICIARY: THE FIRST ONE NAMED BY THE POLICY.
CONTINGENT BENEFICIARY: THE SECOND ONE NAMED BY THE POLICY.
FINAL BENEFICIARY: THE INSURED'S ESTATE. |
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Term
| REVOCABLE VS. IRREVOCABLE |
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Definition
| REVOCABLE MEANS THAT THE POLICY HOLDER MAY CHANGE THE BENEFICIARY WHENEVER NEEDED AND IRREVOCABLE MEANS THEY MAY NEVER CHANGE THE BENEFICIARY WIHTOUT THEIR CONSENT |
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Term
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Definition
| IF BOTH THE INSURED AND THE PRIMARY BENEFICIARY DIE AS A RESULT OF THE SAME ACCIDENT, THEN IT IS ALWAYS ASSUMED THAT THE INSURED DIED LAST. THIS ENSURES THAT THE INSURED'S CONTINGENT BENEFICIARY WOULD RECIEVE THE PROCEEDS INSTEAD OF THE HEIRS OF THE PRIMARY BENEFICIARY |
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Term
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Definition
| PROTECTS THE LIFE INSURANCE PROCEEDS THAT HAVE NOT YET BEEN PAID OUT TO A NAMED BENEFICIARY FROM THE CLAIMS OF THE BENEFICIARIES CREDITORS. DOES NOT APPLY TO PROCEEDS THAT ARE PAID IN ONE LUMP SUM. |
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Term
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Definition
| IF THE BENEFICIARY SELECTS THIS OPTION, THE MONEY REMAINS WITH THE INSURANCE COMPANY TO ACCUMULATE ADDITIONAL INTEREST OVER A PERIOD OF TIME. THE INTEREST IS SUBJECT TO TAX IN THE YEAR EARNED EVEN IF NOT PAID OUT |
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Term
| FIXED-PERIOD INSTALLMENTS |
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Definition
| THE BENEFICIARY ADVISES THE COMPANY TO PAY OUT THE POLICY PROCEEDS TO THEM OVER A SET PERIOD OF TIME SAY 140 OR 20 YEARS. |
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Term
| FIXED-AMOUNT INSTALLMENTS |
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Definition
| IF THE BENEFICIARY WANTS A CERTAIN AMOUNT, SAY $1,000, TO BE PAID TO THEM MONTHLY. PAYMENT OF A FIXED AMOUNT TO THE BENEFICIARY OVER A PERIOD OF TIME WILL EVENTUALLY DEPLETE THE PRINCIPAL BALANCE, IF THE AMOUNT PAID EXCEEDS THE INTEREST EARNED ON THE UNPAID BALANCE |
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Term
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Definition
| YOU DON'T WANT YOUR POLICY ANYMORE. YOU CAN SURRENDER YOUR ORIGINAL POLICY BY SENDING IT BACK TO THE INSURANCE COMPANY ANYTIME AND THE COMPANY IS OBLIGATED TO SEND YOUR $40,000 ACCUMULATED CASH VALUE TO YOU WITHIN 6 MONTHS OF YOUR REQUEST. |
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Term
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Definition
| THIS IS THE AUTOMATIC OPTION. IF THE INSURANCE COMPANY DOES NOT HEAR FROM YOU WITHIN 60 DAYS OF YOUR DUE DATE, IT MUST AUTOMATICALLY GIVE YOU THIS OPTION, SINCE IT IS NOT ALLOWED TO KEEP YOUR MONEY. YOU CAN GIVE YOUR $40,000 CASH VALUE TO THE INSURANCE COMPANY AND IN EXCHANGE THEY WILL GIVE YOU A NEW TERM POLICY WITH THE SAME FACE AMOUNT. |
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Term
| REDUCED PAID-UP INSURANCE |
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Definition
| INSTEAD OF CASHING IN YOUR POLICY, YOU WOULD LIKE TO EXCHANGE IT INTERNALLY WITH THE COMPANY FOR A NEW POLICY THAT HAS A REDUCED FACE AMOUNT FROM YOUR ORIGINAL POLICY, BUT IS FULLY PAID UNTIL YOU REACH AGE 120 OR DIE |
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Term
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Definition
| MOST POLICIES ARE REQUIRED TO HAVE A CASH VALUE AFTER THE THIRD FULL YEAR THAT PREMIUMS HAVE BEEN PAID. THE C/V BELONGS TO THE POLICY HOLDER, THEY CAN BORROW NEARLY ALL OF IT ANY TIME THEY WISH. THE COMPANY HAS 6 MONTHS TO DEFER A REQUEST FOR A POLICY LOAN. THE COMPANY CAN CHARGE YOU INTEREST ON THE MONEY YOU BORROW. THE MAXIMUM INTEREST RATE THEY CAN CHARGE ON A NEW POLICY IS 8% FIXED SIMPLE ANNUAL INTEREST |
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Term
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Definition
| OPTION IS AVAILABLE ON ANY LIFE INSURANCE POLICY THAT HAS OR WILL HAVE A CASH VALUE. THE POLICY HOLDER MUST CHECK THE BOX ON THE APPLICATION FOR THIS OPTION. IT KEEPS YOUR POLICY FROM LAPSING DUE TO NONPAYMENT OF PREMIUM. IT IS NOT A NON-FORFEITURE OPTION! IT CANNOT BE ATTACHED TO A TERM POLICY |
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Term
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Definition
| YOU CAN BORROW MONEY FROM THE POLICY CASH VALUE AT ANY TIME. THE COMPANY CAN DEFER THE REQUEST UP TO 6 MONTHS. YOU MAY NOT BE ALLOWED TO WITHDRAW 100% OF THE C/V. YOUR POLICY WILL LAPSE WHEN THE AMOUNT OWED PLUS INTEREST EQUALS THE CASH VALUE. |
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Term
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Definition
| COMPANIES CHARGE A PENALTY FOR EARLY SURRENDER. USUALLY DURING THE FIRST 7 YEARS OF THE POLICY. PENALTY CHARGES MUST BE STATED IN THE POLICY. WRITTEN ON A DECLINING BASIS. THEY DON'T APPLY IF YOU HAVE MAINTAINED YOU R POICY FOR A CERTAIN NUMBER OF YEARS |
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Term
| CASH PAYMENT DIVIDEND OPTION |
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Definition
| THE INSURANCE COMPANY SENDS THE POLICY HOLDER A CHECK. IF THE DIVIDEND OPTION DECLARED WAS $1.00, THE CLIENT WOULD RECEIVE $1.00 PER THOUSAND OF THE FACE AMOUNT |
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Term
| REDUCTION OF PREMIUM PAYMENTS |
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Definition
| COMPANY KEEPS THE DIVIDEND AND USES IT TO OFFSET THE CLIENT'S NEXT PREMIUM, WHEN IT BECOMES PAYABLE. THE CLIENT PAYS THE DIFFERENCE |
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Term
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Definition
| COMPANY KEEPS THE DIVIDENDS WHICH THEN ACCUMULATE ADDITIONAL INTEREST. THE DIVIDENDS ARE NOT TAXABLE, THE INTEREST IS THOUGH |
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Term
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Definition
| THE CLIENT WILL INSTRUCT THE COMPANY TO USE THEIR DIVIDENDS TO PURCHASE THEM ADDITIONAL SMALL WHOLE LIFE POLICIES EACH YEAR WITH WHATEVER DIVIDENDS THEY MAY RECEIVE. THE NEW POLICIES WILL HAVE A CASH VALUE AND WILL BE ISSUED REGARDLESS OF HEALTH. |
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Term
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Definition
| IF DIVIDENDS ARE USED TO PURCHASE PAID-UP ADDITIONS OR LEFT TO ACCUMULATE AT INTEREST THEN THE PAID UP OPTION MAY BE SELECTED. WHEN THE C/V OF THE ORIGINAL POLICY PLUS THE ACCCUMULATED INTEREST OR ACCUMULATED C/V OF THE PAID-UP ADDITIONS EQUAL THE SINGLE PREMIUM DUE ON THE ORIGINAL POLICY. THE POLICY HOLDER MAY ELECT TO USED THOSE ACCUMULATED AMOUNTS TO PAY UP THE ORIGINAL POLICY |
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Term
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Definition
| A FORM OF DISABILITY INSURANCE ATTACHED TO A LIFE INSURANCE POLICY TO PAY THE PREMIUM ON BEHALF OF THE INSURED IN CASE THEY BECOME TOTALLY DISABLED. THE INSURED'S DISABILITY OR ILLNESS MUST LAST AT LEAST 6 MONTHS DURING WHICH TIME THE INSURED MUST PAY THEIR PREMIUM THEMSELVES. THE RIDER COSTS EXTRA AND THE EXTRA PREMIUM PAID DOES NOT GO TOWARD CASH VALUE ACCUMULATION. RIDER DROPS OFF WHEN THE INSURED REACHES AGE 60 OR 65. THE POLICY PREMIUM IS THEN REDUCED |
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Term
| DISABILITY INCOME BENEFIT |
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Definition
| DISABILITY INCOME INSURANCE CAN BE ADDED TO A LIFE INSURANCE POLICYAS A RIDER FOR ADDITIONAL PREMIUM. THIS RIDER WILL PAY YOUR LOSS OF NET EARNED INCOME IF YOU ARE TOTALLY DISABLED AS PER THE DEFINITION IN THE RIDER. USUALLY A SHORT WAITING PERIOD BEFOR MONTHLY BENEFITS START |
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Term
| PAYOR BENEFIT LIFE/DISABILITY |
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Definition
| THIS RIDER IS ADDED TO A POLICY WRITTEN ON THE LIFE OF A CHILD. IT WILL PAY THE PREMIUM ON THE CHILD'S POLICY IF THE PAYOR BECOMES DISABLED OR DIES. PREMIUMS WILL BE PAID BY THE INSURER UNTIL THE CHILD REACHES AGE 18 OR 21 DEPENDING ON THE COMPANY. AT WHICH TIME THE CHILD MUST ASSUME ALL PAYMENTS |
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Term
| ACCELERATED (LIVING) BENEFIT PROVISION/RIDER |
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Definition
| ALLOWS A POLICY OWNER TO ACCELERATE RECEIPT OF A PORTION OF THE POLICY'S DEATH BENEFIT UPON THE INSURED'S OCCURANCE OF A TERMINAL ILLNESS, A CATASTROPHIC ILLNESS OR ELIGIBILITY OF LONG-TERM CARE. LIVING BENEFITS MAY BE INCLUDED ON NEW POLICIES AS A PROVISION OR ADDED TO EXISTING POLICIES AS A RIDER GENERALLY WITH NO ADDITIONAL PREMIUM CHARGE. ALL INSURED'S ARE ELIGIBLE ( NO EXCLUSIONS) NO RESTRICTIONS ON USE OF FUNDS. THE RIDER MUST BE APPLIED BEFORE IR CAN BE EXERCISED. ACCELERATED BENEFITS ARE NOT TAXABLE. FUTURE BENEFITS PAYABLE UPON DEATH WILL BE REDUCED BY ANY AMOUNTS PAID OUT UNDER THE TERMS OF THIS RIDER. |
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Term
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Definition
| COMBO OF WHOLE LIFE ON THE BREADWINNER AND A LEVEL TERM RIDER ON THE SPOUSE AND CHILDREN. NEWBORN CHILDREN ARE AUTOMATICALLY COVERED WITH NO INCREASE IN PREMIUM! THE TERM COVERAGE FOR BOTH THE SPOUSE AND CHILDREN IS RENEWABLE UP TO A CERTAIN AGE AND CONVERTABLE TO WHOLE LIFE! OTHER INSURED RIDER IS TO AFF COVERAGE TO YOUR WHOLE LIFE POLICY FOR A NEW SPOUSE, SUBJECT TO INSURABILITY |
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Term
| FAMILY MAINTENANCE POLICY |
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Definition
| COMBO OF WHOLE LIFE AND LEVEL TERM BUT BOTH COVER THE SAME PERSON. THE WHOLE LIFE COVERS UP TO AGE 120 AND LEVEL TERM PROVIDES THE BENFICIARY A MONTHLY INCOME FOR A SPECIFIC PERIOD OF TIME IF THE INSURED DIES DURING THE TERM OF THE LEVEL TERM RIDER. |
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Term
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Definition
| COMBO OF WHOLE LIFE INSURANCE WITH A DECREASING TERM RIDER ON THE SAME PERSON. |
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Term
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Definition
| KNOWN IS DOUBLE OR TRIPLE INDEMNITY! IT WILL PAY YOUR BENEFICIARY DOUBLE OR TRIPLE ONLY IN THE EVENT THAT YOU DIE AS A RESULT OF AN ACCIDENT. YOU MUST DIE WITHIN 90 DAYS OF THE ACCIDENT. RIDER DROPS OFF AT AGE 60 OR 65. IT IS A FORM OF HEALTH INSURANCE ATTACHED AS A RIDER ON A LIFE INSURANCE POLICY |
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Term
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Definition
| PROTECTS THE INSURED'S RIGHT TO BUY MORE COVERAGE IN THE FUTURE WITHOUT HTE NEED TO PROVE GOOD HEALTH. IT COSTS EXTRA. |
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Term
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Definition
| INCREASES THE FACE AMOUNT OF YOUR POLICY TO COINCIDE WITH THE RATE OF INFLATION SO THAT IT WILL BE ADEQUATE TO COVER FAMILY EXPENSES AT ALL TIMES |
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Term
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Definition
| YOU BUY AN INCREASING AMOUNT OF TERM INSURANCE THAT ALWAYS EQUALS THE TOTAL AMOUNT OF PREMIUMS PAID TO DATE. IT DOESN'T ACTUALLY RETURN THE PREMIUMS PAID, IT PAYS AN ADDITIONAL AMOUNT OF INSURANCE EQUAL TO YOUR PREMIUMS PAID AT DEATH. YOU ARE SIMPLY BUYING ADDITIONAL TERM INSURANCE |
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Term
| OWNER, ANNUITANT AND BENEFICAIRY |
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Definition
OWNER: PERSON WHO OWNS THE POLICY.
ANNUITANT: PERSON WHO THE ANNUITY IS TAKEN OUT ON.
BENEFICIARY: PERSON THAT RECEIVES THE BENEFITS. |
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Term
| SINGLE PREMIUM IMMEDIATE ANNUTIES |
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Definition
| PURCHASED WITH A LUMP SUM BY THE ANNUITANT. YOU START RECEIVING PAYMENTS THE MONTH AFTER YOU STARTED THE ANNUITY. THE AMOUNT OF YOUR PAYMENTS IS BASED ON YOUR LIFE EXPECTANCY, YOUR SEX AND WHAT TYPE OF ANNUITY YOU PURCHASED. |
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Term
| SINGLE PREMIUM DEFERRED ANNUITY |
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Definition
| YOU CAN BUY THE ANNUITY AND TELL THE COMPANY TO HOLD ON TO YOUR MONEY UNTIL AGE 65. THE INSURANCE COMPANY WILL PAY YOU AT LEAST, THE GUARANTEED MINIMUM INTEREST RATE DURING THE TIME THEY HAVE YOUR MONEY. TAX DEFERRED INSTEREST ACCUMULATION DURING THE ACCUMULATION PERIOD |
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